The Welfare State is Dead, Long Live the Welfare State
by Baron Bodissey
The noted blogger Fjordman is filing this report via Gates of Vienna.
I have heard comments from people who thought Fjordman was from Sweden, because I write at least as much about Sweden as I do about my own country, Norway. There are several reasons for this. The most important one is that Sweden is probably one of the worst, if not the worst, country in the Western world when it comes to Political Correctness. Norway is pretty bad, Sweden is absolutely insane. Which makes it fun to write about.
The other reason is that Sweden is the largest and best known of the Scandinavian countries. When people in Canada or the USA discuss the Scandinavian welfare state, they usually talk about the “Swedish model,” not the “Norwegian model.” The Swedish welfare state was presented during the Cold War as a middle way between capitalism and Communism. When this model of a society collapses – and it will collapse – it is thus not just the Swedish welfare state that will collapse but the symbol of Sweden, the showcase of an entire ideological world view.
Besides, Norway is a special case in the Western world since it is the world’s third largest exporter of oil, next to Saudi Arabia and Russia. Norway’s considerable oil wealth will keep the welfare state artificially afloat for years to come. I will thus mainly concentrate on Sweden in my writings below.
Let me first say that there are positive aspects to the welfare state model. It would be hypocritical of me to say anything else, as I have enjoyed some of its benefits by growing up in one. It is also not entirely incorrect to say that it has worked better in Scandinavia than anywhere else. Still, my view is that there are critical flaws to this model. Although they may not bring the system down right away, they will do so over time. My bet is that we are approaching the point where the Swedish welfare state will cease to function.
Even if you consider a national welfare state to be a totally closed system without migration in our out and without international competition – which isn’t possible, of course – there are internal flaws that will, over time, weaken the structure.
Judging from the experiences in Scandinavia, the welfare state worked to some extent because it was based in small and ethnically homogenous nations, with a strong cultural and religious (Protestant) work ethic which had just experienced several generations of a booming capitalist economy. These traits kept the system afloat for decades, but the work ethic and the sense of duty slowly got eroded and replaced by a sense of rights, while the high taxation and the passivity bred by the system eroded initiative and the will to take risks. Again, these flaws are inherent to the model. They make time to develop, but they will, eventually.
The welfare state will also be subject to external pressures. International competition will make a welfare state economy less competitive because the high tax rates in the will stifle economic growth.
Singapore’s Lee Kuan Yew points this out: “In the end, the workers, whether they like it or not, will realize, that the cosy European world which they created after the war has come to an end.” “The social contract that led to workers sitting on the boards of companies and everybody being happy rested on this condition: I work hard, I restore Germany’s prosperity, and you, the state, you have to look after me. I’m entitled to go to Baden Baden for spa recuperation one month every year. This old system was gone in the blink of an eye when two to three billion people joined the race — one billion in China, one billion in India and over half-a-billion in Eastern Europe and the former Soviet Union.” One study warned that Europe risks becoming a “second- or third-world region” within a generation because strict labor laws are preventing companies from restructuring properly. David Lewin, who co-wrote the study, said European countries were falling behind the United States because of a lack of investment in information and communication technology (ICT). Companies in Europe had to pursue a policy of “creative destruction” to change the way they do business and learn from the “hire and fire” culture of the US to compete with emerging Asian companies. Mr Lewin added: “It is all down to employment law. In the US if you are made redundant three or four times that is normal, but in Europe there is a stigma.”
Another factor is immigration, and welfare states tend to attract the “wrong” kind of immigrants, those who would be likely to piggyback on the system, while the most dynamic immigrants tend naturally to travel to countries where they pay less tax and thus receive more in return for their work and efforts.
A Danish think tank has estimated that the net cost of immigration was up to 50 billion kroner every year, and those were cautious estimates. A study found that every other immigrant from the Third World — especially from Muslim countries — lacked the qualifications for even the most menial jobs on the organized Danish labor market.
In Norway, social benefits and salaries for low-skilled workers are among the highest in the world. At the same time, the salaries for highly skilled workers are comparatively lower and the taxes are high. This compressed salary structure is the result of decades of Socialist policies in Scandinavia. It leads to attracting people with lower skills and little education, who tend to become a burden on the welfare state, but also makes the countries less attractive for researchers and scientists.
The Western European welfare states thus get crushed by two opposing forces of globalization: The success of the Asian countries, which push us out of global markets, and the failure of Africa and the Islamic world, which send much of their excess population to us and push us out of our own cities.
A welfare state such as the Swedish one will thus experience a long, slow decline due to its inherent flaws, and a faster and more dangerous disintegration with the introduction of mass immigration of persons who do not share any group loyalty with that nation state and do not have the cultural background necessary to uphold the welfare state. The natives will, at the same time, become less willing to pay huge sums if this is seen as supporting other ethnic groups, and may eventually decide to leave the country. A welfare state can only work in an ethnically homogenous society with high levels of mutual trust. Immigration will remove much of this trust.
Nima Sanandaji, an Iranian who has lived for some years in Sweden, describes how during the 1870s Sweden was an impoverished nation. All this changed as capitalism was introduced in the country. “Free markets, property rights and the rule of law created an environment where the Swedish people could achieve a long period of rapid economic development.” After WW2, the Social Democrats initiated a large-scale expansion of the welfare state. Income taxes doubled between 1960 and 1990, rising from approximately 30 to 60 percent.
“P.J. O’Rourke once wrote that no American would work if they lived in a system such as the Swedish welfare state, where government is ‘generous’ with benefits to the unemployed, those on sick leave and those that have retired. What makes Sweden interesting is that for a long time people were very reluctant to take advantage of the system. The Swedish population had a strong tradition of entrepreneurship and hard work and continued to work hard even though they now had the option to live off government. But people do adapt their morality to maximize their benefits in the economic system in which they live, although this might take a generation or so.”
“According to the Institute for Labour Policies the average salary of a person who has studied at a university for three years is only five percent higher of somebody who is uneducated.” “The European welfare systems have functioned because of strong work ethics that made people reluctant to exploit them,” according to Sanandaji.
I have criticized Johan Norberg, a free-market champion and Libertarian, for having a naïve view of immigration. He does. But he can still have some insights into flaws of the welfare state. “The architects of the cradle-to-grave Swedish system said that if it couldn’t work there, it wouldn’t work anywhere. Well, it didn’t and it doesn’t.” “For a while, it performed well for the very reason that its master planners, Nobel Prize winners Gunnar and Alva Myrdal, thought it would: that Sweden was the ideal country to try the welfare state experiment.” “The Swedish population was small and homogeneous, with high levels of trust in one another and the government,” Johan Norberg explains. It also had a culture with a strong Protestant work ethic, a trait it shared with the other Scandinavian countries. Even with all that, “the Swedish model is rotting from within,” Norberg writes.
Norberg says it would be unwise to abandon the work ethic, because once we have enough money to satisfy basic needs, such as food and health, what makes us happy is not the money but the activities we engage in to get it. Human beings like solving problems, planning and hoping for the future, and work and careers enable us to do this. “If government becomes too paternalistic it deprives us of the need to be responsible for ourselves,” he says. “Then two things happen. We don’t get those challenges that seem to make us happier. And after a while we might even lose our capacity to make choices, which in terms of happiness is the worst thing that can happen to a person.”
In his classic The True Believer, Eric Hoffer writes something similar: “The poor on the borderline of starvation live purposeful lives. To be engaged in a desperate struggle for food and shelter is to be wholly free from a sense of futility. The goals are concrete and immediate. Every meal is a fulfillment; to go to sleep on a full stomach is a triumph; and every windfall a miracle. What need could they have for ‘an inspiring super individual goal which could give meaning and dignity to their lives?’ They are immune to the appeal of a mass movement.” “There is perhaps no more reliable indicator of a society’s ripeness for a mass movement than the prevalence of unrelieved boredom. In almost all the descriptions of the periods preceding the rise of mass movements there is reference to vast ennui; and in their earliest stages mass movements are more likely to find sympathizers and support among the bored than among the exploited and oppressed.”
Is this boredom, the sense of futility and the meaningless of life in the nanny state one of the causes of the famously high suicide rates in Scandinavia? Theodore Dalrymple thinks so: “One reason for the epidemic of self-destructiveness that has struck British, if not the whole of Western, society, is the avoidance of boredom. For people who have no transcendent purpose to their lives and cannot invent one through contributing to a cultural tradition (for example), in other words who have no religious belief and no intellectual interests to stimulate them, self-destruction and the creation of crises in their life is one way of warding off meaninglessness.”
Dalrymple identifies the welfare state as one of the root causes of Europe’s problems: “The principal motor of Europe’s current decline is, in my view, its obsession with social security, which has created rigid social and economic systems that are extremely resistant to change. And this obsession with social security is in turn connected with a fear of the future: for the future has now brought Europe catastrophe and relative decline for more than a century.”
“But there are other threats to Europe. The miserabilist view of the European past, in which achievement on a truly stupendous scale is disregarded in favor of massacre, oppression and injustice, deprives the population of any sense of pride or tradition to which it might contribute or which might be worth preserving. This loss of cultural confidence is particularly important at a time of mass immigration from very alien cultures.”
Observer Per Bylund notes how the welfare state corrupted Sweden: “Old people in Sweden say that to be Swedish means to supply for your own, to take care of yourself, and never be a burden on anyone else’s shoulders. Independence and hard work was the common perception of a decent life, and the common perception of morality.” The slogan in Norway was “Do your duty, demand your rights.” Over time, “duty” tends to become eroded, leaving only the sense of “rights.” According to Bylund, “The problem is that the welfare state was created and it would dramatically change people’s lives and affect their morality in a fundamental way.”
“People seem unable to enjoy life without responsibility for one’s actions and choices, and it is impossible to feel pride and independence without having the means to control one’s life. The welfare state has created a dependent people utterly incapable of finding value in life; instead, they find themselves incapable of typical human feelings such as pride, honor, and empathy. These feelings, along with the means to create meaning to life, have been taken over by the welfare state.” “Perhaps this explains why such a large part of the young population now consumes antidepressant medication, without which they are unable to function normally in social situations. And presumably it explains why the number of suicides among very young people who never really knew their parents.”
This last point, the absence of biological parents because the state becomes your substitute mother and father, is highly significant. Bylund points out that “most of us were not raised by our parents at all. We were raised by the authorities in state daycare centers from the time of infancy; then pushed on to public schools, public high schools, and public universities; and later to employment in the public sector and more education via the powerful labor unions and their educational associations. The state is ever-present and is to many the only means of survival — and its welfare benefits the only possible way to gain independence.”
A significant number of the problems we are witnessing now in Scandinavia and in Western Europe in general have their roots in the ideology of the all-encompassing state. Education teaches people to respect the consensus, not sabotage it. As Roland Huntford demonstrated in the book The New Totalitarians, Sweden is a “peaceful utopia” controlled by a bureaucracy which actively discourages all signs of individuality and dissent.
This totalitarian impulse was implicit in the welfare state from its very inception. Marcos Cantera Carlomagno in 1995 published a PhD thesis at Lund University describing a series of letters sent by Per Albin Hansson, leader of the Swedish Social Democrats who was Prime Minister between 1932 and 1946 and worked for the establishment of “Folkhemmet,” the People’s Home, as the Swedish welfare state model became known as. The embarrassing fact was that Hansson was a very dear pen pal with Italy’s Fascist leader Mussolini during the 1930s, and praised the corporate, Fascist system where the entire economy and each individual were intimately tied to and subordinate to the state. Carlomagno’s work was totally ignored by the entire media and political establishment in Sweden when it appeared in the 1990s.
The Social Democrats have ruled Sweden, with only a few years exception, in the 74 years since 1932, and have such a dominant position in the country that some Swedes have warned against signs of a “one-party-state.” Professor Bo Rothstein at the University of Gothenburg complains that the Social Democratic government “controls in detail” much of the research going on in the country, by hand-picking which researchers who will receive funding and be hired for certain projects. Rothstein fears that this politicization of research is so widespread that it is damaging the vitality of the Swedish democracy.
This close ideological connection between Socialists and Fascists might surprise those who have been brought up to believe that these ideologies are polar opposites. In fact, they have more in common with each other than either have with classical liberalism, not the least the tendency to reduce the individual to an organic part of the state. F.A. Hayek pointed this out in The Road to Serfdom:
“In Germany and Italy the Nazis and the Fascists did indeed not have much to invent. The usages of the new political movements which pervaded all aspects of life had in both countries already been introduced by the socialists. The idea of a political party which embraces all activities of the individual from the cradle to the grave, which claims to guide his views on everything (…) was first put into practice by the socialists.
It was not the Fascists but the socialists who began to collect children from the tenderest age into political organisations to make sure they grew up as good proletarians. It was not the Fascists but the socialists who first thought of organising sports and games, football and hiking, in party clubs where the members would not be infected by other views. It was the socialists who first insisted that the party member should distinguish himself from others by the modes of greeting and the forms of address. It was they who by their organisation of “cells” and devices for the permanent supervision of private life created the prototype of the totalitarian party.”
Ulf Nilson, columnist in newspaper Expressen and one of the saner voices in Sweden, thinks that: “Any idiot can see that Swedish leaders – starting with [Social Democratic PM] Palme and his gang – have been waging a war on the family, father, mother, child, since at least the 70’s. The law of individual taxation from 1971 did in reality abolish stay-at-home-moms. The overwhelming majority of families became dependent on two salaries. Thus the child was collectivized; children became the property of the state and a state responsibility.” This thinking was “exemplified by the famous citation: “You (the state) can’t possible be thinking of unloading the burden of responsibility onto the parents?”
Policy analyst Jill Kirby claims that this “Nationalisation of Childhood” is happening in welfare state Britain, too: “It builds on the Chancellor’s doctrine of “progressive universalism”, rooted in the belief that the state must intervene in the lives of all, for their own good.” “The Marxist doctrine was brought up to date by Anthony Giddens, one of the architects of New Labour, in 1998. In The Third Way, Giddens explained how the “democratisation” of the family demands that responsibility for childcare be shared not only between men and women but also between parents and nonparents. Giddens also proposed that in the democratic family, parents would have to “negotiate” for authority over their children.”
“The role of parents would, in effect, be subsidiary to the state.” “In the guise of a caring, child-centred administration, constantly proclaiming its desire to support parents and reduce inequality, this Government is effecting a radical change in the balance of authority between parents, children and the state. The nationalisation of childhood is no longer a Marxist dream; it is becoming a British reality.”
Øystein Djupedal, Minister of Education and Research in Norway’s current Leftist coalition government, stated in public that: “I think that it’s simply a mistaken view of child-rearing to believe that parents are the best to raise children. Children need a village, said Hillary Clinton. But we don’t have that. The village of our time is the kindergarten.” He later retracted this statement after public reactions, saying that parents have the main responsibility for raising their children, but that “kindergartens are a fantastic device for children, and it is good for children to spend time in kindergarten before [they] start school.” The Ministry of Education and Research in Norway is responsible for nursery education, primary and lower secondary education, day-care facilities for school children, upper secondary education and institutions of higher education. Basically, everything Norwegians learn from kindergarten to Universities and PhD level.
Bruce Bawer, author of the book While Europe Slept, who lives in Norway, has heard Norwegians talk a lot about “solidarity,” but when his partner was attacked in the middle of a rush-hour crowd in Oslo, nobody came to his aid. “Solidarity doesn’t just mean a spirit of community – it means a spirit of community mediated through government institutions.” “There does seem to exist in Western Europe a deadly pattern of passivity that derives from a habit – born of life in a welfare state – of expecting the government to take care of things.”
Americans say “God bless America” or “In God we trust.” Europeans giggle and think it’s funny or silly. But we have some buzzwords of our own. “Solidarity,” for instance. Is the welfare state, on some deep, subconscious level, a substitute for God? An omnipresent state instead of an omnipresent God? Europeans lost belief in God in Auschwitz and the trenches of WW1. We no longer trust in God, so we put our trust in the welfare state, to create a small oasis of security on a continent that has had such a turbulent history. The irony is that it worked well only in countries which used to have a strong religious base, a Protestant work ethic and sense of duty. As that religious heritage gets weakened, so does a necessary precondition for the welfare state.
It will do nothing to “provide security” in the face of Islamic Jihad, however. The welfare state breeds passivity. For rulers, this can be quite useful. The official reason for the welfare state is to alleviate poverty. This may be part of the reason, but we should remember that a powerful state bureaucracy which deals with all aspects of life also leaves a great deal of power to those on top of that bureaucracy, ruling people who have been pacified and emasculated by decades of state indoctrination and interference in their private lives. I suspect one of the reasons why Europeans put up with a powerful EU bureaucracy running much of Europe’s affairs is that we have already been accustomed with this on a national level.
Anna Ekelund in the newspaper Aftonbladet writes that: “We are a people who allow ourselves to be insulted by the government on a daily basis. We are not expected to be capable of thinking for ourselves, of deciding what we will read, or managing our own money. We pay up and smile in deference to the “better schools and healthcare” slogan, only to be met in the autumn of our lives with a shrug of the shoulders and the final humiliation. So we direct our outrage instead towards gender hierarchy and pornography.” “Swedes are as co-dependent as an alcoholic’s wife. Yet we do not hurry to the ballot box to remove the prevailing systems. Not because we don’t want to but because too many of us have painted ourselves into their corners.”
In Norway, people are not allowed to buy beer in shops after 8 pm. This is because, well, I don’t know why really, probably because the nanny state wants to look after us and make sure we don’t drink too much or something. An adult person can thus walk into a shop at 08.01 pm, the beer is there but you are not allowed to buy it. Norwegians accept this, just as we accept that the state keeps official lists of which names you are allowed to use for your children, what kind of toilet you have in your cottage etc. We are used to following rules, and do so too frequently without question.
To demonstrate just how far acceptance of state interference has gone, Norway will shut down private companies that refuse to recruit at least 40 percent women to their boards by 2007 under an unprecedented equality drive. Former Minister Laila Daavoey said that all state-controlled firms had already complied. “If we can recruit women to our state companies why can’t private businesses do it too?” Female directors must make up at least 40 percent of all new shareholder-owned companies’ boards of directors from January 2006. Existing stock companies will have two years to conform to the new quotas. Minister Karita Bekkemellem says “This is all about sharing power and influence and it is intervention in private ownership, but it was overdue.”
Now, what happens if this powerful state bureaucracy gets taken over by people who, say, want to push Multiculturalism and Muslim immigration? In this case, this ingrained passivity becomes extremely dangerous. The welfare state weakens the ability of citizens to protect themselves and think for themselves. It no longer provides “security,” in fact it provides insecurity, since we are financing our own, Islamic colonization. It is used to pacify the general populace by the Eurabian elites. Not only will the welfare state collapse, it probably must collapse.
Journalist and writer Kurt Lundgren notes on his blog that Sweden during the past five years has witnessed the largest mass-emigration in the country’s history since the peak of the immigration to the USA more than a century ago. The people leaving are primarily highly educated, native middle class Swedes. Common reasons cited for leaving are rampant crime and a sense of hopelessness and resignation over poor political leadership. At the same time, Sweden receives a large amount of immigrants from Third World and Islamic nations every year. Is this population replacement profitable for Sweden as a nation?
Lundgren states that it feels like “being spectator to a huge social experiment: The dismantling of an entire nation, one of the oldest in Europe, with all its traditions, its entire history for good or bad, the national awareness and the nation’s soul; all of this shall be eroded in a planned process. Nobody knows what will come instead of this, but there could be something monstrous emerging from this, something really terrifying….”
Lundgren read a book about the collapse of the Soviet Union, and believes the system collapsed when the vision of reality presented by the authorities and the media became too different from the realities people experienced in their everyday lives. He fears the same thing is now about to happen in Sweden. What makes the situation particularly serious is the constant influx of unemployed and partly unemployable immigrants
“I don’t think even a tax rate of 64 percent will do to sustain the illusion of a welfare state. Maybe it will take 70 percent or more in the future. Perhaps before the year 2010 we will reach a point where the fantasy image we are presented no longer can be reconciled with what the people are experiencing. At that point, everything will fall apart, just like in the Soviet Union, but there will be a few more years of disintegration and chaos until we reach this point.”
The Buddha tells a story about a man and a raft which is used as a simile for understanding his teachings. The raft should be used to cross over to the other shore, but not for anything more:
“Upon reaching the further shore, he might think, ‘How useful this raft has been to me! Why don’t I, having hoisted it on my head or carrying on my back, go wherever I like?’ What do you think, monks: Would the man, in doing that, be doing what should be done with the raft?”
“No, lord.” replied the monks.
“And what should the man do in order to be doing what should be done with the raft? There is the case where the man, having crossed over, would think, ‘How useful this raft has been to me! Why don’t I, having dragged it on dry land or sinking it in the water, go wherever I like?’ In doing this, he would be doing what should be done with the raft.”
That’s what Western Europeans should do with the welfare state.
The welfare state wasn’t all bad, and it did indeed work better in Scandinavia than anywhere else. However, the welfare state belongs to a specific historical epoch that we are now rapidly leaving behind, and its flaws are starting to catch up with it. The welfare state creates a false sense of security in a dog-eat-dog world. It can even be quite dangerous to cling on to a raft when you are heading for a waterfall. Instead of clinging on to the raft, which may in fact drag you down with it, the sensible thing to do is to make it to the shore and continue without it.
The welfare state is dead, long live the welfare state.
A note from Baron Bodissey: Thanks to reader LN for the “Svensk Tiger”. He says it is a Swedish pun:
During WW2 this was a very frequent bill/poster in Sweden; it was everywhere, in trains, in busses, in the station, in the school, in the library etcetera…
It is a witty, double-barreled joke meaning:
A Swedish tiger = en svensk tiger
A Swedish person keeps silent / holds his tongue >>> tiger/tiga = keep silent, hold your tongue, keep quiet!