Four Swedish paradoxes
How the lessons of capitalism influenced the Scandinavian model of the “functional socialism”
The Scandinavian stability is to be envied by most countries. When the whole world suffered from the recession, the four northern countries went through all economic cataclysms with their intrinsic Nordic firmness. The figures made public during the World Economic Forum in Davos prove it. Such stable economy is the result of the Scandinavian model whose main traits started shaping in the 1930s. The model is based on the successful combination of private property and market competition with the governmental programs aimed at supporting the disabled and the compensation of losses caused by the instable market economy. The Scandinavian economic model relies on the concept of the functional socialism by the Swedish social democrats. What makes the Scandinavian model different from the one of the European Union is a higher level of social protection and people’s security. However, though the models of Denmark, Norway, Finland, and Sweden have the common development direction called “The Nordic Way,” the economic strategies of these countries have principal differences. “It can be easily seen even in their relations with the EU,” opines the Swedish economist, politician and writer Klas Eklund. “Finland belongs to the EU and has introduced the euro. Denmark refused the currency union, however, its currency is tightly related to the euro. Sweden is not in the eurozone and has a floating currency. Finally, Norway is neither in the EU nor in the eurozone, but instead is an active NATO member. Four countries have four different strategies.”
Though Sweden is a classical capitalist country as 95 percent of means of production are in private property, it has the most developed social protection and collective consumption systems. The half of the GDP is controlled by the government and 50 percent of this money is used for social needs. The reformist program of the Swedish social democrats implied the evolution to the socialism through improving the system of social protection. Thus the Scandinavian model shaped the developed market economy with the mature social infrastructure.
This year the World Economic Forum made public a poll reading that “Sweden is one of the most productive and competitive economies of the world.” The rating created by the NGO Help Age International and published in Global AgeWatch reads that Sweden is the best country to grow old. The high position of Sweden is conditioned by generous subsidies and pensions, good transport and the feeling of community characteristic for the people in this country. To build the society of such level the Swedes have made a long way on which there were certain paradoxes.
SOCIAL CONFIDENCE AND RADICAL INDIVIDUALISM
Sweden is one of the leaders of the “social capitalism” which includes such values as confidence, respect to other citizens, readiness to help, volunteering, etc. It is conditioned by the high level of social confidence. Writer, historian, and editor of the Swedish daily newspaper Dagens Nyheter Henric Berggren said that “the Swedes are putting a strong emphasis on the national solidarity which is the ability to subordinate personal interests to the collective rationality.” With this the writer is referring to Marquis Childs who wrote the book Sweden: Low Profile in which he conceded that Sweden has found balance between the altruistic socialism and egoistic capitalism. However, according to Berggren, it is half true since the social solidarity in Sweden includes strong, nearly extreme individualism. This combination defines the development and harmony of the life of their country.
STABILITY AND INNOVATIONS
On the other hand, Sweden is a country of possibilities and ideas. “This Scandinavian country helped me to fulfill myself,” said Iranian Ardashir who immigrated to Sweden eight years ago. “Here I finished my education and started realizing my ideas. Now I own one of the most successful companies in Sweden and I do what I like.” It turned out that Sweden sponsors the ideas of young people and helps to realize them. If a young person wants to do music (not necessarily this person can play a musical instrument) he or she goes to a special institution, receives a musical instrument there, a place to practice and money for development. If young people want to start their own business, they bring this idea to the state and the state gives thousands of krones to realize the idea. The essential is the desire to develop, ideas, and innovations. These are the main concepts for the Swedes.
The national inclination to inventions helped Sweden become one of the most innovative countries in Europe and the world. This characteristic made the basis for the growth and wealth of most of the Swedish or joint companies such as Volvo, Ericsson, ABB, Tetra Pack, and AstraZeneca which is the tradition inherited by the companies of the new generation of the Swedish technological pressure. Skype developed the system of free Internet telephone connection, Spotify created the market of music streaming – such examples abound.
Sweden invests about 3 percent of the GDP, or 16 billion dollars, into scientific research and developments. It is one of the highest numbers in the world. The government of the country deals with investments into research works. Now the efforts are focused on the medicine and biology, new technologies and the climate problems.
THE MOST POPULAR SERVICE – THE TAX AGENCY!
In 2011 the citizens of the country declared the tax inspection of Sweden the most popular and auditing services the most modern. The tax inspection started its reforms back in the 1970s. In the 1990s the Swedish taxation system was radically changed aiming at lowering taxes and widening the earning basis. Today individuals pay the income tax to the government as well as the local authorities whereas legal entities have to pay only the national income tax. Every year all local authorities decide which part of taxation the tax will make. On average, the income tax makes about 31 percent of taxation. As the project manager of the Swedish Tax Agency Anders Strih informed The Day, now the Tax Agency “is trying to find a balance not to make people pay to many taxes, but not too few.”
The system is transparent and open. All the taxes are public and the Swedes can see who pays money to the state treasury and how much. As we were told by the press secretary of the Tax Agency Charlotte Milson, “the officials consider people’s schedules, so the Swedes can pay taxes till 12 at night and the hot line for the journalists works 24/7.”
CORRUPTION IN THE INCORRUPT COUNTRY
According to Transparency International, Sweden is the sixth less corrupt country of the world. The dismissal of a Swedish minister was resonant: he used his government credit card to pay for some shoes and a Toblerone chocolate bar. He returned the money, but still was fired. However, as The Day was informed by the professor of Linkoping University Gissur Erlingsson, the corruption exists even in Sweden. “The scandals with Bofors, Telip, and Jas are an example. According to the survey, 48 percent of Swedes completely agree that the corruption exists in their country, 41 percent partially agree, and only 11 percent do not agree.” As we found out later, these figures can be explained by the high level of development of the society and the ability to critically assess their country.
