TO BE A Swede is once again to be admired. Sweden is "the most successful society the world has ever known", declares the left-wing British newspaper the Guardian; "Swedes lead Europe in reform", claims the free-market-oriented Financial Times; only the Nordic model "combines both equity and efficiency", explains a recent report initiated by the European Commission.
In a contentious European debate marked by hostility, riots and unrest, Sweden looks like a safe bet--neutral, uncontroversial and with no natural opponents. Sweden is a Rorschach test: The Left sees a generous welfare state, and the Right sees an open economy that pushes for deregulation in the European Union. The only thing British reformists and French protectionists could agree on at the EU summit in Brussels in March was that Europe should learn from the Scandinavian model's combination of generous social provisions and a high-growth economy. Sweden is seen as the proverbial "third way", combining the openness and wealth creation of capitalism with the redistribution and safety nets of socialism. It is the best of both worlds.
But things in Sweden are not as good as the advocates would like to believe. Long the paragon of social democracy, the Swedish model is rotting from within. Ironically, the unique social and economic foundation that first allowed Sweden to construct its political edifice--and which makes it such a difficult model for other countries to emulate--has been critically weakened by the system it helped create. Far from a being a solution for the new sick men of Europe, Sweden must face serious and fundamental challenges at the heart of its social model.
The Origins of the Welfare State