Socialism Will Be the Death of Economic Growth - SHHHH Don't tell Sweden!

If you believe what the American media, or at least the loudest bunch of people screaming in the US at the moment, socialism is the death of all that is good in our beautiful capitalistic world of free love or wait, that was free commerce.

And while I don't want to make this blog too political, the news from the Swedish business world this week sings a slightly different tune. I think this must be because someone forgot to tell the Swedes how terrible Socialism is for the market or something.

According to this article not only is the Swedish economy recovering from the latest financial downward spiral, it is growing by leaps and bounds, 5.5% growth for 2010. New jobs are everywhere. Companies are seeing a huge upswing in sales. The crown is strong. The economy is growing. 

All this despite the strong unions in this country, the high taxes, the five week vacations.

What could it be? A deal with the devil? (We already know that God Hates Sweden). Why do Swedes bother to go to work at all? When they could be lying at home on the sofa being cared for by their Nanny State?

 Things like this continue to frustrate a certain side of American politics, but not too much, because they never actually read about these things because FoxNews doesn't write about them.

OK, political rant over. And while I am highly skeptical of a sustainable growth in perpetuity - and the crazy amount of loans my generation is being saddled with due to the extortionist prices of housing - I am glad that things seem to be going well for Sweden.

Swedish Politics 101 - The Social Democrats

Despite not being the party currently in power, I am going to start my look at Swedish government with the Social Democrats because they ilustrate all that is Sweden.

As a foreigner it can be easy to confuse the Social Democrats with the Sweden Democrats (at least for this foreigner) due to name alone. This is a very dangerous mistake. The Sweden Democrats are a highly controversial, anti-immigrant party, that we will take a look at later.

The Social Democrats have been the leading party in Sweden for much of the last century. And given that each party elects their own party head, and that party head goes on to become prime minister when the party wins, I've always felt slightly ill at ease with the democratic process here in Sweden. That said, for the first time in memorable history, Social Demokraterna, also known as S (NOT SD), have lost 2 major elections in a row, so kudos to democracy.

When Americans go on and on about the terrible dangers of Socialism, it is usually the image of the Social Democrats that comes up. I find this terribly confusing because when I studied Socialism in school it was all 'the government & the people own and oversee production.' But now everyone is more afraid of government sponsored healthcare and bailouts of financial giants. It is confusing. Espcially since in Sweden we even have a privately owned mail delivary service.

The Social Democrats frequently run on the promise that they 'will raise taxes' (this is in fact what one S representative told me in the town square before election) but that we will see this tax money in increased benefits for all. They were offering higher unemployment payments, longer sick-leave, and more money to the schools (in my town anyway)last election cycle. It would cost me a couple of percent of my income.

Usualy this tactic works for S. I usually joke that the Moderates (the right wing party) are the check and balance system for the S political domination (yes I am that much fun to have at parties). That is, S goes around raising taxes, spending a boatload of money on social programs, increasing spending every year, and then once every 12-18 years the right wing comes in, chops away at this severely. Annoys everyone. And gives the S room to come back and raises taxes and spending. In perfect symbiosis. Until this last election which shocked the pants off of everyone. (well anyone who wasn't really reading the news too much).

Sweden is also one of those confusing multi-party parliments. This means that despite the fact that S were considered the losers of last election (and indeed they were) they were the party that received the most votes (by a historically low .5%). They didn't win power because their coalition was still behind the right-wing coalition.

Confusing, I know. So this week in the news S booted their leader, Mona Sahlin and will soon nominate a new party leader. This is an exciting time for S as they will be deciding a new way to try to spend tax money to appeal to a wider audience.