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Sweden's Demographic Crisis.

Sweden, once the poster-child for a socialist paradise, now (predictably) faces grave challenges to its very existence. Over the years, a brand of high-tech free enterprise, uniquely Swedish, has coexisted with a cumbersome welfare state. Sweden, always neutral, maintains no significant active military force (although it does has a large reserve force, so it reaps a constant peace dividend.

The Swedes, ever-generous, have given the world many gifts over the years. Sweden has supplied the United States, for example, with a steady flow of Sports Illustrated swimsuit models.

All of that is in peril today, and the Swedes are beginning to realize it. The Swedish bikini team, as mythical as it may be, could become but a curious abstraction, a relic of the past, as the Swedes lose their cultural (and indeed, national) sovereignty, slowly-but-surely, from within.

The Daily Standard has a great examination of Sweden's reverse-colonization problem:

"MALMÖ IS THE CITY IN SWEDEN most touched by immigration--but it's not unique. In a fit of absent-mindedness, Sweden has suddenly become as heavily populated by minorities as any country in Europe. Of 9 million Swedes, roughly 1,080,000 are foreign-born. There are between 800,000 and 900,000 children of immigrants, between 60,000 and 100,000 illegal immigrants, and 40,000 more asylum-seekers awaiting clearance. The percentage of foreign-born is roughly equivalent to the highest percentage of immigrants the United States ever had in its history (on the eve of World War I). But there are two big differences. First is that, given the age distribution of the native and foreign populations, the percentage of immigrants' offspring will skyrocket in the next generation, even if not a single new immigrant arrives, and even if immigrant fertility rates fall to native-born levels. But second, when America had the same percentage of foreign-born, many had arrived decades before, and were largely assimilated.

Modern Sweden has built its sense of identity on two pillars: its generous welfare state and its status as what Social Democrats used to proudly call a 'moral superpower.' (Non-Social Democrats still use the term, mockingly.) Indications are that the latter achievement is in the process of destroying the former."

Sweden's generosity could lead to its own demise. Neutrality can be taken advantage of rather easily, as the Nazis proved to the appeasement-minded Swedes during World War II; similarly, despite Sweden's philosophical zeal for tolerance and diversity, which led to an explosion of immigration over the years, it has become an increasingly segmented, dangerously segregated society.

More from the article:

"TOWARD THE END of the Social Democratic reign that ran uninterrupted from 1932 to 1976, Sweden not only ranked among the world's handful of richest countries but also provided the world's most lavish welfare state. It married solidarity to prosperity. In the prevailing Keynesian climate, Swedes assumed that the solidarity created the prosperity. The state was generous with workers, who spent their money and kept the economy pumped up. Today, people are inclined to think the causality runs in the other direction. Johan Norberg, the young new-economy guru of Timbro Institute in Stockholm, notes that if Sweden were somehow to leave the E.U. and join the United States, 'we would be the poorest state in America.'

An entire revisionist history of the past hundred years of Swedish economics and politics is beginning to emerge from the work of Norberg and others. Sweden misjudged its strengths. Chief among these was that, for most of the last century, Sweden was the least protectionist country in the world. Private companies had to fend for themselves, without subsidies or tariffs. The result was an entrepreneurial energy unequalled anywhere. Saab cars ran, and Electrolux vacuum cleaners whined, on all continents. This extraordinary business acumen persists today in Ikea, Absolut vodka, H&M retailers, and the Metro newspapers that are the most widely circulated in the world."

So Sweden was doing something right, at least, with its free trade policies. Perhaps, if Sweden had been highly protectionist through th 20th century, its socialist tendencies would have gotten the best of it, but it lucked out, owing its moderate-but-significant economic success to its unique cultural solidarity (now in jeopardy) and its liberal trade policies.

Another thing Sweden got right, more recently, was its decision to reform its Social Security system, along the lines of what President Bush is currently proposing. Market-based personal accounts were imperative for the Swedes, as it had vastly over-promised benefit payouts (like the U.S. is doing now).

The Swedes were smart enough to deal with one part of their demographic time-bomb, but they still must address the other part, assimilation of its immigrants. Whether Sweden reforms or not, and does so soon, will determine whether Sweden will remain Sweden beyond the next generation. Because the Swedes care so much for their status as the world's greatest "moral superpower," the outlook is not so great. But then again, never underestimate the power of a culture under fire to make hard-but-crucial choices.

Posted by Will Franklin · 1 March 2005 03:21 PM

Comments

Posted by: Rudolph Carrera at March 26, 2005 07:05 PM