Capitalism Saved Sweden, by Michael Munger

If the US were to adopt the “Swedish model,” so beloved by so-called democratic socialists, the US would become more capitalistic. Sweden is a mixed economy, but it is certainly not socialistic, and by many measures its economy is freer than the US’s. From Michael Munger at aier.org:

Josh Billings famously diagnosed a problem with beliefs: “I honestly believe it is better to know nothing than to know what ain’t so.” I am astonished at how many students, and for that matter adults, in the U.S. honestly believe that the U.S. should model itself after Sweden because Sweden has shown that socialism works.

I will leave aside the question of whether the U.S. should try to “be like” Sweden; they are very different countries, with different histories and different institutions. But it is important to refute, using simple and widely available empirical evidence, the claim that Sweden is “socialist.” It is not. In fact, Sweden is one of the most robustly capitalist nations on earth.

By socialism, I mean a system that relies on state ownership and control of the means of production, state direction of production decisions, and direct state control of education and employment decisions of individuals. If one does not mean those things, then that would require a little more thinking about what “socialism” means. If by “socialism” you mean prosperity and rule of law, then you are confused.

There are several important issues to discuss, to understand the differences between capitalism and socialism.

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