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Monday, September 18, 2006
Messages from Sweden
The Atlanta Journal-Constitution
Sweden’s politics are not high on the agendas of most Americans — or most Europeans, for that matter. But the outcomes of two contests there yesterday are revealing.
In the big one, the leftist Social Democrats party which has ruled Sweden for 64 of the past 70 years, including the last 12, was ousted by the center-right Moderates. Their strategy was to attack high unemployment by proposing to cut taxes for the lowest wage earners and to shrink unemployment benefits so the jobless have incentive to work. In a sense, the Moderates followed the strategy that George W. Bush has pursued here: Don’t threaten to dismantle the welfare state, but introduce incentives to change undesired behaviors.
In an interview with the Swedish newspaper The Local , Johan Norberg, author of “In Defence of Global Capitalism” who is a free-trade champion and a critic of his country’s welfare state, was asked about his observation that Sweden was “rotting from within.” “How do you mean?” the interviewer asked.
“I mean that the welfare state was built on specific preconditions: wealth, a strong work ethic, a sense of trust in a homogenous society, and an aversion to living on welfare. All of which made it possible to create a strong social security system. Now that may sound great but with it came a gradual distortion of incentives.
What we now see is that taxpayers are footing the bill for people who choose not to work. Plus we have the strange situation whereby Sweden is one of the healthiest countries in the world but also has the highest level of sick leave. The collapse of the initial preconditions has meant that attitudes have changed to the point that people are no longer sure what is right and what is wrong. “
Vaguely familiar?
The other item of interest from the Swedish elections was a seven-month “experiment” in Stockholm with “congestion-pricing.” It was called an experiment, though it involved spending $525 million to implement. It levied electronically recorded charges on motorists on heavily-traveled corridors into Stockholm based on time-of-day. The fees ranged from $2.76 per trip between 7:30 and 8:29 a.m. and 4 to 5:29 p.m. to $1.38 at the start and end of the day. Between 6:30 p.m. and 6:29 a.m., tolls were lifted. Taxis, buses, electric cars, hybrid vehciles and foreign-registered cars were exempted.
The toll did reduce traffic, with volume falling 20-25 percent, though some or all of that could have been shifted to non-toll streets and to the no-toll hours. The “experiment” was halted July 31 to await results of Sunday’s referendum. All results weren’t in as of this morning, but with 457 of 461 voting districts reporting, the yes votes led 51.7 to 45.6. Surprise! They loved it in-town and hated it in municipalities surrounding Stockholm, where not a single one favored it. Eleven of 14 had reported results and every one of them rejected time-of-day tolls.
