Pomperipossa Effect

Astrid Lindgren (1907-2002) was a very successful Swedish writer of fiction and screenplays. She is best known for several children's book series, featuring Pippi Longstocking. Her books sold massively worldwide and that meant royalties for Astrid Lindgren.

In 1975 the Swedish Social Democrat Government introduced a new tax regime that meant self-employed individuals like Astrid Lindgren had to pay both regular income tax and employer’s fees. In Lindgren’s case this meant a marginal tax rate of 102%. Which meant that she had to pay more in tax than she actually earned.

As a reaction, Astrid Lindgren wrote 'Pomperipossa in Monismania’ (English: ‘Pomperipossa in the World of Money’), a satirical allegory about a writer of children's books in a distant country. The story was published in Stockholm’s leading evening tabloid newspaper, Expressen, on 3 March 1976.

Publicly, Lindgren continued to support the party for all her life, but private letters reveal that she supported the opposition in the 1976 election and that she feared that the Social Democratic Party after 44 years of consecutive rule was turning Sweden into a socialist dictatorship.

This idiocy has subsequently been dubbed the ‘Pomperipossa Effect’ by economists[1]. Even the Swedes, who are normally fairly passive over high levels of tax, were so incensed that the next year the Social Democrats were thrown out of government. The Pomperipossa Effect is thus a way to commit political suicide.

The English translation of 'Pomperipossa in Monismania' can be read here.

[1] Professor Ian Angell (Department of Management, London School of Economics): The Pomperipossa Effect - 2014