Sweden Baffling Economic Gravity

Chris Burford cburford at gn.apc.org
Wed Oct 13 00:09:25 PDT 1999


At 17:31 12/10/99 -0500, John Taber wrote:
>Doug posted the NYT article on Sweden:
>
><
>New York Times - October 8, 1999
>
>REBOUNDING SWEDEN DEFIES THE LAWS OF ECONOMIC GRAVITY
>By Edmund L. Andrews
>
>STOCKHOLM -- At a time when world leaders are fascinated by the
>United States' economic success and its credo of less government and
>low taxes, Sweden seems to be defying gravity.
>>
>
>I'm baffled, and I hope somebody can straighten me out.

This is much more than a straw in the wind.

The extremely grave laws that are being successfully defied are the dogmas of neo-liberalism.

Interestingly the article was published in the International Herald Tribune circulating in Europe with the headline "Sweden Bounces Back, Welfare and Entrepreneurship Combine in Powerful Transformation of Economy."

The headline story is that despite some painful cuts in the social wage, Sweden has remained an economy in which close to 60% of the GDP is 'consumed' by the government, whereas the neo-liberal model says this should be down to the low 30's, like the 32% in the USA.

What Sweden has done is to deregulate a section of the economy which has become very competitive in the international balance of trade (eg like the Finns, in the mobile telecommunications market).

I suggest that providing the balance of payments between a country and the outside world is broadly balanced externally, internally it may have a highly integrated mixed social economy. One phrase by the chief economist of the Swedish Federation of Industry, the "networked economy" is interesting because it suggests a highly flexible but mixed economy, acceptable to both the state and capital.

(Indeed one could speculate that the success of mobile telecommunications in which Europe is technologically ahead of the USA, led by the Scandinavians, is complemented by a social system with a high degree of social consciousness.)

This is much more than a straw in the wind. It means that some variants of social democracy are indeed still possible, which means in turn that there is space for more socialist campaigning .

This is a major blow to the dogma of neo-liberalism.

The dramatic headline is deeply and correctly ironical, but also significantly, not for circulation in Europe. The received paradigms are already shifting. When are progressive people in the US going to catch on?

Chris Burford

London



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