Do you know Godwin’s law? That any internet discourse eventually devolves into something involving Hitler?
There is a new law. I’m coining it, as Doolittle’s law: The minute someone mentions Sweden in an economic argument, you know that they’re analysis is wrong.
1) As Felix Salmon states, Wealth is very different from Income. The WEALTH distribution in the USA and Sweden is similar because sweden is a capitalist country albiet one with a great deal of redistribution, and wealth must be in the hands of the people with the knowledge to EMPLOY that wealth in order for wealth to exist.
2) Felix also states that countries with great retirement schemes require less wealth accumulation, since wealth accumulation is a retirement scheme. So individuals with retirement schemes have less incentive to develop wealth. Swedes have fewer incentives to accumulate weath.
[callout]Doolittle’s law: The minute someone mentions Sweden in an economic argument, you know that they’re analysis is wrong.[/callout]
3) Redistribution that affects one’s family, tribe and culture is one thing. Redistribution that allows a group or class to compete with you is something else. Redistribution that is used for purposes that one objects to is something else entirely. No one is against redistribution. It’s the USE of redistribution that gets people up in arms – whether it’s the concentration of wealth in the hands of a competing minority or class, or redistribution to minorities seeking political power. And they’re right to do so. Homogenous cultures are comfortably redistributive. Heterogeneous cultures aren’t. That’s why multiculturalism fails, and always will fail. One can only have multiculturalism under a political system where there is no means by which competing interests can gain political power, and no matter of redistribution. This is why european cities were multicultural before the advent of democracy and nationalism.
4) Sweden is an outlier. It is a small, genetically homogenous, protestant, ascetic, nordic, resource economy with no border issues that did not experience the second world war. It is an abnormal country. It cannot be compared to heterogeneous countries of much larger size. The cultural comparison at scale is Japan, not the USA. Japan is an island based, racially homogenous ascetic culture.
5) Sweden doesn’t have all that much ‘wealth’ with which to create a distortion. The bigger the economy, the greater the potential for concentration of wealth. Sweden is a small country of 10M people, 85% of whom live in a very dense area, and who benefit from the remainder of the country’s low population density and the ability to export natural resources easily into europe. In the USA we have cities that big – and they are full of tribal and competitive minorities, and complex social class structures competing for political influence in order to demonstrate social status for themselves and their tribes. So, that’s why there isn’t a vast difference in income. It’s because sweden is a small country, it isn’t an empire, it doesn’t have the ability to concentrate capital, it doesn’t have the ability to create liquidity and it has a small market.
6) When comparing the USA to another country you must use the whole of western europe, because that is the degree of diversity in the USA. We live in the Nine Nations of North America. And different nations are not generous to each other. They cannot be. I’m happy to debate this with anyone. But humans cannot build a large country with complex relationships and have high redistribution, unless they want to invite civil war.
7) The evidence is pretty clear. You an live a better life with more choices in the USA for less money if you ‘enter the system’. Entering the system means consumer credit, housing, and working reasonably hard for a living. If you don’t want to ‘enter the system’ you’re going to be in the lower quintiles. It’s pretty simple. Furthermore, It’s terribly expensive to live in Sweden and it takes little research of expat writings to see how few people from the USA want to live there after trying, and inversely, how many swedes come the USA and stay here because of greater economic freedom.
Social status matters because it determines access to opportunity, and access to mates. Status hierarchies are more valuable in-group than across groups, which means that humans will always be naturally racist and anti-culturalist except under two scenarios: a) at the margins where mate selection is advantageous for one or two generations, or b) (as in the UK) where a a social class can gain temporary social status for one or two generations by demonstrating ‘tolerance’.
No data will demonstrate otherwise. And that is what makes good economics. Use of statistics to create ‘errors of aggregation’ and ‘ignoring causality’ in order to intentionally create a false argument is bad economics. Whether bad economics is a a form of fraud and deception, or whether it is immoral, is a matter for someone else to decide. But I’m willing to stipulate that regardless of those potentialities, it’s is simply bad economics.