The Success of Swedish Society is Not Due to the Welfare State

“It is the result of cultural and demographic factors, as well as a favourable business environment throughout most of Sweden’s modern history.”   So says the author, Nima Sanandaji, of Libera’s latest report ”The Swedish Model Reassessed – Affluence Despite the Welfare State”.   The evidence for this hypothesis comes from three sources:   Firstly, Sweden showed even higher rates of growth and had a model society well before the start of the Social Democratic era in 1936.   Secondly, descendants of Swedes who migrated to the United States in the nineteenth century are also today characterized by favourable social outcomes, such as a low poverty rate and high employment. The Nordic nations have, for hundreds of years, benefited from sound institutions, such as a strong Lutheran work ethic, a homogeneous population, and high levels of trust, civic participation, and cooperation.   Thirdly, starting in the 1990s, Sweden has dramatically scaled back the size and scope of government, which was followed by a recovery of the earlier strong growth rate. The period characterized by the most extensive welfare state policies, around 1970–1995, is associated with low growth rates.

Based in Helsinki, Finland, Libera is a private, independent, non-political think tank that advances and supports the principles and values of individual liberty, free enterprise, free markets, and a free society.