John Stossel / @JohnStossel /
For years, I’ve heard American leftists say Sweden is proof that socialism works, that it doesn’t have to turn out as badly as the Soviet Union or Cuba or Venezuela did. But that’s not what Swedish historian Johan Norberg says in a new documentary and Stossel TV video.
“Sweden is not socialist—because the government doesn’t own the means of production. To see that, you have to go to Venezuela or Cuba or North Korea,” says Norberg. “We did have a period in the 1970s and 1980s when we had something that resembled socialism: a big government that taxed and spent heavily. And that’s the period in Swedish history when our economy was going south.”
Per capita gross domestic product fell. Sweden’s growth fell behind other countries. Inflation increased. Even socialistic Swedes complained about the high taxes.
Astrid Lindgren, author of the popular “Pippi Longstocking” children’s books, discovered that she was losing money by being popular. She had to pay a tax of 102 percent on any new book she sold. “She wrote this angry essay about a witch who was mean and vicious—but not as vicious as the Swedish tax authorities,” says Norberg.
Yet even those high taxes did not bring in enough money to fund Sweden’s big welfare state. “People couldn’t get the pension that they thought they depended on for the future,” recounts Norberg. “At that point the Swedish population just said, ‘Enough, we can’t do this.'”
Sweden then reduced government’s role. They cut public spending, privatized the national rail network, abolished certain government monopolies, eliminated inheritance taxes, and sold state-owned businesses like the maker of Absolut Vodka. They also reduced pension promises “so that it wasn’t as unsustainable,” adds Norberg.
As a result, says Norberg, his “impoverished peasant nation developed into one of the world’s richest countries.”
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