Sent: Monday, April 30, 2001 1:31
PM
Subject: Re: Anti-EU demonstration in
Sweden
I accept Per's more informed
comments. If he says the
Swedish currency is floating, or at least being allowed to
devalue,
against the euro, I am sure he is correct. This may
mean that my
remarks vis a vis the Danish krona may be incorrect as
well.
I also accept his updating that the
Swedish economy now
appears to be slowing down after three years of solid
growth.
This has not yet shown up in the internationally published
stats.
However, I have read of Ericsson's problems. Is there
an explanation
for these?
I would say that Denmark and
Norway are now the flagships
of the "Scandinavian model," in terms of exemplars.
Sweden has
indeed fallen to last place in real per capita income among
all of
them (unless one includes Estonia, which most people do not
yet).
However, it is hard for those in the US to switch their
thinking
partly because there has been so much written about the
Swedish
model and so little about these others. Of course many
of the
desirable features of these others have been shared by
Sweden,
at least in the past. So, to the extent that people
read accounts
of the past, they are not too far off about Denmark and
Norway.
Or am I offbase here? I stand
to be corrected if I am.
Barkley Rosser
----- Original Message -----
Sent: Friday, April 27, 2001 4:13
PM
Subject: Re: Anti-EU demonstration in
Sweden
Henry, Barkley, and others,
As one of the Swedish list subscribers
(thankfully living in the US though!), let me
add a general comment:
While I don't see any immediate risk for a
Swedish secession from the union, I do foresee increased tensions between
Sweden and the EU about the common currency. Sweden did not negotiate any
exemptions in this respect so is under a legal obligation to adopt the Euro
-- but has failed to honour this commitment owing to 'domestic political
resistance' according to the government. So far that has been well taken in
Brussels, but it remains to be seen how long that patience will last.
Sweden may also come under increased pressure
from a human-rights point of view. A recent government proposition mandating
authorities to register the political opinions of anybody seeking social
assistance (about 10 percent of the population every year) is a worrying
example of the constant tendency towards more 'big brother' type
registration and intrusion into people's privacy. In judging the
significance of this, one should bear in mind that Sweden is a country where
the government controls well over half of GDP and permeates every aspect of
people's lives from cradle to grave.
After two abysmal decades culminating in an outright depression, Sweden's economic performance has improved, at any rate to match
the rest of the world, since 1997. The culprit was a U-turn on the part of
the government (facing re-election problems) in fiscal policy whereby
government spending began to rise after an extended period of stagnation or
decline. Private consumption accelerated sharply, partly reflecting the
acute need to replace deteriorating stocks of automobiles and other consumer
durables, partly in response to the massive surge in equity and real-estate
prices. Real incomes also began to grow, albeit at a moderate pace. Total
consumption (public and private) has
increased by about 3 percent per year since 1998 and GDP has grown still
faster.
However, these three magnificent years, wherein
consumption for a change was allowed to grow at a
pace comparable to other OECD countries, came to an end last fall.
Private consumption is now standing still and government consumption is
falling. GDP still grows, albeit at a sharply reduced rate, thanks to
expanding construction activity and increasing net exports.
The current prospects are somewhat bleak, with
major problems and massive reductions taking place in the telecommunications
flagship Ericsson. The currency (crown) has depreciated sharply and is weak
even compared to the Euro. These problems are related, since the Ericsson
shares are massively important to the Stockholm Bourse (stock exchange),
more one third of which is owned by foreigners. Foreigners' sell-off of
Ericsson shares and the associated currency transactions likely account for most of the recent weakening of the
crown.
One should remember that the Stockholm Bourse
has been the fastest rising in the world, with a (comprehensively defined)
General Index peaking at about 6,800 last spring, an incredible 68-fold
increase since the base year 1980 = 100, after an increase of some 65
percent only in 1999. Owing to the recent Ericsson crash the index now
hovers around 4,000, i.e. 'only' a 40-fold increase since 1980. Nominal GDP
barely quadrupled in the same period. A 10-to-1 relationship in other words,
between the stock market and GDP.
About half of the employment lost in the
depression (which amounted to 12 percent of all jobs) has been regained
since the recovery commenced, and unemployment has fallen from catastrophic
levels to more manageable rates (5.3 percent in February). It remains high
by historical standards though. Both employment and unemployment appears to
be flattening out at this time, but neither is increasing, at any rate not
yet.
Notwithstanding (or as the flip side of?) the
hausse in stocks, Statistics Sweden's income distribution survey (HINK)
reports that the lowest 6 deciles of the population have an average net
worth of zero. (The net worth of deciles 5-6, i.e. the middle 20 percent is
$12,000.) It goes without saying that this is not much to fall back upon if
one loses one's income -- and the access to credit is much more limited than
in the United States. The vast majority have no significant reserves or
resources to fall back on but are in effect completely and immediately at
the government's mercy should something go wrong in their lives.
Virtually all media, all think-thanks, the
entire university system and research community, all trade unions and other
major organisations are closely interwoven with the government and dependent
on government financial support to an extent that has, at any rate in my
judgement, seriously impaired their role as controlling and counterbalancing
powers to the state. My personal experience
of interacting with these institutions in my five-year (1992-97) endeavour
to publicly criticise the government's macroeconomic policies from a
Keynesian point of view is anything but encouraging. In the end I faced the
choice of doing something else or leaving the country! (I chose the latter.)
It is hard for me to give a balanced account of
what is going on in Sweden, partly because of my personal
experiences, which have given rise to a certain amount of resentment on
my part, and partly because the situation and trends are genuinely difficult
to analyse and discern given the volatility of a social and political system
where most people now make a virtue out the necessity of following the
leader, and where the leadership is often quite capricious and
unpredictable. It could end up anywhere if it weren't for the cushioning
provided by 'what the neighbours might think' -- i.e. the international
setting. In this respect, the EU membership is an important positive factor.
What I can say for certain, is that Sweden is no longer the country that American Liberals
used to cherish. Unfortunately, the ideologically based cherishing tends to
go on long after its grounds have disappeared. I sometimes say, half
jokingly, that all that remains of the celebrated Swedish Welfare State is
the taxes! Which, I am afraid, is closer to the truth than one would like to
think. Indeed, the developments in
Sweden in recent decades may well be taken to illustrate what Hayek warned
of in 'The road to serfdom'.
Per Gunnar Berglund
----- Original Message -----
Sent: Thursday, April 26, 2001 5:53
PM
Subject: Re: Anti-EU demonstration in
Sweden
I would be interested to know from those who are informed
about northern
Europe, such as Hugh Whinfrey or others, if this is
unique to Sweden, or are
there general centrifugal forces at work
against regionalization.
Henry C.K. Liu
Harry Veeder
wrote:
> Aren't member states allowed to leave should
they
> decide it is not in their best interest to be part of the
EU?
>
> If so, these events probably signal the beginning
of
> Sweden's "repatriation".
>
> Harry
Veeder
>
> >There are no people in Sweden on this list, for
a very good reason.
> >Keynesianism as a scientific paradigm or
policy practice was banned from
> >universities, political
institutions and the labor movement a good two
> >decades
ago.
> >
> >As to the mass arrests I can only quote a
distinguished contemporary
> >American poet: "You ain't seen
nothing yet". The subscribers to this
> >list would think I'm
flat crazy if I began to tell what's going on under
> >the
polished surface in that country, so I won't. "Sweden?? Naw,
that's
> >such a nice place!"
> >
> >Tell
whoever sent that mail, Henry, that the rest of the world won't
>
>care until it's too late (it already is, actually) so he or she
better
> >migrate ASAP.
> >
> >/srl
>
>
> >"Henry C.K. Liu" wrote:
> >>
>
>> This just got in my mail. Any comments/analysis from
list members in
> >> Sweden?
> >>
>
>> "hello.
> >> I just wonder what sort of
press coverage the anti-eu demonstration in
> >> malö,
sweden got in the rest of the world? it was a rather small
>
>> demonstration (about 1500) but that ended with something
like 250 taken
> >> into police custody in what appears
to have be an organized police
> >> drill for the
big demonstration in göteborg in juni (read, the police
>
>> had before the demonstrations started plan to practice some
mass
> >> arrests). "
> >>
>
>> Henry C.K. Liu
> >
> >--
> >Sven
R Larson
> >PhD; Assistant professor of economics
>
>Department of Social Sciences, Bldg. 22.2
> >Roskilde
University
> >Pb 260
> >DK-4000 Roskilde,
Denmark
> >Phone: (+45) 4674
2910