Excerpts from John J. Ray
The dominant political party in Sweden since 1932 on has been the Social Democratic Party. The program and policy of the Social Democrats centred around transforming Sweden into a folkhemmet (A home for the people). This became the dominant Swedish concept of Sweden in 1932 with the accession to power of the Social Democrats but was well in evidence before that. The concept is usually traced to a book, The State as a Live Form ( Staten som livsform ), written by Rudolf Kjellen in 1910.
Folkhemmet is probably best translated as “a home for the Swedish people”. And this idea of what Sweden should be was what the Swedish Social Democratic Party preached. The concept is the core of the “Swedish model” and what it brought about was essentially just another version of the characteristic Fascist “corporate” or “collectivist” State. So, like Fascism generally, the Swedish model was seen as a Third Way between Communism and Capitalism.
The Swedish corporate State really got going only in 1938, however, with the Saltsjobaden Agreement between the unions and the employers. This agreement outlawed strikes and created a central wage-fixing system for the whole country.
And Sweden has been essentially a socialist one-party State since 1932, with the socialists being out of power for brief interludes only. But what exactly the folkhemmet should consist of evolved and developed only very slowly and gradually. Change in Sweden is glacial even in the hands of Leftists so the fundamentally paternalist folkhemmet took many years to develop a sweeping dominance of Swedish life. Bit by bit taxes were raised, business was regulated and taken over and welfare programs were expanded. It was not in fact until the early 1990s that the whole edifice came crashing down. So the concept of a fatherly government was there from the beginning, the one-party State was there and a quiet conviction of Swedish superiority and unique wisdom was also there.
Like all Fascist ideologies, however, folkhemmet had its own unique national character. Sweden experienced nothing remotely like the huge interwar disruptions that took place in Germany and Italy — for the excellent reason that Sweden stayed out of WW1. So Swedish nationalism was much calmer and less excitable. Which led to it being neither strident nor expansionist. Swedes felt perfectly comfortable with the burgeoning wealth being produced by their own country and so felt no need for foreign adventures or huge and sudden changes.
The Swedish Social Democratic party was founded on its popularity and was achieved by constitutional rather than revolutionary means.
So the Swedish folkhemmet State was welfarist, nationalist, paternalist and essentially all-powerful. Because it used its power very sparingly and cautiously, however, and respected civil liberties, it was undoubtedly the mildest of the Fascist States. Fascism varied greatly from country to country (to take a rather striking example, Sir Oswald Mosley initially used to expel from the British Union of Fascists anyone who made antisemitic remarks!) and the distinguishing feature of the Swedish version was undoubtedly that it was the least authoritarian. And after the war the Swedish Social Democrats did as all Leftists did and abandoned overt nationalism.
After their big economic meltdown in the early 90′s (huge unemployment and welfare benefits that could no longer be paid for) they undertook an exemplary program of privatizations and made big cuts to both taxes and welfare benefits but there are still huge disincentives to work in Sweden. Incomes are kept pretty uniform regardless of what you do — meaning that there is little incentive either to improve one’s skills or to work hard — and the sickness benefit side of the welfare system is still a huge racket. People on sickness benefits no longer get a higher income than they would by working but the benefits are still close to wages and access to the system is very easy. So huge numbers of Swedes have declared themselves too ill to work.
As a consequence, average Swedish incomes have fallen well behind American standards — as indexed by the most objective criterion we have: GDP per capita. When purchasing power is taken into account, the picture is even worse. A cup of coffee, for instance, is likely to cost you three times as much in Sweden as in the USA.
Leftists who advocate high taxes and pervasive welfare need to be told that the country that went furthest in that direction hit a rock years ago and has been paddling in reverse ever since.
There is an assumption that the welfare states of Scandinavia were high-tax regimes which tried to redistribute wealth from rich businessmen to the average person. This is not the case at all. On the whole the Scandinavian systems are not meant to be redistributive states. Nor are businessmen the targets. Business is relatively lightly taxed compared to many developed nations. It is not the earnings of businesses that the bureaucrats want to control but people. (Comment: This point might be true for BIG corporations that are running the country together with the government (Revolving door business/politics – the same people on the board of a large company take turns to sit in government positions). Small individual business owners are taxed in to oblivion, unable to employ and survive for the most part. Privateers are unwanted in Sweden. They want you working for BIG companies. Entrepreneurship is pretty much non existent in Sweden. As long as you are dependent sucking of the corporate-fashist-government teet, it’s ok.)
The Swedish welfare state, in particular, was designed so that the average individual was highly taxed. There was even the well-known case of Swedish author Astrid Lindgren, of Pippi Longstocking fame, who discovered that her tax bill was 102% of her earnings. Consumers are highly taxed, while business itself is not so highly taxed.
The reason for this is simple. Taxation is a means of control. The object of control in the Swedish system is not business, they produce the golden eggs after all. The object of control is the individual. The Swedish system doesn’t so much redistribute your wealth but confiscate it and return it to you provided you spend it in ways approved of by the political elite.
Consider how this system works. Say you are taxed $100 on earnings of $150. The state may now say that can have $20 back in education vouchers for your children, $30 in health “benefits” and so on. If you choose to spend in other ways you will not receive the money back. In essence the Swedish system was created to take control of the individual Swedish consumer, not redistribute wealth from the rich to the poor. While some redistribution is inevitable that is not the reason why the system was created.
Swedish business is more lightly taxed because the government wants business to provide jobs for workers. Once the workers are employed the state can tax them and control their spending. Approved spending is subsidized with the tax money that consumers pay in, unapproved spending is not subsidized or may be heavily taxed. This system of coercive incentives is meant to regulate how people act.
While many in the world think that the “third way” of Sweden was a “socialistic” policy of helping the needy, the reality is closer to a “fascistic” policy of manipulating the consumers into behaving in ways that politicians want.