Solutions from the Middle · The Ground Rules

The Sweden Lesson: Not Left, Not Right, Does It Work?

Fareed Zakaria made a point about Sweden that I haven’t been able to shake. Until the 1990s, Sweden was a socialist country. Public spending hit two-thirds of the economy. Tax rates became comical. Then banks failed, unemployment jumped from two percent to nearly nine, and the central bank pushed interest rates to 500 percent trying to save the currency.

Socialism did not work. Not even in Sweden. And then Sweden did something America seems almost incapable of doing. It changed course.

It deregulated, privatized, cut spending, put a ceiling on the budget, and rebuilt its pension system. Sweden stopped being a socialist country and became a capitalist country and a social democracy, a free-market economy with a strong safety net. That is the Sweden that works. They didn’t spend ten years arguing about whether socialism was good or capitalism was evil. They looked at what wasn’t working and fixed it.

Apparently the Swedes call this social engineering. It means treating government like a machine. If the machine isn’t working, you don’t ask whether the broken part is morally righteous. You figure out why it’s broken, what it costs to fix, and preferably get enough people from the other side to sign on so the repair survives the next election.

That’s the trick. Not who’s right and who’s wrong. Does it work? And most of what Sweden did was boring. That’s probably why it worked.

Now let me be fair, because the socialists are not coming out of nowhere. America has let capitalism run amok. We are the richest country in the history of the world, and we cannot seem to fix problems that any rich country should be able to handle. People go bankrupt because they got sick. Young people cannot afford a house. Wages have not kept up with anything. Meanwhile, the news is full of the first trillionaire, and a handful of billionaires seem to have more say in Washington than the rest of us combined.

So when a young person looks around and says the system is rigged, they are not crazy. The system has been letting them down. That is why socialism is gaining traction. Not because socialism works, it does not, but because unregulated capitalism has stopped working for too many people, and nobody in either party has been honest about fixing it.

Sweden’s lesson cuts both ways. Socialism failed, so they dumped it. But they kept the safety net, the fair rules, and the sense that a rich country owes its people a decent life. Capitalism with a conscience. That is the whole ballgame, and it is exactly what America keeps refusing to do.

And where are the universities in all this? They should be leading the social engineering, the honest, boring work of figuring out what fixes a broken country. Instead, too many of them are cranking out slogans and turning out graduates who can name every oppressor but cannot balance a budget. Universities have become part of the problem.

Maybe that has something to do with who is writing the checks. Qatar and China have become two of the biggest foreign donors to American universities. Ask yourself whether either one wants to see a strong, confident, well-run America. Then ask yourself what they are getting for their money.

And Washington is no better. Our current president seems perfectly willing to profit off the office, crypto coins, foreign deals, the whole family cashing in, to a degree that would land an ordinary person in jail. Meanwhile, members of Congress from both parties keep trading stocks on information the rest of us will never see, and they are not about to pass a law stopping themselves. This is what the socialists point at when they say the system is rigged. And on this one, they have a point.

In my business career, once I became the boss, which was not an easy road by the way, I told my employees the same thing. Don’t bring me problems, bring me solutions. Anybody can walk into an office and complain. The people worth keeping were the ones who walked in with a plan. That philosophy worked pretty well for me, and it is exactly the philosophy America needs right now. We have plenty of people pointing at problems. We are running very short on people bringing solutions.

A lot has been written about the signal and the noise. I once heard Kevin O’Leary, Mr. Wonderful himself, talking about Elon Musk. He said Elon deals with the signal 99 percent of the time and disregards all the noise. That is a really hard thing to do. Perhaps that is why he teeters around the trillion dollar mark.

Well, it is time our politicians did the same, and we need to demand it. Cut the noise, find the signal, and do some social engineering of our own. Figure out what is broken, figure out what it costs to fix, and fix it. We certainly have enough things that need taking care of. Health care, the border, schools, and on and on. So let’s start right here. Over the next few weeks I am going to write about solutions and see what we come up with.