That’s how it worked out for Sweden

At Crooked Timber, they’re discussing a Tobin tax. Andrew F. asks:

How well did this work out for Sweden?

In the ruins of the city once known as Stockholm, ragged survivors barter rotting fish for scraps of used toilet paper outside the scorched hulk of the former Riksbank, that was once the oldest central bank in the world. Many have hacked out their own eyes with shards of plastic rather than see the desolation and depravity they brought upon themselves. “Would we hadn’t done it! The Tax that Dare Not Speak Its Name has reduced us to things lower than beasts!”

Elsewhere, corpses litter what were the chic alleys of hipster Södermalm, marking out the last desperate and insane brawls over crispbread and Cheap Monday products, clearly fought to the knife or rather to anything that would take an edge, in that grim night without darkness.

In the darkened concrete bunkers of what used to be one of the world’s largest Internet exchange points, Netnod, we found the rotting bodies of sysadmins still surrounding a router that appeared to have exploded, as if some sort of wave of pure evil had exploded across the wires from the hearts of a million bloggers the moment the first transaction tax was assessed.

And they tell me it’s worse in Skane. That’s how it worked out for Sweden.

(Although, the Greek source quoted here seems to be thinking along the same lines:

“If we default, it’s not just the domino effect. It will make Argentina look like small game. This place will become worse off than Bangladesh. People will be killed for a sandwich as they cross the road. It will be that bad.”


9 thoughts on “That’s how it worked out for Sweden

  1. It’s true. Plus the gaping hole from when they literally ripped up the whole city block that used to hold our financial services industry and shipped it to London. I recently tried to invest with a local funds manager that fell of that transport and have been forced to remain, but they now only accept payment in un- (or dis-)assembled IKEA furniture, which they use to heat the caves in which they dwell. And we had already eaten ours.

    Whatever you do, don’t go Tobin! Because whatever would we do without arbitrage?

  2. Truly fascinating Alex, if a bit lumpen, but tell us something. Did the proceeds of the Swedish transaction tax stay in the Swedish economy, or was it confiscated by the EU to prop up the Euro?

    I don’t want you to seem to be economical with the truth, you see.

  3. I don’t know how it could have been “confiscated by the EU to prop up the Euro”, because the Euro didn’t exist in 1985 and neither did the EU (it was still the EEC), and Sweden didn’t join the Euro.

    Also, what did you find particularly ragged (lumpenproletariat = ragged proletariat) about the post?

  4. I don’t think I understand your point here. Sweden is doing fine so obviously every policy enacted in the past 20 years must have hit their mark?

    I’m assuming it’s a quip, but it’s not really a very clever quip.

  5. Yes, Simon. I think Alex was joking when he wrote that: surviving Swedes “have hacked out their own eyes with shards of plastic rather than see the desolation and depravity they brought upon themselves” and that “corpses litter what were the chic alleys of hipster Södermalm”…

    You’re right. Sweden is doing fine.

    (And, just to be clear, there is no massive gaping hole in Stockholm either.)

    BTW, Alex and David, a charitable reading is that jon livesey is suggesting that Sweden has done so well precisely because we weren’t part of the Eurozone and could keep the proceeds from the tax, whereas that wouldn’t be the case with the EU tax proposed now. And that is a coherent objection, thought it is quite an exaggeration to portray the proposed tax as a massive transfer of wealth to mighty Brussels from feeble little EU economies that will end up as zombielands as a result.

  6. Maybe you don’t understand the question. It was a policy question, not “is Sweden a desolate wasteland”.

    In the context of the Tobin tax the question is “did it successfully slow down the number of transactions without harming the general liquidity of the markets in question”.

    I don’t know the answer, but it would be great to find out the answer.

  7. For the advanced markets it’s going to be a question of whether high-frequency trading is just electronic market-making or market manipulation. Lots of debate, but I don’t think anyone really knows.

  8. If Malmo can be used as a litmus, then the country is booming. I was there last year and on 4 or 5 previous occasions. I will have to revisit Stockholm soon, but the next trip will be to Gotham City (Göteborg). I bet that Riksbank would pass any stress test.

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