Column: Look at Sweden’s reality, not Bernie Sanders’ version

Courtesy of Creative Commons

Adrian Tolstoy, columnist

You have most likely heard that the United States has a presidential election coming up this year. One of the most enthusiastic front-runners for the Democratic Party is Bernie Sanders. His political platform promises solutions to complex societal problems, and many of these proposals involve expanding the role of government.
As students, we are rich in many things, but not money. Naturally, it can be appealing for students to hear an enthusiastic man screaming with hands over his head that he will make expensive necessities “free.” Sanders claims that by inflating the government’s role and allowing it to operate health care, education and even banking services, it will work in favor of the less-off people. It instigates a feeling of hope among us — that we can restore the tremendous problems this country is facing like income inequality, increased cost of living and declining economic growth. Many contemporary issues in the U.S. economy can be traced to corporations and their control over almost every political stage. Legislation is then naturally skewed in favor of corporations in the United States. 

Inflating the role of the government like Sanders calls for sounds like a great adverse option for the nation. However, students who are eligible to vote should listen critically to what Sanders has to say, particularly when he refers to my home country of Sweden. 

Sanders often refers to Sweden as a success story. Poverty is nearly non-existent, workers are well-paid, prosperous entrepreneurs are everywhere and we are currently ranked as one of the happiest countries in the world. If you think about it, we, with 10 million people, have a higher GDP than the Philippines, which has 110 million people. It sounds like a utopia, and it’s understandable why someone would want his or her country to move in the same direction as us.

But Sanders wants the United States to resemble Sweden in its socialistic era, which lasted from 1970 to 1991. During that period, Sweden was run entirely by social democrats who believed the government was the answer to everything. Telecommunications, railroad, television, health care, education, pharmacy, energy and postal services were all industries with legal monopolies held by the government. However, they were not performing well because without competitors, they had no incentive to do so. 

Furthermore, it was not free to operate all these services and monopolies, in particular when there was no real inducement for companies to run on a surplus. It was extremely costly, in fact, we had peaking budget deficit throughout the 1980s. In order to fund all these ineffective government programs and monopolies, the government was forced to adapt a concept that was essentially to tax everything that is moving until it stops moving. Taxes crippled companies and entrepreneurs all across the country. As the pressure from labor regulations and taxes increased, major corporations like IKEA began fleeing the country. One of Sweden’s most prominent authors, Astrid Lindgren, found that she paid 102 percent in taxes. In the same period, we experienced stagflation, meaning that we had rapid inflation while our economy stagnated. This is an economic death sentence. This might sound like a nightmare to you, and if you vote for Sanders, this is the direction your country will head in. 

Sanders has misunderstood the Swedish success story. It does not come from the historic large role of the government; it comes from the historic retreat of the government. The government should provide vital societal services, but not through the means Sanders wants. If the government operates services you will have inherent monopoly issues. The government should provide funding for private enterprises in welfare sectors and regulate how they are allowed to operate. The voucher system Sweden has introduced in both health care and education should be studied and instituted here in the United States.

 Another lesson the United States should draw from Sweden is the support the government gives to entrepreneurs. We have benefited from the good effects of trickle-down policies in Sweden because regulations are often placed on large corporations and not small businesses. In these small ventures, employers and employees work closely with each other and there is a link between the proximity between employers and employees and increasing wages. Wages have not stagnated like they have in the United States and we have seen tremendous economic growth. In 2018, Sweden was ranked as the sixth best country to be located in as an entrepreneur

We encourage innovation by having small entry barriers and low corporate taxes for small companies. Sweden has four times as many startups per capita compared to the US. Spotify, Skype, Klarna, iZettle and Minecraft are all products of policies introduced in the 1990s that encouraged people to start their own business. This sizzling startup community in Sweden is more alive than ever today. In fact, Stockholm has second-most billion-dollar tech companies per capita in the world after Silicon Valley. We have realized that small business owners and startups are the backbone of society. American politicians have yet to come to the realization that they should empower small independent businesses and not large corporations. According to the Swedish economist Lars Persson, Sweden has modified its regulatory landscape in favor of small business, with substantial anti-monopoly laws and prohibiting industry consolidation. The United States has done the opposite, molding its regulatory landscape in favor of large corporations.

So, you are probably wondering which candidates truly understand the Swedish success story. Based on the platforms presented by each candidate, Elizabeth Warren and Mike Bloomberg are the ones you should consider. They want to empower small business owners and be tougher on corporations, which are shirking their fair share of societal duties. Whenever you hear a candidate screaming about empowering small business owners and voucher systems, a green light should appear in your head. On the contrary, some proclaim that the government should start to operate businesses. Additionally, they state that small-business owners should be regulated. This should set off a red light in your head. Don’t believe Sanders’ false depiction of Sweden’s success. Our success was based in free markets, not government socialists.