David Brooks uses some of my figures

He writes:

"Roughly a century ago, many Swedes immigrated to America. They’ve done very well here. Only about 6.7 percent of Swedish-Americans live in poverty. Also a century ago, many Swedes decided to remain in Sweden. They’ve done well there, too. When two economists calculated Swedish poverty rates according to the American standard, they found that 6.7 percent of the Swedes in Sweden were living in poverty.

In other words, you had two groups with similar historical backgrounds living in entirely different political systems, and the poverty outcomes were the same.

A similar pattern applies to health care. In 1950, Swedes lived an average of 2.6 years longer than Americans. Over the next half-century, Sweden and the U.S. diverged politically. Sweden built a large welfare state with a national health service, while the U.S. did not. The result? There was basically no change in the life expectancy gap. Swedes now live 2.7 years longer.

Again, huge policy differences. Not huge outcome differences."

My brother, using figures I prepared for him, wrote in a smaller journal:

"A Scandinavian economist once stated to Milton Friedman: "In Scandinavia we have no poverty." Milton Friedman replied, "That's interesting, because in America among Scandinavians, we have no poverty either." Indeed, the poverty rate for Americans with Swedish ancestry is only 6.7%, half the U.S average. Economists Geranda Notten and Chris de Neubourg have calculated the poverty rate in Sweden using the American poverty threshold, finding it to be an identical 6.7%.

In 1950, before the high-tax welfare state, Swedes lived 2.6 years longer than Americans. Today the difference is 2.7 years."

While I agree with the thrust of Brook's article, he neglects one figure.

"These cultural phenomena do not disappear when Swedes cross the Atlantic to the supposedly inferior “cowboy” country. On the contrary, they appear to bloom fully. The 4.4 million Americans with Swedish origins are considerably richer than the average American. If Americans with Swedish ancestry would form their own country their per capita GDP would be $56,900, more than $10,000 above the earnings of the average American.

The old Sweden, in contrast, has not done as well in economic terms. In 1960 taxation stood at 30 percent of GDP, roughly where the US is today. As taxes rose, economic growth decreased, with Sweden dropping from being the 4th richest country in 1970 to being the 12th richest in 2008. Swedish GDP per capita is now $36,600, far below the $45,500 of the US, and even further behind the $56,900 of Swedes in America."

Swedes are a very competent people. Under the American free-market system, they earn about 50% more than they do in Swede. Despite the fact that the Swedish system is geared towards reducing poverty and income inequality, they manage only the same poverty rate, and much lower average income.


So far I have been linked or cited (directly or indirectly, I frankly don't care) by Greg Mankiw, Tylwer Cowen, The Economist blog, Casey Mulligan, National Review and the New York Times.