STOCKHOLM -- For every 100 jobs on its auto-assembly lines in Sweden, Volvo hires 114 workers, who are among the most highly paid manufacturing employees in the world. Why this expensive overmanning in a company facing falling profits? The simple answer is that young Swedish workers respond to the conditions of work and rewards in this the most socialist of the capitalist countries.
That is, they take four or five weeks of vacation a year and they profit from a generous sick leave system that frequently pays them more to stay at home ''sick'' than to go to work. Volvo needs the extra workers to fill the gaps in production schedules left by vacations and by workers missing a statistical average of 25 workdays a year on sick leave.
History has not lost its sense of irony. Just as East European and Soviet politicians and economists are adopting the ''Swedish model'' of socialist political values and a free-market economy as their highest aspiration, the Swedish model has run into deep trouble at home. Swedes are increasingly convinced that their society is being victimized by a social welfare state run amok.
Some Swedes even think they have cautionary lessons to learn from the collapse of centrally planned economies in neighboring states, rather than lessons to teach the survivors of that collapse.
In the West, ideologues will use the evident failures of the Swedish economic model as another chance to say they told us so. But Sweden's problems are more interesting and more important than that. The law of no good deed going unpunished applies here; unintended consequences pile on top of each other in this bureaucratized system, creating disincentives to work and stifling personal initiative.
At the same time, safety nets prevent anyone in this small, homogeneous country from hitting bottom and having to worry about where the next meal is coming from or having a roof over one's head. Many of the complaints heard in Sweden today arise because the welfare system that Social Democratic governments have built over four decades can no longer perform its egalitarian tasks in an efficient manner. This is a malaise among people who know they lead a socially privileged existence that is threatened.
The government can no longer meet the demands placed on it by a populace grown psychologically accustomed to having the state care for almost all family needs. But the state is unwilling to dilute its egalitarian instincts and allow private enterprise to take over any of that burden.
The state's day-care centers do not have room for 30 to 40 percent of the children who seek places. This creates a desperate situation for families where both parents have to work to make ends meet on salaries ravaged by the high tax on incomes -- currently 65 percent -- that is synonymous with Sweden. Rent control makes housing cheap, unprofitable to build and therefore difficult to find.
The distorting effect of Swedish socialism is seen most clearly in work habits, or the lack thereof. Workers in their twenties take 50 percent more sick leave than do workers in their sixties, one Swedish economist reports.
''The young workers are responding rationally,'' says Anders Aslund. ''There is no cost whatsoever to taking sick leave, and in fact some financial incentives to take it. People in their sixties are still quite responsible and ignore this. They began their work careers in a different atmosphere than did the young people.''
I first met Aslund, an intense, pyrotechnically bright economist turned diplomat, in Moscow in the early days of perestroika. He foresaw much of the coming Soviet economic debacle then, and took a leave to write an insightful book on that subject. Now he is devoting his time to shaking up the Swedish political establishment by publishing articles contending that Sweden needs a perestroika of its own.
About 30 percent of the Swedish work force is employed by the government in what Aslund calls ''our own command economy,'' and adds: ''The national health service has no idea what its costs are, how to measure inputs or capital costs or even how to maintain productivity. Productivity is declining in the public sector by 1.5 percent a year. We have built disincentives to work, and we have shortages in services and housing. But the law prevents these things from being changed by the market.''
Aslund thinks that high tax rates are a problem here, but that Americans tend to overrate that factor in looking at Sweden. Nor is state ownership the root of all evil here. Only 7 percent of industry is owned by the state, and pre-tax business returns can be impressive. ''We have in Sweden very rich enterprises and not very rich citizens, who get below average services by European standards from their expensive government agencies,'' he adds.
What worries him and others is that Swedes have taken several long strides down a slope that has led to economic disaster in the Soviet bloc, where work and money were devalued by governments intent on crushing personal initiative. The Soviet economy is too far gone to respond to the piecemeal reforms known as perestroika. But Sweden could benefit from a fresh look at the values of market forces. Perestroika, anyone?