While Sweden is often portrayed internationally as an egalitarian – even a “socialist” country – in reality it is one of the most unequal countries in the world today, according to the newly published book Sweden of the Greedy: how the welfare state became a haven for the super-rich. . Moreover, as the recent Kurdish sell-off shows, the Swedish ruling class are vicious imperialists whose concern for “human rights” is sheer hypocrisy.
New book Sweden of the Greedy: How the Welfare State Became a Paradise for the Super-Rich tells the story of how Sweden went from being one of the most equal countries in the world to one with greater wealth inequality than Nigeria, the Philippines, Haiti and the United States states.
If you want to convince yourself of the absolute depravity of Swedish capitalism, this is the book for you. In Sweden, dollar billionaires have accumulated more wealth as a percentage of GDP than in any other country. Nowhere in the world are the capitalists so rich relative to the size of the economy as a whole. Unfortunately, this book does not offer a solution.
The author, business journalist Andreas Cervenka, explains in detail how the super-rich became so rich in Sweden of all places. The government and central bank have addressed all three recent major crises of Swedish capitalism – the crisis of the 1990s, the financial crisis and the one triggered by the pandemic – with huge bailout packages and interest rate cuts. From 2015-2019 the interest rate was even negative. Borrowing large amounts of money has been made as easy and cheap as possible.
At the same time, politicians have done their best to make being rich as beneficial as possible. Inheritance, gift, property and capital taxes were abolished, and the old system of taxing profits and dividends was replaced by a lump-sum taxation through investment savings accounts. Property tax levels are lower than in the UK and US.
The politicians responsible for implementing these changes – Social Democrats Göran Persson [prime minister from 1996 to 2006, now chairman of Swedbank]Bjorn Rosengren, Pär Nuder [minister of finance 2004–2006]and Conservative Anders Borg [minister of finance 2006–2014] and Fredrik Reinfeldt [prime minister 2006–2014] – are now among the richest 0.5 percent in Sweden. State and capital work hand in hand.
As a result, the number of billionaires has skyrocketed. Sweden has grown from 28 billionaires in 1996 to 542 today. Together they control 68 percent of GDP, thirty times more than in 1996. In fact, that number has doubled in the last two years alone.
When it comes to dollar billionaires per million inhabitants, Sweden ranks sixth in the world – only Monaco, St Kitts and Nevis, Liechtenstein, Guernsey and Hong Kong have more. With eight billionaires per million inhabitants, Sweden is far behind the USA with only 1.8.
According to the Gini coefficient (a measure of economic equality), Sweden is the 12th most unequal country in the world.
Pyramid schemes and online casinos
The billionaires did not create their wealth through productive investment in industry – GDP per capita and productivity have stagnated since 2007. As Marx explained, once the capitalist system finds itself in a crisis of overproduction, there are few opportunities for profitable investment located. The crisis is precisely the result of production that exceeds the capacity of the markets to absorb raw materials.
Cervenka calls the time after the 2008 crisis a “lost decade”. Per capita growth was virtually non-existent between 2007 and 2014, reaching just 0.4 percent annually over the entire 2007-2020 period.
On the other hand, Nasdaq Stockholm has grown by almost 800 percent in 25 years. The stock market has delivered excellent results at exactly a time when the real economy has been struggling. There is significant speculation in new technology companies, which tend to be significantly overvalued both in Sweden and internationally.
At the same time, Stockholm has the second largest number of so-called “unicorn” companies, ie unlisted startups valued at more than one billion dollars. The CEO of venture capital firm Social Capitals has described the world of startups as a giant pyramid scheme of “bought, unprofitable and engineered growth.”
Of Sweden’s 542 billionaires, 70 made their fortunes in real estate. However, they have hardly invested anything in the construction of badly needed new low-cost housing. Instead, they followed a modus operandi of:
- Buy real estate, increase the price and then resell it.
- Minor home renovations to justify huge rent increases (sometimes up to 50 percent) – renovation evictions or “renovations.”
- Purchase of public properties for rent to schools, health and care services with rents that are many times higher than the new value of the properties.
Meanwhile, banks are benefiting from rising real estate prices through interest payments on home loans. The price of condos has increased 800 percent since 1996. Home loans account for 60 per cent of Swedbank’s profits and 50 per cent of commercial banks’ profits. You also benefit from packaging these home loans and reselling them to third parties.
Another lucrative market used to ruin the working class is cheap and unsecured credit, known as “consumer credit” or “blank credit.” Klarna Bank has made particularly strong gains in this market and is now valued higher than Swedbank, SEB and Handelsbanken. The volume of unsecured “blank loans” increased tenfold between 2008 and 2018. They make up only 20 percent of Sweden’s total debt, but because of high interest rates, they account for 50 percent of loan repayments. One in five customers of a consumer credit company faces the debt collector because they cannot afford the repayment.
Finally, there is the gambling industry (casinos). These include companies like Evolution Gaming, which recently made the top ten companies traded on Nasdaq Stockholm. It is estimated at around 30 billion euros. Other companies that make their profits from gambling addiction are Bettson, Netent, Kindred and Leovegas.
This is how the lazy Swedish capitalist class makes its fortune.
At the expense of the workers
Cervenka also shows how conditions for ordinary working-class people have deteriorated.
While dollar billionaires have doubled their share of the country’s wealth since 2016, the share of the poorest half of the population has shrunk from 3.2 percent to -2.4 percent since 2015. You now have more debts than assets.
One in three people aged 18 to 29 say they rarely, if ever, have any money left over at the end of the month and that they have no savings that would allow them to meet even smaller unexpected expenses. In 2019, 15 percent of the population was classified as relatively poor, i.e. had an income below 60 percent of the median. This number is the highest since these surveys began.
Private debt has exploded due to skyrocketing real estate prices, from 90 to 200 percent of annual income in 1996-2021. With this figure, Sweden is close to the top in the world. Today, total debt (private and public) is 313 percent of GDP, nearly double the 2005 figure, and now surpasses both the US, Italy, the UK and Spain.
Cervenka explains that the fate of the Swedish economy today is tied to real estate prices. In 2019, the central bank conducted a stress test which revealed that a fall in the real estate market to 2012 levels would result in losses of SEK 771 billion for the big three banks Swedbank, Handelsbanken and Nordea. This would be, in Cervenka’s words, “financial Armageddon” and would likely require the nationalization of one or more banks.
And now there’s inflation. This has forced the central bank to raise interest rates, affecting the rest of the economy and therefore demand. House and condo prices began to fall. SBAB recently warned of a possible 15 to 20 percent fall in house prices.
fear of revolution
Andreas Cervenka does an excellent 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 in the past. What we see today is exactly what capitalism looks like in deep crisis: super-rich parasites thriving on credit, speculation and gambling, extreme wealth inequalities between classes, and conditions that make it increasingly difficult for workers and youth to get by.
In an interview with the reform-leaning left-leaning daily ETC last year, “entrepreneur” Roger Akelius – whose fortune is worth SEK 85 billion – said growing inequality was an “extremely dangerous situation”, adding: “I’m scared of what’s going to happen happen. Gaps of this magnitude are bound to result in severe suffering for some people. A huge frustration will build up.”
Sverker Lennheden, another Swedish billionaire, said: “During the 2008 financial crisis, huge sums of money were poured out on us rich people. It’s strange that there hasn’t been a revolution.”
Don’t worry Sverker, it’s only a matter of time! The working class will fight back. In the words of Marx and Engels: “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.”