Scandinavian Socialism: Dangers of the Welfare State

hi everybody this is stefan molyneux from freedomain radio so those of you who keep writing in and tell me tell us that the laws of economic reality somehow fade the more blonde the women get and the higher the ski slopes are here to be proven wrong or incorrect or certainly open to correction this is the dr. Nieman salmon dodgey he holds a PhD from the Royal Institute of Technology in Stockholm and is the author of Scandinavian and exceptionalism culture markets and the failure of Third Way socialist Third Way socialism this book is available for free online at the Institute of Economic Affairs website IEA org UK I just came out about a month ago and it is currently being translated into a wide variety of languages I only assume that the African clicking language is going to be first followed by a variety of others so I thank you so much for taking the time today thank you to including me so why why pick on our Scandinavian native neighbors to the north what what did they do that has got people including Bruce pink Springsteen so confused well to begin with the reason for me to write about this is that I'm living in Sweden I'm an Iranian Kurdish immigrant who came here and I've been raised on welfare in Sweden so I'm very much part of the Swedish working state and for many years now I've been writing about a switchman for state and it's very obvious for us who live here and understand Scandinavia that other people have got it completely wrong is these ideas about a Nordic model being a miracle cure is flatly wrong so there's this general the third way that you refer to if I understand it correctly so there's the disasters of predatory communism responsible for a hundred plus million deaths in the 20th century not too many sane people want to head off in that direction again on the other hand there's perceived to be this sort of weird Dickensian dog-eat-dog free-market capitalism where people in monocle regularly dined upon the the limbs of poor people and this is considered to be something brutal and what is the third way that people have this fetish for with regards to the Scandinavian model so there's two things terrible socialism and the Scandinavian model thirdly socialism was an experiment that was introduced in Sweden Indian 70s word state tried to control the economy in a democratic country the idea was that a labor unions should own all of the businesses and this the third way socialist model was a colossal failure the complete failure even the Social Democratic Minister of enterprise who introduced it even at the time he introduced it he knew this was a horrible idea and what happened was that Sweden which had been a very interpreted economy intrapreneurship stopped growth stopped Sweden went from being the for precious country in the world to being a pretty mediocre country and thirdly socialism was only introduced in Sweden none other of the Scandinavian economies was dumb enough to follow suit and even a Social Democrats abandon it even the Communists part in Sweden they form a communist party even they don't and want that system again the other thing you mentioned is the Scandinavian welfare model and IDs have a big one first state have taxes that are currently in Sweden the average person pays 50% of her or his income in hidden and visible taxes and in Denmark this figure is even higher and when the welfare state was as I could at its peak the average Swede would pay 60% taxes it was ten years ago so that is a Nordic system big government model right now one of the things that you point out is I've sort of pointed out in presentations as well is in these are traditionally agricultural societies so an agricultural analogy won't go far a mess I'm sure right so if you're a farmer you have to keep your seed crop to be able to plant in the spring right so you harvest you eat some you sell some you trade some and then you keep your seed crop to plant you eat your seed crop you have a lovely winter with very little hunger but come spring you have nothing to plant and then you end up No tree bark and beaver feed throughout the next year and one of the things that you point out is that from the 1870s when they first began to it and I'm really generalizing and I apologize for all of that but from the 1870s when they really started to industrialize up until the 1960s early 1970s there was a huge amount of entrepreneurial activity massive growth in the economy and then what happened was they turned all socialist and they began I would argue to eat their seed crop in other words to rely on the momentum of previous economic freedoms in order to fund what they were doing right now so it's like a guy who's a jogger for a long time and then he starts smoking and he says well I still feel pretty healthy and I can still run well well that's because you were a jogger for a long time now you're smoking and it takes a little longer for the health effects to show up is that a fair characterization of your head a lot of analogies take Sweden Sweden was a poor country until free market capitalism was introduced around 1870 from this period until 1970 Sweden was a free-market success story Sweden had the highest stroke rate in the industrial world and until about the late 60s sweet'n low taxes soon had a liberal free-market low tax regime and it was only around the late 7 60s and the beginning of the 70s when the Social Democratic big government policy was introduced and what happened was Sweden stagnated for a long period until in the 1990s 2000s both dil Reich and the Social Democrats themselves realize this is horrible idea we have to introduce free markets again we have to reduce the generosity of one per state and we have to cut taxes and during this new film market reformist era we again have groats so what is sweeter history very very nice atmosphere free-market capitalism the highest growth rate in the world third wave socialism and big government stagnation a lot of three markets return of the growth I think what an argue my book is that Kanon avian in Nordic countries should really be seen as free market role models and one reason is a Great Depression because how do you remember the Great Depression in a mannequin room you remember it as a long process when the New Deal was enacted in effect starting the American welfare state you introduced the welfare state you did with the Great Depression the Nordic countries did not the Nordic countries when they were faced with the Great Depression this is a huge problem for them small trade dependent nations global trade collapsed global capitalism collapse but in Nordic countries did not go the same way as in u.s. because at the time they were very free market oriented even more than the US and what he did was they grew out of the depression through free markets many of the most famous foolish companies to off-court Saab etc were actually founded during and started after the Great Depression and creating so many jobs that within a few years we have more jobs than when the Depression hit us but later when we introduced a big mistake job creation died out well for dependency Princeton's and that I didn't know that aspect of the Scandinavian history but I just really want to reinforce that for the listeners that the example which I had traditionally used in free-market circles is to look at the American economy right after the first world war there was a big sharp crash in 1920 which took 12 to 16 to 18 months to recover from because the president did nothing and let the free market reallocate its resources in a relatively liberal economy but in Sweden of course a huge export and import country like all people with extreme climates think they need stuff from other countries and then when the trade barriers came crashing down all over Europe and I think you characterized this in a mistaken attempt to protect their own economies people arrested it's huge protectionist trade barriers like Bastet have never lived and said anything but and in in the Scandinavian countries they did not respond with punitive tariffs and and an increasing control over the economy they just let the free market respond to the crisis as people generally do by allocating resources even more effectively and you know according to the old quote necessity is the mother of invention when they were up against the wall all these great ideas and companies began pouring out of them and they recovered in the u.s. it ground on for like 13 years culminating in a giant global conflagration of World War two but you to point out in Scandinavian countries it was a year or two bang you know they're back up they're growing and they have new and stronger companies that they had even before the Depression started yes let me give you a modern-day example of exactly the same thing what did the Nordic countries have during the Great Depression they have free markets but it had another card we played with Nordic countries are cold they're harsh companies and the farmers who lived here they had to work hard otherwise you're eating three bored or starving so these countries develop extremely strong norms related work responsibilities Lutheran working ethics and these countries which are very homogenous they have the highest trust rate in the planet and combining three markets it is strongly a conservative work ethic culture create an era of growth made it possible to grow out of the depression today we have the same condition in the Baltic States the Baltic states used to be I am run by a Soviet Union and when the Soviet Union collapses you're six dreamily impoverished these three countries have however two advantages the first one is that they are very free-market small government capitalism they love it secondly they have the same Nordic working at least what happened during the 2008 financial crisis in Europe people's all remember Greece Greece had a big crisis yes but who are the biggest prices well Greece and the Baltic States and you know how many how much money has been spent bailing out the Baltic states not much they do run out of the crisis they are thriving now and the crisis in Latvia for exam is comparable to Greece it's what a mitten in one of the countries mostly by the Depression was gladly on the other tooth Baltic states but they combined the culture conserve the working culture each free-market policies fantastic and that is very much what Scandinavia had what in Nordic countries had in the first half of the 20th century and that is why I'll show my book not only did the Nordic countries during the first half of 20th century combined of free markets and working ethics with prosperity and devote they also had the adverb and social features that they admired for today equality in Nordic countries developed before the major expansion who enter state we had oh yeah let's just that for a sec because I think that that the point that you have in the book that is it's hard to absorb because when you're a central planner you huge human beings it's interchangeable pawns and you change the laws and suddenly yet the entire cultural history of the planet changes or like you can have a bunch of simoleons move to Minnesota and they're exactly the same as all the Minnesota's they're just with this interchangeable blobs of protoplasm to be ordered around by central planners but I think as you point out and you know correct me where I go astray but what you point out is that these cultures have developed over centuries and have a lot to do with harsh conditions and the need like farming communities in particular as you point out and some of these countries they were not serfs but they were actually owned the land but farming countries by cultures tend to really focus around a trust and hard work because farming is a some sitting around and then a crazy amount of work during harvesting and planting and so on and these cultures have developed over an enormous amount of time and they did produce these welfare state systems temporarily as you point out like a decade or two of a peak and in the sort of bell curve of statism but you can't just take the welfare state policies put them into another culture and have them reproduce what took centuries to develop in the Scandinavian countries in from a cultural standpoint you point out that some of the farmers were able to get loans even without collateral because it's a very high trust society why is it Hydra society because people are trustworthy and they all come from similar backgrounds similar cultures and they understand each other they speak the same language they have the same cultural references they have the same religiosity and the same morals that kind of efficiency you can't just reproduce by taking the products of that culture and transplanting it to another country is that fair way of pretty much you're saying you know I would say if you want honest understand Scandinavian early success listen listen to Thomas Jefferson What did he say he said optimal starting around for a tribal society is independent farmers who owned their own land because Jefferson understood independent farmers who own their land they will work hard and AUB enterpreneur commune and that is what you had in Nordics people owned their own land but they lived in a land you just code so they had to work really hard in order to survive so when they got free markets date thrived when Nordic countries got free markets and tribal and became rich however some people said that's how the world first state now introducing a welfare state in Scandinavia was a very good idea in terms that no other part of this planet was as well suited for welfare states as an aurochs you have a homogeneous population people have very strong working at it very strong benefit ethics so you can introduce a system look at Greece Greece try to introduce a journalist well per state like the Nordics what would happen immediately nobody works nobody pays or taxes and everybody uses any benefit they can what happened one of the one first aid was introduced in Scandinavia people continue to work people did not overuse the systems because they had very strong norms but what I show in my book and there's a lot of research on this topic is a lot of facts and figures is that even the Nordic people have adjusted their behavior to the welfare state it takes generations for adaptation well for state policy to occur but once it occurs it changes society and the welfare states are in effect self-destructive because slowly they're eroding the norms that make welfare state function slowly Sweden is moving towards Greece slowly but surely well and this is a point that it is so dangerous and and people have a very tough time understanding this like in Canada when they nationalized the health care system in the 1960s they inherited a free market system and all the doctors had a very strong work ethic and it was very much focused on on the patients and and all that and that doesn't immediately change right it's not like the guy says oh now I'm being paid by the government so my entire work ethic my commitment to my patients and all that is going to vanish but what happens is over a generation or two new people come in who are just different they're just different it's like what happens in in NASA right like the American space agency they say wow we they went to the moon that did all this cool stuff but that's because they got all of their engineers from the free market and they were all very hardworking very dedicated and then as it continued as a space program continued you start to get career engineer bureaucrats coming in and it's like watching a movie slowly going out of focus you don't know exactly what it happens but it goes from sharp to blurry and it takes a long time as you say it can take a generation or two or three for this these standards to relax and for the configuration of society that's shaped by the free market that's then inherited by more socialist central planning for that to sort of drift its resource allocation and to change the culture is a very slow and insidious poison that that people don't it gives you an initial high and then in the long run by the time it's it's really comes up for like review or people are like what have we done there's been so much adaptation to it that undoing it becomes extremely difficult you know I love your analog about NASA let me first tell you the annual viewers I am NOT against the welfare state I am pretty well for state it is a good idea to give young people education is a good idea in so that people who come from poor families like myself get welfare support etc what happens is overly generous welfare systems in a Nordic countries that trap people in welfare dependency when welfare states become so generous that destroying the social fabric instead of creating opportunities for disadvantaged people what we can see in the Nordic countries is really that much of this social progress happens before the shift to be governments and this is not fun in terms of world but one very good metrics of welfare is how long you lived and many many left is people they look at it statistics a Saluki Nordic people are living long lives and they have big government as high taxes if we raise the tax in the u.s. we will live as long as they do in the Nordics and these people I've opted with my book and I hope they read it because I have a very very simple analogy I look at the life expectancy in modern economies when did before the creation of a big welfare state in Scandinavia and after the shift to the very large Weber State and what I can show is that it's Nordic welfare state state relatively plummet in life expectancy Denmark for example went from being the fourth the country the fourth highest living expectancy in 1960 when Denmark had a small government one for society to having the 22nd highest life expectancy in 2005 which was a peak of the Nordic welfare states and in Denmark is of course the country in the world with the highest tax level and why is that because these the Greek alcohol they smoke so they don't live as long and in 1960 dings and threes and fins and Norwegians they had they eat fish the hike in the mountains they took long walks in the forest and indeed not another example is Iceland Iceland if I tell you Iceland is it a country with a pleasant climate I think the first syllable gives you a clue yes Iceland is the only Nordic country that actually relatively increases its life expectancy compared to other companies during this period and what fascinates me is Iceland is the only country in the Nordics that has never implemented in really generous 1/4 state so the country the smallest welfare state increases its relative life expectancy and it comes with the highest tax in the world plummets Leo yeah there's these are the people who say for heaven's sakes don't open your umbrellas otherwise it's going to start to rain I mean that course in effect is just way backwards I'm sorry you are you in the middle of the point please there please finish up I mean that is the point it caused a correlation much often nor this success story is about free markets and this weird Nordic culture of trust working ethics but I would know is ok so go ahead no you finish finish apart so I can keep a traffic every 500 things I really write about a lot in the book and I am seeing that many people are interested in this when I'm doing the translation of the book I said why do you want to translate it this is this point is very interesting is I show how people's ethics slowly over generations it drops to one four steps let me give you one example in the 80s in the mid 80s the Swedish people had still not adjusted the norms to general welfare they still retained these conservative norms so when I ask them is it ever right to take government money that you're not entitled to less than one-fifth of the Swede said yes it can be you know good to take government money that you shouldn't take today when asked the same question almost half of this room so yes it can be right for me to take government money as you met bulges a little the younger the younger side yes yes and a lot of good research just shows that the younger generations have hot mush worse norms Norway is interesting because Norma has only and I'm from Iran Owen destroys countries we have oil is a free resource when government is gets free money they spend it on weird stuff and they you know they for the area they use it as collateral to borrow of course giving Edmond the money is ensuring that your children will be indebted to untold degrees ah exactly and Norway uses oil to be the only Nordic country that has yet not reduced in generosity of the welfare state they have kept the Social Democrat idea of an overly generous welfare state and in Norway did use young Norwegian the new generation of Norwegians they have horrible working lives there was a survey in Norway let me tell you they asked Norwegian employees employers do you think that young your visions have strong working at it could you guess how many percent said yes I think it was in the single digits if I remember your book correctly – 2 D – – / 0 signal digits right yes low single-digit and this is really the effect of one perspective policy when you have overly generous welfare first first one you track a lot of people new world for dependency and that kind of social poverty I grew up with that it's horrible but also you affect the entire community slowly it becomes more acceptable to live off government and people stop taking responsibility for their lives and welfare dependency actually creates poverty it creates social poverty so the welfare state usually introduced to reduce social poverty to reduce economic poverty once it became too generous slowly create the same problems it was out to fix well I think also there's a very Amin that that's all very very true there's a very softer side that I think is also very compelling about what the welfare state does is that when your parents don't have jobs they can transmitted the economically valuable capital of how to negotiate a workforce how to deal with a difficult boss how to deal with customers how to build your career I mean I think like yourself I grew up in a welfare home my mom couldn't help me with my career and she couldn't really tell me anything useful I mean she could tell me how to fill out forms I guess if that's what I wanted to do with my life but the human capital is I think the most destroyed I mean there's certainly generations in America where it's been like two or even three generations since people have actually had jobs let alone careers and the children growing up and that have no exposure that work ethic which took centuries of brutal slog to build up how quickly it can be drained away and how hard it is to resuscitate among people you know let me again say I'm not against welfare states I write a lot in Sweden and some of the stuff I wrote is actually in support of welfare policies I believe that it's Scandinavian experience really teaches us to King's what wondrous things firstly they can work in the beginning of a 20th century in Nordic countries spend money on Basic Education they spend money on basic health care etc and combined with strong norms combined with free market is created a longer opportunity then they made of the mistake of creating overly generous water slaves of government moving into the economy carving our private business enterprise and that was not successful and that eroded the norms that even made it possible I work for state he said self-destructive policies so Scandinavian countries know or the experience teaches us that small welfare states plus free market capitalism superb idea moving to overly generous water state not only will it earth grows you can also hurt the social progress it will track some of the people in one for dependency and that form of poverty as you say is more difficult to escape from than having a working parent who just has a low income so welfare states shouldn't be seen as good or bad is immigration is like eating candy small-market candy good too much candy less good all right I'm gonna put on my challenge hat for this because we I think we have a divergence of opinion and I want to make sure that my eye can hear the questions my audience is yelling in my ear like that so the first which is more of a proxy illogical issue which is you know giving governments the power to take money through force from one section the population and distributed to the others has violation of property rights considerations that are problematic from a moral standpoint and of course our interferences with the free flow of capital and the right of self ownership that's not really debatable because welfare state is the initiation of force to move money but I know that you're not saying that I think but let me ask you since you are very much on the empirical pragmatic side can you give me an example of a welfare state that has remained sustainable over a couple of centuries because I mean the ones that come to my mind of course the Roman Empire collapsed with bread and circuses Germany was of course the first country to come up with the modern welfare state under Bismarck in the 1870s with old-age pensions and unemployment insurance and that grew to a highly militarized state America is eating it's a hundred trillion dollars plus of unfunded liabilities I'm trying to think of a welfare state that grows like puberty and doesn't grow like cancer and overwhelm the body politic in the long run again I know it's a jagged upwards and here in Canada of course the same thing has happened as well so give me an example if you can of where it sustained itself you know I can't do that because of two reasons first as you say there's this tendency to overdo it and to borrow money etc and secondly because history hasn't gone too long it's a pretty mean institution and I do agree with what he said it the moral issue but my point is a family one thing we know is successful is early interventions if early on look at kids were 6 years old and I salute this kid he's going to fade is cognitively socially behind he comes from a poor family is not getting support etc we invest in early childhood support program that I mean there's a lot of empirical research shows that is a good investment because that choice yeah yes hang on hang on I haven't run a lot of people have done lip area sass then just friends you can say we want to do this privately you should have a turret addition how the government but that's a good investment and just empirically a small welfare state in Nordics was a good idea but you're right they didn't stop at the current level you just kept expanding expanding the system until like your NASA analogy it not only was bigger but much less well-functioning and was trapping people in dependency instead of helping them out of dependency so sure you can all of this criticism I guess the work force it is fair I just want to make the point even if you're American liberal even if you're an American socialist I hope you can read my book and see that there is a point about the limits of policy the limits of welfare policy more welfare state isn't always better even if you don't care about libertarianism even if you don't care about private ownership even if you don't care about money you just care about good social outcomes low levels of inequality even then you should limit how much wealth per state you have because after why the welfare state actually destroys social capital it creates social poverty yeah and it creates a voting bloc of people who have a conflict of interest with a small government right because they're reliant upon social benefits handed out by the government which means that they're going to vote with their need and they're going to create a voting bloc the politicians have to pander to it changes the media as well because you end up with this endless Marxist economic determinism of all the poor are victims and sad and tragic and nobody ever made mistakes and nobody ever did something dumb and nobody was ever mean or stupid or anything like that nobody ever got drunk and went to work and got fired and and you know they should be examples to others of what not to do it all becomes like you know sad-eyed heroic single moms who never did anything wrong and it changes the entire culture when you get out de penser torture of em a victim mentality and it creates a lot of issues with race and them and it creates a culture where if you're immigrant and you're living off a benefit screen you grew up in a benefit street you don't have any social capital you don't meet any others who have jobs the left tells you no no the problem is not welfare dependency it is that all people who are not a minority are racists and you should be a cultural Marxist your victim improving our culture marks them true and then on the other hand you get racism going on because people say why aren't these immigrants since we're working well I mean they would work in the US the same people who probably go to the job but here is trapped in worker dependency you can't blame the individual only the system actually tracks in dependency and then other people gets upset and you get these very nasty conflicts in Nordic countries anti-immigration parties have become major political forces and much of the reason we have them is actually that people are frustrated over the development of welfare states where a large share of the population who could work or just depend on government and if people were in this segment they are frustrated because they don't want to be there they're poor they weren't doing well so of course there are many issues with worthless things I do agree with that yeah and I mean immigration to me is undeniably tied up with the question of a welfare state as you point out in the book immigrants have significantly higher rates of welfare dependence than domestic citizens and that is a that is a big problem of course it's going to ferment problems in a society with with a pure free market I mean to me come and go as you please right like I don't care but when my taxes are going to rise with the number of immigrants particularly from other cultures that are going to come in you know I'm sorry it's not a matter of racism it's just I have to protect my wallet and people get tense about that kind of stuff and the state of course is to be that which mediates and diminishes social conflicts but so often it creates a win-lose situation where people have no choice but to get involved in often a hostile way in each other's business because the state means that my neighbor's business and not just his business but it becomes my business and my children's futures business as well and that creates a lot of social conflict that I think is driving some of these parties in the way let me give a good example Sweden Sweden has three periods of modern immigration first when we had a small government free market free labor market system immigrants came worked and they got jobs and you know was all world then we had another in a period in the 80s 90s during his field a lot of immigrant refugees came to Sweden from countries like Iran I'm an Iranian curve like me a lot of people flipside I'm saying these people were often highly educated people who came as refugees but they had a good education many of them had had were the executives or the big companies in Iran etc this highly educated group with a lot of working experience in the u.s. they would have jobs they would have grown prosperous they would pretty fast become an elite group as has happened amongst many immigrant small immigrant groups in Sweden the same groups during this period became welfare dependent because they couldn't enter the labor market because then overly high effective minimum wages well for traps etc now we have a system where the refugees who come to Sweden are not highly educated the highly educated people do not come to Sweden they come to calendar they come to Australia they come to the US where they can have more opportunities right where they can put their education to better use for magnetic combined with the fact that it's very difficult integrate here because I work for say the high taxes and of course this is not a pretty picture what is happening not we because what we're seeing now is that many people who come to Sweden they don't have a chance into the labor market the children most likely would end on it social poverty and the one fisted actually can't handle that the one first stick could handle Sweden when everybody had high degree levels of social capital then it seemed to function very well now we're seeing in the limits of welfare policy and it's not a pretty picture yeah I think there is I mean America cost took a big pause in immigration from the 20s until the mid 60s and the argument for it was to say that if a bunch of immigrants come to a country it takes a while to assimilate to the existing culture if too many immigrants have combined with the welfare state in particular but when too many immigrants come into a culture into a culture they tend to create these sort of bubbles where they only in this you can see in France with Muslims you can see this of course with Chinese people earlier in the century in China towns along the west coast in the United States but they create these subcultures and because there are enough of them and because the welfare shields them from the need to participate in the larger economic life of the society they become very inward looking groups and the assimilation just doesn't seem to happen very well and that lack of assimilation means that the the existing culture becomes very fragmented and that has you know regardless of what you think of multiculturalism that has significant social cost because it's very difficult to have a very productive economy with people who don't speak the same language who have different cultures different expectations and so on yeah you know Sweden's third largest cities monomer monomer is right next to Denmark's capital Copenhagen it's situated in a perfect spot it's been ranked as one of the most innovative places in in the world because there are a lot of universes there monomers should be very very prosperous maybe she'll be the most prosperous place in Sweden perhaps it's horrible mama is the failure of integration multicultural Sweden the current debate we have in Sweden now is how many hand grenades are being thrown in Malmo and and the police doesn't know lead I think the last few days and they have been throwing hand grenades most of this week last week I there were four days of hand grenade in Malmo in this small country of Sweden in this is not Chicago we're talking about a very small city the police are helpless and what happens is that many immigrants who live in Malmo they are living in a culture that is not the modern Western democratic free market system is it pretty violent school collapsing well for dependency culture which really isn't what promotes people to you know girls individuals get a job etc so it is pretty nasty what is happening and what we've seen is that modern work receipts are not coped to handle these issues for a long time Swiss and American listen look these Americans have violence in the streets look at these bastards is capitalist discomforts but once the same thing comes to Sweden we have no idea to what you want to do about it and it's very difficult to make a case economically to the average native-born white Western Swede it's very difficult I think to make the case to say your economy is going to be better served by having someone from Mogadishu come and live in your country than having a Swedish person native born to a Swedish family in your country right because as you say high levels of trust and culture and so on I think again there's exceptions to every rule you could have some brilliant guy from Mogadishu and some dumb guy from Sweden being born but in general I can't for the life of me and you know more about this than I do I'm certainly happy to hear the case but I can't for the life of me understand how you could make the case to say bring in immigrants with incompatible cultures that's going to give you greater economic growth and stability than having your own kids and the problem is of course as the welfare state begins to have this effect of tilting money away from native-born Swedes to immigrants what happens is the immigrants who are a net negative to the economy as a whole end up having a lot more kids and because the taxes then become even higher native form Swedish people have fewer kids I mean the demographic decline of the current order yes the ancient inhabitants of Europe is I think significantly tilted again that creates all this conflict with in a free society would barely exist yeah you talk about tilting let me get back to this empirical analysis of the welfare state from a perspective that is not against the welfare state maybe have a more libertarian view on that initially when it well first it is introduced the idea is not to give money to people so they become dependent on it when Franklin D Roosevelt created American wealth of state to the New Deal two years later he said this to Congress he said that welfare dependency was a subtle not talking a destroyer of a human spirit even the architect of the American welfare state understood the idea is not for people to continue living off government right and initially the Nordic winter states the reason I think they were efficient was they investing money in the future investing money in giving every child an education etc investing money in health care that was prevented preventive health care so people don't become sick now you can invest this money privately to the water state but these smart investments gradually the entire workforce eight ships towards giving money to you when you are sick giving money to you when you don't want to work and you say oh I'm sick a non-work giving money to you once you've become dependent on one third and this is the problem we have and this problem of course reinforces and the issues of immigration because the people who become depend on welfare the people who live in the benefits routes of Europe are mainly people like me not myself well me as a Kappa child what people like me who become depend on a welfare state and what we should have is exactly what Canada had in 1990s when even in Canadian left slowly began to understand part of the Canadian left that we have to reform the welfare state and that is exactly what we're seeing in Denmark the Danish Social Democrats which recently last election they actually started a national debate about the need go from the welfare state towards a competition state a state where the model is not about supporting citizens within very generous benefits but about giving them public services and relying on individual responsibility yeah and I mean all of that sounds great on paper but until I can be shown an empirical evidence of this becoming a sustainable thing I'm going to view it with extreme skepticism like in America under the Republicans then again I'm not a Republican by any stretch of the imagination but in America under the Republicans they did put well you have to get trained or get a job in order to get temporary welfare and that reduced the role to some degree you know then Obama came in and just reversed all of that and you know like it's you know I think it's a jagged line but I think it continues the same way and there's like you know say history is short but the you have speedom landed the in the UK and I think the 18th century they tried all this government run well first aid to destroyed industries and and created massive amounts of vagabonds the ancient Roman Empire I mean to me to me there's so many examples of how this forced redistribution of income aside from being a huge moral issue fundamentally shifts human nature and the great thing about private charity is it competes for best outcome that the government welfare state of course does not compete to best outcome and and I you know I came from a poor background I think as you did as well so I really want the poor to get help but unfortunately with a government well for a state 70 to 80 percent of the money doesn't get to the poor I want a higher percentage of my money getting to the poor than giving it to a bunch of bureaucrats in your government and their money yeah you know the money should be about helping people in a right single time when you can help them not just giving money to the poor right but because I'm I just know the government doesn't know the difference between what the Victorians used to call the deserving poor and the undeserving poor right the government simply well first of all it's just going to be out there buying votes in general politicians follow their own particular path to power just as everyone has their own self-interest so they're going to be out there buying votes and there's going to be a huge number of people who end up with Korea's based upon the existence and size of poverty right I mean all the social workers and the psychologists and the aid workers and the welfare bureaucrats and the they all require the continued existence of poverty to have their paycheck so they're very few people as you know ever work themselves feverishly out of a job yeah very few people get up at 6 o'clock in the morning so I want to put in 18 hours a day this week to make sure I get no job next week I mean that's just not how people work and so when something profits off poverty rather than the reduction of poverty it's hard to see how the poor don't become just a kind of crop that they want to maintain rather than a weed that they want to eliminate if that makes sense well you know the book I wrote it's being transmitted Skinny Love international media mostly from people I guess with your clicking and being a libertarian I'm a pragmatic and many of my friends are libertarians I'm pragmatic I will tell you one thing though one of the things I wrote in the book is about in limits of policy many years ago Milton Friedman came to Sweden this freedom market economy is some reporting in Scandinavia we have no poverty and he said as a very smart individual you know what in America amongst the Scandinavians we have no poverty either and I showed this in the book this is absolutely true Scandinavian Americans have the same or lower poverty levels that is Scandinavia themselves and much much higher living standards Finnish Scandinavians have finished American sorry they have 47 percent higher living standard than their cousins living in Finland and who are them Scandinavian Americans they are the descendants of the poor people in Scandinavia who couldn't feed themselves so they max immigrated to America and they had a culture of trust working ethics and all of that he became very successful so really you should also think about any limits of policy what can you solve through policy what can't you solve and many people says they don't understand correlation correlation causation yet on a sign I love an umbrella is an umbrella causing the rain or not they think that you can just copy a country's culture by copying its M policy and the case of the Nordics the welfare state has a self-destruct in nature in a sense that is strong working ethics are being eroded by overly generous welfare state so if you want to have strong working ethics if you want to have individual responsibility you should copy more the system that Scandinavian Americas are living in which kind of does encourage people to retain the working attics than the Nordic one and I will promise you if you could a measure this you would see that a working ethics is stronger in Scandinavian Americans and Scalia name is in Scandinavia Trust is higher in Scandinavian Americans than in Scandinavia in Scandinavia so you can really see this I would and I think that's a very an excellent point and it goes to show that it is the culture that is transferable and the policies themselves are not but you know just just the last annoying point I sort of make in is that you say oh well I'm a pragmatist and so on but as a dogmatist of course you should be focusing on that which has been proven to work historically so your challenge as somebody who's for the welfare state is to find a time in history where this has sustainably worked in a population that would be the pure pragmatic about yeah if you want to let me know I'd come back and tell me I'd Lancia first half of 20th century instead Navia we have we had in low taxes 25 percent GDP goes of taxes and equality wrote all of that and the size of the scamming one word persist then was the same size as our government as the most free market countries today Austrailia Canada the US so what again make one other point hang on are you saying from sort of 19th way you say from for the 1900 to 1950 that is a sustained like 50 years a generation and a half that's your sustainability which then bloated interesting monstrosity said right but we don't know that I'm very pragmatic I would say it's like the British Pound has been around for 400 years and and if you got I don't know I'd say for 50 years which then bloats into a monstrosity that causes massive economic dislocation huge amounts of interracial and intercultural conflicts and debt and and loss of productivity and massive youth disenchantment lazy work ethic unemployment I got to think as a pragmatist wouldn't you want something a little more sustainable you know what I think is the most best examples of welfare states is actually Canada Australia and knitted months because they had the major problems with overly generous big governments and somewhat reformed half of the situation what you reckon alien I am I am a Canadian and I can tell you this that the debt in my province of Ontario is five times the debt per capita of California which is considered the left-wing basket case of of America so we are not at all in Canada on a sustainable path and of course you know the argument is well for both Canada and for the Scandinavian countries is that because they rely on the military shield of the United States this is not my argument it's a short rational argument yes that they don't have to be the best they can afford a welfare state because they don't have to spend money on weaponry which is off sort of off source to other countries and so on but I you know since I don't believe that American military spending is doing anything to bring peace to the world far from it that's not really my case but it's a case you know what's leaders current military strategies I don't know in gender feminism you but now feminism occasionally strategy currently and a few years ago Georgia the country of Georgia was partially invaded by Putin Vladimir Putin you remember that at the time Sweden had advisors in Georgia training them in gender feminism and I don't want to know I mean I thought if I were to say educated about American military shield Putin would have taken parts of Sweden or done something with Sweden so I do agree with that but you know maybe but on the plus side I mean I think that that the Scandinavian countries would have been very well protected by social justice warriors making mean comments about patriarchy on social media and that kept most of the Russian troops out of the country creating a shield of outrage and indignation that could be penetrated by no mortal weapon so that's their mate yeah listen thanks thanks very much I really appreciate the conversation I'm gonna Mull I'm going to mull over what you've said and maybe we can chat again about the sustainability of the welfare state should that be of interest to you but I really want to remind people to to pick up this book look first of all like well written I mean I an elegant pen is enormous ly helpful when it comes to getting good ideas out into the world so I just really wanted to point out to people it's well-written easily digestible I hope that you're going to get an audiobook version out there for the twitchy types who like to be out and doing things when they're consuming their their wisdom but I really hope that people will we'll pick this up and make sure they get a hold of it the title again Scandinavian unexceptional ism culture markets and the failure of Third Way socialism again free online you can get at the Institute of Economic Affairs website at a little too small for my eyes there we go ie a org dot uk' and thank you so much anyway it was a really enjoyable chat and thanks of course for the work that you're doing to help push back this socialism fetish that people have for these countries through generally wild amounts of misunderstanding thank you very much thanks take care bye

32 thoughts on “Scandinavian Socialism: Dangers of the Welfare State

  • Sweden is no socialist Country. There are still private businesses, there are still property Rights, People can still make Profits and you can still be filthy rich. Once you surprass a certain threshold of Money and income you will have countless opportunities for tax Evasion, Lobbying or Government contracts (Tax Payers Money)

  • Maria Montessori showed early education expanded childrens’ minds even in the slums of Rome. So early education is a great investment for the country as a starting point. But a welfare dependency state robs intelligent children of a future.

  • In Sweden there are many political parties, but they are all essentially the same. None entertain the notion of reforming the social welfare state. SD is the only party addressing the immigration issue which is affecting the welfare policy, but even they are not about reforming the system. The majority of people are really trapped. It can only go on so long though. The fissure that divides the rich from the poor will become frighteningly obvious within two generations.

  • You can't combine socialism with insane immigration policies. Nationalist socialism is totally different.oh wait…but that would mean …

    Sweden is NOT a good example. Try Faroe Islands or Iceland. Let's not all turn into Jewish Libertarians because multicultural socialism doesn't work

  • The socialism of Scandinavia will not work in a country that has a giant illegal immigration problem and is racially diverse.

  • Scandinavian social democracy worked so long as everyone was Scandinavian. It cannot work in a polity which is not homogeneous, and it cannot be used as a tool to make people who are not homogeneous all the same. In heterogenous society, you need other approaches if it is your intent to address the same issues.

  • What works better is to tax companies and banks as 4 billion a quarter in profit is ridiculous and those that have 1 million plus in an upward curve of tax on the more you earn on investment and interest earned so the more tax you pay on what it earns and it's yet to be done' but of course its the rich that are always against this type of tax system and who control all national governments of the world and workers would not pay tax and business would have customers that can pay for goods' this is just a simple outline. You must remember that AI and robots are coming online and jobs will become less' its fact that people will have to work less and two shifts will have to be introduced from 6am to 12 and from 12 to 6pm, therefore, it will almost double the job positions available because the system has to change because of the world population increased and the people will have more leisure time and therefore the people will be happier. This is what I see for now to be introduced and tested therefore the welfare state can be avoided if not reduced that allows capitalism and democracy to survive without the socialism of the top 1 percent rule with unlimited wealth to which means socialism is just the same form as communism and was before it was renamed and disguised as socialism under any so-called labor communist socialist type Government. Universities should be always free to those who can past entry as paying for education is a crime for any system to charge a fee to gain knowledge and to be better which benefits society and the nation in the long run and if not to the rest of the world. The people are ultimately responsiable to the type of system and those who they place into power. So look at yourself and your fellow man for the woes that you all allow to exist every single one of you. Your Ignorance is no excuse to what is happening in your nation and in the rest of the world.

  • It sickens me how many entitled brats spout the virtues of socialism despite all evidence to the contrary. But when have selfish people let the inevitable cost of millions of dead stop them from demanding things they haven’t earned or deserve?

  • tax created church theivery and a massive royal family on a pedistall any tax is bad not good royals and church are the benifiters of the olde days pirates and slave trade?

  • if the worker has good year tax man says we can take more end up 6 day week same as welfare wages ?nice having inheritance that multiplys in value but house prices go crazy pump out kids with welfare borrow more money than workers even millionaire buissnes owners cant borrow money anymore banks prefer lending to goverment and geting bailed out so banks and goverment are living on welfare?

  • Finnland isn't apart of Scandinavia btw just thought I'd point that out so you know for future videos.

  • How Laissez-Faire Made Sweden Rich

  • I read that mortgages in Sweden are for 140 years. That means that they are borrowing money from the future. How many generations to own a house. In Mexico one can pay and own an small house in 15 or 20 years and I am taking about the average worker. The low salary workers.

  • Tino är bäst att sätta saker i samband, ut av de får han till saningar om hur det är, och har en fantastisk förmåga att fransraden dessa ,men har fått mindre plaforn senaste tiden.

  • Mainstream media tar sällan in Tino Sanandaji i debatter. Nästan bara genusvetenskap Utlbildade (??) Experter..

  • ….IMHO: If it is TRUE, that, "the BEST Gov't IS the SMALLEST Government"….. Then, MOST GOVERNMENTS, (around the World), ARE GETTING WORSE, by Leaps and Bounds!!!!… Is there ANY country in the World, where things ARE IMPROVING ( this measure?!….)….

  • High working ethics seems to be the key for Nordic and Baltic countries. Then you introduce a horde of African and Asian people with NO or very low working ethics and you get………???

  • Stupidity… Social programs does NOT equate Socialism!!
    Socialism is defined as "Public Ownership"; a theory based on the participating members of society owning, operating, distributing, and retaining the products/profits of business/production.
    NO NATION ON EARTH has such a society/economy/government… never existed. The human race is yet to mature to the level of this "Enlightenment Era Socialism".
    Soviet Socialism, German National Socialism, etc etc are all frauds, lies, or nonexistent.
    Stop listening to LIARS like this BS artists.

  • Hello Stefan. 1st – thanks for all the time you put into prepping your thought provoking vids.
    Rome, Europe, Britain – I agree these demonstrate a correlation between an ever more generous welfare state and decline. One of the reasons I left the UK to live elsewhere was even if I worked harder to get promoted in my field (& I have a PhD) I didn't feel the financial returns were worth it due to the higher tax brackets. This was at the same time I could also observe around me that living off welfare had become a genuine option for a "lifestyle choice". I'm therefore a direct example of the demotivation & "push" effect on the taxed of a generous welfare state.
    My question : You did challenge Nima to provide you with an example of where a welfare state had been sustainable over a long period & it does seem hard to find one. Can you provide an example where your description of a totally free market (presumably you mean with close to zero taxation?) has been tried and been sustainable? Many Thanks, Ian.

  • You are looking at life expectancy totally wrong.. when countries become really rich, they begin using luxury products as alcohol, cigarettes and start living unhealthy.. it does not tell anything about what is right or wrong…

  • the reason why Sweden overcame the great depression so quickly was because the state boosted the economy by building bridges and many other things! Not because of SAAB and other private companies…

  • So this is the problem. What is the solution??? Cause welfare dependent people will wote for more welfare, so what can the working people do????

  • The welfare system really does not have a long lasting coping strategy for crisis situations – like a steady swarm of needing people. Sad but true. Cultural atrophy sinks in after a generation or two. Stefan is also right I think: The downward spiral feeds itself with voters relying on welfare to vote for more welfare. It is not a "trap" – Danes call it "Idleness is the root to all evil". We do know about "The dulling of the mind" is intrinsic to living in a welfare state. Hard work ethics are necessary; No sick days unless you are down in bed – or grab an aspirin and suck it up you lazyhead! BTW: My income tax is 40%. Being a student I get 972 USD (net) a month to make ends meet. Education is "free"…No it isn't! Someone else paid for my education. Thanks – I'll pay it back in a few years, with hard work UP FRONT to the next in line! However, this chain is easily broken.

Leave a Reply

Your email address will not be published. Required fields are marked *