Get Bernie Out of the 1970s
An article by Jonah Norberg
[...] As a native of Sweden, I must admit this makes me Feel the Bern a bit. Sanders is right: America would benefit hugely from modeling her economic and social policies after her Scandinavian sisters. But Sanders should be careful what he wishes for. When he asks for "trade policies that work for the working families of our nation and not just the CEOs of large, multi-national corporations," Social Democrats in Sweden would take this to mean trade liberalization — which would have the benefit of exposing monopolist fat cats to competition — not the protectionism that Sanders favors. [...] Sanders isn't completely deluded, of course. Sweden and the other Scandinavian countries have experimented with very big government and semi-socialist ideas. There's just one problem: That experiment coincided almost perfectly with the region's only sustained period of economic decline over the last 100 years. [...] But in the early 1990s Sweden began to abandon its brief detour into Bernienomics. It deregulated, privatized, reduced taxes, and opened the public sector to private providers. The two decades that followed saw real wages increase by almost 70 percent. [...]
We also pay for the welfare state in a fairly brutal way, but one that doesn't hurt production as much: by squeezing the poor and the middle class. Unlike the rich, poor and middle-class people don't flee or dodge when they're taxed aggressively. The Social Democrats knew all along that they couldn't fund such a generous government by taking from the rich and the businesses — there are too few of them, and the economy depends on them too much. So Sweden and Denmark take in lots of revenue via highly regressive value-added taxes at a normal rate of 25 percent of sales — the only tax where the rich and poor pay exactly the same amount in kronor. [...]
Gunnar and Alva Myrdal, the two leading Social Democratic thinkers of the 20th century, thought that the Scandinavian countries were uniquely suited for experimenting with high taxes and redistribution. They had homogenous populations with a strong work ethic, non-corrupt civil services, a high degree of trust in bureaucracies and politicians—and competitive free trade economies to foot the bill. If it did not work there, they suggested, it would be difficult to think it could work anywhere.
Full article here.
[...] As a native of Sweden, I must admit this makes me Feel the Bern a bit. Sanders is right: America would benefit hugely from modeling her economic and social policies after her Scandinavian sisters. But Sanders should be careful what he wishes for. When he asks for "trade policies that work for the working families of our nation and not just the CEOs of large, multi-national corporations," Social Democrats in Sweden would take this to mean trade liberalization — which would have the benefit of exposing monopolist fat cats to competition — not the protectionism that Sanders favors. [...] Sanders isn't completely deluded, of course. Sweden and the other Scandinavian countries have experimented with very big government and semi-socialist ideas. There's just one problem: That experiment coincided almost perfectly with the region's only sustained period of economic decline over the last 100 years. [...] But in the early 1990s Sweden began to abandon its brief detour into Bernienomics. It deregulated, privatized, reduced taxes, and opened the public sector to private providers. The two decades that followed saw real wages increase by almost 70 percent. [...]
We also pay for the welfare state in a fairly brutal way, but one that doesn't hurt production as much: by squeezing the poor and the middle class. Unlike the rich, poor and middle-class people don't flee or dodge when they're taxed aggressively. The Social Democrats knew all along that they couldn't fund such a generous government by taking from the rich and the businesses — there are too few of them, and the economy depends on them too much. So Sweden and Denmark take in lots of revenue via highly regressive value-added taxes at a normal rate of 25 percent of sales — the only tax where the rich and poor pay exactly the same amount in kronor. [...]
Gunnar and Alva Myrdal, the two leading Social Democratic thinkers of the 20th century, thought that the Scandinavian countries were uniquely suited for experimenting with high taxes and redistribution. They had homogenous populations with a strong work ethic, non-corrupt civil services, a high degree of trust in bureaucracies and politicians—and competitive free trade economies to foot the bill. If it did not work there, they suggested, it would be difficult to think it could work anywhere.
Full article here.