Trouble in the Workers’ Paradise

Sweden is regarded by many as the ideal balance between capitalism and socialism.

A lot of people genuinely believe it is a “Workers’ Paradise.” They worship the “Nordic model” as something all Western democracies should emulate.

Recent events show that the model of a lavish welfare statism cannot erase deeper economic and cultural divisions. Right now, Sweden is seeing the worst riots in years as immigrant youths trash everything in sight, and clash with mobs of immigrant-haters. Cars are torched. Rocks are thrown at police and firefighters. Schools have been set ablaze.

Riots in Stockholm, Sweden - 22 May 2013

Sweden has experienced various riots in the last few years. Usually these cool off after a day.

The latest riots have gone on for a week. The situation evokes memories of the 2005 Paris riots, or the 2011 London riots.

But why should anyone want to riot in Sweden? Isn’t everything perfect?

The disturbances erupted in Husby last weekend, after police shot dead an elderly man brandishing a machete inside his house. Angered at what they saw as police heavyhandedness, youths torched cars and buildings and stoned police and firefighters. Police were then forced to draft in extra manpower from outside Stockholm as the trouble spread to other immigrant-dominated suburbs of the capital and towns such as Orebro in central Sweden, where 25 masked youths set fire to a school on Friday night.

According to one rioter:

“In the beginning it was just a bit of fun,” said one young man in his early 20s who did not wish to be named. He was one of a Husby group of 30-40 youths that battled with police.

“But then when I saw the police charging through here with batons, pushing women and children out of the way and swinging their batons, I got so damned angry.”

The Swedes just can’t understand why this is happening.

“We have tried harder than any other European country to integrate, spending billions on a welfare system that is designed to help jobless immigrants and guarantee them a good quality of life,” said Marc Abramsson, leader of the National Democrats Party. “Yet we have areas where there are ethnic groups that just don’t identify with Swedish society. They see the police and even the fire brigade as part of the state, and they attack them. We have tried everything, anything, to improve things, but it hasn’t worked. It’s not about racism, it’s just that multi-culturalism doesn’t recognise how humans actually function.”

It’s fair to wonder, if this can happen in Sweden, why not everywhere?

(Maybe not Canada. Instead, we riot over god damn hockey games.)

Multiculturalism has never worked anywhere, ever, in all of human history. It’s not because different groups of people can’t get along. Trade and peace is natural, even between people of different religion, race, culture, or ethnicity. The blame instead rests on the institution of the state itself.

Rather than erase conflict between different groups, as many like to believe, welfare statism aggravates the conflict between them. This happens because the state encourages not cooperation and respect between people, but rather dependence on its ability to transfer property from one group to another. This always breeds resentment between people who are more or less on the dole than other people.

The state cannot create harmony between people. It creates only discord.

— Read more at The Telegraph and Yahoo News

The European Central Bank Is Deflating

A lot of people talk on and on about how all the central banks are printing money.

But, to the dismay of radical Keynesians, central banks are not always printing money all the time.

The ECB has spent the last several months deflating.

ecb assets

This will put pressure on Europe. It will be interesting to see how long this lasts, given how bad things seem to be over there.

European Union Wants to Tax Heavy Crude from Oil Sands

The European Union is falling apart. It is desperate for money. The bureaucrats in Brussels will tax anything they can.

Now the EU wants to modify its fuel quality directives, so that refiners who use oil that is “too dirty” (according to bureaucrats) must pay a tax.

Joe Oliver, the Natural Resource Minister of Canada, thinks this amounts to specifically targeted tax on Canadian oil-sands product. He says Canada will sue the EU at the World Trade Organization if they implement the changes, because the oil-sands crude isn’t any “dirtier” than many other crude imports which are not subject to the tax.

Firstly, let me note the hypocrisy when an official from Harper’s government whines about tariffs, while Harper’s government loves tariffs. “Oh yeah, taxing our stuff is bad; taxing your stuff is okay.” Typical government knavery.

On a more general level, yes the EU fuel quality directives and its associated penalties are bad for the economy. They are bad for Europe and bad for Canada. They reduce production of the taxed good and divert resources to government approved fuels. The government is in principle incapable of knowing to what extent a given quality of oil should be used.

Oil sands production is “dirty”, sure. The industry has a lot of flaws. Really, the CO2 emissions aren’t even a big deal, although that’s what everyone focuses on. But the environmental situation is still very screwed up, because Alberta is essentially a mini-petro-state. Property rights and laws of tort can rarely protect the environment because virtually all the pollution takes place on government land.

Even so, that is true of most oil. There is very little “clean” oil where you just turn on the tap and get light, sweet, succulent crude with minimal impact on the earth. Most of it is heavy and sour and difficult to get. Due to inept government regulation and interference with property rights, its production is environmentally problematic. So the European tax seems to be not just destructive, but arbitrary.

If the WTO agrees with Canada that the fuel directives constitutes an unjustified tax, they can’t force them to change it. It just means the Canadian government can put their own tariffs up to retaliate. That is bad for everyone. It would be better to just accept one dumb tax over which one has no controlnthan implement another dumb tax to go along with it. If the Canadian oil producer finds it harder to sell its oil, that’s already bad enough. Why should the Canadian consumer also be punished? It makes no sense, and only a politician or a shyster would advocate this.

Read more at Market Wire

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