March 10, 2008


Competition and free trade key to prosperity: THE Swedish economy has often been compared with a bumblebee, whose ability to fly can only be explained by its ignorance of aerodynamics and physics. Proponents of the Swedish model claim Sweden is proof that, counter to conventional wisdom, big government and economic growth can peacefully coexist. (Maria Rankka, March 11, 2008, The Australian)

Though there certainly are positive as well as negative lessons to be learned from Sweden, one should be wary of those who claim causal relationships between Sweden's welfare state and its historic economic achievements. The parts of the welfare state that work the best today are the parts that have been reformed, where competition and private alternatives are allowed.

School vouchers, for example, were introduced more than 15 years ago in Sweden. This reform has allowed children to choose a privately run school if they want to, paid for by taxes. Recent research shows not only that independent schools produce the best results but that school choice andthe existence of independent schools has improved overall efficiency and effectiveness in the entire school system.

American documentary filmmaker Michael Moore praises the Swedish healthcare system in his movie Sicko. But he is worried that the new Swedish Government will destroy this paragon of public health funding, as he sees it, by letting in private alternatives. In fact, Sweden has had private alternatives within the healthcare system for 15 to 20 years. That is no big deal for Swedes, at least not as long as the private alternatives don't constitute too large a share of the market. The debate is on the financial side. Should people be empowered to buy private insurance?

There is also a debate whether big emergency hospitals should be allowed to be run privately (still with funding from the government) and if private hospitals should be allowed to make a profit. Hardly anyone other than Moore is totally against privately run health care.

Yet he's the guest of honor at Democrat Conventions?

Posted by Orrin Judd at March 10, 2008 9:17 AM
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