Sweden's socialist experiment nearly killed one of the most productive economies in the world. The Swedes fixed it by reversing course: something the left refuses to do. By 1993, Sweden's GDP had contracted three years straight. Unemployment hit 12 percent. The welfare state built after World War II had pushed marginal income tax rates above 80 percent, crowded out private investment, and handed bureaucrats control over capital allocation. The state owned or regulated everything that mattered. Then Sweden cut. Drastically. Between 1991 and 1994, the center-right Bildt government privatized state enterprises, deregulated financial markets, opened Sweden to foreign competition, and slashed the top marginal tax rate from 87 percent down to 50 percent. The central bank gained independence from politicians in 1999. Corporate tax fell to 28 percent by 1994. Capital responded immediately. Investment returned. Productivity climbed. By the late 1990s Sweden posted some of the strongest growth in the OECD. The villain in this story is the Swedish Social Democrats, who spent four decades proving that governments cannot efficiently allocate capital, suppress price signals without distorting behavior, or tax production at confiscatory rates without destroying it. They tried anyway and ended with a collapsing economy by 1991. The recovery came from property rights, competition, and price signals directing resources toward their most productive uses. Sweden stopped fighting the market, and the market rewarded every Swede who survived the wreckage.