The reality of Swedish capitalism | Sweden

While Sweden is often portrayed internationally as an egalitarian, even “socialist” country, the reality is that it is now one of the most unequal countries in the world, as demonstrated in the recently published book , “Sweden of the greedy: how the welfare state became a paradise for the super-rich”. Moreover, as the recent sellout of the Kurds reveals, the Swedish ruling class is made up of vicious imperialists whose concern for “human rights” is sheer hypocrisy.

The recently published book, “The Sweden of Foodies: How the Welfare State Became a Paradise for the Super-Wealthy”, chronicles how Sweden went from one of the most egalitarian countries in the world to a country with a greater wealth inequality than Nigeria, the Philippines, Haiti and the United States.

If you are looking to be convinced of the total rot of Swedish capitalism, this book is for you. In Sweden, dollar billionaires have amassed more wealth relative to GDP than in any other country. Nowhere on the planet are capitalists so wealthy relative to the size of the economy as a whole. Unfortunately, this book offers no solutions.

The author, business journalist Andreas Cervenka, explains in detail how the super-rich got so rich in Sweden of all countries. The government and the central bank have tackled the last three major crises of Swedish capitalism – the crisis of the 1990s, the financial crisis and the crisis triggered by the pandemic – with huge relief programs and lower interest rates . From 2015 to 2019, the interest rate was even negative. Taking huge loans has been made as easy and cheap as possible.

At the same time, politicians did their best to make wealth as advantageous as possible. Inheritance, gift, real estate and capital taxes have all been abolished, while the old system of taxing profits and dividends has been replaced by a lump sum, through savings accounts. investment. The level of property tax is lower than that of Great Britain and the United States.

The politicians responsible for implementing these changes – the Social Democrats Göran Persson [prime minister from 1996 to 2006, now chairman of Swedbank]Björn Rosengren, Pär Nuder [minister of finance 2004–2006]and curators Anders Borg [minister of finance 2006–2014] and Fredrik Reinfeldt [prime minister 2006–2014] – today themselves belong to the richest 0.5% in Sweden. State and capital work hand in hand.

As a result, the number of billionaires exploded. Sweden has gone from 28 billionaires in 1996 to 542 today. Together they control 68% of GDP, thirty times more than in 1996. In fact, this figure has doubled in the last two years alone.

When it comes to dollar billionaires per million people, Sweden ranks sixth in the world – only Monaco, Saint Kitts and Nevis, Liechtenstein, Guernsey and Hong Kong have more. With eight billionaires for every million citizens, Sweden leaves the United States far behind with just 1.8.

According to the Gini coefficient (a measure of economic equality), Sweden is the twelfth most unequal country in the world.

Pyramid schemes and online casinos

Billionaires did not create their wealth through productive investment in industry – GDP per capita and productivity have stagnated since 2007. As Marx explained, there are few opportunities for profitable investment once the system capitalist finds himself in a crisis of overproduction. The crisis is precisely the result of production exceeding the capacity of the markets to absorb raw materials.

The author, business journalist Andreas Cervenka, explains in detail how the super-rich got so rich in Sweden / Image: Rikard Westman

Cervenka describes the period following the 2008 crisis as a “lost decade”. Per capita growth was practically non-existent between 2007 and 2014, reaching just 0.4% per year for the entire period from 2007 to 2020.

On the other hand, the Nasdaq Stockholm has risen almost 800% in 25 years. The stock market recorded excellent results exactly at a time when the real economy was struggling. There is considerable speculation in new technology companies, which tend to be significantly overvalued both in Sweden and abroad.

At the same time, Stockholm has the second highest number of so-called “unicorn” companies, i.e. unlisted startups worth more than $1 billion. The CEO of venture capital firm Social Capitals described the startup world as a massive pyramid scheme of “bought, unprofitable, artificial growth.”

Of Sweden’s 542 billionaires, 70 have made their fortunes in real estate. However, they have hardly invested anything in the construction of badly needed new cheap apartments. Instead, they followed a modus operandi of:

  1. Buying a property, raising the price and then reselling it.
  2. Make minor renovations to apartments in order to justify huge rent increases (sometimes up to 50%) – renovation evictions or “renovictions”.
  3. Buying back public properties to rent them to schools, health and care services, with rents several times higher than the initial value of the properties.

Meanwhile, banks are making huge profits on rising house prices from interest payments on home loans. The price of condominiums has increased by 800% since 1996. Home loans account for 60% of Swedbank’s profits and 50% of Handelsbanken’s profits. They also profit from packaging and reselling these home loans to third parties.

Another lucrative market that serves to bankrupt the working class is that of cheap, unsecured loans, known as “consumer loans” or “white loans”. Klarna Bank has made particularly strong gains in this market and is now better valued than Swedbank, SEB and Handelsbanken. The volume of unsecured “white loans” increased tenfold between 2008 and 2018. They represent only 20% of total Swedish debt, but due to high interest rates, they represent 50% of loan repayments. One out of five customers of consumer credit companies finds themselves face to face with the debt collector, for lack of the means to repay.

Finally, there is the gambling industry (casinos). This includes companies such as Evolution Gaming, which recently reached the top ten listed companies on Nasdaq Stockholm. It is valued at around 30 billion euros. Bettson, Netent, Kindred and Leovegas are other companies that make money from gambling addiction.

This is how the rotten Swedish capitalist class makes its fortune.

At the expense of workers

Cervenka also shows how conditions have deteriorated for ordinary working class people.

While dollar billionaires have doubled their share of the country’s wealth since 2016, the share of the poorest half of the population has fallen from 3.2% to -2.4% since 2015. In other words , they now have more debt than assets.

One in three people aged 18-29 say they rarely, if ever, have money left over at the end of the month and don’t have savings to cover expenses even smaller contingencies. In 2019, 15% of the population was classified as relatively poor, i.e. had an income below 60% of the median. This figure is the highest since the start of these surveys.

Private debt has exploded due to soaring house prices, rising from 90% to 200% of annual income in 1996-2021. This figure puts Sweden near the world top. Today, total debt (private and public) is 313% of GDP, almost double the figure for 2005, and now exceeds the United States, Italy, Great Britain and Spain.

Cervenka explains that the fate of the Swedish economy today is linked to that of real estate prices. In 2019, the central bank conducted a stress test which found that a reduction in the housing market to 2012 levels would lead to losses of SEK 771 billion for the three big banks, Swedbank, Handelsbanken and Nordea. This would be, in Cervenka’s words, a “financial Armageddon”, and would probably require the nationalization of one or more banks.

And now inflation is here. This forced the central bank to raise interest, affecting the rest of the economy, and therefore the demand rate. House and condominium prices have begun to decline. SBAB recently warned of a possible 15-20% drop in house prices.

fear of revolution

Andreas Cervenka does a great job of exposing Swedish capitalism, but his solution is to try to save capitalism from itself. His hope is that we can return to the “good old days”, with responsible capitalists and politicians, and a more restrictive central bank. But those times are over. What we see today is exactly what capitalism looks like in a state of deep crisis: super-rich parasites profiting from credit, speculation and gambling, an extreme wealth gap between classes and conditions that make increasingly difficult for workers and young people to get by.

In an interview with the left-wing reformist daily ETC last year, “entrepreneur” Roger Akelius – whose wealth stands at SEK 85 billion – said growing inequality is an “extremely dangerous situation” and added: “I’m scared of what’s going to happen. Shortcomings of this magnitude are bound to cause serious suffering to some people. Huge frustration will build up.

Sverker Lennheden, another Swedish billionaire, said: “Huge sums of money were poured on us rich people during the financial crisis of 2008. It is strange that there was no revolution.

Don’t worry, Sverker, it’s only a matter of time! The working class will fight back. As Marx and Engels said: “May the ruling classes tremble before a communist revolution. The proletarians have nothing to lose but their chains. But they have a world to win.

Comments are closed.