Tuesday, November 19, 2013
Why Scotland is Not Like Scandinavia
In that the SNP are absolutely right. If we had non-EU world average growth (6%) we would be twice as well off by 2025.
And if the SNP were going to do it I would be for them. Indeed back when Jim Mather was their intellectual light I thought they at least intended to do so.
The SNP have had a term and a half to produce growth and sweet absolutely nothing. Well nothing positive. They have wasted billions on windmills and committed us to be "100% renewable by 2020" which is a commitment to economic collapse and deaths. When their Green partner in the Yes campaign promised that separation would mean the joys of recession for at least 10 years and hopefully forever, they said not one word in disagreement. They still haven't. Their numerous promises of lower taxes and higher government spending do not suggest that economic competence is anywhere on their radar.
The latest SNP spokescritter wheeze is to say that high taxes and government interference works in Scandanavia. Lesley Riddoch was squeaking this line last night. Well no they have a wrinkle our government doesn't. Their governments spend relatively effectively on doing things and don't regulate wealth creation out of existence,
Why does Sweden have so many billionaires ?
Billionaires per capita.
Here's the top 10 (number of billionaires/estimated population):
1. Monaco (3/35,427)
2. St. Kitts and Nevis (1/53,051)
3. Guernsey (1/65,573)
4. Hong Kong (39/7.1 million)
5. Belize (1/356,600)
6. Cyprus (3/1.1 million)
7. Israel (17/7.8 million)
8. Singapore (10/5.2 million)
9. Kuwait (5/2.8 million)
10. Switzerland (13/7.9 million)
12. Sweden (14 billionaires, population 9.56 million)
But one country stands out on the list: Sweden.
How does a famously socialist and left-wing country like Sweden get so many billionaires ?
Why are billionaries a good sign ? Because usually they created a great company.....The good news about Sweden is that it’s exactly that kind of place. High taxes go to finance cheap health care and education, an excellent system of public transportation, and relatively generous subsidies to low-income households that keep the poverty rate and inequality low. But they haven’t stopped Swedish entrepreneurs from building giant firms like H&M, Ikea, and Tetra Pak.
The Scandinavian success stories show that great companies can be born and innovate amid generous welfare states, they do have some cautionary tales for left-wing thinking. The Swedish tax code was substantially reformed in 1990 to be friendlier toward capital accumulation, with a flat rate on investment income. Sweden has no taxes on inheritance or residential property, and its 22 percent corporate income tax rate is far lower than America’s 35 percent. Even after spending cuts by the current center-right government, the Swedish public sector is still about half the total economy (much higher than here), but the taxes that finance it fall more heavily on consumption and less on business investment than in the U.S.
Sweden also has a relatively lightly regulated economy. There are rules about public health and environmental protection, of course. But Sweden is arguably further down the neoliberal path of dismantling purely economic regulations than the U.S. In Stockholm, for example, taxi fares are completely unregulated and for-profit charter schools are common. All things considered, international surveys rank Sweden as a place where it’s easy to do business. Within the U.S., surveys show that licensing rules rather than tax rates are the main driver of local business-friendliness.
If you have a high income tax rate but low corporate, property and capital gains taxes and light regulations for other aspects of business then you can still generate a lot of billionaires.
Norway cuts hundreds of km of tunnels at £4m per km whereas the SNP, with support from the other useless Holyrood parties, spent £2,300m on a new Forth bridge (8 times more than it should have been) and said that a £30m tunnel would have cost £6,600m if built by them.
Finland, as well as Sweden, are willing to use nuclear power.
Iceland, in proper free enterprise style, let their banks go bust.
Norway and Iceland refuse to be part of the EU zero growth zone.
Yes the Scandinavian countries prove that with only a bit of common sense and very little free marketism it is possible to do rather well. Estonia, which started much poorer because it had been in the USSR went ideologically free market and is thus doing remarkably well.
But none of the current Holyrood parties have any commitment to Scandinavian common sense. All are committed to massive state parasitism. Worse than that, our media institutions are also committed to it. Not one paper or broadcaster was willing, at any time, to report that the 7/8th of the cost of the Forth Bridge is either state parasitism or simple theft.
Government economic parasitism (ie taxes) is important (it costs 50% of our gdp, possibly 55% in Scotland) but regulatory parasitism is worse in that it costs at least another 100% of current gdp, and the latter is the bit the Swedes have beaten.
We wouldn't have to be run that well to achieve growth that would end all our problems (Zimbabwe recently managed 9.3%) either in Holyrood or Westminster, but it is absolutely certain that the Holyrood parties have neither the competence nor desire to do so.