Saturday, June 10, 2006

We're All Happy Here, Really

One of the shortest words in the Swedish language is "tack" which, roughly translated, means "look at how polite we all are". Its fortuitous that the word is so short, as the average Swede must say it about a hundred times a day. No, really, I'm serious... you go to a social gathering and its "tacktacktacktacktacktack" like some kind of courteous machine gun. This is only one of the many lessons I learned during my recent, whirlwind trip to Sweden. Sweden really is a lovely country, full of rolling hills and green and these brilliant yellow fields of Canola flowers, populated by a windswept, gently Nordic people. Sort of like Minnesota. My wife and I went over to see one of her friends get married to the son of a Baron (yes, a real, bona-fide Baron), to which all of the Swedes replied "What, you're only here for a week? You poor Americans having to actually work for a living". Seriously, though, Sweden is a truly interesting place to visit. Not so much for the scenery, which is lovely but a lot like certain portions of the US, but more for the culture, which is recognizably Western but unique in many respects. I, being in general a supporter of laissez faire capitalism, found the Swedish economy to be particularly fascinating. The standard of living for your average Swede is very high, in part because a higher portion of their take home pay is disposable in comparison to here in the US. As my wife pointed out, that woman who works behind the counter at the gas station has health care and a pension and won't have to pay for her children to go to school. I'd always assumed that the Swedish government was paying for this sort of thing by taxing the crap out of Swedish citizens, but apparently that is only part of the story. While we were in Sweden we stayed with a middle-class couple at their home on the lake (did I mention the high standard of living?). Whatever else their hangups might be, the Swedes are very open about the whole money thing... in a casual, conversational sort of way they asked about how much we made, what we paid in taxes, how much our house cost, all that sort of thing. It turns out that, at least in terms of personal taxes, we're paying the same, if not more, as our Swedish hosts. They said that they've an average tax rate of ~30%, which is really quite comparable to what a lot of people are paying here in the US. When you consider the outrageous property tax that we have to pay in NY state its really quite likely that my wife and I have a higher tax burden1. So where, I ask you, is all the money coming from? Is the Swedish government that efficient (or our government that inefficient) that they can provide all these public benefits, or are they pulling gold out of the ground somewhere to pay for things? In chatting with people I started to find out what else what going on. In addition to personal income and property taxes there's a bunch of other ways that the government is funding its operations. Lots of VATs and usage fees and luxury taxes. Gas was ~12 SEK/liter (~$6.25/gal); according to one person I spoke to the vast majority of that was taxes of various sorts. And then there's corporate income taxes, which also seem to be substantial. Another person I spoke to related the tale of starting a cafe; they ended up giving up because their taxes were so high as to not make the venture worthwhile. Despite all of this its hard, at first glance, to find fault with the system. Sure, you can quibble about undue appropriation of private property etc. etc. etc., but even I find that these theoretical musings pale in significance when compared with the quality of life that the average Swede experiences. So should the US go socialist? Its hard to tell. While I was at the wedding I had a chance to talk to a bunch of young-ish Swedes, and many of them expressed doubts about the sustainability of the Swedish lifestyle. Its apparently very hard for young Swedes to get a job in the country; many of them spend their early careers hopping from temporary job to temporary job. Others end up going abroad to find work. That's crazy. Thanks to government subsidized education Sweden has one of the most highly educated workforces in all of Europe; their economy should be humming and young Swedes coming out of university shouldn't have a problem finding work. So what's the problem? The people I spoke with pointed to twin causes: globalization and excessive corporate burdens. It seems that Swedish industry is having a hard time keeping their competitive edge. It used to be that they were tops in quality, which let them keep their margins up. But now they've got all sorts of problems from developing economies like India and China who have quickly been closing the "quality gap". So it gets harder for them to make a profit, which is where the second cause comes into play. With reduced profit margins the burdens imposed on corporations by the state become much more significant. From what people were saying it sounds like Sweden is suffering from the same malaise as the French. The costs of hiring people on a permanent basis make corporations unwilling to do so. And there's other problems as well... the graying of their workforce will cause similar problems to what we are seeing in America w/ Social Security, only the effects will be more profound because the benefits to which retirees are entitled are much greater. So it really is a question of sustainability. I would imagine that at some point they're going to be force to cut back on entitlements along with the rest of Europe. But enough nattering about economics. There's all sorts of other goodness to talk about as well. Like lagom, the Swedish national pastime. This expresses itself in a myriad of small (and not so small) ways. Like their houses are always clean (bordering on immaculate), everyone is always proper, no one raises their voice. There's a gentle sort of conformity... I got the feeling that people would not mock you openly if you violated some social social more... rather, you worry that they'll be silently pitying you if you screw up. This cultural trait is apparently a source of amusement for the rest of Europe. The French boyfriend of one of our hosts' daughters was fond of mocking this tendency. Even the Swedes seem to recognize that they're just a little bit anal-retentive. You have to wonder though how a race that, a thousand years ago, specialized in raping and pillaging is dealing with their newfound civility. There don't seem to be many socially sanctioned outlets for aggression in Sweden. I suspect that, lurking under the surface of every Swede there's a Viking just waiting to come out. For instance, I was at the wedding dinner when all of a sudden the tent full of Swedes started barking in unison, which immediately conjured in my mind a pack of fanged Swedes with bloody maws falling on some helpless victim. I later found out that the barking was actually the way that Swedes execute "three cheers for so-and-so". If you aren't prepared for it (like me, since I don't speak any Swedish) its a truly startling experience. The marriage itself was nice in a baronial, moneyed sort of way. It consisted of a short ceremony followed by several days of speeches interspersed with attempts to eat food before the next person started talking. As I don't speak Swedish I spent a lot of time either not making eye contact or hovering behind my wife (who does speak Swedish). In a certain sense this trip was a lot more taxing that my recent trip to Ecuador. There I don't look like a local but do speak (to a first approximation) the local language, but in Sweden its the other way around. I had a number of vaguely awkward incidents where someone would address me in Swedish and I'd have to say "I'm sorry, I don't speak Swedish". From a functional standpoint that's not really an issue, since most of Sweden speaks very good English, but its still kind of embarrassing to not speak the local language. Though that leads me on to the more general topic of speaking English vs. speaking something else. There's a perennial joke: "What do you call someone who speaks three languages? Trilingual. What do you call someone who speaks two languages? Bilingual. What do you call someone who only speaks one language? American". There's a certain guilt among the educated set in America revolving around the dominance of English and/or the general inability of Americans to speak multiple languages. They point to other civilized countries where children learn second languages (often English) at an early age and bemoan our own lack in that department. And yet, at the same time, that guilt is in some sense unwarranted. When the Frenchman met our hosts' daughter neither of them spoke the other's language with any facility, so they communicated in English. The brother of the bride went to work in France specifically to learn French, but found that the only way he could get the French to pay attention was to speak English. English has become the lingua franca, at least in Europe, so why feel bad if its the only language that you speak? Its not as if the dominance of English is (wholly) the result of imperialism on the part of the US; English as a language has intrinsic merit as well. Anyway, in addition to see a nice chunk of Sweden we also spent a day in Copenhagen. I think if I were given a choice of where to live that I'd choose Denmark on the grounds that they seem to be having just a little bit more fun. Admittedly, I didn't get a chance to see Stockholm, so its not a completely fair comparison. But really, can any place where the standard measure for beer is a half-liter be all that bad? That is all, we now return you to your regularly scheduled ranting.
1 Though it apparently gets worse as your income progresses... they've marginal tax rates of 70%+ at the highest brackets, and my wife maintains that if you make enough money you can actually end up paying more that 100%.

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