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Why Sweden is Not the Social Utopia We Think It Is

Courtesy of ZeroHedge. View original post here.

People often think that the grass is always greener on the other side especially when things aren’t exactly going well on their side of the fence. Some end up wishing they were born in a “better” country. Sweden is typically considered a nice place to live in. The country appears to offer better lives for its citizens than most. Even United States Senator Bernie Sanders quipped that the US should be more like Sweden. But is Sweden really the utopia everyone thinks it is?

It does seem cozy in the Nordics. The Swedish people enjoy high standards of living. Along with its Scandinavian neighbors, Sweden consistently tops the list of the happiest countries in the world. Citizens have access to quality social services. Education (even college) is free. Healthcare is decentralized and government-funded.

Sweden is also the world’s closest thing to a modern cashless society. Only less than 1 percent of the value of all payments made in 2016 used cash or coins. Payments are done efficiently through digital means. According to the 2017 State of Online Banking report by Swedish payments service Trustly, Swedes are highly satisfied with their banks’ services. They also have the Swish mobile app for peer-to-peer payments and they only need their nationally approved BankIDs to authenticate transactions.

This forward-thinking attitude towards finance and a clear understanding of market preferences have made Sweden a leader in financial technology (fintech). For instance, bank accounts are central to Swedish finances. Knowing this, Trustly found success enabling merchants to accept bank transfers for payments. Since other markets share the same preference of payment methods, Trustly was able to bring its business to other European markets. The company has recently surpassed €10 billion in total payments this year.

Other fintech ventures Klarna and iZettle have already joined the likes of Spotify, King, and Skype as Sweden’s unicorns. Sweden is also home to other global brands like Volvo, H&M, and IKEA – all of which contribute to the country’s thriving business sector. However, like with most things, imperfections often reveal themselves to those who stare close enough. Sweden isn’t without its own issues and the perception of Sweden as a utopia may not exactly be accurate.

High cost of living

According to Numbeo, Sweden ranks 15th in the Cost of Living Index as of mid-year 2017. In contrast, the US and the UK rank 24th and 25th respectively. While social services are provided for by the government, personal income tax can be as high as 60 percent. People have to commit themselves to work in order to produce enough disposable income.

Higher education may be free but students in Sweden often have to take out loans to cover living expenses including rent and food while studying. 85 percent of students in Sweden graduate with debt and these fresh graduates also suffer from a high debt-to-income ratio once they land jobs. Sustaining oneself while trying to establish a career can be tough. Rent in centers like Stockholm can be both expensive and hard to come by for most young professionals.

Immigration and refugee issues

Sweden also has the highest rate of refugees accepted per capita in all Western nations. The country has taken some flak for its position on refugees and immigration particularly in light of the attack in Stockholm earlier this year. Despite the criticism, Sweden maintains that its acceptance of refugees hasn’t caused a spike in crime and terrorist activities.

However, immigrants themselves face challenges in the country. Only half of refugees who arrived in 2003 were able to get jobs by 2013. Swedish businesses still prefer hiring people who can speak the native tongue. Since most immigrants flock towards jobs and businesses that could accommodate English, they have to fiercely compete for limited jobs. Claims of discrimination also exist.

Not a socialist utopia

Sen. Sanders claimed that lessons on democratic socialism can be learned from the Nordics. However, Scandinavians were among those quick to correct Sen. Sanders saying that they aren’t socialist. They are technically market economies.

Perhaps there’s this notion that a utopia is where citizens are provided everything and that everyone enjoys freedom and equality. For the most part, this seems to apply to Sweden since the government covers essential services and the people have an egalitarian outlook hence the reason why they’re mistaken to be democratic socialists.

Still, the reality is that people have to work hard, pay taxes, and deal with competition common in a market economy if they want to thrive in Sweden.

Not a perfect model but still a good one

These said it’s only fair to accept that no country is ever going to fit everyone’s nuanced definition of “perfect.” Even the concept of utopia can be highly subjective.

Sweden may have its own set of issues and isn’t exactly perfect but countries would do well learning from what Sweden has done right. Much could be learned from how the country effectively managed its economic crisis in the 1990s. Business could also benefit studying how the Swedish model can be applied to good board selection to ensure responsible stewardship of organizations.

Sweden has also been open to embracing disruptive technologies. While most countries have approached the emergence of blockchain with caution and skepticism, Sweden is already actively exploring the technology’s use for government purposes. The country is already testing its blockchain-powered land registry system that’s aimed to save taxpayers $100 million.Context and perspective play huge roles in how people perceive their respective situations. Sweden may appear to be ahead but countries may also just have to appreciate the positives from their own experiences.

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