The Swedes, along with the Japanese, are the world's most voracious newspaper readers. In fact, circulation figures show, more than half the Swedish population buys a newspaper every day.

Swedes can afford to buy newspapers, which are cheap partly because Sweden is one of the biggest newsprint producers on earth. But newspapers are also numerous and inexpensive here because they are subsidized by the government.

Government subsidies to newspapers may shock foreign journalists, who consider freedom of the press to mean total independence from the state. In Sweden, however, freedom of the press is guaranteed by government funds that assure the survival of a variety of competing newspapers that would otherwise have failed for financial reasons.

Since the system was introduced in 1971, only one Swedish newspaper has gone bankrupt, and that was because its managers refused to accept government aid as a matter of principle.

Government subsidies to the Swedish press amount to $44 million per year. In U.S. terms, it is as if Washington distributed $1.5 billion annually to America's newspapers.

Anyone with the courage to launch a new newspaper can turn to the government for start-up money. Competing publishers who agree to cooperative arrangements for production, distribution or advertising sales can obtain public funds.

There are low-interest loans for newspaper firms seeking to expand their market, and there are subsidies for newspaper that need to be helped through temporary troubles.

The largest sums paid by the government to the press are in the form of production grants, which are given to all newspapers with less than 50 percent of total circulation in their area of distribution.

The obvious question asked by foreign observers is whether newspapers here are able to criticize the government. In other words, can a subsidized press bite the hand that feeds it?

The purpose of subsidies, however, was precisely to fulfill Sweden's conviction that the press must play a decisive role in the democratic process.

From 1945 to 1965, the total circulation of Swedish newspapers nearly doubled. But by 1970, the number of newspapers had declined, largely because of rising costs.The consensus among all the political parties was that Sweden's democracy would suffer if the press shrank, and this led to the subsidy system.

Newspapers operate under a set of laws that safeguard their independence. These laws, dating to 1812, give every citizen the right to publish a newspaper, prohibit all forms of censorship and protect the anonymity of sources.

One law unique in Sweden is similar to the Freedom of Information Act in the United States. It authorizes the press and the public acess to all offical documents, whether they be the prime minister's expense account or the minutes of cabinet meetings. Sensitive defense and intelligence papers are excluded.

About one-fourth of Sweden's press relies on government funds, and the main benfiriaries are newspapers affiliated with the Social Demorcratic Party. Their dependence on the government stems less from political bias than from the fact that they are generally managed badly.

It is worth noting, incidentally, that the fall of the Social Democrats from power in 1976 has not meant any cut in subsidies.

This system could probably not be exported to most other nations, which lack the homogeneity of Sweden. But it works here - except in one respect.

While editors and journalists are not influenced by government handouts, publishers and their staffs have been spolled by public generosity, which has reduced their incentive to go after advertising and circulation. So in the news business, as in other industries protection breeds inefficiency.