I lean toward the second side of the argument. I’ll add two points. First: To say that Swedes can “go about their day in a largely normal fashion,” as Fund and Hay say, seems like an overstatement:
Sweden’s bars, hotels and restaurants are facing a huge drop in business, despite being allowed to remain open during the pandemic, according to the country’s business minister, Ibrahim Baylan.
He told a news conference that many restaurants, hotels and bars were struggling – with a 50% average drop in demand. This has risen to 90% in areas typically popular with tourists.
Second: The perspective Fund and Hay take on the mortality rate is open to question. They say the rate is higher than that of the U.S. only because it has an older population. But that seems less like a defense of Sweden’s policy than a reason for it to have hesitated to adopt that policy.
There’s one additional argument in defense of the policy: namely, that Sweden has front-loaded its deaths rather than increased their number. But whether that trade-off turns out to have been wise will depend on what treatments and vaccines we eventually have, and when we have them.
Update: See also this story from last week: “Sweden had no lockdown but its economy is expected to suffer just as badly as its European neighbors.”
Update 2: I inadvertently mischaracterized Fund and Hay, saying they had not made the front-loading argument; they had, and I have fixed the reference.