SWEDEN AND MISSISSIPPI, REVISITED
Like the proverbial bad penny, the argument about whether Sweden is poorer than Mississippi, thereby demonstrating the superiority of capitalism to socialism (no, really, I’m not making this up; here’s the link to the whole controversy) continues to come back.
John Ray , for example, the Grand Inquisitor who has assigned himself the task of exposing and extirpating the leftist heresy, defends GDP per capita as an “objective” measure of well-being.
A few points in summary:
1. As measured by GDP per capita, Sweden is indeed poorer than the US, though richer than France, Britain, or Germany.
2. Anyone who has visited both Sweden and Mississippi will doubt that the latter is in any meaningful sense richer.
3. Even comparing to the US as a whole, Swedes are, on average, better-educated and longer-lived; these are crude and partial, but still significant, measures of overall well-being.
4. GDP per capita is, as Ray says, an accounting measure of total market-traded or tax-financed economic activity. It was not designed as a measure of net welfare, even net material welfare.
5. Leisure, clean air, safe and comfortable working conditions, personal security from criminal victimization, high educational standards, and highway safety are all aspects of material well-being omitted from the GDP measure. GDP also fails to account for resource depletion, whether of the forests in Brazil or the water table under Phoenix, Arizona.
6. It’s true that any specific adjustment to the GDP measure will involve judgments that are in some sense political. But that does not make GDP an “objective” measure of welfare. Using it that way implies a judgment that the value of leisure hours is zero. That isn’t political: it’s simply wrong.
The whole controversy has been, I submit, silly from its inception. Only the desperate need of some conservatives and libertarians to believe that Sweden, which pursues policies they condemn, must therefore be in terrible shape, explains it. After all, it would have been equally true to say, “After a decade of Thatcherite rule, Britain was poorer than Mississippi,” or “The disastrous policies of the Berlusconi regime have made Italy poorer than Mississippi,” or “The Austrian flirtation with a neo-Nazi government has left it poorer than Mississippi,” since Sweden is richer, on a GDP per capita basis, than Britain, Italy, or Austria. But of course saying any of those things would have been foolish.
Nick Scultz of TechCentralStation.com provides some useful perspective:
First, most people know Sweden from its cities (Stockholm, in particular) but the Swedish countryside is extraordinarily poor and the worst off there have fared extremely poorly in the last few decades.
Quality of life measures can be misleading. For example, critics of the comparison between the two point out how much more leisure time Swedes have. But leisure time is defined as time away from their official places of work.
And that’s a misleading statistic. Given the generous welfare benefits and the differences in immigration policies, Swedes spend a lot of their “leisure time” doing work that Americans pay others to do for them (household chores, etc.)
Also, you have to remember that the reason people feel as strongly as they do about this is that Sweden was THE model of workable socialism in the west – when I was in college in the early 1990s, Sweden was touted by every political science department in the country (save, maybe, Hillsdale or the University of Chicago) as the last best hope for socialism given the failures of Soviet communism. But the overall point is that Sweden hasn’t really “worked” – in terms of being an innovative, growing, wealthy welfare state – as well as some of its loudest champions said it did. A minor
point, but not an altogether insignificant one in a sense.
This isn’t to say that American-style capitalism is the answer. Indeed, I’d probably rather live in Sweden than Mississippi. For what that’s worth.