Beyond the insults: Swedish Model 2.0

As Sweden takes a battering in the US health care debate, Swedish Institute chief Olle Wästberg examines two of the insults most frequently flung: that Sweden is rampantly socialist, and that it's the poster child for neo-liberal market excesses.

In the ongoing campaign against president Barack Obama’s ambitions to reform the US health care system, one of the worst insults has been ”Swedish.” Obama wants to make a Sweden out of the US – which he of course denies.

Conservative TV personality Bill O’Reilly asks his audience: “Do we really want to change America into Sweden?” The answer is evident.

Times change. In 1956, US Democrat Adlai Stevenson’s campaign used Sweden as a model. That was the sort of welfare system America should have. Well, Stevenson lost, and at that time Sweden had about the same level of taxes and public sector size as the US.

Since then, the notion of “Sweden” in some American discussions has been equal to “Socialism.”

That is a stereotype, and – frankly – not true.

Sweden has always been on the side of the market economy. And to talk about Sweden as a socialist country has always been pretty far off the mark.

Sure, Sweden has high taxes – but so do most European countries, and the Swedes are no longer the hardest taxed people on earth (the Danes are).

And to compare with the US: Sweden has no inheritance tax, no wealth tax, and the tax on real estate is lower than in most US states.

Swedish pensions are nowadays partly financed by people themselves on a kind of individual basis.

Most new schools that open in Sweden are private, as are the preschools.

Actually, even on the railroads there is private competition – private train companies have the right to use the railroad and in Stockholm the subway is partly private.

This spring, Christian Science Monitor published an article painting Sweden as a capitalist paradise, “a bastion of market capitalism.”

This, too, is an exaggeration.

But Sweden has privatized some of the tasks once carried out by the Swedish postal service and, recently, the pharmacies.

The next step is a broad privatization and increased freedom of choice (for the customers) in the health care sector.

This development of competition and privatization has been politically controversial at the level of details, but not when it comes to the overall course. Many of the liberal reforms were initiated under the last social democratic government.

So is there a “Swedish Model 2.0”? Yes, I would say so.

The Swedish Model of today is characterized by the combination of public – and to some extent equal – funding and competitive production. This is why Sweden will probably never be a tax haven.

Health care guarantees and the public funding of education will exist all over the country and provide a measure of public control. But the fact that most of the individual services are privately owned and operated gives consumers power and a better chance for adaptation to shifting conditions.

That is far from socialism, but nor is it the neo-liberalism attributed to Sweden by the Christian Science Monitor.

Olle Wästberg, Director-General of the Swedish Institute

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