With governments around the world taking steps to prop up their domestic auto industries, I’ve been wondering where the necessary reduction in global car production capacity is going to come from. One answer, it seems, is Sweden where the center-right government says it’s not interested in having Swedish taxpayers take over Saab as GM tries mightily to dump it.
Sarah Lyell’s New York Times coverage spins this as a repudiation of “Nordic” “socialism,” but in truth Nordic social democracy at its best doesn’t involve all that much socialism in sense of state ownership of the means of production. Rather, its successes have to do with the generous provision of social and human services (education, day care, health, etc.) and infrastructure in exchange for high levels of taxation. Pretty much all advanced democracies have, at one time or another, flirted with state support for “national champion” firms that have many employees (General Motors) or important political connections (Citibank) and that’s true in the very market-oriented countries and the very social democratic ones.