Saab, GM, Chrysler and Why Sweden is More Capitalist than the US

Forbes

The usual image we have of the Swedish economy is that they're all rather dreary socialists, revelling in being able to charge some of the highest tax rates in the world. However, there are certain dimensions along which it is possible to prove that Sweden is more capitalist than the US.

Swedish car maker Saab may finally have secured its future after Chinese groups Pang Da and Youngman agreed to buy the company for €100m (£88m).

The loss-making Saab is in bankruptcy protection after failing to pay suppliers. It has not produced a car at its famous Trollhaettan base since April.

Numerous attempts to secure emergency funding for Saab, which employs 3,700 staff, have broken down, and Swedish courts appeared on the verge of scrapping its bankruptcy protection – leaving the company at the mercy of creditors.

The reaction to the local car company going bankrupt is rather different in the two countries. When GM decided that it didn't want to keep subsidising Saab's losses, the Swedish government said, in effect, that if no one wanted to buy it then of course it should go bankrupt. That no one actually wants it is proof perfect that there should be no government subsidy.

The Swedish government has been as good as its word too: when Spyker bought Saab they didn't interfere, when Saab went bankrupt they didn't interfere and now the Chinese have bought it they didn't interfere.

This is just one of the ways in which Sweden just isn't as socialist or left-wing or even modern day liberal as many seem to think. The country has no national minimum wage, no inheritance tax, capital and certainly corporate taxes are lower than in the US, in fact, the tax system as a whole is less progressive than that of the US or UK. It just isn't what many seem to think it is.

View Comments