Dear editor,
As a student of economics here at Loyola, I would like to take a moment and clear up some of the misconceptions and outright falsehoods printed in The Maroon last week. Parker Denton in his letter, “Rape is not a gender issue,” said, “Socialism seems to work in Sweden, which has one of the highest standards of living. They have more industry than the United States (all of ours is in China) and less poverty.
First we should define the term socialism. Though a complex question, it can be reasonably simplified to ownership of the means of production by the workers, or in some cases, the government. The vast majority of Sweden’s industry is held privately, led by such household names as Volvo and Electrolux. Only 54 companies are held wholly or in part by the state. They are charged with overseeing public transportation, gambling and space travel. Sweden is also a world leader in privatizing its pension plans. Unlike many other western countries, they worry about how to spend the national surplus and have paid down their national debt from a high of 78 percent of gross domestic product to less than 34 percent in 2010. By comparison, the United States has about 100 percent debt to GDP. Even if we look at their regulatory structure, the Index of Economic Freedom, published by the conservative think tank The Heritage Foundation, ranks Sweden as the 21st out of 180.
Second, we should look at some numbers. U.S. GDP is approximately $15 trillion. By comparison, Sweden’s GDP is $0.5 trillion. Approximately $2.33 trillion of the U.S.’s GDP comes just from its manufacturing base, making it the largest manufacturer in the world and also making it mathematically impossible for Sweden to have “more industry” than the United States. Per capita GDP is almost equal between the United States and Sweden, $46,000 and $47,100 respectively. The Human Development Index, which ranks countries by metrics such as life expectancy, literacy, education and standards of living, places the United States fourth with a score of 0.910 and Sweden 10th with a 0.904.
Sweden is a social democracy with relatively high social spending. But social spending is not socialist spending, and its advocates include such staunch anti-socialists as Milton Friedman and Friedrich von Hayek. Socialism is not a synonym for liberalism a la the Democratic party, as Fox News pundits would have you believe; it is its own specific economic form, and conflating it with the mixed economies of Western Europe shows great disrespect for the rich histories of both forms. By so casually changing the meanings of words, we effectively stop any meaningful conversation in favor of intellectually masturbatory celebrations of jargon with little to no substance.
Sincerely,
David Holmes, economics senior
