Swedish Model: Short Retrospective Analysis

The present article summarizes arguments, but also historical and statistical data supporting the following theses: (a) in the mid-twentieth century Sweden has become one of the most prosperous and fast-growing economies in the world promoting free-market, free trade and a favorable business environment; (b) the establishment of the welfare state and the enforcement of radical welfare reforms in Sweden resulted in only two decades in economic downturn: unsustainable financial situation of the public finances (by increasing government spending and public debt), inflation and macroeconomic policies that generated a boom bust business cycle and economic crisis; (c) the economic principles of the Swedish model (folkhemmet) and the radical vision of welfare policies were generally abandoned or weakened in the post-crisis period in Sweden. Economic policies and reforms enforced after 1990 reflects this new approach: lower government expenditures, lower taxes and the liberalization or the reform of certain markets that were traditionally under state monopoly; (d) Swedish model is one of the best examples of how economic freedom fosters economic growth and development, whereas radical welfare policies and reforms destroys the very foundations of wealth creation: private property and free market.