In The Capitalist Welfare State, Lund University economist Andreas Bergh explains how Sweden has managed to increase economic productivity despite its large public sector.

Bergh says that despite popular mythology, Sweden is not a socialist success story but instead owes its economic growth to the lowered tax rates and deregulation of the early 1990s, which allowed innovation and investment to flourish. Bergh also discusses how Sweden’s national voucher program revitalized the country’s educational system and warns that Americans who are hoping to emulate Swedish success by growing the public sector are learning the wrong lessons from Sweden.

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In this new video from the Center for Freedom and Prosperity, a Swedish economics student makes three important points.

1. Sweden became a rich nation in the late 1800s and first half of the 1900s by relying a free markets and small government.

2. Growth deteriorated beginning in the 1970s after the imposition of high tax rates and a big increase in the burden of government spending.

3. For the last 20 years, Swedish lawmakers have been trying to restore prosperity by lowering tax rates and adopting pro-market policies.

So if Swedes have learned from their mistakes and are now trying to reduce the size and scope of government, why are American politicians determined to repeat those mistakes?

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