Re: Sweden -- A few reactions on the N.Y. Times article

["Rosser Jr, John Barkley" <rosserjb@xxxxxxx>]

Sven and Per,
     Obviously both of you have already made your judgments
and decisions regarding what is best for you in terms of
your own academic activities.  But is it not the case that
there remain outposts "in the provinces" of Sweden where
one can find support for a more traditional Swedish view,
e.g. Umea, Lulea, Jonkoping, Uppsala, Lund?  Is it not the
case that this neoclassical takeover has been mainly
concentrated in Stockholm?  Of course, I understand that
Sweden is one of those countries where there is a "Primate
City" that runs nearly everything, and it is Stockholm.
So, for influencing policy, that may be all that matters.
Barkley Rosser
On Wed, 12 Aug 1998 16:42:20 -0600 S R Larsson
<larson@xxxxxx> wrote:

> First of all, let me say that as I read the NYT article I got a feeling of
> hopelessness. Intellectually I have already left Sweden (I've been working
> in Denmark for two years now) but since I still have my family there I am
> still forced to face the tragedy of Sweden every week. I see all the
> concrete effects of two decades of anti-keynesianism escalating into pure
> fiscal madness. One would hope that foreign media were sensible enough to
> start asking the right questions at some point. But the NYT article gave no
> reason to hope for this.
>
> I have written before on this list about the intellectual climate in
> Sweden. I worked for three years at the department of economics at
> Stockholm University, and during those years I got a pretty good inside
> view of how the effects of the 1979 intellectual coup d'état were nursed by
> Assar Lindbeck and his staff. Much of what Per says about the libertarian
> over-representation at the IIES is true, but I think one has to remember
> how grad students at IIES end up being libertarian. (This is actually a key
> issue in understanding how Sweden became what it is today.)
>
> The problem is not that the very small minority of dedicated libertarians
> outrun all competition for the salaried grad student positions at IIES. The
> problem is that mainstream economics unintendedly can open for
> libertarianism as a moral conclusion in the minds of students.
> Irresponsible professors can easily give students the impression that
> libertarian solutions are the only reasonable solutions to economic
> problems. In a country of pluralism, open public debate, intellectual
> diversity in academia etc, the libertarian potential in mainstream
> economics is curbed by the pressure from alternative ideologies and
> paradigms. But in a country where the political opposition competes with
> the incumbent government over who is the most fiscally prudent of the
> bunch, things turn out to be a bit different. Students of economics refer
> to the media debate over financial markets, taxes, government spending,
> unemployment and exchange rates when they try to understand the use and
> meaning of economics. If that world outside the classrooms is
> unrestrictedly conservative, if the media consumer is drenched with
> "Spending money, like eating people, is wrong" (although this time they're
> dead serious about it...) from the morning paper to the late night TV news,
> seven days a week, then she has to have one hell of an integrity not to
> become a libertarian while taking economics.
>
> I chose to write my dissertation in Denmark. Per is now going to the US to
> do it. Neither of us found any place in the academic system in Sweden. I've
> tried the questions I'm working with on former friends now working high up
> in the Swedish government administration or at universities in Sweden. They
> all dismiss them as unscientific, uneconomical or simply unintelligible.
> There is not one, I daresay, not one graduate student of economics in
> Sweden who would even think of working with the problems I address - or,
> not to forget, the issues into which Per has been digging so well over the
> past few years. One has to remember that these students later become
> professors, big-shots in the central bank or finance ministry or the
> brivate banking industry. They get to set the intellectual agenda, to
> define what's economics and what's whacked. They get to define fiscal
> policy and the daily conditions of living for millions of people. They're
> all deeply convinced that the only sort of fiscal policy that can be
> tolerated is as far from keynesianism as Big Bang is from us. (At best
> these people regard keynesianism as an interesting piece of the history of
> economic thought - something one can chat about with trustworthy colleagues
> in the lounge after a nice dinner.)
>
> Before I conclude, I must comment upon the ethnical remarks in the NYT
> article. It is hinted that one of the problems with Sweden today is ethnic
> diversity. As an answer I would like to point at two things: a) out of one
> million (not 800 000) immigrants of first and second generation in Sweden,
> half are from neighboring Nordic countries, predominantly Finland, which as
> I see it is not a contribution to ethnic diversity; b) Denmark shows at
> least the same ethnic diversity as Sweden, but the economic downturn here
> ended several years ago and the Danish economy is in better shape than it
> has been over the last 25 years. So the ethnic remarks in the NYT article
> (though disguised) are yet another sign of the insufficient research behind
> the article that Per labelled "crap journalism".
>
> Wrapping up, then: Together with Per I've been trying to predict the
> economic and political development in Sweden throughout the '90s. The
> accuracy of our predictions is remarkably high ('cause we're keynesians!)
> but we've often been wrong about the timing. It seems to be that when all
> the three power centers of a country - the legislative (government), the
> economic (private businesses, in our case Wallenberg) and the intellectual
> (academic economics) - pull in the same direction, namely towards the abyss
> of austerity, then the process tends to slide faster than one can really
> imagine in advance. We should remember thgat nevr in post-war history has
> there been such a full-scale experiment of reversed keynesianism as in
> Sweden.
>
> My current view is, sadly, that there is nothing we can do about Sweden.
> The process of social and economic disintegration has gone too far, the
> budget cutbacks have been to severe, and the damage done to the labor
> market is so serious, that only an international intervention can prevent
> that country from a socio-economic meltdown within a few years. (All it
> takes is another round of 5+% of GDP in reduced demand via tax hikes and
> plunges in government spending.) When I tell politicians and academics in
> Sweden that this is indeed what I think awaits them, I'm dismissed as a
> funny oddball. Sometimes I wish I were...
>
>
> /srl
>
>
> -----
> Sven Robert Larsson
> Address:        Roskilde University
>                       Department of Social Sciences, Bldg 22.1
>                       Pb 260
>                       DK-4000 Roskilde, Denmark
> Telephone:      +45 4674 2910
> Fax:               +45 4674 3080
>
>

--
Rosser Jr, John Barkley
rosserjb@xxxxxxx