Stossel: Sweden is Not a Socialist Success

Many people think Sweden is socialist, but its success comes from free markets.

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Democratic socialists in the United States point to Sweden as a socialist success. But Swedish historian Johan Norberg says, "Sweden is not socialist."

Norberg hosts a documentary called Sweden: Lessons for America?, in which he notes that in Sweden, "government doesn't own the means of production. To see that you have to go to Venezuela or Cuba or North Korea."

John Stossel asks Norberg why so many Americans think Sweden is socialist. Norberg answers, "We did have a period in the 1970s and 1980s when we had something that resembled socialism: a big government that taxed and spent heavily."

But big government led to problems. "Our economy was in crisis, inflation reached 10 percent, and for a brief period interest rates soared to 500 percent. At that point the Swedish population just said, 'Enough, we can't do this,'" Norberg says.

Sweden cut public spending, privatized the national rail network, abolished certain government monopolies, eliminated inheritance taxes, sold state-owned businesses, and switched to a school voucher system. It also "lowered taxes and reformed the pension system," adds Norberg.

So Stossel asks why we keep hearing "that Sweden is this socialist paradise."

Norberg answers: "We do have a bigger welfare state than the U.S. and higher taxes than the U.S. But in other areas, when it comes to free markets, when it comes to competition, when it comes to free trade, Sweden is actually more free market."

He's right, according to the Heritage Foundation's Economic Freedom Rankings. Sweden ranks higher than the U.S.

Norberg also tells Stossel that Sweden's tax system may surprise Americans. "This is the dirty little secret....We don't take from the rich and give to the poor. We squeeze the poor, because rich people might leave."

Even people who earn below average income pay up to 60 percent in taxes.

Stossel asks: What lessons should Americans take from Sweden?

"You can't turn your backs on the creation of wealth," warns Norberg.

Sweden: Lessons for America? airs on PBS on October 29th at 7 p.m. Eastern. You can also watch it at freetochoose.tv.
The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.