“Sweden, long treated as a model of democratic socialism, has spent the past three decades moving toward freer markets. Following a period of economic stagnation and a financial crisis in the early 1990s, the country cut taxes, restrained public spending, opened parts of education and healthcare to private providers, and generally liberalized the economy….Sweden’s growth prospects now look unusually strong by European standards, with projections roughly equal to those of the United States and about twice as high as those of France and Germany,” reports The Doomslayer.
The Wall Street Journal explains:
For decades, Sweden was shorthand for the brand of high-tax, high-spend government that managed people’s lives from cradle to grave through state-run hospitals, schools and care homes.
No longer. With little fanfare, this Nordic country of 11 million has embraced capitalism.
Today, nearly half of primary healthcare clinics are privately owned, many by private-equity firms. One in three public high schools is privately run, up from 20% in 2011. School operators are listed on the stock exchange.
Sweden’s experience has lessons—good and bad—for other rich countries, including the U.S., where New York City Mayor Zohran Mamdani is looking to emulate parts of the state-centric model such as universal child care and city-run stores.
The capitalist makeover has allowed Sweden to do what few industrialized countries have managed in recent years: shrink the size of the state. That has enabled the government to sharply lower taxes and, economists say, sparked a surge in entrepreneurship and economic growth.
Its total public social spending bill—which includes healthcare, education and all welfare payments—has fallen to 24% of gross domestic product, similar to the U.S. and well below the over 30% for nations like France and Italy.
Sweden’s economy is expected to grow by around 2% a year through 2030, roughly the same pace as the U.S. and double the growth rates of France and Germany, according to an April forecast by the International Monetary Fund.
Free market reforms also helped Argentina. Argentina was broke, in a recession, and experiencing hyperinflation. But in 2023, it elected Javier Milei as its president. Milei got rid of lots of government red tape and fired many bureaucrats. Due to Milei’s policies, Argentina’s inflation rate fell from 25% per month to less than 3% per month.
Before President Milei was elected in 2023, Argentina experienced decades of decline. Argentina had once been one of the richest nations on earth, richer than Canada, Australia, and all but a handful of countries. But by the time Milei was elected, Argentina had fallen behind around 70 countries, including countries that were once much poorer than it, such as Turkey, South Korea, and Panama. Arbitrary regulations and red tape did much to cause its economic decline.
But after being elected, Milei repealed many of his country’s regulations. Argentina has one of the biggest red-tape burdens on earth, although Brazil has a more complicated tax code, and France has a higher tax burden. At the time Milei was elected, Argentina ranked 23rd worst out of 165 countries in terms of its regulatory burden, imposing more red tape than many European countries with much better health, safety, and labor conditions.
In December 2023, Milei issued a decree that repealed or reformed 300 laws to begin reversing “decades of failure, impoverishment, decadence, and anomie.” Milei had his work cut out for him — Argentina ranked very low in economic freedom — 158th out of 165 countries ranked, in one study, and 144th in another. Now, Argentina ranks about 124th, a substantial improvement, although still below average.
