Several things turned this hayseed country in the unheated attic of Europe into a wealthy modern state. Land-reform laws in the early nineteenth century allowed farmers to exercise property rights by enclosing common space, thereby increasing production, though at the expense of landless rural laborers. The medieval guilds, which gave comfy local monopolies to artisans, were abolished in 1846, and business freedom was guaranteed by law in 1864. Craftsmen could now succeed—or fail—at anything they wanted, anywhere they liked. Sweden also had supplies of timber, iron ore, and other minerals. Since these were export commodities, a policy of free trade was instituted. Thus, Sweden’s prosperity was the result of the very deregulation that a socialist government would be expected to abhor. A socialist will tell you that these policies lead to economic disparities and social dislocations. And the socialist is right. During the late-nineteenth and early twentieth centuries, almost one-million Swedes, nearly a quarter of the population, left Sweden. Fortunately they had someplace to go: Minnesota. Dislocated and disparity-ridden as they may have been, the Swedes did pretty well there. A Scandinavian economist once proudly said to free-market advocate Milton Friedman, “In Scandinavia we have no poverty.” And Milton Friedman replied, “That’s interesting, because in America among Scandinavians, we have no poverty, either.” A very different kind of Scandinavian economist, Peter Stein, tried to explain to me the Swedish Model or Swedish Miracle, the so-called Middle Way, which is supposed to deliver all the houses, cars, and nuisance calls from competing long-distance carriers that America has with the perfect social equality of, say, Sweden. Mr. Stein is one of a small group of Swedes willing to believe in complete economic liberty. It is a group so small that I think I met all of them in a room at Stockholm’s free-market-oriented City University, an institution itself so small that it’s housed on a couple of floors of an office building. Mrs. Ulvskog had told me, “A conservative politician in Sweden is closer to a United States liberal than to Newt Gingrich.” Mr. Stein pointed out that for sixty-two of the one-hundred years of splendid growth, the Swedish socialist welfare state contained no socialism and hardly any welfare. The left didn’t take power until 1932, and when the Social Democrats did get in office, they made socialism work by the novel expedient of not introducing any. Very few industries were nationalized. The Social
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