Is Sweden Really Worse off than Mississippi?

Why the smart thing to do with a “believe-it-or-not” blogospheric factoid is not to believe it. The perils of comparative policy analysis.

This topic continues to generate more controversy than it deserves. John Ray , for example, the Grand Inquisitor of 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, which are crude 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.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com