How Sweden Became Prosperous

Wednesday, April 11, 2018

One frequently hears of Sweden as a role model for socialism, but rarely hears how the nation achieved prosperity under that political system. As many advocates of liberty would suspect, that is because it was freedom, not socialism, that made Sweden into a prosperous country, as a recent article by Johan Norberg indicates. Norberg presents a lengthy historical overview of Sweden's transformation from one of the world's poorest nations into one of the world's richest over the past couple of centuries, looking at the ideas and actions of many prominent figures, such as Anders Chydenius, also known as "the Nordic Adam Smith." Norberg introduces Chydenius by discussing his take on emigration, which many in his day saw as a big problem:

Anders Chydenius (Image via Wikipedia)
... There is nothing wrong with emigration, he wrote. The problem is the oppressive and corrupt system that makes it impossible for people to stay in Sweden and build a good life there. In detailing all the abuses, regulations, and taxes that destroyed opportunity, Chydenius outlined a radical laissez-faire critique of the Swedish government. He showed that privileges, license requirements, and trade prohibitions protected a small lazy aristocracy and stopped hard-working people from making their own luck. High taxes confiscated whatever they managed to create; a corrupt justice system made it impossible for them to win against the powerful; and restrictions on the press made it illegal for them to complain about it. "Fatherland without freedom and merit is a big word with little meaning," he pointed out.
Chydenius sounds like a real firebrand, and he was also a major proponent of freedom of speech, which the article correctly notes was integral to Sweden's transformation. That said, the article, like Chydenius himself and the movement to which he belonged, is a mixed bag. To wit:
One pamphlet that Chydenius published was more important than the others. The National Gain was a short but forceful argument for economic freedom. Chydenius explained why a free market is self-regulating because the profit motive and the price mechanism keep us all in check and stimulates us to help others by producing the kind of goods and services they want most...
Chydenius, who worked with the poor, deserves credit for realizing that freedom is the best way to help them, but note his suspicion of the true ethical basis for the capitalist political system. Rather than seeing capitalism as the best way for people to live their own lives as best as possible, he frames his advocacy in terms of a collective. He is, at best, confused about selfishness, conflating it with the kind of short-range, predatory behavior that capitalism and rule of law do, in fact, keep in check.

The lack of an egoistic moral defense of capitalism did not harm the initial rise of Sweden because the various factions ("estates") were so blatantly harming each other that even the de facto nationalist justification for freedom resulted in improvements for all. But it would come back to haunt everyone later. Norberg notes that, just at the time it looked like the liberals had won Sweden permanently, freedom became, in his words, "[a] victim of its own success," with the political movement splintering, and -- surprise! -- some people returning to the use of government to filch money from other people's pockets. At the same time, others were seemingly oblivious to the threat this posed to freedom, and fought instead for new "rights", be they consistent with individual rights or not. (Norberg himself shows a similar blind spot: At an earlier point, he praises a publication for being, "the first publication to attack not just abuses of power, but political power as such." A proper government without power would not be a good thing, because freedom cannot exist in an anarchy.)

On balance, I think this essay offers information that can be of high value not only in defusing the lie that socialism "works" for Sweden. (I pass over many facts and statistics like those I cited in yesterday's post on Estonia.) A the same time, the piece suffers from the same disease that has cost Sweden much of its freedom and prosperity, and which is epidemic among those who want to champion capitalism. Without a proper ethical justification -- a frank appeal to rational self-interest -- capitalism will not make a meaningful comeback. Furthermore, whatever gains it might make thanks to its superior productivity will be temporary once people -- who do not understand why it is immoral and impractical to steal -- wrongly feel safe enough to start undermining it again.

-- CAV

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