Lotta is allergic to electricity

Posted by Marc Hodak on May 9, 2007 under Unintended consequences | Comments are off for this article

Today’s WSJ had a front page article on Sweden’s disability subsidies. It began with the story of Lotta Landstrom who has been collecting said subsidies because her doctor said she is allergic to electricity.

Along with hundreds of other Swedes diagnosed with the condition in recent years, she came to rely on state-funded sick pay.

Well, the Swedish government, tired of watching the number of disabled climbing to the highest in the world, 13% of their population, is tightening up on these benefits and working to get “sick” people back into the work force where they can contribute to the tax pool instead of just drawing from it. The idea of significantly retrenching their disability benefits is not on the radar of the Swedes. They don’t want to be like the U.S.

Here’s the thing: I believe Lotta. I honestly think she is allergic to electricity. The girl chooses to live by lamplight in one of the coldest places in civilization when no one is watching. I could be wrong. We’re pretty far away from each other. The basic problem is that a generous disability subsidy is no different from paying people to be sick, and there is no reliable way to distinguish the truly sick from the scammers. The more forgiving we are about someone like Lotta, the more open we are to someone like Henrik, who says

he relied on state support for four years after suffering a slipped disc. The pain didn’t stop the big, brawny invalid from moonlighting as a night club bouncer on weekends, though. “There are no controls,” he scoffs, admitting that it was easy to scam the government.

So, what’s an earnest Swedish policy maker to do?

Tighten up, right? But tightening up is far from costless. Now you need a bigger bureaucracy. The Swedes aren’t used to that.

Benefits applicants used to hearing “yes” don’t always take kindly to the new approach. Earlier this month, a client threatened to break a welfare officer’s fingers. Lulea’s social insurance agency installed heavy security doors and keypad locks after receiving a bomb threat and other scares.

Make that, a bigger bureaucracy and some heavy doors and locks. If you were paying at the level of Swedish taxes and they cut you off, wouldn’t you get upset?

I’m no advocate of violence, but I don’t doubt that (a) a lot of Swedes now really believe they are disabled, and feel threatened by a more skeptical welfare system, and (b) even if they wouldn’t threaten anyone, they are probably not entirely unsympathetic to those that do, knowing that the costs have gone up for everyone–the Lottas and the Henriks. So, Swedish society’s tolerance for conflict is probably on its way up.

What’s next? Well, more power to the welfare officers making the decisions, because there is no formula to distinguish the sick from the scammers, and we need to stop the scammers. After that, more dissatisfaction, cheating, and perhaps violence, because there is no way that any system can perfectly sort the sick from the scammers, and the sick in a highly taxed society will do what they can to get the care they need. After that will come rules to tighten up on the arbitrary powers of the welfare officer, because power corrupts. After that? Tougher criminalization of welfare fraud, to deter the scammers (and their enablers) whose sense of entitlement may only be overcome by stiff penalties. After that, a backlash when someone sick who really needed help gets trapped in the legal apparatus designed to root out scammers.

All the time, the costs of this system are rolling up, to the point where the cost of infrastructure to provide these disability benefits begins to be a multiple of the benefits themselves. Then, they will have to cut costs the only way a bloated bureacracy will allow–by cutting benefits. Then the Swedes will have arrived at a place they really didn’t want to go. America.