Sweden Sour

Posts on economics on this blog are going to be necessarily speculative, for the simple reason that I have no training in the subject, and in any case going hunting for all those stats and graphs and evidence to make a sustained and substantive point sounds boring and time-consuming. Instead I thought I'd lay out the kind of questions that the majority of untrained but interested minds are likely to ask, and then, if this blog ever has any readers, and if any of them happen to be economically literate, maybe they could take a stab at answering in the comments. That's quite far down the line of possibility, I realise.

Anyway, this post from Matt Yglesias has been doing the rounds. I have liked Mr. Yglesias for a while now, though I read him more when he was still at ThinkProgress and not the "5 ways the iPad is making Obama lose the black vote" Slate. In my lazy moments when I can't be bothered to find my own economic ideology (once again, too much effort with all those charts and fiscal multipliers and weird freshwater vs saltwater aquatic fistfights), I offload the hard work to pundits like him, Ezra Klein and Paul Krugman. Such bloggers are, after all, clearly well-versed in their subject, and are compatible with my own moderate social democratic viewpoint, favouring all the good stuff like regulated markets, decreased wealth disparity, and good old-fashioned high taxes.

Or so I thought. Because I'm also a lazy leftwing fan of the Scandinavian model, forever bringing up Finland whenever anyone challenges my dislike of private education at parties, they hardly have a private system at all and they lead the world dontchaknow. So what exactly do I do when Matt Yglesias writes an article pointing out that Sweden, well, doesn't actually have very high taxes? 

Ok, it does. But not in the areas I thought. Go read the article yourself, but here's a blinder for me: Sweden has no taxes on inheritance or residential property. What? But those are my favourite taxes! They're the good ones, the ones that punish unearned wealth, punish people for being the children of investment bankers and arms dealers and land-owners, surely? I always say we should have more of those. Surely good old Sweden can't be so thoughtless as to do something other than fulfil exactly what I imagine a perfect social democratic country looks like. The bastards, what the hell am I supposed to bullshit with if I can't start "well, in Sweden..."?

And then there's the light business regulation, deregulated labour market, low business taxes and hang on, when the hell did Sweden become a smoking neoliberal wasteland of greed and hedge fund managers stamping on the outstretched fingers of orphans? Even the high taxes seem to be a result of consumption taxes, which even I know punish the poor disproportionately because they spend more of their income on basic stuff rather than invest it or save it. And yet, it all seems to work pretty well, given that the key measure of any wealthy society, equality, is higher than just about any other European nation, and the capitalist engine of innovation seems to be ticking along nicely.

Just off to strip the assets from an impoverished mining town in order to fill our corporate coffers.

That leaves me in the uncomfortable position of probably having to change my mind a bit. Although if I were Obama I would pretend I hadn't changed my mind at all, so as to be able to use it as a bargaining counter in negotiation, I would probably concede the corporate tax rate could stand to come down. I might even have to concede that there is plenty of deregulation that can be done to improve innovation and the business environment (on the condition that it harms neither the environment nor financial stability). 

All this, of course, in my perfect world, would be in exchange for a more generous safety net, shorter work weeks, more maternity and paternity leave, and the rest of it. The deal for the average worker thus runs "your union no longer has the same power to protect your job, but hey, you get a ton of extra benefits from the state!" A nice fluid labour market with a highly educated workforce and lots of redistribution that also is open to the rampages of capitalism and a few very wealthy and powerful individuals and businesses. Hmmm. Actually, I still want to put the property and estate taxes back in there, because I still like them, so there. 

Is this what I actually want when I claim I still want capitalism, but a "good" capitalism? I don't know, I'm just thinking aloud. But I do know that there's a lot of work for me to do before my economic views are half mature, and it will probably involve a lot more grumbling at Sweden when it puts its money where its mouth is and does the capitalism side of things properly.