----- 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