Sweden beaten at its own game

[natedogg]

Gotta love techcentralstation:. Enjoy the cool breakdown of Sweden's misguided socialism:

http://www.techcentralstation.com/112904D.html


natedogg

[nicky g]

Wow. Austria and Denmark, which also have very high tax and welfare rates but ones very slightly lower than Sweden, have had slightly better economic growth than Sweden over a given period. Conclusive proof that the Swedish model is doomed.

[Fluffington]

That may not be conclusive proof, but in my humble opinion the Swedish model is doomed. This doesn't seem to be deterring Gordon Brown, though:

http://www.spectator.co.uk/article.php?id=5344&issue=2004-12-04

[Il_Mostro]

I won't argue the facts, I'm sure they are reasonably correct, I've also read things along the same lines in Swedish papers the last few years.

But...
From the article:
"Good welfare states depend on a growing economy."

Kenneth Boulding:
"Anybody who believes exponential growth can go on forever in a finite world is either a madman or an economist."

Any, I repeat, ANY economic model that relies on exponential growth will eventually collapse. The only things that can grow exponentially for ever are immaterial things, like inflation. Rest assure that you cannot have exponential growth in anything that requires the usage of physical things, be it oil, iron, fresh water, food or whatever. My point being, all western economies are doomed, unless we find a way to transform them.

[MMMMMM]

A growing economy does not necessarily require "exponential" growth, does it?

Also, ideas can pretty much grow forever, and a significant portion of today's economy is based on intellectual capital, and on further "idea-building".

Finding more efficient designs and synergies is also very important, and contributes greatly to growth. Growth isn't only about depleting raw materials.

[Il_Mostro]

[ QUOTE ]
A growing economy does not necessarily require "exponential" growth, does it?

[/ QUOTE ]
You need to look up exponential /images/graemlins/smile.gif
If X grows with 1% every year then you have an exponential growth. After Y years the total amount of X needed is X* (1.01^Y). That's exponential for you. For example, if oil usage keep increasing like it is today, in 1700 years or so we will need one earth-mass of oil each year. Exponential growth is a bitch...

[ QUOTE ]
Also, ideas can pretty much grow forever, and a significant portion of today's economy is based on intellectual capital, and on further "idea-building".

Finding more efficient designs and synergies is also very important, and contributes greatly to growth. Growth isn't only about depleting raw materials.

[/ QUOTE ]

This is the usual argument you hear, today our economy is not as oil dependant/raw material dependant/dependant on any physical thing as it used to be.
I find this very hard to belive, considering we (as in the world) use more and more raw materials every year... Just because you move the actual usage of the material somewhere else does not mean it ends.

I would argue, but right now I can't base it on facts (at work you know) that economic growth without growth in anything physcially limited is impossible. Be it energy or steel or timber or fresh water or whatever.

[zaxx19]

What these hyper liberal societies do depend on is a starving 3rd world to continually replaenish their aging and infertile populations. These type of societies WILL NEVER BE SUSTAINABLE due to the demographic realities not economic ones.

[TomCollins]

Exponential growth in economy does not require exponential growth in resources. Productivity gains and efficiency are a much larger factor than being able to reap more resources. We have less farm land today than 100 years ago but can produce orders more food.

If you think we are still going to be using oil in 1700 years, you are gravely mistaken.

[cardcounter0]

Yes, I heard the Swedish Bikini Team is almost all Latino now.
/images/graemlins/grin.gif

[Patrick del Poker Grande]

Man... when's the last time I've seen the Swedish Bikini Team? They need to make a comeback.

[Il_Mostro]

[ QUOTE ]
Exponential growth in economy does not require exponential growth in resources. Productivity gains and efficiency are a much larger factor than being able to reap more resources. We have less farm land today than 100 years ago but can produce orders more food.

[/ QUOTE ]
Yes we do. But only because we have the help of hydrocarbons. Oil to fuel the machinery, and NG to produce nitrogen. We also have about half as much topsoil as we did a hundred years ago, at least in the US. We use up topsoil 30 times faster than it is regenerated. We also use up fresh water a lot faster than it is regenerated. If you havn't already, read the article on agriculture I posted in my "Essential reading" post. Sombering reading.

And you still havn't answered the question about why we (as in the world) uses exponentially more raw materials each year, if that is not necessary for growth... I also have not ever seen a sound argument that we can have growth in the economy without using more of anything. And by the way, there are a lot of things we will run out of even without exponential growth.

[ QUOTE ]
If you think we are still going to be using oil in 1700 years, you are gravely mistaken.

[/ QUOTE ]
Obvoiusly we aren't. I used that example to show that it's simply not possible to have exponential growth of a physical entity.

In earlier posts I have argued that we are about to face a real energy problem/catastrophy/challenge. This because the world is about to run out of cheap oil. By that I mean that the production of oil is about to peak and then go into permanent decline. There is no substitite for oil. That this is about to happen no-one seriously doubts (except for a few economists), the discussion is about when, not if. Some people (like USGS) say in 30 years, others (like geologists) say between now and 10 years from now. If it happen in 30 years we might have a chance to find an alternative if we start now, if it happens in 10 years, I very much doubt we will.

If you do not take my word for it, have a look at the video of the lecture by Richard Smalley, 1996 Nobel price winner.
http://smalley.rice.edu/

[Il_Mostro]

Not sure what you mean. Please explain.

There are, however, no doubt that the "first world" does everything and anything within their power to keep the "third world" from becoming richer. Need I say agricultural subsidies? Tariffs that are higher for poor countries than rich ones?

[Il_Mostro]

well, around here they havn't been sighted for at least 3 months, I hate winter /images/graemlins/mad.gif

[Six_of_One]

You argue persuasively, but all of it is based on the assumption that economic growth under capitalism cannot continue indefinitely, due to limitations in natural resources. I don't understand why this must be so.

Yes, certain physical resources are limited. Others (energy, for example) are not. The only limitation is current technology. In addition, in the long run, we are not limited to the physical resources found on Earth.

My point is, when certain resources (such as oil) run out, substitutes will be found, because they MUST be found. Substitutes do not exist today, because they are not profitable. When they are needed, however, they will be enormously profitable, and thus the amount of time and money devoted to their development will increase vastly.

I am known as the cynical type, but human nature being what it is, I can't make myself pessimistic enough to doubt that.

[TomCollins]

Populations are also going to max out in the next 100 years. But even so, there will still be growth. We will be able to produce more goods and services. We will be more efficient and we will also become more efficient at reusing previously reused material.

If you are correct, we would have run out of water years ago.

[Dr Wogga]

....their broads are smokin' .....and everything else after poon-tang is just window dressing

[sam h]

Whoever wrote this would be considered a joke by anybody who studies these countries or issues seriously.

Sweden experienced decades of very high growth under the welfare state. This amazing economic performance was in fact intimately tied to the corporatist system of wage-bargaining that developed hand in hand with the welfare state there and in most European countries after the second world war.

In the last twenty years, changes in the global economy have produced serious challenges to the Swedish system. Like many European countries, they are trying to figure out how to adapt the welfare model for the new environment.

There is very little evidence that drastically cutting back the state and liberalizing the economy is the best option, though some kind of labor market reform is probably needed.

[Il_Mostro]

[ QUOTE ]
Populations are also going to max out in the next 100 years.

[/ QUOTE ]
Something like that, yes.

[ QUOTE ]
But even so, there will still be growth. We will be able to produce more goods and services.

[/ QUOTE ]
And how do you do that if you are not allowed to have growth in the raw material usage? From where does the material to produce "more goods" come? And services... well, how many haircuts can you have in one day?

[ QUOTE ]
If you are correct, we would have run out of water years ago.

[/ QUOTE ]
And why is that, pray tell.

And besides, the fact that large parts of the US and other parts of the world is running out of fresh water is hardly debatable, or do you have any scientific reasearch showing that it isn't?
Exhibit 1 (http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=321&ArticleID=4026&l=en)
Exhibit 2 (http://www2.mcdaniel.edu/Biology/EPS04/foodprod/foodpo.html)

So, from where do you get the notion that "we would have run out of water years ago"? The water systems has never been under more stress from humans than it is today.

[Il_Mostro]

[ QUOTE ]
You argue persuasively, but all of it is based on the assumption that economic growth under capitalism cannot continue indefinitely, due to limitations in natural resources. I don't understand why this must be so.

[/ QUOTE ]
Yes, my argument / understandment of the problems are based in the following assumptions:
1) Growth cannot go on forever
2) We are about to run out of cheap energy
3) We are destroying the earth much faster than it can heal itself.
4) Every civilization that has faced depletion of a critical resource has gone under. I have not been able to find any example when this has not happened, maybe there are?

There are lots of economists who don't agree to the first assumption. However, I have never seen a satisfactory argument on how growth are to continue in the face of depletion of various resources. That the capitalist economy must grow is not controversial, I don't think anyone says different.

[ QUOTE ]
Yes, certain physical resources are limited. Others (energy, for example) are not. The only limitation is current technology.

[/ QUOTE ]
Yes and No. Energy is not limited in the true sense of the word. However, we draw somthing like +90% of our energy needs from fossil fuels, and they are limited. Thus we need to find an alternative. Today, there is no alternative that can even begin to take over from fossil fuels, not a single one or any conjuntion between different ones!
I also belive that if we wait until we face serious shortage in fossil fuels we will not be able to find a new source of energy, we will be busy fighting over that last of the fossil fuel resources. If, however, we start now, start a new, preferabley worldwide, apollo-type program to find new sources of energy, we might find something.
But then we will sooner or later run into some other limitation, be it water, food, steel, silver or whatever.

[ QUOTE ]
My point is, when certain resources (such as oil) run out, substitutes will be found, because they MUST be found.

[/ QUOTE ]
No, they does not HAVE to be found. Look at Easter Island for an example on when they didn't...

[ QUOTE ]
Substitutes do not exist today, because they are not profitable.

[/ QUOTE ]
Profit is not the problem. The problem is the scale, there exist nothing today that can produce as much energi as fossil fuels, period.

[ QUOTE ]
I am known as the cynical type, but human nature being what it is, I can't make myself pessimistic enough to doubt that.

[/ QUOTE ]
You need to read more on the subject /images/graemlins/smile.gif

[Fluffington]

I think it's a misconception to believe that Sweden was a welfare state in today's sense when it experienced the highest economic growth (roughly between 1950-1970). During that time government expenditure as a percentage of GDP ranged between 20.5 and 40.5 per cent which today would put it amongst the least tax plagued (and most growing?) developed countries. Also, a large part of the Swedish industrial success during this time can be attributed to the fact that Sweden didn't take part in WW2, which has nothing to do with whether it was a welfare state or not. (Though recent international events indicate that welfare states are - with the noble exception of Denmark - more likely to advocate the appeasment of tyrants.)

[adios]

[ QUOTE ]
"Anybody who believes exponential growth can go on forever in a finite world is either a madman or an economist."

[/ QUOTE ]

Don't know of an economist that states that the business cycle in the U.S. has been repealed i.e. that the U.S. will never again see an economic slowdown.

[adios]

Economic systems tend to work when the population is on the rise and consummer demand in the aggregate rises as well. When population growth abates I suggest that the welfare-state has problems.

[Il_Mostro]

[ QUOTE ]
Don't know of an economist that states that the business cycle in the U.S. has been repealed i.e. that the U.S. will never again see an economic slowdown.

[/ QUOTE ]
I'm not sure I understand what you mean. Clarify please (maybe it's just my english playing tricks on me)

[adios]

"Kenneth Boulding:
"Anybody who believes exponential growth can go on forever in a finite world is either a madman or an economist."


The "business cycle" implies periods of economic expansion and contration i.e. periods of economic growth that are positive and negative. Economic slowdowns happen periodically and can be exacerbated for long periods of time. I don't know of an economist that doesn't support this notion.

[Il_Mostro]

True. But I fail to see the relevance. Are you saying that we don't need to grow to new highs, we can just contract back a bit and then grow up to the same level we where before, then to contract again, and so indefinately? I find that to be a strange argument, but if that's what you are saying, do you have any references or arguments for that position? If that's not what you are saying, then, what are you saying?

[TomCollins]

[ QUOTE ]
1) Growth cannot go on forever
2) We are about to run out of cheap energy
3) We are destroying the earth much faster than it can heal itself.
4) Every civilization that has faced depletion of a critical resource has gone under. I have not been able to find any example when this has not happened, maybe there are?

[/ QUOTE ]

I don't see why your assumption is better than an economic assumption.

Cheap energy is a joke. We haven't even scratched the surface of nuclear energy. But then again, environmentalists such as yourself won't let us use ANY resources if there are ANY downside to them. The only way cheap energy runs out is if you force it to through Sweden-style anti-business practices.

I have not been able to find any example when this has not happened, maybe there are? Of course this is not the cause of the problems. Any time a resource has run out, we have moved to a BETTER resource. Whale oil may have been cheap energy in the past, but we found a better solution. It was more costly at first, but try power all the cars in the world on a bunch of drained blubber.

Humans can adapt extremely well to their environment. Technology will continue to improve and we will be able to find even cheaper energy than before. The cost of energy has decreased tremendously over time. Even as our usage has increased exponentially.

[adios]

You make a statement about economists and I state that I don't know of any economists that fit your characterization of them. Name me one economist that states that economic growth will continue to infinite levels. In order to have a rational discussion about economists and what they believe first one has to characterize them accurately which you have failed to do.

[Il_Mostro]

[ QUOTE ]
We haven't even scratched the surface of nuclear energy

[/ QUOTE ]
And you base that statement on what?
http://beheer.oprit.rug.nl/deenen/
These scientists don't agree with you anyway
[ QUOTE ]
The use of nuclear power causes, at the end of the road and under the most favourable conditions, approximately one-third as much CO2-emission as gas-fired electricity production. The rich uranium ores required to achieve this reduction are, however, so limited that if the entire present world electricity demand were to be provided by nuclear power, these ores would be exhausted within three years. Use of the remaining poorer ores in nuclear reactors would produce more CO2 emission than burning fossil fuels directly.

[/ QUOTE ]

And please don't come dragging with fusion. I belive that when I see it.

[ QUOTE ]
Whale oil may have been cheap energy in the past, but we found a better solution. It was more costly at first, but try power all the cars in the world on a bunch of drained blubber.

[/ QUOTE ]
The whale oil example keeps being dragged up... It's simply not a valid example, the economy in the 1800:s was not entirely built up on whale oil, like ours is on oil. Look at Easter Island instead, that's a better comparison

[ QUOTE ]

Humans can adapt extremely well to their environment. Technology will continue to improve and we will be able to find even cheaper energy than before. The cost of energy has decreased tremendously over time. Even as our usage has increased exponentially.

[/ QUOTE ]
True. But that is all because of oil. When someone shows me something that can even begin to produce the same amount of energy that oil and other fossil fuels does today I will listen. So far, noone has. And trust me, I have been looking. If you don't want to belive me, fine, I couldn't care less. But the fact of the matter is that if we don't have a replacement when oil starts running out we are in for some rough times. I'll stop highjacking this thread now. Look up the facts if you want, it's not as easy as you think.