Riding high in the Daypop Top 40 is an intriguing study (and ensuing debate) about the Irish economic model versus the Scandinavian one.
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Very interesting article. I haven't gone into the debate, but I'm sure it's fairly comprehensive.
Ireland's growth has been impressive, but I think the article overlooks one important point: yes, Ireland has grown relatively, but we were playing catch-up. The Scandinavian model is a model which seeks to limit differences (eg poverty v wealth, access to services) whereas the Irish model is one for growth. A high level of Tax burden (61% in Sweden) works to take cash away from the individual and towards the community. Ireland's model works to incentivise the individual to be more productive.
This article misses the ideological debate completely.
Posted by: Damien | November 30, 2005 at 11:13 AM
Having visited Sweden twice this month to visit my girlfriend I think it's a great place and the taxation model works well there but I am 100% sure it wouldn't work there. The reason it works there is because people have far more civic pride and are far more law abiding, here we'd still all be trying to dodge taxes, run red lights, dodge fares on the metro etc...
Posted by: Dave | December 01, 2005 at 09:20 AM
I live and run a business in Sweden and the reality is that the taxation model does not work here, people do not have more civic pride, nor are they far more law abiding. An estimated 20% of the economy is "black," cash-in-hand work is rife and the real unemployment rate is an estimated 17-20% (as opposed to the barbered figure of around 5 to 6% spewed out by the government, which take large groups such as students and immigrants who have never held a job out of the total - oddly, if you have never had a job, you are not considered unemployed). Cheating is widespread when it comes to social benefits; some 11% *admit* they take paid time off work to "care for a sick child" to do things like go shopping or catch up on the laundry and suffer no moral qualms about it, and that is only one small example.
Meanwhile, not one single one of Sweden's largest 50 companies was started after 1970, the rate of entrepreneurship is the lowest in Europe, and the social welfare system has created a culture of dependency that is very difficult to dismantle. As a simple example, the average single parent with a child in Sweden pays SEK 66,000 in income and payroll taxes every year. In return, she or he receives SEK 56,000 in subsidies (child benefit, housing benefit, etc.). Administering those benefits also costs, mind you, but the incontrovertible fact is that if that single low-income parent were exempted from income tax and payroll tax, she or he would come out ahead with no subsidies whatsoever. Only about 24% of tax revenues are spent on healthcare, education (at all levels) and "social care" (child care, elder care, assistance for the disabled, etc.).
Damien is correct in attributing the differences to ideology. Here in Sweden, that comes down to "as much socialism as we can get away with" and the main objective is to maintain Social Democratic power by creating a population of security junkies dependent on subsidies from the government and largely devoid of belief in their own ability to support themselves. Conversely, and thankfully, Sweden also has a great many very hardworking, innovative and creative individuals willing to take risks despite the economic downside of being an entrepreneur in Sweden, for a host of reasons.
Posted by: Rosemary | March 18, 2006 at 02:33 PM
I just think that if we can combine having the second highest level of wealth per capita and fourth highest income per capita in the world with the highest standard of living in the world(as stated by the objective Economist Intelligence Unit), I'd say we're doing fairly well.
As well as that, we've overtaken the Swedes in the UN Human Development Index too, and in poll after poll we have been ranked as more happy and fulfilled than the Swedes in the Eurostat Happiness Surveys.
And, since both Sweden and Ireland have opened our labour markets to Eastern Europeans, hundreds of thousands of them have come here, in opposition to merely a few thousand going to Sweden, says something, doesn't it?
Posted by: Cathal Dunne | March 20, 2007 at 10:05 PM