Capitalism and Socialism

[Marulus]

Originally Posted by Seekers

What the social democrats want is for people to entertain futile and vain hopes that they will be protected against the evil spectre of capitalism and other evil right wing spectres. Now I'm going to tell you what it's really like here. The social democrats want people to be poor, because that's how they can keep the myth about their spectres alive, which in turn will fool most of the population that they have to vote for the left. That's 70 years of Swedish politics up to this moment.

I heard that in many countries Social Democrats and other leftists, when in power, tend to ally themselves with the big business (Capitalists) and crush the middle class. Through high taxes they dissuade people from starting their own businesses, while they bribe the poor with the welfare. The money for the welfare benefits comes from the big capitalists, who are more than happy to hand it out to the government, because they like living in such a society in which they won't have too much to worry about the comptetition of the small or medium-size businesses. As they are extremely rich, they are able even to stand high taxes without suffering serious damage. If they fail, the government would subsidize them anyway.

On the other hand, the big business produces many very cheap products which poor people are able to buy, the mass consumer goods. So they get back the money they handed out to the state in the form of taxes, with very possibly a great surplus. So, it boils down to promoting poverty and welfare, for the sake of mass consumption.

I know nothing about Sweden and I don't know if the situation there bears any resemblance to the pattern I just described, but I heard generally that this is the model on which various "Social Democrats" operate and thrive these days.

[Gnist]

Plethon, you are right on.

A capital idea

Published: 26th March 2007 16:26 CET
Online: The Local - A capital idea

The average Italian is six times as wealthy as the average Swede, yet the state is a massive corporate conglomerate with business holdings worth 75,000 kronor per citizen. It's time to turn this wealth over to the people, argues Billy McCormac, of Swedish think-tank Timbro.

Beneath Sweden’s sleek economic exterior lurks a bloated welfare state. Though Swedes have all the trappings of material wealth – brand-name apparel, fine food and gadgets galore – they are no better off than their 19th-century ancestors. They are proletarians in the truest sense of the word, with little or no equity and depending entirely on income from work or the welfare state. These and other alarming facts can be found in economist Dick Kling’s book On Condo Proles and Proxy Capitalists: The Story of Sweden’s Lost Wealth (Timbro, 2007).

The average Swede has a personal “wealth”—if one chooses to call it that—of 28,000 kronor ($4,000). Remove home ownership from the equation and this leaves 80 percent of Swedes without any equity whatsoever; in fact, many are deep in debt. The richest one percent of Swedes has an average personal wealth of 10 million kronor – a sizable sum, to be sure, but a far cry from independently wealthy since this includes the value of main and secondary residences.

The average American is roughly twice as wealthy as the average Swede. The average Briton is four times as wealthy. The average Italian is six times as wealthy. It should be noted that we’re talking about people in the middle of the wealth distribution. If one instead examines average wealth, the United States leads the pack with around $200,000. Wealth in America, however, is less evenly distributed than in the United Kingdom and Italy, which explains why their average citizen is better off than the average American.

On the whole, wealth distribution in Sweden is less even than in the United States. This might come as a surprise – especially for Swedes, given their worldview. It is only when reaching the very pinnacle of wealth that one sees a greater concentration of wealth in the United States than in Sweden.

Traditionally, political debates in Sweden revolve around distribution. Pretty much any issue boils down to its effect on income – particularly for people earning less of it. Wealth-related issues are, however, rarely discussed. Perhaps people assume that Swedes don’t have any wealth to speak of, making it a non-issue.

Signs that Sweden is a country of proles—albeit well-off proles—are all around us. Few new businesses get off the ground because people can’t gather enough seed capital; the labor market is undynamic and unresponsive since many are loathe to quit jobs that provide a steady income. More, the political conversation reflects the dire fact that most Swedes live hand to mouth. Political change, particularly the classical liberal variety, is excruciatingly difficult when most households scrape by with the tiniest of margins.

Dick Kling notes, quite correctly, that the new government’s decision to divest the state-owned companies gives it a golden opportunity to improve life appreciably for all Swedes. Simply put, Dr. Kling wants the government to give these companies back to their rightful owners: the people. Though dramatic, such a move is nevertheless realistic and highly doable given Sweden’s amazingly robust finances.

In Sweden, the state is a massive corporate conglomerate, employing a whopping 190,000 people. The state’s business holdings are valued at around 75,000 kronor per citizen. In other words, Swedes aren’t really poor, they just entrust the state to manage their companies for them. If this enormous wealth was turned over to the people, Swedes would be far less dependent on the public sector, and would be equipped to live in a far more liberal society. Let’s hope the government seizes this once-in-a-lifetime opportunity.


Billy McCormac, Timbroeditorial@thelocal.se

[bombadillo]

Originally Posted by Plethon

I heard that in many countries Social Democrats and other leftists, when in power, tend to ally themselves with the big business (Capitalists) and crush the middle class.

Some truth in that: In Scandinavia, there was a loose compact between social democrats and big capital (every left-leaning political party or alliance that isn't outright communist has to arrive at some accommodation with big capital). Social democrats have been comfortable with monopoly capital, which stifles small- and medium-sized business. This compact lasted into the 70s, and then slowly started to unravel: big capital -- under pressure from global competition -- couldn't and didn't want to pay the social welfare bill anymore. This unravelling was more pronounced in the UK and USA (with politicians like Reagan and Thatcher leading the way), but it has also occurred in continental Europe, with left-leaning parties helpless in the face of the current wind. And also too ideologically bankrupt to propose anything to counter what is taking place.

The money for the welfare benefits comes from the big capitalists, who are more than happy to hand it out to the government, because they like living in such a society in which they won't have too much to worry about the comptetition of the small or medium-size businesses. As they are extremely rich, they are able even to stand high taxes without suffering serious damage. If they fail, the government would subsidize them anyway.

Indeed, but that era is now over, and lasted roughly thirty or forty years from 1945 to the mid- (or late-) 70s. Now it's dog-eat-dog in today's global capitalism.

On the other hand, the big business produces many very cheap products which poor people are able to buy, the mass consumer goods. So they get back the money they handed out to the state in the form of taxes, with very possibly a great surplus. So, it boils down to promoting poverty and welfare, for the sake of mass consumption.

True to an extent, but not cheap -- monopoly capital is neither efficient nor innovative, relying instead of its privileged position in the market (aided and abetted by government tariffs and government contracts to maintain its place).

[Marulus]

Originally Posted by bombadillo

True to an extent, but not cheap

I meant, relatively cheap to buy. So that even people living on welfare can afford them.