When Swedish music company Spotify went to New York for the first time to raise money by selling shares, the stock exchange on Wall Street celebrated by hanging out a Swiss flag. The confusion of Sweden with Switzerland is forgivable – they are both small northern nations with Teutonic roots and snow. In any case, what we know about distant countries tends to be based on big brands and historical quirks. Dwight Eisenhower bears some responsibility for residual notions about Sweden. In a speech in 1960, the US president alleged that this ‘socialist’ nation had high rates of suicide, drunkenness and loose morals – false perceptions that still survive today.
Before we begin our safari into the world of Scandi wealth creation, what do we need to know about this country, its history, politics and values? Is it possible to make any useful generalisations about Swedishness? We all look so similar these days across the developed world: we dress the same, eat the same, work in the same environments, holiday in the same places, read the same books and watch the same TV programmes. The pace of change is fast – what seems to be a stable feature of a nation can soon become an anachronism. So it might be a fool’s errand, but it is still fun, and fruitful I think, to explore some big-picture features that make Sweden stand out from the rest.
Let’s start with some birdwatching. Each year, tens of thousands of Eurasian cranes gather at the southern tip of a lake two hours’ drive from Gothenburg. In early spring you can hear these huge birds calling amid the low cloud, their slender necks stretched out ahead of them. When they reach this lake with its tongue-twisting name, Hornborgasjön, they dance in an elaborate pairing ritual – it is an amazing spectacle. But this is a man-made phenomenon. The lake became a stopping-off point for the cranes on their migration thanks to the potato fields that once formed the basis of the local economy. This used to be vodka country. Potatoes that escaped the harvest and remained in the soil were nourishment for tired birds. The vodka industry has since moved on, so now the locals feed the cranes to keep them coming.
The cranes are here because Sweden once had an alcohol problem, and potatoes were in demand. A century ago, average vodka consumption reached almost a litre a week for every man, woman and child in what was still a very poor, agricultural nation. For decades, the country battled to find a way to regulate consumption. Alcohol today remains a vivid example of Sweden’s distinct attitude to market economics, and the ways in which this affects Swedes more generally.
What they came up with was Systembolaget – the System Company, abbreviated to Systemet, or ‘the System’. This is the state-owned alcohol retail monopoly and the only place where you can buy anything with an alcohol content stronger than 3.5 per cent. The System dominates the sale of alcohol for home consumption, its explicit mission being to reduce the damage to society from alcohol. You have to travel far to find it: there are more golf courses in Sweden (491) than shops where you can buy a bottle of wine over the counter (439). And they close early – at 3pm on a Saturday and remain closed for the rest of the weekend.
The System is a physical representation of Sweden’s deep distrust of alcohol in particular, and drugs more generally. It is institutional guilt on a national scale. Entering a System shop is like having sex in church – you cannot avoid a strong feeling that you shouldn’t be there. The shops are designed to sell as little alcohol as possible and make no profit. TV advertising plays on this: ‘The Swedish way is a little different’, a matronly figure admonishes a pushy American consultant who only wants to boost sales. The System’s staff claim they are there to help you make the right choice of wine to accompany your food, but no – this is about social control. They are like priests at confession. Forgive me, Father, for I am about to sin. People don’t like to be seen with a Systembolaget carrier bag, or to be given away by the clinking of bottles in a public place.
Alcohol shame is deep-rooted. I once went campaigning with a political leader in the run-up to elections, and we needed somewhere warm afterwards for an interview. But she declined to enter a convenient bar in case she might be photographed in a place selling alcohol. In Britain, for example, politicians like to pose with a drink to show they are ‘of the people’. This would never happen here. Sweden – a very 21st-century nation renowned for embracing modernity and liberal freedoms – has a significant temperance movement, bigger than most of its political parties. There is no alcohol advertising on television made in Sweden. Ads in printed media are for wine and beer only, and generally just comprise a photo of a bottle and a generic exhortation to ‘try this, it’s nice’. Each ad comes with a large official health warning informing the reader that alcohol increases the incidence of accidents at work or damages your unborn child. Living here, you would never have any idea that the country supplies the world with that supreme party drink, Absolut Vodka.
I personally don’t like the System, it rankles that I am not allowed to make adult choices for myself. And yet, I can reluctantly admit that the tight restrictions on alcohol make sense. This is society stepping in, recognising that unlimited freedom in this sphere has damaging consequences, and saying: ‘Let’s deal with it’. This is a good principle, at least. And remarkably, the System’s popularity is high and growing higher. In 2018, a staggering 77 per cent of Swedes were in favour of the state alcohol monopoly, according to a long-running annual survey. Systembolaget is the most trusted institution in Sweden, ahead of IKEA and Volvo, and far out in front of privatised services such as the railways and postal service.
Social change has chipped away at the System, thanks to internet sales and booze cruises to Denmark or Germany, where alcohol is cheaper and much more freely available. But it survives – and thrives. When Sweden joined the European Union in 1995, it had to negotiate special permission to maintain the monopoly. Until recently there was a similar situation with gambling, so Swedish gaming entrepreneurs were forced to take their businesses offshore. But the internet and 4G have put an end to that. There is a moral panic in Sweden at the time of writing because of a flood of online gambling ads on Swedish television. Perish the thought that the same could ever happen with alcohol.
Booze is also a good example of the conservatism with a small ‘c’ that runs through much of Swedish society. Marijuana use is ticking up, but it remains far below that of North America or most other European nations. It is illegal to buy sex. This is a highly internationalised country where most people speak English, but national pride is strong – the suburbs are a forest of flagpoles flying the yellow-on-blue national flag. Sweden is often hailed as the most atheist country on earth. But this is belied by the fact that almost 6 million of the population – that’s six out of ten Swedes – are members of the Swedish church. Membership is not cheap, it means paying a tax of about 1 per cent of your income to the church. This adds up to billions and makes the Swedish church a very wealthy institution. Membership is down – it used to be more than 95 per cent 50 years ago, and the number of active worshippers is even fewer. But the church continues to hold a respected place in society. One of Sweden’s largest active congregations is Katarina Church in Södermalm, the most hipster part of Stockholm. Young people are drawn to the church by all sorts of factors, but least of all by religion, a priest told me.
What about Sweden’s famously liberal attitudes to sexual orientation? Sweden is one of the most gay-friendly countries in the world. Gay sex was legalised way back in 1944, while the age of consent was equalised for gay and straight sex in 1972. In the same year, Sweden became the first country in the world to allow transgender people to legally change their sex. Pride celebrations in the big cities attract tens of thousands of people. Stockholm boasts the world’s first lesbian bishop. Each year the country becomes quite literally obsessed with the campest event on the planet – the Eurovision Song Contest.
However, possibly because things have been legal and official for so long, there isn’t quite the liberating sense of freedoms having been won, rather than bestowed from above. Sweden never had a Stonewall moment; there is no Swedish Harvey Milk. It makes me wonder how deep attitudes go. There are few prominent gay figures outside the arts and sport, for example. A few years ago at the opera house in Gothenburg I saw La Cage aux Folles, the musical about gay love, with its wonderful anthem ‘I am what I am’. It finished with the well-dressed, middle-class audience clapping politely as if they felt it was the right thing to do. In London, it would have ended with an explosion of tears, hugging and cheering. One gets a similar feeling about official anti-racism in Sweden – it’s all very right on, but when you scratch the surface it’s not hard to find prejudice, as we shall see later on.
If Swedish values are generally conservative with a small ‘c’, how does this square with the country’s allegedly left-wing past? It is true that the Social Democratic Workers’ Party has been Sweden’s largest political organisation since 1921, dominating government almost uninterruptedly until the early 1990s. As we shall see later, the Social Democrats reigned during a period when Swedish capitalism was extremely successful. It is easier to fund welfare and income distribution when the tax receipts are rolling in. Sweden stayed out of both World Wars, avoiding the economic destruction they wrought. And, notoriously, it traded with both sides in each of them. Sweden’s copper made great bullet casings, and its iron ore made Nazi steel. Neutrality was good business.
Ever since 1944, the Social Democrats’ constitution has been steadily watered down. Now ‘socialism’ gets only a single mention, and narrowly in terms of democracy and equal rights. Since the millennium, the party’s share of the popular vote has been in sharp decline. Currently it survives in government thanks only to the tolerance of the liberals. In its heyday, its leftism was largely rhetorical and confined to the international stage – the party’s aristocratic leader Olof Palme took a stand against the Vietnam war, nuclear weapons and apartheid South Africa, but also against repressive regimes in Eastern Europe; the Sweden of Palme’s Social Democrats was characterised by strong anti-Russian sentiment. At home, for several decades the party presided over a eugenics programme of forced sterilisations, which started out as an experiment in racial biology but later aimed to weed out social problems. Until 2012, transgender people requesting a sex change were required to undergo sterilisation.
When Palme was gunned down in Stockholm by an unknown assailant in 1986, his murder shattered any illusions about the country being a tranquil haven of equality and human rights, and more or less marked the end of the old Sweden that Palme had come to epitomise. He left behind a country with particularly high marginal tax rates on the rich – above 80 per cent – a relatively high level of public ownership in the economy, and high government spending. Sweden is very different today. Public spending as a percentage of the economy fell from about two-thirds in the mid-1990s to under half today. In the 1990s, Sweden privatised its railways, the postal service, domestic aviation and telephones. Television was deregulated, and private companies were allowed into the welfare sector, while competition was introduced into public services. At the time Palme was assassinated, in 1986, the state employed around 45 per cent of the workforce; today, public-sector employment is below 30 per cent.
Taxes have been slashed and tax revenue is down to around 44 per cent of the economy – still high in terms of the average for developed countries, but much closer to the norm. And most people don’t grumble about paying it. On the contrary, it seems Swedes imbibe with their mother’s milk the notion that taxes are good because they get what they pay for in terms of public services. Complete strangers will tell you they are happy to pay their taxes. There is a small culture of tax evasion, but it is marginal.
As a result of at least some, if not all, of these changes, Sweden’s economy has hit something of a sweet spot in recent years. ‘Sweden beats other countries at just about everything,’ the World Economic Forum declared in 2017. The country ranked number one in Forbes’ annual list of the Best Countries for Business. It was high on the Global Competitiveness Index, and top of the Global Sustainable Competitiveness Index. On the Global Gender Gap Index it took fourth place. Sweden had a very low level of corruption and ranked fourth in Transparency International’s Corruption Perceptions Index. The European Innovation Scoreboard put Sweden top. It was third in the Global AgeWatch Index of quality of life for older people. And in 2016 it had the best reputation in the world, according to Country RepTrak Index. When you take out the long holidays that Swedes enjoy, their productivity compares well to that of the United States.
I could go on, but it gets a bit repetitive. In short, we have all heard good things about Sweden. So this is the right point at which to end these introductory canapés and get stuck into the main course.