Sweden proves the neoliberals wrong about how to slash poverty. [View All]

[Imperialism Inc.]

http://www.monbiot.com/archives/2005/01/11/punitive-and-it-works/

By George Monbiot. Published in the Guardian 11th January 2005

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But there is another means of testing the neoliberals’ hypothesis, which is to compare the performance of nations which have taken different routes to development. The neoliberals dismiss the problems faced by developing countries as “growing pains”, so let’s look at the closest thing we have to a final result. Let’s take two countries which have gone all the way through the development process and arrived in the promised land of prosperity. Let’s compare the United Kingdom – a pioneer of neoliberalism – and Sweden: one of the last outposts of distributionism. And let’s make use of a set of statistics the Economist is unlikely to dispute: those contained within its own publication, the 2005 World in Figures.(6)

The first surprise, for anyone who has swallowed the stories about our unrivalled economic dynamism, is that, in terms of gross domestic product, Sweden has done as well as we have. In 2002 its GDP per capita was $27,310, and the UK’s was $26,240. This is no blip. In only seven years between 1960 and 2001 did Sweden’s per capita GDP fall behind the United Kingdom’s.(7)

More surprisingly still, Sweden has a current account surplus of $10bn and the UK a deficit of $26bn. Even by the neoliberals’ favourite measures, Sweden wins: it has a lower inflation rate than ours, higher “global competitiveness” and a higher ranking for “business creativity and research”.

In terms of human welfare, there is no competition. According to the quality of life measure published by the Economist (the “human development index”) Sweden ranks third in the world, the UK 11th. Sweden has the world’s third highest life expectancy, the UK the 29th. In Sweden, there are 74 telephone lines and 62 computers per hundred people; in the UK just 59 and 41.

The contrast between the averaged figures is stark enough, but it’s far greater for the people at the bottom of the social heap. Perhaps unsurprisingly, the Economist does not publish this data, but the United Nations does. Its Human Development Report for 2004 shows that in Sweden 6.3% of the population lives below the absolute poverty line for developed nations ($11 a day).(8) In the United Kingdom the figure is 15.7%. Seven and a half per cent of Swedish adults are functionally illiterate – just over one third of the UK’s figure of 21.8%. In the United Kingdom, according to a separate study, you are over three times as likely to stay in the economic class into which you were born than you are in Sweden.(9) So much for the deregulated market creating opportunity.

The reason for these differences is straightforward. Over most of the 20th century, Sweden has pursued, in the words of a recent pamphlet published by the Catalyst Forum, “policies designed to narrow the inequality of condition between social classes”.(10) These include what the Economist calls “punitive taxes” and “grandiose programmes of public spending”, which, remember, do “nothing but harm”. These policies in fact appear to have enhanced the country’s economic competitiveness, while ensuring that the poor obtain a higher proportion of total national income. In Sweden, according to the UN, the richest 10% earn 6.2 times as much money as the poorest 10%. In the UK the ratio is 13.8.(11)

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