5 Reasons Why We Need Sweden’s Democratic Socialism | We The Internet TV


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[LOU] Sweden. Birthplace of pop stars ABBA, Ace of Base, and Greta Thunberg. [GRETA] I should be back in school
on the other side of the ocean. [LOU] And the go-to vacation spot
for American celebrities like
A$AP Rocky and Lou Perez. What?
I’m kind of a star. Okay, if anyone asks in
Sweden about me, just tell them
I’m really big in the states. “Speech too short to protest.” All I know about Sweden are
IKEA, IKEA’s meatballs, and of course,
Sweden’s super successful brand
of democratic socialism, which may or may not
be sold in IKEA. If you’ve been listening to
U.S. politicians like Bernie Sanders, Sweden seems to be
doing everything right. [COLBERT] Both of you
identify as Democratic Socialists. [OCASIO-CORTEZ] And my policies
most closely resemble what we see in the U.K., in Norway,
in Finland, in Sweden. [SANDERS] And I think we should
look to countries like Denmark,
like Sweden, and Norway, and learn from what they have
accomplished for their working people. [LOU] Okay! What lessons can
Americans learn from Sweden’s
Democratic Socialism? (music) [LOU] I flew all the way from
New York to Stockholm to learn all I can about this
mythical Scandinavian land. [LOU] Is Sweden socialist? [NORBERG] No. [LOU] Is Sweden
democratically socialist? [NORBERG] No.
It’s democratic, but not socialist. (dramatic music) [LOU] What am I even doing here? You should make a doc about
democratic socialism, they said. Sweden’s democratically socialist,
they said. You should go to Sweden,
they said. Well, they were wrong! Now what? I’ve already been to the ABBA museum. Twice. Alright, my flight doesn’t
leave for five days. And I’ve already hired the crew, so… I might as well stick around
and learn something. I guess. (music) [LOU] So what is Sweden? How would you describe
Sweden’s economic model? [NORBERG] I’d say it’s a free market capitalist economy based on open trade and with a
fair amount of government
redistribution of the proceeds. [LOU] Do you have any insight as to
why American politicians continue to use countries
like Sweden as the model? [NORBERG] It’s very interesting
because Sweden really had a twenty year period when
we experimented with socialism to see whether it worked or not.
And it didn’t. It ended in spectacular failure. But for some reason,
this is the twenty year period
that all of you remember! And what happened
was that in 1970, Sweden was one of the
richest countries on the planet because we had this
one hundred year period of very competitive businesses,
always exposed to foreign competition, always very low taxes,
lower than in the United States
for a very long time. And we thought,
“Wow! We’re top of the world!
We can do anything.” And if you think you can do anything, you also sort of forget what brought you there. So our politicians
began to think, “Let’s just redistribute everything. Let’s regulate business,
and even experiment with
government ownership of businesses.” We doubled the size of government,
of government consumption of GDP. Increased taxes and
regulated everything. This is what the rest of
the world remembers. You think,
“Look, Sweden is one of the
richest places on the planet, and yet they’re more
socialist than we are.” But it was like that old joke,
you know. How do you end up with
a small fortune? Well, you start with a large fortune,
and then you waste lots of it. And that’s what we did
for twenty years. [LOU] I’m just amazed that
you were able to get out of that
without bloodshed. Because that seems almost like
it has all the callings of a
revolution coming. [NORBERG] That was the time
when we pulled ourselves
back from the brink. One prominent politician said that,
look we had to realize that the experiment with
democratic socialism failed. The policies were perverse,
unsustainable, and absurd. That politician was the
Social Democratic Minister of Finance. And at that time, in a broad
consensus from the left to the right, they opened up the
Swedish economy again. Shrank the size of the government,
they reduced taxes, deregulated the product markets,
and opened up Sweden
for business again. And now we’re back on track.
But it almost killed us. [LOU] I don’t know if you’re familiar with death metal, black death metal? [BERGH] I am. [LOU] Do you listen to it? [BERGH] No, but there is a
death metal singer which is also called
Andreas Bergh. So we are sharing the name. [LOU] Do you ever get stopped
on the street, and people say… [BERGH] No, we look very different. It’s very easy to tell Bergh the economist
from the death metal singer. When you think of
a welfare state, you think of a system that
taxes the rich and gives to the poor. That’s not the case in Sweden. You pay taxes when you’re working,
but you get money when
you’re not working. And most of your taxes are actually
just redistributed over your life cycle. They’re not handed to
the lazy or the poor, they are given back
to yourself later in life. [LOU] How high were taxes? [BERGH] So around 1980,
the marginal income tax
at its highest was around 90%. [LOU] 90%!
[BERGH] Yes. But we were also quicker
in reforming our tax system and pulling back when we noticed
that things are not working. The biggest problem with
marginal taxes around 90% is, of course, the amount of
tax planning that anyone will do in order to avoid paying
those high taxes. So very few firms
actually paid them, but rather moved their incomes
or shipped them to other countries, or rewarded their employees
in other ways. Which meant that the high tax rates
only created tax planning rather
than tax revenue. [LOU] So basically whatever they
could do to avoid paying taxes? [BERGH] Yes. [LOU] I remember reading about how
ABBA used to wear these very wild outfits as a way to get
a tax deduction because, according to the law,
if your outfit was something that no reasonable person
would wear in public,
it could be tax deductible. [BERGH] Yes, that is one of
many examples of oddities created
by the Swedish tax system. [NORBERG] The dirty little secret
of the Swedish model is that we don’t squeeze the rich,
we squeeze the poor. We take most of the money from
the poor and the middle classes
because they are loyal tax payers. They don’t move to Monaco. They don’t have tax lawyers,
or anything like that. The bulk of income tax payments
is from a payroll tax set around 30%, and then a local regional
income tax at 30%. And they are both flat taxes.
Not progressive. And then we get almost as much
as we get in income taxes, we take in excise taxes
and consumption taxes. We have a VAT at 25%. So the poor pay exactly the same
when they go to the store and buy whatever they need
as the rich do. That’s what Swedish Social Democrats realized fairly early on. We can have a big government
or we can make the rich pay for it all, but we can’t do
both of these things. [LOU] How can you be a
progressive country if you don’t have
progressive taxation? Hey Sweden, why are you
taxing everyone when you can just have the billionaires
pay for everything? (music) [LOU] Sweden is a unicorn factory. Unfortunately, they don’t make
those kinds of unicorns. No, a unicorn is a privately held startup that’s valued at over a billion dollars. Sweden is second only to
Silicon Valley when it comes to
the number of unicorns per capita. So yeah, Sweden is a lot more
than just IKEA. In fact, this year,
the World Economic Forum ranked Sweden in the top 10
of its Global Competitiveness Index. And first globally in
macro-economic stability. I’ll be impressed
when I find out what that means. Congratulations. [NORBERG] Thank you. [LOU] And, can you tell me
what that means? [NORBERG] It means that we are
a pretty stable place. We have, at least for the last decade, seen big business and also new startups,
innovative businesses, they are the ones who are creating
the wealth, the jobs, the innovations that will make Swedes productive in the future as well. We have trade unions that are
remarkably interested in the well-being of businesses,
because they have realized that restructuring, even if it’s painful
in the short run, lots of people lose their jobs,
that’s the only way to create more wealth in the future. And I think it’s partly the result…
in the 1970s and 1980s, we weren’t a very welcoming place
for innovators, entrepreneurs,
and businesses. The businesses left.
All the ones that you’ve heard of. The IKEAs of Sweden, the Tetra Paks, they left for other places: for Switzerland, for the Netherlands, and other places. Our entrepreneurs,
our innovators left. Even our sportsmen left. And that resulted in a
horrible situation. We didn’t create a single net job
in the private sector for thirty years. That makes you sort of focus
your mind and pay attention to the needs of the business sector. [LOU] For those of you
who don’t know, a very fine dressed cat
just walked through. A cat in a turtleneck! (music) [LOU] Anders, thanks for joining us. [ANDERS] Thank you.
Pleasure. [LOU] I hope I’m saying your
name correctly. [ANDERS] Anders. [LOU] Anders.
Look at that. Perfect. [ANDERS] Public health care
had problems. It didn’t function as good
as it should have. So we had long queues,
we had waiting time to get
access to health care. Patients didn’t get their
operations on time, and you couldn’t
reach your doctor. So there was a public pressure. Something needed to be done,
and therefore the politicians
opened up the entire sector. But now you can choose,
as an individual, you can choose to go to
one provider which is private, or you can go to the public provider.
It’s your own choice. Twenty, twenty-five years ago,
you were not allowed to choose. You couldn’t have chosen anything
because you only had the public part. And those who have private
health care insurance, they are, well the majority of them,
are low or middle income, and they often work
in small businesses. Because for a small business owner,
it’s a way of improving your working conditions
for your employees,
to have this kind of insurance. [LOU] If government run
health care works so well, then why would you need
to introduce a private option? It doesn’t make any sense. (music) [LOU] You’ve seen the tweets. College is free in many countries
around the world. Same goes for Sweden,
where students don’t pay
a krona to attend. How do the Swedes manage
to provide free education
for their college students? [ALMERUD] There is no such thing
as a free education,
not in any country. We just have chosen another model
to fund the education system. So we do it through public funding
and through taxes. [LOU] In the United States, we have
an incredible amount of student debt. Is that a similar thing in Sweden? [ALMERUD] Actually, I think
we are worse. So that’s a strange thing
about Sweden, we have a very generous system
for student aid, but we still have the highest debts
in the world among students. [LOU] Wow. Yeah, I’ve never heard about that in Sweden. I’ve always heard, “Free!” [ALMERUD] Yeah, a huge amount of debts when we graduate. And one of the other consequences
is that we don’t have… the return on investment in Sweden is quite low compared to other countries. And I think it’s because we have
the model of the welfare system. So in some occupations,
you will never get the return on the investment
you do in higher education. It will be negative. [LOU] So, I’m trying to wrap
my head around this. Even though college
is publicly funded, people still need to get grants,
or take out loans in order to be able
to go to college? [ALMERUD] Yes, they do. So they don’t pay any fees,
but they borrow money to live during the time they actually study. On average, a Swedish student
spends six years for a four-year education
program in Sweden. [BERGH] I think the big difference
is that the United States have a number of really good
elite colleges, and some that are
probably not so good. Whereas in Sweden, most colleges
and universities are tax-financed,
and of similar quality. So we sort of avoid the worst,
but we also do not have the best. [LOU] So a happy mediocre? [BERGH] I think that is
a fair description, actually. (music) [LOU] Stockholm sees only
six hours of daylight in the winter time. Which means Sweden needs a lot of power to keep all those unicorns alive. Yet, Sweden is also intensely
devoted to going green. [FLINK] I would say that Sweden
has one of the best electricity systems
in the world today. We have very low climate footprints,
we have a lot of nuclear, a lot of hydropower,
and we have wind coming
into the system. 40% of the electricity generation
in Sweden is nuclear. That is absolutely an important part
of the Swedish electricity system. [LOU] Is it possible to get
off of fossil fuels without
nuclear playing a role in it? [FLINK] Looking, for example,
at the IPCC reports, they also include nuclear
in their scenarios for the future
electricity system, if we’re going to a net-zero
economy worldwide. So I think that nuclear will
be an important part. [LOU] Back home, there’s an
ongoing debate about the
Green New Deal, which calls for us to reach
net-zero greenhouse gas emissions
in ten years. That means decarbonizing
electricity and the entire
U.S. economy in a decade. And they want to do it
without nuclear power. I don’t know, it seems like a stretch
for a big country like the U.S.
with a population of 330 million. But maybe Sweden,
population 10 million,
maybe they could do it in ten years! [SUNER FLEMING] It would be
very difficult for Sweden to become
carbon free in that short time span. The targets that have been set now
for 2045 is more realistic, because then you have
a number of years in order to change technology and develop
and to get the systems working. But of course, we also have
those voices in Sweden, people wanting to go
much much further and faster. But still, you need to have
a sort of realistic time span
on how to actually make this… [LOU] I would imagine that a lot
of the people wanting it to go faster aren’t necessarily working in the
lab developing the technology. [SUNER FLEMING] No.
So I think, even though you could
wish that it would move faster, it will, unfortunately, take some time even for a country like Sweden to become climate-neutral. (music) [LOU] Do you have a message
to American politicians who continue to call Sweden
“The beacon of democratic socialism”? [NORBERG] If American socialists
want to imitate Sweden, I would say,
be careful what you wish for. Because if the United States
would be more like Sweden, it would have to deregulate markets.
Abolish occupational licensing. Introduce more free trade.
It would have to reform social security. Partially privatize the pension system. Introduce a national school voucher
system with private schools getting
the same funding as public schools do. And you would also have to
abolish taxes on property,
on gifts and inheritance. It’s not your
grandfather’s socialism. [BERGH] I have lots of advice
for the United States. Don’t try to copy Sweden and
implement that in your country, because Sweden arrived at where
we are through a very bumpy road. We learned from our mistakes,
we corrected them, and then
we made new mistakes. And each country has to seek
its path to prosperity. [LOU] You have to be careful
because every now and then, a comedian will actually fly to
that country and check it out for himself. [BERGH] I welcome him doing so. (music)

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