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Which Mixed Economic System is Better?
Social Democracy in Sweden (sometimes called: “democratic socialism” or “welfare state capitalism”)
In short, social democracy is an economic system that adheres to the capitalist mode of production (private
ownership), but has a fair amount of government intervention in the economy. Privately owned firms account
for about 90% of industrial output in Sweden. Social democrats believe that the individuality of each human
being can only be developed in a society where there is political and economic equality. They argue that if
human beings are to develop their distinct capacities they must be accorded equal respect and opportunities
denied them by the inequalities of capitalist society, in which the life opportunities of a child born in the inner
city are starkly less than that of a child born in an affluent suburb. In a social democracy, the government
ensures that each citizen is provided with food, housing, quality education, healthcare, childcare, care for the
disabled and elderly, etc. Citizens of a social democracy are often guaranteed between 4-6 weeks of paid
vacation per year. In Sweden, the legal minimum is 5 weeks. All working parents in Sweden are also entitled
to 16 months paid leave per child, the cost being shared between the employer and the state. To encourage
greater paternal involvement in child-rearing, a minimum of 2 months out of the 16 is required to be used by the
"minority" parent, in practice usually the father. All of these benefits come with a price of course. Swedes pay
upwards of 55% of their salary towards taxes. Wealthy Swedes pay even more. Also, it can be argued that
large bureaucratic governments are slow and inefficient. Swedish workers report in sick more often than other
Europeans, taking advantage of the number of sick days they are allotted. And many Swedes complain about
long waiting lists for hospital procedures.
The World’s Happiest Countries
(takes into account numerous standards from
income and education to health and social services.)
The rates in the chart below refer to the actual federal
taxes paid on a salary of $100K. They does not take
into account any state, property or sales taxes.
Mixed Capitalism in the U.S.
The United States is said to have a mixed economy because privately owned businesses and government both play
important roles. American capitalism emphasizes private ownership. Private businesses produce most goods and
services, and almost two-thirds of the nation's total economic output goes to individuals for personal use (the
remaining one-third is bought by government and business). The consumer role is so great, in fact, that the nation is
sometimes characterized as having a "consumer economy."
This emphasis on private ownership arises, in part, from American beliefs about personal freedom. From the time the
nation was created, Americans have feared excessive government power. In addition, Americans generally believe
that an economy characterized by private ownership is likely to operate more efficiently than one with substantial
government ownership. US firms are at or near the forefront in technological advances, especially in computers and
in medical, aerospace, and military equipment. But throughout US history, the government has become increasingly
involved in areas where the invisible hand was not doing the job. For example, the government sets a minimum
wage, provides social security for the elderly, and unemployment benefits. The government also ensures fair and
safe business practices. The federal and local governments also employ millions of citizens repairing roads, fighting
wars and teaching children. To pay for these benefits, Americans pay upwards of 30% in income taxes. Wealthy
Americans can pay around 50%. Still, America has one of the closest economies to a free market system in the
world. Millions of entrepreneurs open small businesses each year in the hopes of fulfilling the American dream.
And many have achieved it. While the US has the largest economy in the world, the GDP per capita of the US is
only around $53,000, compared with $60,000 in Sweden. Over the past decade, the wealth gap in the US has
consistently widened. In 2013, the top 1% of Americans controlled 40% of the wealth. Other long term problems
include inadequate investment in infrastructure, rapidly rising medical and pension costs and excessive trade and
budget deficits.
From
The Atlantic – CityLab
The Global Technology Index is a broad assessment of the
technological and innovative capabilities of the world’s leading nations.
(US ranks 3rd, following Finland and Japan. Sweden is 5th.)