The Road To Sweden?

Does the Scandinavian economic model disprove Hayek‘s assertion that planned economies lead to totalitarianism? Don Boudreax argues that far from being centrally planned the Swedish system is compatible with Hayek’s vision for a liberal economy and society.

Hayek said that “the planning against which all our criticism is directed is solely the planning against competition – the planning which is to be substituted for competition.” So because Scandinavian countries emphatically do not plan in this way, Samuelson was mistaken to say that their socialism is of the sort that Hayek believed paved the road to serfdom. Those countries have reasonably free trade, only light regulation of capital markets and business, and strong private property rights. In short, all Scandinavia retains what for Hayek was the most significant protection against serfdom: competitive economies.

And while Hayek would disapprove of the size of Scandinavian welfare states, he stated explicitly that “Nor is the preservation of competition incompatible with an extensive system of social services.”

I think this raises an interesting point, because what separates Sweden from the USSR is precisely it’s liberal economic model. What separates Sweden from us is not only the generosity of her welfare state but, often, also the willingness of the Swedes (and other Scandinavians) to apply liberal ideas to the delivery of public services. With Labour riding high in the Irish polls, is Ireland about to lurch ‘left’-wards? And if so, to where? Scandinavia or a little further east?

PS The abridged version of Hayek’s classis appears to be freely available online : The Road To Serfdom

Update See also – Constantin Gurdgiev’s analysis of Sweden and Ireland.

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  • Mrazik

    With Labour riding high in the Irish polls, is Ireland about to lurch ‘left’-wards? And if so, to where? Scandinavia or a little further east?

    You mean, are the turkeys going to vote to scrap Christmas?

  • willis

    Thanks Mack

    The abridged version is very interesting. Although I have to say that this section brought me more in mind of some of our home-grown fundamentalists than Marx

    “It was not the fascists but the socialists who
    first thought of organizing sports and games, football and hiking,
    in party clubs where the members would not be infected by other
    views. It was the socialists who first insisted that the party member
    should distinguish himself from others by the modes of greeting
    and the forms of address. It was they who, by their organization of
    ‘cells’ and devices for the permanent supervision of private life,
    created the prototype of the totalitarian party.”

  • Rory Carr

    Oh, I don’t know, Willis, I think that the aristocracy and the haute bourgeoisie were into such exclusive organisation long before either the fascists or the socialists. There were no serfs seated at the Round Table in Mallory I seem to recall..

  • Munsterview

    Once the Paras are respected for the kind of elite soldiers they are as a unit and where they fit in the hierarchy of such world class professional soldiers, then the likelihood of they doing anything other than acting under specific orders is remote.

    I took a close interest in accounts of their activities in the Malvinas War, especially that came from Argentinean or other non Para sources. They are ‘what says on the tin’ have been all the ways back to ‘a bridge too far’ and still are !

    This makes the ‘run amok’ theory and anything else other than acting under direct orders redundant.