(MUSIC) Welcome to Stockholm, Sweden. My name is Johan Norberg. And this is where I was born and raised. These are friends of mine and we're going to watch a big game between two Stockholm teams, so it should be a good one. And it might get a little crazy in there. Yah, it's going to be a lot of crazy. Look at this excitement over a football game, or soccer, as it's called in America. I'm not sure if this is how Americans typically picture us. It's easy to have misperceptions about a country. So...what do Americans know about Sweden? People have blonde hair, and then there was Vikings from there. I think they have good cheese, though. Oh no, that's Switzerland. Well, I love ABBA. Ikea, of course. It seems like it's like a place with no problems or something. It is a socialist economy. Volvos...and socialized medicine. So, it seems our international companies are pretty well-known. But our economic system is misunderstood. This is the story of how we Swedes grew our nation to become the 4th most prosperous country in the world, and almost threw it all away. We'll explore a little Swedish history, and meet some people who will show us what it's really like to live in Sweden today. I think there might be lessons learned for other countries. But I'll leave that for you to think about as I share this story about my home. (CROWD ROARS) Major funding for this program has been provided by: L. E. Phillips Family Foundation, DKT Liberty Project, Donald & Paula Smith Family Foundation, Chris & Melodie Rufer, Sarah Scaife Foundation. 25 years ago, when I first became interested in economics, I was studying a low-income country, poorer than the Democratic Republic of Congo in Africa. This country had a life expectancy half as long; and infant mortality three times as high as the average developing country. In fact, I was studying my own country, Sweden- as it existed 150 years ago. But then in one century, everything changed. This impoverished peasant nation developed into one of the world's richest countries. We grew from being a country of subsistence farmers, barely surviving in a harsh climate, to a world exporter of goods and raw materials. But to understand how all of that happened, I have to tell you about Anders Chydenius. If you've not heard of him, don't worry, you're not alone. Have you ever heard of this guy? Anders...Clydenius. (LAUGHS) No. (LAUGHS) No, I've never heard of him... So, who was Anders Chydenius you may be wondering? Many Swedes, in fact, learn about him in school but don't really remember his name. But for people like me, and other historians and economists, he's one of the greatest thinkers and champions of freedom in history. Today, I'm going to see a rehearsal of a new play written about Chydenius. Hey. Hi, that was amazing. Thank you. Thank you. No, this is not Anders Chydenius... this is Mats Holmqvist, an actor who has studied and portrayed Chydenius for almost 30 years by now. And now, you promised to show me some places that were important in Chydenius' life, right? Yeah, sure, could I change into some clothes and then I can show you? That's probably a good idea. Chydenius lived in western Finland, which was part of the Swedish empire at that time, and he held some radical ideas for the 1760s. Living under the rule of the Swedish king, Chydenius argued for minimal state power, low taxes and land rights for peasant farmers. Chydenius published the National Gain, his own arguments for free markets and personal freedom. And many people think that he would have become world famous had his ideas been translated into in a major language of his time. What happened here? This is the actual place where Chydenius started his career. He was a preacher. So, it was when he was here that he started to write about the farmers' right to sell their goods freely to other countries? Yes, you can say so. He worked on bringing better circumstances for the farmers around where he lived because he cared that everyone should be free to do as best as they can. Although educated as a priest, Chydenius feels that working in politics is a better way to directly improve people's lives. And in 1765, he's elected to the Swedish Parliament and moves to Stockholm. As a Member of Parliament, Chydenius pushes for freedom of religion, and freedom of the press. And in 1766, Sweden becomes the first country in the world to have freedom of the press written into its constitution. But within a year, Chydenius' views get him in trouble. He writes an article about monetary policy that criticizes the Swedish authorities. He's quickly expelled from Parliament. Defeated, Chydenius leaves Stockholm and dedicates his life to his parish work...and music. (QUARTET PLAYING) This quartet is playing one of Chydenius' favorite pieces, using some of his own music notations. But it is not for music that Anders Chydenius is remembered. He is Sweden's earliest champion of individual freedom... a man who fought to give impoverished farmers control over their own lives. Chydenius would not live to see his ideals come to fruition. By the time Chydenius died in 1803, Sweden was one of the poorest countries of Europe. Hundreds of thousands of Swedes, out of sheer desperation, left the country to find opportunity in new lands...many came to America. So is Chydenius buried here? We don't know. But the legend says he might have been moved and brought here under the church floor. The farmers, who he had done so much good for, they wanted him back to his own church. So, do you think he's buried here? I don't know, but I like... I like the idea that he is...home again. I'm going to meet with Dr. Tom Palmer, an American author and commentator on international politics and ethics. I've known Tom for over 15 years. And he has come to Stockholm to share his perspective on Swedish history. Hi, Tom...great to see you. Hey...good to see you. I thought the new Viking museum would be a nice place to get a cup of coffee. Sounds good. Chydenius wanted freedom of the press, and he also wanted freedom of labor, the right of people to offer their services on voluntary terms to other people, to negotiate, to move where they wanted to go, to leave the country if they wanted to, to live wherever they wanted to live. And it was really quite striking, the parallel between that and what the American Founders did. Chydenius, he's sometimes called oh, the precursor of Adam Smith. It's an insult. He was an original thinker on his own who came up with the ideas before Adam Smith, before the American revolutionaries. And I think he deserves to be recognized as a real innovator. In the decades following Chydenius' death, Sweden remained poor. But there was one area in which Sweden would come to excel, literacy. In time, the printed word became a vehicle to spread Chydenius' ideas, and spark reforms. I'm here at Aftonbladet. This was the first modern Swedish newspaper, and a bastion of Swedish laissez-faire liberalism. It was the first publication to attack not just abuses of power, but political power itself. I am here to talk with Sofia Olsson Olsén, the publisher of Aftonbladet. Take a look here. This is a room full of history. Yeah, isn't it? And this is the first copy, the first issue of Aftonbladet. You can see it was published in December 1830. Oh, that's fantastic. We just took it down from the wall to show you. Aftonbladet was founded by Lars Johan Hierta. We had free press in Sweden, but it was not fully developed. So Lars Hierta was the person who really pushed the free press forward. And he was a very brave man, I would say, because it was dangerous at that time. And this is the bust of Lars Johan Hierta, as well. He looks very serious. Yeah. He was a serious man. And he's looking straight into your office. Yeah, all the time. And I also wear him here, close to my heart. By the mid-19th century, Sweden's literacy rate was 75 percent, one of the highest in the world. The growing middle class could now read first-hand stories about urban overcrowding and rural poverty. The authorities didn't like Aftonbladet, of course, because it was challenging the power. And at that time, most of the decisions was happening in the bedroom of the king, because it was an honor to get to the king's bedroom so it was very, very close. And the only news you could get was from the priests and from the king. Though Lars Hierta was challenging the power, then he really took the power from the bedroom and gave it to the people because they got information; you know information is power. In 1835, the government used an arcane law to shut Aftonbladet down. But Hierta was prepared for this. He had already received official permission to publish additional newspapers through silent partners. So, when Aftonbladet was closed down, he simply started the new Aftonbladet. When that was shut down, he started the newer Aftonbladet. After that followed the fourth Aftonbladet, the fifth, the sixth...and so on. And after 26 editions of Aftonbladet, the king gave up. The ideas of Chydenius- which had previously been limited to the parlor talk of aristocrats- began spreading across the entire nation of Sweden to people of all economic circumstances. And that must be the royal seal of approval- Yeah...exactly. -that he was allowed to publish this newspaper. Yeah, at least this issue. At least for a while, yeah. He needed many more seals of approval like that. Yeah...yeah. Lars Johan Hierta was a feminist of his time. He was radical, and I think he would have been proud to see me, the first female publisher of Aftonbladet, and I think he- he would have liked it. It is no exaggeration to say that Sweden experienced a nonviolent liberal revolution starting around 1840. Chydenius' ideas and Hierta's megaphone set the stage; then came along a young, aristocratic politician named Johan August Gripenstedt. He put these ideas into political action. For ten years as finance minister, he pushed the establishment and transformed Sweden's economic system. This was the man that, indeed, created the new open economy in Sweden, the market economy. He abolished the old system of guilds and of regulations... and he created the institution of the modern economy. And Sweden had fantastic economic expansion for a 100-year period, characterized by free markets and minimal state intervention economy. Sweden went, basically, from one of the poorest countries in Europe to one of the richest countries in the world. We were growing in wealth, and health. Between 1850 and 1950, Sweden's per capita GDP increased almost sevenfold. Infant mortality rate was reduced by 85 percent, and life expectancy increased by an amazing 26 years. Sweden was now one of the world's richest countries. It had one of the most open and deregulated economies in the world, and taxes were lower than in the United States and most other western countries. Sweden managed to transform its impoverished fate, and build the beautiful cities and landscapes we know today. And you know what happened after that? We screwed it up. Until 1960, Nordic countries had, still, low taxes, minimal government, free markets, private ownership. Then, in the middle of the 20th century, slowly the welfare state was introduced, the welfare state which Sweden is so famous for. In the 1970s, Swedish unions, in collaboration with the government in power, envisioned a true cradle-to-grave welfare state. Healthcare, education and retirement income would all be provided by the government and funded by increasingly larger taxes. What happened was, as Social Democrats noticed, wow, people don't want to pay more than like 30 percent of income tax. But this wasn't enough to fund the big welfare state. They introduced a new tax, which is an employer's fee. The employer's fee was a hidden tax, based on each employee's salary, and paid regardless of a company's profitability. In 1970, that tax was 12 and a half percent of every employee's salary. Nine years later, those taxes had tripled to almost 37 percent, compared to about 12 percent in the U.S. But since the money was taken from the employer, few employees were aware of how much taxes had increased. That is, until it started to impact some of Sweden's most beloved figures. Astrid Lindgren, who wrote the very popular children's books, Pippi Longstocking, for instance, she was a Social Democrat, but she had made a lot of money from her books and she was, there was this cult around her, she was a national treasure. But she found that she'd paid 102 percent in taxes. So for every extra book she sold, you know, she lost money on that. So what she did was that she wrote a new children's story that she published as an essay in one of the biggest newspaper, and she addressed it to the minister of finance himself. Ingmar Bergman was Sweden's most famous film director. He made dozens of films and won three Academy Awards. But in the 1970s, he ran afoul of Swedish tax laws. The tax authority, actually, went to the Royal Dramatic Theater in Stockholm where Ingmar Bergman was rehearsing a play, and brought him away to question him about his taxes. "We were in the big rehearsal room and then suddenly somebody came to me and said 'The police is downstairs and want to talk to you.' It was like, good heavens, what has happened? I was completely confused." He just got so fed up with the tax authority himself that he just basically said that, "I can't live in this country anymore," and he fled. He fled to Germany. It's very difficult to sort of create a sob story for the banker, but if you have a filmmaker that has made Sweden a big name all across the world as a genius, that's a completely different story. (MUSIC) It's perhaps, hard to understand just how far taxation had gone. Not only were our successful artists affected, taxes were stifling entrepreneurs, workers and businesses nationwide. It was absurd. This is classic Swedish countryside: no people, no buildings, trees, trees, trees. And some more trees. I'm heading four hours north of Stockholm to meet Peter Lageson, the CEO of an innovative Swedish business. Peter has joined the high-tech company, SenseAir. Growing up, he saw his father and grandfather run a more traditional manufacturing company. I thought he could help us understand doing business back then, compared to today. Let's go meet him. Hello there, I'm Johan. Hi, most welcome. How are you doing? Thanks for having me. Come on, let's go in. Thank you. So what exactly is it that you do here? We do sensors for air and gas sensing; it's about 30 percent of all commercial buildings globally are using our technology for sensing CO2, and controlling the indoor climate in these buildings. Wow. So if I enter a couple of buildings a day, I end up somewhere where SenseAir sensors are. Yeah, we do about 600,000 per year now, and ramping up. You come from a family of entrepreneurial traditions, right? What's it like doing business in Sweden today, compared to your grandfather's and father's days? They had to fight their way through the 70s and 80s, and I think the environment now is much more positive to entrepreneurial companies and initiatives, and more risk-taking than it used to be in the 70s and 80s, when the tax situation was crazy in the country. Sweden's excessive taxation was clearly oppressive, and was suffocating the economy. And then came a plan from the labor unions to acquire ownership of private companies. In the 1970s, you could say that Swedish unions influenced politicians with Socialist ideas, basically, one of them being the wage earners' funds. Every year, the company had to pay a certain percentage of their profit to these funds, and the funds started to buy shares in those companies. And if this continues for a few decades, of course, the wage earner funds will own and be the majority owner of a company. Basically, buy the companies with the companys' own money, which, of course, in itself was a preposterous suggestion. But at the time this was a very, if you would say so Socialistic time, and parts of the union were sort of saying, you know, it's we want to take not just the power but the actually, the means of production. And a large part of the population, including small entrepreneurs, small shop owners and so on, became extremely agitated and angry, because they felt the unions were going to take their companies away from them. By the end of the march, it's estimated that nearly 100,000 came to protest; this in a country of eight million people. An equivalent demonstration in America would number nearly four million protestors. People came by buses, and by air, and by cars from all over Sweden. And then, during the march through Stockholm, people from the streets started to march with us. And those were people who owned companies who never go out on the streets otherwise...and their employees. So it wasn't just the owners. There was a time of hubris on the union side. You can see it also through the so-called wage earner funds. And we tried to solve these problems in negotiations with employers, and the employers didn't want to negotiate, and at the end of the day, we couldn't stop the politicians to enter the field, and then there you had it. When I look back on some of the decisions that my father and grandfather had to do, I mean, I think they were rather sort of courageous, anyhow, and fighting their way, building their businesses. But it was clearly many situations where they withheld from doing investments, and withheld from recruiting people. From 1976 to 1995, Sweden's economic growth shriveled to nearly 50 percent of the growth of other developed nations... countries like France, Germany, Australia and the U.S. Our economy was in crisis. Inflation had reached 10 percent, and, for a brief period, interest rates soared to 500 percent. I remember that there were some major family companies that moved abroad. Ingvar Kamprad, the IKEA founder. He went to Switzerland. It seems like what Sweden did in the 1970s and the 1980s.... that seems to be the image that has stuck for some reason among Americans. Why is that? American society at that time was undergoing such dramatic conflict and upheaval. The Vietnam War and the civil rights struggle, so it looked like somehow the anti-America was the utopia that wasn't America. Sweden moved on. Institutions were tried out. Some turned out not to be very successful and were abandoned. But the perception has been pretty much frozen for lots of Americans in that late 60s and 1970s model. But it doesn't correspond to what Sweden is today. By the 1990s, the economy was in turmoil, and had reached a breaking point. Sweden decisively changed course. Reforms were voted in. The wage earner fund was abolished and taxes reduced. The pension system, healthcare and education were all reformed, and the utilities deregulated. But, many people had grown accustomed to their abundant benefits, regardless of the country's ability to pay for them. Initially, these reforms were very unpopular among the population, and two governments fell because of these reforms and the crisis. But, in retrospect, I think just about everybody agrees that they had to be done; they had to be pushed through. And they united between the different parties since there was agreements across party lines. Remember how our economic growth crumbled to 50 percent of developed countries' back in the 1970s and 80s? Well, since the reforms of the 1990s, our growth rate has risen to 50 percent above the average developed country. Families have benefitted greatly from this. During that same period, the growth rate of family disposable income increased almost fourfold. So, how did that happen? I'm here at Hövding, which started in 2005 and is a great example of the innovation that's coming out of Sweden right now. And, in a minute, you'll understand what this is, and why I'm also a personal fan of Hövding. This is it? This is it. So this is the first airbag for cyclists in the world, it's a revolution. And what it does is you wear it like a collar... around your neck. And then, there's a small computer. And if this small computer detects that you have a body movement that is close to, or similar with one of the accidents stored in the computer, it will inflate in 0.1 seconds. The point is: it's not just for people like me who are a bit vain, and want to protect our hair. No...exactly. And it actually measures your body movements two hundred times every second, and with this one, you're up to eight times better-protected than with the traditional helmets, actually. So, here are the fundamentals of Hövding. Yeah? It's a collar and you wear it around your neck...like this. You zip it up. Then, of course, you have to activate it. Yeah? And it's driven on battery. So when I start this, in twenty seconds, it will inflate like it would be in an accident. All right. Okay. That's exciting. Here we go. And when I start, it's going to take you 20 seconds before it inflates. Right. So...have fun. Yeah...thank you. Yeah, this is exciting. So it could happen at any moment now... is that it? It will start... Beeping sound... ...beeping, yes...when it counts down. Is it too late to change my mind now? I guess it was. So, now if you feel, it's really hard around your neck, which is great for whiplash injuries. And the amount of protection you have all around your head is second to none. I'm really stuck. Yeah, you're really stuck. So, this is the way to ruin my haircut with your helmet as well. In recent years, Sweden's strong culture of entrepreneurship has led to increased innovation, more jobs, and the ability to weather financial downturns. But there are still hurdles. Tell me about regulation, because it is currently blocking you from selling to certain places, right? The Consumer Protection Act in North America requires a physical product on your head with a chin buckle underneath, and, of course, this product cannot do that. So, basically, regulation says that you have to keep on producing the same products that we've always used and innovative products it's more difficult to get in. Of course, this is the first in the world, so we're challenging the whole system. But Swedish regulation does not block you in any way? No, they don't. If you take a look at Sweden, you have loads of people inventing new stuff and realizing what's needed in the markets and maybe even before the market realizes that they need it. And I think you can go try and build a company, you can go try your ideas. You know, I'm brought up in the kind of Sweden where it was a bit frowned upon being an entrepreneur in business, and so on, but it's changing right? Do you have the sense that Sweden is a becoming a better place to do business and to be entrepreneurial in? Definitely. No doubt...no doubt. Definitely the climate for entrepreneurs and innovation is better than ever before. So here we go. Yeah...good luck! Thank you. Yeah...worked well. I look like a Pokémon...don't I? We reformed our tax system, and adopted a hands-off approach to free enterprise. But, we didn't really cut back on the many welfare programs that had been put into place. Today our taxes pay for pensions; you call it Social Security, for 18-month paid parental leave, government-paid childcare for working families, government-paid schooling through college, government-paid healthcare for all citizens, government-paid elderly care and nursing homes. But having the government manage all of these things didn't work well, so we had to manage it in another way. We have some very interesting reforms on letting private enterprises into welfare- schools, hospitals, healthcare, elderly care- that have worked out quite well, and added a lot of innovation and qualities. It's a universal healthcare system, so everyone living in Sweden has a right to use the system. But, there is a much larger part of the actual production of healthcare which is made by private companies. Another unique characteristic of Sweden's healthcare system is that it is primarily not run by the national government. Rather, the majority of healthcare decisions, and the taxes to pay for them are determined on the local level. Private insurance is also available for those who wish for more options, and to avoid longer wait times. The way that social services are delivered have changed a lot, whereas before everything that was paid by taxpayers' money was also produced directly by the state. Now, in many sectors, private companies are the service providers. And this is particularly true for the school system. In 1992, Sweden switched to a school voucher system, which allows all parents to make the decision of which school is best for their child. There are both public and private schools. And the vast majority all charge the same tuition. Each child is provided with a tuition voucher from the government that can be used in any school in the country. Today, 50 percent of Swedish high schools are private. This is where I went to school as a teenager. It's been awhile, and since then, the public school I went to has been transformed into this private school, the International English School. It's a highly regarded school, but the thing is, any parent in Sweden can send his child to this school, by using a government voucher that gives them access to any school in the country. Can I have two, straight, quiet lines, please? So this is 4th Grade now. It actually used to be the cafeteria where we had meatballs all the time. I love what they've done to the place. Okay...this is how I started out when I arrived in this school... but then I moved on...and...and on. You can't be serious. Yeah. (ROCK MUSIC PLAYS) This is late 1980s. Yeah...oh...Whoa! No...why? Why did you go through this? Wasn't it like almost painful? It might be the only time I saw my father cry. Is it important that every family gets to choose? I remember that I...we were in my other school, which was on the other side of the bridge, I went to this test day on a Saturday, and I just liked it. So, so when I came home I said, 'I'm gonna to start there.' And here I am. It's like a door to the future, almost, like it opens a new door than if I would have gone to, like, an ordinary school. Being able to choose for yourself is- is important because it's your life. And if you're not mature enough to decide yourself, then your parents should have the opportunity to choose for you. The wealthy have always had school choice. If you have enough money to buy a house wherever you want to live, you can just move to somewhere where there are good schools. These are not options that are open for the poor kids. The fact that you are allowed to choose a school for your children, is that important to you? It was, yes. It was, yes. And it has become much more important to me today, since I have a son that is a little bit more challenged in school. Some argue that making a profit off of education or healthcare is improper, and will cause private companies to cut back on quality. I think this feeling that the only way to make a profit would be to lower the quality, which, of course, in the rest of our world we tend to think it's opposite. That the biggest risk for low quality is when you can't make ends meet. Once you have introduced a system where parents can send their kids to any school they want- in any neighborhood in a different city -it is extremely difficult to roll such a reform back. We have a waiting list, and to get on that waiting list, parents register very early. In some cases when the child is one or two years old, and we go only according to the date of registration. There are no preferences due to how important you may be or due to how rich you may be. Yes, we are making money, and due to that, we have been able to expand to 34 different schools throughout Sweden. In the past, the schools were very segregated. Now, these schools are open for every child, so you have more mobility; it is not costing any more in terms of taxes. So, what's the problem? There's been a lot of conversation in the United States about alternative models in schools and so on. But there are a lot of very strong special interests that have opposed school choice, for example, in the U.S. A part of this national conversation that Sweden had was to say, okay, we will provide state funding to make sure everyone gets an education, but it doesn't follow that the government is the best provider, that we shall assign students to where they have to go. And so, they have voucherization in hospitals and schools, and so many other areas where the government gives you the money, and you can go and spend it the way that you want. So the market is delivering the service, and that's a very valuable lesson to see how to do this more effectively. It's the same truck every day? Yeah...it's the same truck every day. I'm here at Ragn-Sells, a Swedish waste management firm. And this is Johan Bergeback, who's going to talk to me about working in Sweden. This is an impressive bit of machinery. Yeah...it is, actually. Johan collects grease and food waste from restaurants in Stockholm. That waste gets converted to biofuel. As you will see, this job has a unique odor to it. Let's go then... For how long have you been doing this? Since 2011, and I really enjoy it, actually. You can manage your own day, and I have a really good relation with my boss, also, so that helps a lot so... Are you sure I should open it? Yeah. This is part of the work. Okay...here we go. Phew. And we haven't really started yet. No, we haven't started yet. This is just the first little sip. Swedish unions are powerful. But the union's relationship with employers is not as adversarial as it sometimes is in the United States. Swedish culture has always favored consensus, and the unions and employers, historically, have a long history of cooperation. The 70s and the 80s are a time of confrontation. The consensus culture collapsed; you have very big strikes, too. So you have a totally different situation. The extreme experience of the 1970s and 80s strained the relations between unions and employers. But since that time, both have worked to return to a more balanced appreciation of employee needs, while ensuring business success. Unlike many other European countries, Sweden decided to try to get an orderly way of organizing the conflict between companies and labor. It was decided that issues between business and labor should not be handled by the government. What you do want to do is to support the employers and the trade unions to make their own agreements, and find ways of regulating things by themselves. And in most countries, like the U.S., have minimum wage laws, for example. We don't have that in Sweden. Although Sweden doesn't have minimum wage laws, there aren't that many people with very low wages. Many unions around the world think that technological change is a problem, while in Sweden it's something that we have been embracing for- for a long time. One area of conflict that remains an issue is the union regulation that if a company needs to fire someone- it has to be the last person hired. Old people who have had a job for a long time, they can feel pretty safe. Youngsters and newly-arrived immigrants will have a harder time finding a job. And for the firms, in the worst case, the one you hired last is really, really important- it might be a programmer that is essential for your business. And that might actually punish your entire company. But it seems like there's- at least if you compare it to some other countries- like it's more hamonious relationships between the company and the employees. I would say so. It's not really antagonistic, right? No...no. Yeah, I know what you mean. I don't see any enemy stuff going on between the union and the workplace at all, actually. Until I met the Americans or European labor unions, I felt that we had rather cumbersome and horrible labor unions. And then I met all the others and realized that we have a very cooperative, reasonable, pragmatic set of labor unions. I was over at a meeting in the U.S. where I met both U.S. employers and labor unions at the same time, and I was quite astounded. It was such a harsh atmosphere and one of the Americans said to his Swedish counterpart that "Well, you know, we need to have the respect that you get in Sweden." And the Swedish guy said, "Well, then you need to earn it." For me, it's really, really important to work alongside and not against. You know, I'm going to spend a lot of my wake hours in this truck and I want to- I want to be feeling good about it. Okay...so this is not really the same thing as we did before. No, this is a different pickup point. You have to pull up this lid... the other way around. Yeah, that way. And then you.... (GROANING)... Gosh I did it! I didn't think you would be able to do it, actually. But you are stronger than you look. So high degrees of social trust... allows a welfare state to persist for a very long time because people don't cheat. They don't cheat on taxes, and they don't cheat on benefits. However, over the long term, institutions can erode those levels of social trust. So, the World Values Survey asks a question about getting government benefits for which you are not qualified, and the most recent survey only 55 percent of Swedes said you shouldn't apply for those benefits... 80 percent to 55 percent. So there's a greater willingness to game the system over time. Yeah, we learned that the hard way in Sweden when we had the most generous government sick leave benefits. It suddenly happened that the, objectively speaking, most healthy population on the planet, were off sick from work more than any other population on the planet. In 1988, workers claimed sick leave one out of every eight work days. But since the reforms, sick leave has gone down. This is also a lesson for the United States. Long-term permanent disability qualification has been rising. As the society becomes healthier, why are more and more people qualifying for permanent disability? It's because of the erosion of this sense that you shouldn't do that. Another area where Sweden is doing some unique things is with our pension system, so I thought it'd be interesting to talk to some retirees about what they think about the system. And what better place to have such a conversation than in a "bastu", or as you call it, "sauna"? Winter or summer, we Swedes love a good sauna. Hey, I'm Johan...nice to meet you. Thank you. Thanks for doing this. So, what's the best thing about taking a sauna? If you have sauna for three, four days a week, you live longer four, five years. There was a realization that the government pension system was not sustainable and it was quite remarkable because there was a broad consensus, almost all the political parties in Sweden, agreed to make a reform. Now the bulk of pensions is really "contribution defined"- .i.e. it depends on how the economy works, and how much of your own savings you have put into the system. So, if things are going well for Sweden, pensions are increasing. But if things are going less well, pensions are automatically lowered, without any political decisions having to be made. This happens automatically. There are actually equations in the law. What do you feel about the changes in the pension system? Was that a good thing or a bad thing? I believe it's quite a natural evolution in the society. It got worse...you got less money. And I mean for the younger people, they are more dependent on saving by themselves. I actually see this as one of the big triumphs of democracy in Sweden, that you could agree on a system like that, which basically takes away from politicians the ability to buy votes by just promising higher pensions, and letting future generations pay. I have a good life. And my son, he said, "You are a good father. You have- you have enough money." It seems like ever since the 1980s, Sweden has been trying to find a new balance between the welfare state and the open market and more limited government. Do you think we're finding that balance now? There are still long-term problems, Sweden is not utopia. Just to be frank, I think Sweden has had a more adult conversation than has taken place in the United States, where parties on the right or the left have gotten together and actually discussed what is affordable? What is feasible? What will last? I'm afraid to say this has not been taking place in the United States. The political discussion is so polarized, it's difficult to get Democrats, Republicans around the table to have a grown up conversation about arithmetic. Sweden has had that conversation, and so they have moved towards systems that are actually sustainable. The low-income earners in Sweden pay a lot more than low-income earners in America. So, despite the fact that Sweden looks like sort of a socialist country which taxes the rich exorbitantly high... the truth is the opposite. Sweden also has a very high value added tax, much higher than any sales tax in the United States. So those are taxes that are really substantially borne by the working classes and poor people in Sweden. If the United States were to try to adopt really the Swedish model, it would mean imposing really high taxes on poor people and working class people. The success of Nordic countries is not because of big government. It is not. The story is free markets really work... and Americans need to understand this. Wages come from companies that make a profit. If we go on strike, there will be no money coming from the company, and no wages. And I think that's the basic idea for trade unions in Sweden today. Our population is still quite positive towards free trade, towards globalization. You need to convince every new generation, and explain. Because it's not, it's not always intuitive why a free market economy is the best. So you can never give up. The biggest lesson that Sweden has shown is people who want to redistribute a cake have to make sure someone baked it in the first place. If no one bakes the cake, you can't redistribute it. Sweden has a very productive private market economy. Sweden is where I was born, and where I'm raising my own family. And today, we're here at the Vasa, the world's only intact 17th century ship...and one of our favorite places here in Stockholm. So, Sweden is not the idealistic socialist state many Americans think it is. We do provide more government benefits for our citizens than the U.S. does, but those benefits are paid for by everyone in the country, not just the top tier of taxpayers. Further, many of those benefits are provided by private companies competing with one another. Sweden is not perfect. There are still many changes I would like to see. But the one thing our country has learned is that without economic growth, there is no wealth to share. Then everyone suffers... the poor most of all. We have learned from our history. I would like to believe that Chydenius would be proud. Thank you for letting me share my home with you. (MUSIC) It gets more difficult all the time for some reason Does it look natural? Or... Um, looks pretty good, but I would like a second opinion. Okay. (LAUGHS) What do you think? This is a very complicated thing. (LAUGHTER) This is a whole sort of...I think I should... Hey, good to see you. (SPEAKING IN FOREIGN LANGUAGE) Okay, sorry. Have you ever heard of this guy? And a good looking fella too. You think? Yeah. Ah. Don't you think he must have been? (LAUGHTER) Or shouldn't I have said that? Major funding for this program has been provided by: L. E. Phillips Family Foundation, DKT Liberty Project, Donald & Paula Smith Family Foundation, Chris & Melodie Rufer, Sarah Scaife Foundation. Sweden: Lessons for America? is Available on DVD. For more information or to order a DVD of this program call 1.800.876.8930 or visit www.freetochoose.net
This video is a short introduction of our Nordic father of liberalism, Anders Chydenius, https://en.wikipedia.org/wiki/Anders_Chydenius
I just think hes an underrated classical liberal that have become forgotten.
Swedish legislation regarded as the world’s first law supporting the freedom of the press and freedom of information passed by the Swedish Riksdag 1766.
Influenced by Anders Chydenius, a liberal pastor and member of the Nightcaps, the Riksdag passed the Freedom of the Press Act, which abolished the censorship of most publications and granted citizens access to official documents to encourage the free exchange of ideas.
https://www.britannica.com/topic/Freedom-of-the-Press-Act-of-1766
In Chydenius work "Den nationnale winsten" (The National Gain) Chydenius published theories closely corresponding to Adam Smith's invisible hand, eleven years before Smith published his book, The Wealth of Nations. Some believe if The National Gain would have been published in some wider languages, he would have become as famous as Adam Smith is today.