Saturday, February 14, 2009

Comparing Sweden to the U.S. is Really No Different Then Comparing Wyoming to Detroit...

A common mantra among Liberal Americans has always been that “the Scandinavian nations are demonstrably better places to live than the U.S. because they are more socialistic.”

There are two major flaws with that reasoning. The basic difference between “socialism” and “capitalism” is that, while the former is predicated upon the abolition of private property (ALL property, businesses and industries) are owned by the state, the latter is predicated on private ownership of property.

And while detractors of market-based economies deride the “wide disparities in wealth and income” endemic to those economies AND the fact that “there can never be anything approaching any real economic equality so long as private property rights are respected,” it’s socialism that has ALWAYS failed and ALWAYS delivered far poorer economic results. In short, despite its flaws, market-based economies consistently deliver MORE prosperity to MORE people.

There are two majors flaws with the invidious “Sweden vs America” comparison. The FIRST is that the U.S. is NOT a “free market economy.” It hasn’t been since around 1912. Since that period, J P Morgan and Bernard Baruch moved the U.S. FROM its free market roots TO the regulated market it has had ever since.
Today, there are no “free market” (completely unregulated market economies) in the world and few truly socialist economies either.

Sweden, like the U.S., France, England, Germany, Japan, is a government REGULATED market-based economy. It respects private ownership of land, businesses, industry, etc. It also has a guaranteed retirement system (like America’s Social Security), a generous welfare system (like America’s) and even a graduated income tax (like the U.S.).

So why do some people erroneously insist on calling Sweden (where 90% of the industrial output is produced by the private sector) a “socialist nation?” Primarily for the same reason they call the U.S. “free market,” that is, because they’re misinformed.

Within the market-based economy there is a scale or continuum. On the right side of that scale, is Supply Side policies that limit regulation, lower tax rates, limit government and “let the market work its magic. On the left side of that market-based continuum is Keynesian policies that ratchet up regulation, raise tax rates and make sure that all aspects of the economy are supervised by a watchful government.

Keynesian policies are NOT “socialist” policies because they DO NOT allow for the abolition of private property, in fact, they are predicated on the viewpoint that “markets work best.”

The problem with Keynesianism is that it places too much faith in governments that are, in fact, even more corruptible than business and industry and that inevitable leads to the kind of economic malaise America had under Carter and Western Europe suffered over the last twenty years.

So, YES, Sweden, Iceland and much of Western Europe (France, Germany, etc.) are indeed MORE Keynesian than the U.S. is, at least right now, they are NOT demonstrably more “socialist” as they not only have a market-based economy (like America’s), they also have the SAME guaranteed retirement system, the SAME generous welfare system and the same sort of graduated income tax that the U.S.

So really, comparing Sweden to America is not demonstrably different than comparing Wyoming (above, top) to Detroit (above, bottom). Wyoming has a lower crime rate and a much better quality of life, despite having the same basic economic system as Detroit has.

In fact, that comparison is much more adept.

Sweden HAD a much lower crime rate and a much better standard of living BEFORE it had to deal with an influx of mostly Arabic and Muslim immigrants that have congregated around a few teeming ghettos in that country. Much of Sweden’s low crime rates of the past seem, in retrospect to be due largely to Sweden’s more homogeneous population. Likewise, Wyoming has always enjoyed a lower crime rate, better quality of life and higher standard of living than places like Detroit and probably for many of those same exact reasons, despite having the very SAME economic system as those places.

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