Or, you know, it could be the fact that Sweden's industrial capacity survived WWII largely intact and so the country in general was better positioned than the rest of Europe to make money.
IKEA opened their first store outside of Scandinavia in 1973, H&M in 1976 and according to wikipedia Tetra Pak had financial troubles until they became successful in the mid 1960s. Of course Sweden had a major advantage in that its infrastructure wasn't destroyed in WWII.
It's apparently been a much longer journey, starting in the 1800's as detailed by http://www.libertarianism.org/publications/essays/how-laisse...
The part about John Hierta is especially interesting; he's the obvious entrepreneur who managed to change politics.
The conventional story about Swedish wealth is a joke. In fact, wealth was primarily accumulated under a largely free market system between 1840 and 1970 or so. After that the welfare state started expanding in earnest and it has mostly been downhill from there, e.g. Sweden going from the fourth richest country to the fourteenth.
"The authors contrasted American-style cutthroat capitalism with Nordic-style cuddly capitalism"
America hasn't had cut-throat Capitalism in a century.
Few seem to understand the difference between 19th century Capitalism, with actual free markets, and 21st century Socialism. You'd think the entire 19th century never happened, such that authors have no reference source for actual 'cut-throat' Capitalism.
We have soft European Socialism. The government system spends 40% of GDP ($6.7 trillion out of $17 trillion). We don't have a free market in nearly any sector, including the biggest such as: healthcare, education, banking, telecom, energy, utilities. When 80% of your economy lacks any actual free markets, how can one claim Capitalism as the system?
In fact, our government spends so much we're bankrupt a few times over when you count entitlements + public debt, none of which can ever be paid in full. The public debt is of course laughable, we couldn't pay it down in a century of surpluses, even at 2% interest rates. We're currently in the process of actively defaulting on our debt, using QE (aka debt monetization) to devalue said debt.
The Federal Government alone spends so much, it's half the size of the entire Chinese economy.
We have the largest welfare system in world history, by far. We have the largest entitlement system in history, by far. We have the largest government-controlled health system in history, by far.
America has more regulations on its books than any other country, by far. We add thousands upon thousands of regulations annually. We have the most regulated economy in history, there isn't even a close #2.
Our taxes are worse than Canada (supposedly a semi-Socialist nation), and among the highest for industrialized nations when you count local + state + federal. We also have the largest and most convoluted tax system by far, the total IRS tax code is so large no human could ever reasonably read it.
It's not pure capitalism, of course. But America is undeniably more capitalistic than the majority of OECD countries and even goes so far as to consider capitalism an ideal, and capitalistic policies to be more virtuous. And the US is very much a low-tax country, in aggregate. See this graph: http://blogs.crikey.com.au/pollytics/files/2011/12/taxasgdp2...
> 19th century Capitalism, with actual free markets
To be absolutely clear, when people say that free markets have never been a thing, you're saying that this claim is false and we've had them in America in the 19th century?
Maybe we should tell those kids in somalia to "innovate" a steak or a hamburger...
American today are living off the golden age when a man could work his way up and actually move up in life. I say actually because they had the means to do so.
If you are too poor you can't afford shit, you can't afford to go to college, to move to an area with better jobs (or less cancer) let alone dropping everything and building a startup.
Why you think YC started giving out $20k? so founders wouldn't starve during the 3 months they are skipping from work. It might be news for some here but most young people have no savings and their parents can't support them anymore.
Back in 1950 you could live off a part-time gig waiting tables while you were in college/building something, but today? don't make me laugh.
It's a myth that this is no longer possible. Want to know how I know? Because I did it.
I grew up poor. My parents told me if I was going to college, I'd have to figure out how to do it myself because they couldn't afford to help me. So I did. I worked hard in high school, scored a 30 on the ACT, got some scholarships and paid the rest myself from jobs worked during school and money saved during the summer.
I earned my CS degree, got out and found a job, and now I have a (different) job where I can afford a 2000 sq. ft. house that I currently owe just over $100k on and still have plenty of money to save up.
People today are generally either lazier or less imaginative. I'm not sure which.
Also part of the "Golden Age" of America was generational thinking. Many people immigrated to America not to become rich themselves but to provide better opportunity for their children. Even if you don't believe that rags-to-riches stories are possible in the extreme, it is certainly possible to be born poor and work your way up the point that your children are able to go to college, which allows them to provide your grandchildren with even more opportunity.
My theory is that (over)population might have something to do with it. The population of the US was around 150 million, it's more than double that now. Maybe there was the same amount of "opportunity" back then as now, but now more people compete over it (and over the same resources). The total population of the world was 2.5 billion back then, now it's almost triple that. The world hasn't grown 3 times since then, it's the same size.
One thing missed by the article is that Sweden was one of the few European highly industrialized nations that weren't ravaged by WWII (due to their neutrality, in turn due their perceived Arianism by Germany), so in 1946, they could start making and selling stuff to Europe which desperately needed, well, everything.
As opposed to Denmark and Norway? It's more likely that the Germans got what they wanted anyway (Sweden sold Germany a lot of steel) and didn't have resources to occupy Sweden just for the principle of it.
Not to get too deep into the historical weeds, but several neutral, "Aryan" nations were invaded during the war. Doesn't it seem more likely that Sweden was fortunate enough to be geographically isolated between Russian-held Finland and German-held (and more strategically significant) Norway? Swap the government and population of Sweden for Denmark and I suspect nothing changes.
The article tells one story, and it is true, but it is not the story why Sweden has many billionaires. Many of facts mentioned in the article are quite recent reforms, and can in themselves not explain this.
I recall that in 1997 the social democratic government introduced tax exemptions for the very rich, put in front of the threat by Stefan Persson that H&M might move abroad otherwise
This old, Google-translated link to an article in Affärsvärlden (Sweden's "Financial Times") describes a more relevant piece to the puzzle.
Sweden also have surprisingly many millionaires as well (69,800 millionaires) of a population of 9,5 million. The number have increased significantly the last years.
As a Swede who have started businesses in Finland, South Korea and Lithuania, I do agree with the article that Sweden is the easiest country to start and run a company in. And the relative high taxes is nothing that bother me at all. I don't mind paying more if the service provided by it was justified.
"No single Swede comes close to the epic wealth of a Bill Gates or a Warren Buffett." -- wasn't Ingvar Kamprad (of IKEA fame) more wealthy than Gates at one point? Due to some currency being strong, iirc.
If I recall correctly, the ownership of IKEA is quite intricate, with Swiss foundations and what have you in the mix. Mainly for tax purposes I think - there was quite a controversy here in Sweden a few years back regarding this.
I believe that the wealth that Ingvar Kamprad ultimately controls is substantially larger than what a look at Forbes 500 might indicate, but perhaps that is not uncommon.
If you look at multiple indexes that rank countries by competitiveness, low corruption and infrastructure, Sweden and other Nordic countries are usually in top 10.
If you think countries as companies, they would be like business parks. You can compete with low price or good infrastructure. Sweden is Google of countries. It provides highly educated people, good infrastructure, safety and low corruption with higher price. This will inevitability drive out low margin industries that rely on cheap labour but it will be good environment for high- and middle-tech companies.
At a theoretical level you would expect a free market system to produce very few billionaires. Low regulatory barriers to entry and easy capital formation mean high profit margins get rapidly eaten by competitors.
If you look around the world today, in practice billionaires and big government do seem to go hand in hand. Consider the massive barriers to entry to the US financial system erected by very wealthy people. Or more egregiously look at the Russian oligarchs.
[+] [-] Matti|12 years ago|reply
Look at when the mentioned companies were founded:
IKEA - 1943
H&M - 1947
Tetra Pak - 1951
Then look at the historical tax-to-GDP ratio chart here:
http://www.ekonomifakta.se/sv/Fakta/Skatter/Skattetryck/
The companies were founded in low-tax, pre-welfare Sweden.
[+] [-] anologwintermut|12 years ago|reply
http://en.wikipedia.org/wiki/Sweden_in_World_War_II
[+] [-] subsystem|12 years ago|reply
[+] [-] ptr|12 years ago|reply
[+] [-] Shivetya|12 years ago|reply
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] meriksson|12 years ago|reply
http://meriksson.net/how-sweden-became-rich
[+] [-] hannibal5|12 years ago|reply
[+] [-] adventured|12 years ago|reply
America hasn't had cut-throat Capitalism in a century.
Few seem to understand the difference between 19th century Capitalism, with actual free markets, and 21st century Socialism. You'd think the entire 19th century never happened, such that authors have no reference source for actual 'cut-throat' Capitalism.
We have soft European Socialism. The government system spends 40% of GDP ($6.7 trillion out of $17 trillion). We don't have a free market in nearly any sector, including the biggest such as: healthcare, education, banking, telecom, energy, utilities. When 80% of your economy lacks any actual free markets, how can one claim Capitalism as the system?
In fact, our government spends so much we're bankrupt a few times over when you count entitlements + public debt, none of which can ever be paid in full. The public debt is of course laughable, we couldn't pay it down in a century of surpluses, even at 2% interest rates. We're currently in the process of actively defaulting on our debt, using QE (aka debt monetization) to devalue said debt.
The Federal Government alone spends so much, it's half the size of the entire Chinese economy.
We have the largest welfare system in world history, by far. We have the largest entitlement system in history, by far. We have the largest government-controlled health system in history, by far.
America has more regulations on its books than any other country, by far. We add thousands upon thousands of regulations annually. We have the most regulated economy in history, there isn't even a close #2.
Our taxes are worse than Canada (supposedly a semi-Socialist nation), and among the highest for industrialized nations when you count local + state + federal. We also have the largest and most convoluted tax system by far, the total IRS tax code is so large no human could ever reasonably read it.
Where's the Capitalism? It doesn't exist.
[+] [-] rsynnott|12 years ago|reply
If you think that any major world economy is socialist, you're deluded.
> Our taxes are worse than Canada (supposedly a semi-Socialist nation)
Wait, what, no, it isn't. Why do you think this? Are you confusing socialism with social democracy, or something?
[+] [-] chiaro|12 years ago|reply
From source: http://blogs.crikey.com.au/pollytics/2011/12/08/australian-e...
[+] [-] saraid216|12 years ago|reply
To be absolutely clear, when people say that free markets have never been a thing, you're saying that this claim is false and we've had them in America in the 19th century?
[+] [-] aianus|12 years ago|reply
[+] [-] Coffeeparty|12 years ago|reply
>>http://www.youtube.com/watch?v=WbS9jZOlQjc
Maybe we should tell those kids in somalia to "innovate" a steak or a hamburger...
American today are living off the golden age when a man could work his way up and actually move up in life. I say actually because they had the means to do so.
If you are too poor you can't afford shit, you can't afford to go to college, to move to an area with better jobs (or less cancer) let alone dropping everything and building a startup.
Why you think YC started giving out $20k? so founders wouldn't starve during the 3 months they are skipping from work. It might be news for some here but most young people have no savings and their parents can't support them anymore.
Back in 1950 you could live off a part-time gig waiting tables while you were in college/building something, but today? don't make me laugh.
[+] [-] pawn|12 years ago|reply
I grew up poor. My parents told me if I was going to college, I'd have to figure out how to do it myself because they couldn't afford to help me. So I did. I worked hard in high school, scored a 30 on the ACT, got some scholarships and paid the rest myself from jobs worked during school and money saved during the summer.
I earned my CS degree, got out and found a job, and now I have a (different) job where I can afford a 2000 sq. ft. house that I currently owe just over $100k on and still have plenty of money to save up.
People today are generally either lazier or less imaginative. I'm not sure which.
[+] [-] hnal943|12 years ago|reply
[+] [-] ahomescu1|12 years ago|reply
[+] [-] forkandwait|12 years ago|reply
[+] [-] m_eiman|12 years ago|reply
As opposed to Denmark and Norway? It's more likely that the Germans got what they wanted anyway (Sweden sold Germany a lot of steel) and didn't have resources to occupy Sweden just for the principle of it.
[+] [-] twoodfin|12 years ago|reply
[+] [-] mongol|12 years ago|reply
I recall that in 1997 the social democratic government introduced tax exemptions for the very rich, put in front of the threat by Stefan Persson that H&M might move abroad otherwise
This old, Google-translated link to an article in Affärsvärlden (Sweden's "Financial Times") describes a more relevant piece to the puzzle.
http://translate.google.com/translate?hl=en&sl=auto&tl=en&pr...
[+] [-] SuperChihuahua|12 years ago|reply
http://blog.trejdify.com/2012/08/lessons-learned-hm-startup....
http://blog.trejdify.com/2012/08/lessons-learned-ikea-startu...
[+] [-] fein|12 years ago|reply
[+] [-] pathy|12 years ago|reply
[+] [-] clonnholm|12 years ago|reply
http://sverigesradio.se/sida/artikel.aspx?programid=2054&art...
As a Swede who have started businesses in Finland, South Korea and Lithuania, I do agree with the article that Sweden is the easiest country to start and run a company in. And the relative high taxes is nothing that bother me at all. I don't mind paying more if the service provided by it was justified.
[+] [-] ptr|12 years ago|reply
[+] [-] Cederfjard|12 years ago|reply
I believe that the wealth that Ingvar Kamprad ultimately controls is substantially larger than what a look at Forbes 500 might indicate, but perhaps that is not uncommon.
[+] [-] dagw|12 years ago|reply
[+] [-] sbt|12 years ago|reply
[+] [-] hannibal5|12 years ago|reply
If you think countries as companies, they would be like business parks. You can compete with low price or good infrastructure. Sweden is Google of countries. It provides highly educated people, good infrastructure, safety and low corruption with higher price. This will inevitability drive out low margin industries that rely on cheap labour but it will be good environment for high- and middle-tech companies.
[+] [-] a8da6b0c91d|12 years ago|reply
If you look around the world today, in practice billionaires and big government do seem to go hand in hand. Consider the massive barriers to entry to the US financial system erected by very wealthy people. Or more egregiously look at the Russian oligarchs.
[+] [-] tsotha|12 years ago|reply
Of course. The bigger and more powerful the government, the more likely powerful people will seek to control it to their own ends.
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] Spoygg|12 years ago|reply