Sweden & Taiwan

Lennart Erixon also homes in on another important point. For all the wonders that Sweden's large export-oriented engineering firms like Asea, Atlas Copco, Aga, Alpha-Laval, Ericsson, Electrolux etc. performed for the Swedish economy, they may nonetheless have come at a cost.

And the chickens are now coming home to roost.

Erixon produces evidence to suggest that the big boys with their preferential access to capital may have squeezed out the little lads and destroyed what otherwise would have been a dynamic small-firm sector.

My own comparison would be with Taiwan where the mix seems to have been better.

Taiwan has an informal private credit sector which provides a third of all private sector finance and virtually all the finance to the small firms sector. It is this which gives Taiwan such winning mixture of 'contract' and 'guerrilla' capitalism.

In Taiwan all transactions are personal...with 'those you know'. This is a long Chinese tradition but also a long human tradition.

Georg Simmel has studied this at considerable length in his 'Philosophy of Money'.

There is nothing particularly Chinese about it.

The Jews have always operated this way...they were given little choice.

So too do the Asians in Bradford and Oldham.

And this was the way of the English gentlemen merchant adventurers.

A hand-shake was the contract.

My word is my bond.

And perhaps it is here that the success of the Swedish Model really lies.

Vikings held personal relations and family ties sacred.

A Viking oath was a terrible thing.

Perhaps Lennart Erixon should start to look more closely at the role of the Swedish diaspora. Thousands upon thousands of Swedish importers shipped across the Atlantic ocean at the end of the last century.

Indeed on Erixon's evidence my hunch would be that this Taiwanese mix is probably what the next Swedish Model will have.

If this is the case then institutions will need to be established which make it impossible for large private interests to penetrate government while at the same time making it impossible for government to penetrate small private interests...for this too was key to Taiwan's success.

This will come as a major culture shock to the myths of corporatism and invasiveness accepted unquestioningly by the current generation of Swedes.

But at the same time it would roll back the veneer of hypocrisy that has grown up around Swedish commercial life.