Sweden is thinking about what makes it great
The first foreigner confusion was the work of neoliberal intellectuals at think tanks such as Timbro who enjoyed remarkable success in reshaping government policy. The second is the work of the Sweden Democrats, who have moved from the neo-Nazi fringes to the center of power as Sweden’s second largest party.
At first blush, Sweden is strikingly cosmopolitan. Most Swedes speak excellent English. Stockholm offers Thai and Japanese food as well as herring and meatballs. Sweden was the world’s third largest international aid donor proportionally after Norway and Luxembourg, spending 0.92 of its gross national income on official development assistance. One in five residents was born abroad.
The driving force behind this cosmopolitanism is Swedish business, which specializes in turning the adventurous spirit of the Vikings into commercial purposes. The country’s most venerable power stations were the product of the first age of globalization before the First World War. Ericsson, a telecom giant, began selling telephones in China in the 1890s. Axel Johnson Group, a food conglomerate, has built its headquarters in the shape of a ship, with galley-like stairs between floors and a bridge on top, to celebrate its origins trading with Argentina. They have been joined in the second great age of globalization by a new generation of Internet-based giants such as Spotify Technology SA. Despite its reputation for equality, Sweden has one billionaire for every 250,000 inhabitants, one of the highest figures in the world, with their total wealth accounting for a quarter of GDP.
The Swedes combine the best features of German and American capitalism. German-style Swedish companies dominate global niches through a combination of engineering, high-quality education and constant innovation. Sandvik AB, which manufactures everything from machine tools to steel rods for nuclear reactors, boasts that “we sell productivity not products” and has a productivity center dedicated to pushing the boundaries of technology – creating the world’s fastest drill, for example. American-style tech companies are specialists in disruptive innovation driven by daring consumers.
In addition, Swedish society in general is remarkably business-friendly. The government allows private companies to run parts of the state such as schools and hospitals. The Swedish stock exchange is Europe’s largest, with 950 listed companies (mighty Germany comes second with around 800). Half of the adult population has savings in the Swedish fund account. Sweden has more venture capital investment as a share of GDP than any other European country, much of it sourced from America, and venture capital-financed investment is believed to have increased GDP by six percentage points since 2005.
Look again and you are faced with a society turning inward, shadowed by anxiety and pessimism. Swedes talk compulsively about the spate of shootings and riots in “troubled areas” and about the rising crime rate. (The latest scam reportedly involves stealing traffic cameras and repurposing them for Russian drones.) They lament the disappearance of the old Sweden of social cohesion and low crime, the distress of the welfare state, with hospital waiting times among the worst in Europe, and the decline of education standards across the board.
Sweden could never match its generous policy towards migrants with its ability to absorb them into society. Successive waves of refugees, who come from Bosnia, the Middle East and Somalia, have become stuck in housing construction on the outskirts of big cities such as Stockholm, Gothenburg, Uppsala and Malmö. The combination of geographic isolation with low skills in a high-wage economy (with minimum wages negotiated at two-thirds of the median wage) proved toxic. Parallel societies based on clan and religious ties developed. Young people were recruited by criminal gangs. Drug-related crime and violence exploded.
The last straw came in 2016 when Sweden granted 156,031 residence permits to refugees, the most in its history in a single year. New immigrants spilled out beyond the hidden residential areas into areas where ordinary Swedes encountered them. The riots and crime in no-go Sweden became compulsive topics of conversation. Since 2018, Sweden has had the highest rate of shooting deaths in Europe, a small figure compared to the carnage in America, but a shock for a country with such a peaceful recent history.
Sweden’s anxiety over immigration pushed the hard-right Sweden Democrats to the heart of the country’s politics. In 1993, the fledgling party organized a “riot night” in Stockholm complete with flaming torches and swastika flags. About 150 people were arrested. Today, it is the Sweden Democrats who dictate many of the country’s policies. This extraordinary growth was partly a judgment on the Swedish establishment’s refusal to talk about immigration — issues don’t just disappear because you’re too polite to mention them — and partly the result of the patient leadership of the “gang of four” that took over the party in 1993. Jimmie Akesson, the party’s leader, is deliberately low-key and common sense, the exact opposite of Donald Trump. The party has made a point of excluding extremists and has increased its vote in every election since 2000. In the current election, it became too big to avoid any longer with 20% of the vote: Conservative parties like the Moderates agreed to work with it , though without giving their MPs government jobs.
The new government is implementing a series of policies aimed at strengthening Sweden’s borders and strengthening its confidence in internal security: freezing asylum numbers to the minimum allowed under EU law; deport irregular migrants and make access to benefits dependent on learning Swedish and adhering to “common values”; limit immigration to people in median-wage jobs; cut Sweden’s aid contribution by 15% compared to the previous government’s target; increased defense spending; hiring new police (during a recent stay I encountered an impressive swarm of new recruits being trained in central Stockholm, although their main victims seemed to be E-scooter riders who had neglected to put on their helmets); and build new nuclear reactors and lower taxes on gasoline.
Indeed, the minority government can easily fall apart or lose its working majority. But even Sweden’s left-wing parties have now adopted a much more restrictive policy: the Social Democrats, for example, have drawn up proposals to limit the number of “non-Nordic” citizens who are allowed to live in “troubled areas”. And Sweden’s right-wing turn is part of a broader Nordic trend: Both Denmark and Norway have preceded Sweden in incorporating far-right parties into their governments and implementing more restrictive policies.
What does the emergence of the second Sweden mean for the first? Surprisingly little when it comes to the labor market and other economic fundamentals. Forecasters worry that Sweden’s population will decline in the long run, with too few young people to care for the old. A few labor-intensive industries such as logging complain of possible labor shortages. But most companies are resigned to the current austerity. Sweden’s economic success has been based on high productivity and high skills rather than, like England’s, on a flexible labor market that is good at absorbing low-skilled labor. Migration has primarily been driven by moral, not economic, considerations.
Unemployment among foreign-born is more than three times as great as it is for native-born Swedes. It takes about eight years for half of the new arrivals to start working even part-time. High immigration has imposed net costs on society at large. The central bank calculates that the immigration shock in 2015, when Sweden took in the equivalent of 1% of the population, led to a decrease in GDP per capita by 1.7% and an increase in aggregate unemployment by 2.2%.
It means much more for the general direction of the country. The goal of the policy must be to preserve what is best about cosmopolitan Sweden while understanding why it generated such a powerful backlash. The respectable parties are right to turn their attention to immigration: if you try to ignore something that worries the mass of the population in a fit of moral superiority, it will simply be exploited by radical parties. But the government must couple a more restrictive policy with a new emphasis on integrating the millions of refugees already there. Despite all the talk about training and Swedish language courses, there is no better force for integration than a job. Conservatives must realize that it is not enough to simply improve the efficiency of the welfare state through market mechanisms, the standard position of recent years. They also need to think more about the values of security and solidarity, not in the nostalgic sense of reviving the 1930s Folkhemmet or “The People’s Home”, but in a more forward-looking sense of reinventing patriotism for a more fluid world. Liberals need to realize that pretending to be a moral superpower can be counterproductive if not followed up by considered decisions to integrate migrants. Thankfully, Sweden’s tougher approach to refugees coincides with a more hardline approach to foreign policy in general: yesterday’s “feminist foreign policy” is being replaced by one that increases military spending and joins NATO.
Sweden has an exceptional history of developing policies that combine globalization with a recognition of society’s need for roots. The People’s Home was financed by large global corporations in its global age and then saved from death by overextension by a combination of neoliberal intellectuals who breathed new life into the model while cutting it down and a new generation of global corporations who rejuvenated the model. economy. Today, Sweden needs to develop a new set of policies for the current, more modest phase of globalization, one that lets go of the naïve talk of a borderless world and ethical foreign policy and recognizes instead the inescapable importance of the nation-state. and the limits of that state’s ability to solve all the world’s problems. More from Bloomberg Opinion:
• Rishi Sunak Goes Straight Into a Lost Immigration Policy: Therese Raphael
• With 100 million refugees, the migrant crisis has barely begun: Andreas Kluth
• Sweden’s centrists can celebrate, but not too hard: Leonid Bershidsky
This column does not necessarily reflect the views of the editors or Bloomberg LP and its owners.
Adrian Wooldridge is the global business columnist for Bloomberg Opinion. A former writer for The Economist, he is most recently the author of “The Aristocracy of Talent: How Meritocracy Made the Modern World.”
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