Title: The Rise and Fall of Sweden

1. Hook

[Compilation News Clips]

Less than a decade ago, Sweden had one of the lowest levels of gun crime in Europe. Now, they’re the second highest. [0]^[a]

In Stockholm, gun violence is roughly 30 times that of London. [0]^[b]

The country is engulfed in a gang war, which is almost entirely run by people with a migration background. [0]^[c]

Sweden’s famed welfare state, and its lax asylum laws has made it a popular destination for immigrants. [0]^[d]

Since the 2000s, they’ve had a steady high number of new arrivals, but in 2015 it peaked at over 160,000. [0]^[e]

Of these non-Western immigrants nearly half (48%) are unemployed. They are also 9 times more dependent on government welfare as native Swedes. [0]^[f][0]^[g]

They live predominantly in poor suburbs and are poorly integrated in Swedish society. This is where armed gangs recruit their members. [0]^[h]

But Sweden actually has much more fundamental problems. They are without a doubt incredibly successful as a nation, but arguably the biggest misconception abroad is that they achieved this through welfare and big government.

In reality, they used the same free market policies, with low taxes and little state involvement as many other Western countries. They became the 4th richest nation in the world by the 1970s, and that’s when they made their drastic turn to the left. [0]^[i][0]^[j]

These migrant communities, now a burden on society, are raising questions about Sweden’s underlying form of government.

This is the rise and fall of Sweden…. with Hindsight.

2. Bumper

3. Body

It’s worth mentioning that Sweden’s gun crimes are still far below the United States. With an average GDP per capita of 60,000 USD, they’re amongst the richest countries on earth. Their life expectancy is 83 years, and they have some of the best healthcare and education in the world. [0]^[k][0]^[l]

Sweden ranks at the top of the charts in many respects. But when it comes to migration, how well immigrants integrate, and how productive they become in society, Sweden is doing very poorly.

I’m going to dive into that topic. But first, it’s important to shatter the biggest misconception about Sweden.

They’re often regarded as a social democratic utopia. Some kind of “third way” between capitalism and socialism. And people believe that nations can achieve similar outcomes by expanding their size of the government. But that’s a misreading of history.[0]^[m]

The famous welfare state, that’s taking such great care of the old, the sick, the unemployed, and a shocking high number of refugees, is only a few decades old.

Sweden became rich and successful before they adopted their comprehensive welfare system.

In the 1870s, their economy was far below Northern and Western Europe, and their GDP per capita was half that of Great Britain. Three quarters of their population lived off farming, which was an incredibly tough existence in the semi arctic environment. They developed a strong work ethic, with an emphasis on hard work, individual responsibility, and family values. [0]^[n][0]^[o]

When the world began to industrialize, Sweden became the fastest growing economy in the world. Swedes were trustworthy, hardworking, and responsible. They remained neutral during both world wars and developed a much more moderate version of today’s welfare state. [0]^[p][0]^[q]

Sweden’s rise to prosperity was characterized by free market policies and limited state involvement.

It wasn’t until the late 1960s, that they underwent more drastic reforms to their welfare system.

The concept “Folkhem”, meaning “People’s Home” gained popularity. It describes Sweden as a family, with citizens being expected to take care of each other like siblings. [0]^[r][0]^[s][0]^[t][0]^[u][0]^[v]

This philosophy partly explains Sweden’s embrace of refugees. But migration has historically also attributed much to Sweden’s economic success.

Today, their welfare state provides citizens, native or immigrant, with incredible benefits.

When a child is born or adopted, each parent is entitled to 240 days of parental leave. [0]^[w]

A married retired couple receives payments that almost equal their pre-retirement income. [0]^[x]

Health care and education are mostly free, and amongst the best in the world. [0]^[y][0]^[z]

The state is very generous, but  thisneeds to be financed through taxes.

In 1950, the personal income tax was 21%. By 1995, it was raised to 52%. [0]^[aa]

So how did this affect the economy?

This is their GDP growth. In this period between 1968 and 1975, most drastic welfare reforms took place. They suffered quite a bit during the 80s, and again during the 90s. They were the 4th richest country in 1975, and the 14th in 1993.

The employment rate hasn’t improved much. In 2014, it was only slightly higher than three decades earlier.

Inequality in 2013 was the same as it was in 1950. Let that sink in for a moment.  [0]^[ab]

The Welfare State brought a lot of good, but it failed to improve a lot of other things, that granted– were already exceptionally good. Sweden became rich, employed, and equal before the introduction of big government. The nation developed a vision of Sweden as a family – an inclusive and equal society, which was extended to refugees.

In 1987, 3% of the population were non-EU migrants. In 2013, this was already 12%. [0]^[ac][0]^[ad][0]^[ae]

And something curious happened when these migrants moved to Sweden.

One study shows that a group of immigrants who fled Saddam Hussein’s Iraq in the 80s and 90s, were 2.3 times as likely to have a higher education as a native Swede. But once in Sweden, only 18% of were employed. [0]^[af]

They were educated and from the upper class. So why weren’t they working?

In 2004, when the Swedish economy was performing strongly, one study showed the average income of Iranian immigrants was 65% that of native Swedes. Whereas similar Iranian immigrants in the United States earned 136% compared to native-born residents. [0]^[ag]

Clearly, migrants in the 80s and 90s were not integrating well.

Sweden’s strategy for managing new arrivals was to distribute them throughout the country. The goal was to relieve pressure on the big cities. What they often overlooked were the local economic conditions. On top of that, about two thirds of jobs in Sweden are filled through informal methods, which is challenging if you don’t speak the language, and don’t have a social network. All the while, the welfare state provided for their basic needs and requirements. [0]^[ah]

The type of migration changed in the 2000s. More migrants arrived for humanitarian reasons, with a peak in 2015 when Sweden took in 163,000 refugees in just one year. Most of them were

from Syria, Iraq, and Afghanistan. [0]^[ai]

This led in 2011 to a staggering 20% of the Swedish population being of non-native descent. (19.6%, defined as born abroad or born in Sweden to two parents born abroad) [0]^[aj]

Many ended up in poor suburbs. They integrated poorly, didn’t feel as a part of society, and many lived in poverty. They depended on government welfare. This was not only a burden on the state, but as it turns out, it was a breeding ground for criminal activity.

The recent outbreaks of violence are between gangs that are ruled by second generation immigrants. They recruit young teenagers from these neighborhoods. They were primarily involved in drug trade, but in recent years they have infiltrated the government and even political parties, where they make money from fraud and other illegal activities. [0]^[ak]

It’s difficult to know exactly, but one study estimates that criminal organizations make around $500 million per year from this type of activity. Or about two thirds of their income. [0]^[al]

They’re robbing the government, through legal and illegal means.

Over half of inmates serving long prison sentences are first generation immigrants, (53%)

and 45% of Sweden’s unemployed are born outside Europe. [0]^[am]

This community has become a heavy burden on society.

For most of the 2010s, the nationalist Sweden Democrats were a lone voice against immigration. They used to be a fringe party, but partly because of the migrant crisis, they have now become one of Sweden’s largest political groups. [0]^[an]

The current Prime Minister of Sweden breaks away from tradition. He supports tax cuts, free market policies, and economic liberalism, and he is working closely together with the Sweden Democrats. [0]^[ao]

His right-wing coalition believes that the rise in gang violence is directly connected to Sweden’s earlier immigration policies. [0]^[ap]

His foreign minister said: “We can now see that 'outsideship' and lack of integration, in combination with trade of narcotics and organized crime is creating this very, very toxic mixture. “ (Tobias Billstrom) [0]^[aq]

It would be short sided to blame this violence only on migration. Government policies aimed at integrating migrants are partly to blame. And the situation escalated in a system that went perhaps too far in accepting new arrivals. But what makes it challenging, is that this issue speaks directly to a core belief of Swedish identity; to treat each other as siblings, and to provide shelter. [0]^[ar]

But many believe that institutional changes are required. The idea of fully returning to a capitalist system is not widely supported. But that reforms are desired can be seen in Sweden’s current government.

They are implementing racist policy. They are making it harder for immigrants from outside the European Union to get social benefits. And for children that have two foreign parents, preschool is now compulsory to help them learn the Swedish language. [0]^[as]

Sweden seems to be on a road to increase economic liberty and incentives for work within the scope of the welfare system. Could this be the end of their famous middle way? [0]^[at]

4. CTA

Please consider one of these two videos for your next watch.

MAIN SOURCES:

Income, wealth and equal opportunities in Sweden (OECD):

https://www.oecd-ilibrary.org/sites/eco_surveys-swe-2017-5-en/index.html?itemId=/content/component/eco_surveys-swe-2017-5-en 

The Rise and Fall of the Swedish Model (UNDP):

https://hdr.undp.org/system/files/documents/stefandevylderpdf.pdf 

The surprising ingredients of Swedish success – free markets and social cohesion (IEA)

https://www.iea.org.uk/sites/default/files/publications/files/Sweden%20Paper.pdf