Madam, - Constantin Gurdgiev ("A story of failure behind the image of prosperity", Agenda, December 19th) draws on an assortment of "facts" combined with the usual neo-liberal mantras. He tells us that the Nordic people are turning away from state intervention in the economy even as the Irish left continues to extol the virtues of the Swedish model. Indeed, the Irish left "can't come to grips with the fact that socialism never works".
Economic growth rates were highest in the developed world between 1945 and the early 1970s when social democratic policies were the norm. Also, the most egalitarian of the advanced economies, those of Scandinavia, have growth rates over the past 80 years that should be the envy of their less egalitarian rivals.
From the mid-1970s onward,social democratic reforms in Sweden came under attack and have been dismantled or rolled back, though the Scandinavian model is far from dead, contrary to Gurdgiev's claims. It is arguable that the rise of neo-liberalism since then is a contributing factor to problems encountered in the Swedish economy. For example, the credit market was deregulated throughout the 1980s, allowing a speculative boom that ended in short order.
By the end of 1991 the government was forced to divert tax revenues to bail out several of the major banks, at a cost of 3 per cent of GDP.
On a global scale, a report prepared for the OECD indicates that the average annual growth rate of world GDP per capita during the neo-liberal period was only half of what it was in the post-war social democratic era.
Furthermore, the empirical evidence that global inequality is widening within and between countries is so overwhelming that none dispute it. And we all know that Ireland is one of the most unequal societies in the developed world.
Dr Gurdgiev does not mention that the Norwegians elected a government this year committed to egalitarian social and economic policies that will entail an increase in taxation. He should also take account of the victory of Evo Morales in Bolivia this week. According to your Editorial in yesterday's edition, it is estimated that 300 million of Latin America's 350 million people are now ruled by left-wing governments. I suggest that Gurdiev and the right should recognise that neo-liberalism does not work. - Yours, etc,
BRIAN McLOUGHLIN, Coolock, Dublin 5.