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SOCILDEMOKRATER
Swedish style
'socialism'
Coates fall
of the Swedish
charts
the St
Demo
the redi
rise and
Social
model
cratic
Sweden's
Social Democrats
are the llagship of ternational
Social Democracy
MIR
ON OCTOBER 26 SWEDEN'S Social Democratic Government unveiled the biggest package of spending cuts in the country's post war history: £1.+ billion was lopped from health and other public services. The Financial Times commented "Sweden's famous economic model - the envy of the world for more than half a century - is dead!"
Not satisfied with these measures, the employers' organisation, SAF, have since launched their own plan for the nineties. Their proposals including a halving of public spending and the break-up of the welfare state, amount to i declaration of war against the working class. "I want to see the mass slaughter of our holy cows," admitted SAF chair, Ulf Laurin.
These developments hold an enormous sig nificance for the labour movement internationally. Sweden's Social Democrats are the flagship of international Social Democracy. They have governed for 52 out of the last 58 years. For Neil Kinnock the Social Democrats are the prototype for the 'new model' Labour Party. Ex-Stalinists like Abalkin, Dubcek and liescu are converts too. Old myths about 'Swedish-style socialism' are rife in Eastern Europe - an attempt to reconcile workers to the savage austerity programmes of Shatalin, Balcerowicz and co, aimed at a return to capitalism.
Defenders point to Sweden's Tiving standards - the fifth highest in the world - and its welfare state, with the highest public spending in the capitalist world at 58% of GDP (the OECD average is 45% ). Life expectancy (80 years for women, 7+ for men) is second only to Switzerland. The infant mortality rate and pupilteacher ratio are the lowest in the world.
Marxists, while being the most determined fighters for reforms in the interest of working
people, have always pointed out that such reforms can never be lasting and permanent under capitalism. Sweden's experience appeared to refute this. For a number of reasons. the reforms wrested from capitalism during the post war period went further and have been sustained for longer than anywhere else. But now this situation has come to an end.
Today: Sweden faces its most serious economic crisis since the 1930s. Latest OECD forecasts predict growth of 0.7% this year and 0.1%, in 1991. Inflation at 11.1% is way ahead of its main competitors and unemployment. though low by international standards, is set to rise sharply.
Decisive sections of the economy such as iron and steel, cars, paper and pulp are already in recession. Industrial production has dropped 7% since January 1989. Show piece companies like Electrolux and Volvo are axing 15,000 and 5,000 jobs respectively. The resulting panic has seen shares on the Stockholm bourse crash 40% in the last two months. Interest rates recently leapt from 12% to 17% to stem a record outflow of capital.
1990 has been a year of unprecedented political shocks. In February the Government resigned after it failed to push through a 'crisis package' — a two year wage freeze and strike ban. Finance Minister Kjell-Olof Feldt described the package as the "last chance for the Swedish model". The workers' response was furious, especially against the LO (blue collar trade union movement) leadership who had given their endorsment. Had the strike ban not been withdrawn days later, it threatened to ignite a massive movement of the working class.
The February crisis was a turning point in history of the party. Feldt, the architect of
the the
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Government's right-wing policies throughout the 1980s, left the Government, Parliament and the party executive. Support for the Social Democrats slumped to 32% - the lowest level since opinion polling began! Prime Minister Carlsson's personal rating fell to 15% from 50% in 1987.
This is a far cry from the days when the party could count on more than 50% of the vote. This past success rested on the relative strength of the Swedish economy. While they were raking in super-profits the capitalists could afford to make concessions to the working class. Sweden had the fastest rate of growth in the world between 1860 and 1960. In key industries it developed world leaders such as Volvo (second biggest producer of trucks and buses in the world), Electrolux (biggest white goods manufacturer), and Asea Brown-Boveri (biggest electrical engineering company).
The enormous concentration of wealth and power in Swedish society makes nonsense of Bryan Gould's claim that "Sweden's economy is more socialist than ours". It is one of the most monopolised economies in the world. The Wallenberg family alone control +0% of the market capitalisation of the stock exchange, including seven of the biggest ten companies. As The Economist commented it would be like
one American family controlling IBM, General Motors, General Electric, Ford, Exxon, Amoco, Philip Morris and Citicorp! Public ownership in the production sector is only 7%, well below the West European average and less than half that in Britain after ten years of Thatcher's privatisation.
Far from 'socialist theretore, the Swedish model' was founded on what Feldt calls "aggressive and dynamic capitalism". During the 1920s and early 30s Sweden's strike rate was the highest in the world. The slump of 1929 opened a period of enormous conflict: mass demonstrations, a regional general strike. armed strike-breaking militias and in 1932, in the town of Adalen, the shooting of workers. The Social Democrats won the 1932 election on the slogan work for all'. They were the first government in the world to pursue a Keynesian programme of state spending to fuel growth, to be followed by Roosevelt in the USA. These policies served to create jobs and raise production for a period but at the cost of creating inflation and a new economic crisis at a later stage. International factors were to intervene, however, which provided a respite for the Government.
From the start the Social abandoned their election
Democratic leaders
promises at the
Social Democrat Prime Minister Carlsson.
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Bofors - one
of 'neutral'
Sweden's arms manufacturers.
Olof Palme. I
behest of the capitalists. Short of a majority. they entered a coalition with the Farmers' Party. The pledge of an amnesty for imprisoned strikers was one of many dumped as the price of coalition. In their first year in office. 56,000 remained out of work with no form of support. Promised public works schemes did not materialise. These policies provoked a split. with the bulk of the party in the industrial city of Gothemburg - 15,000 members, including two MIPs — joining the sister party of the British ILP (Independent Labour Party).
After the 1933 victory of the Nazis in Germany; the Swedish workers' fear of fascism pushed them more solidly behind the Government, despite its attacks on the working class. The Social Democratic leaders opposed fascism verbally while at the same time Hitler's rearmament programme provided a huge market for Swedish exports, primarily iron ore and coal. The LO's call for a trade boycott was buried in the rush to do business with the Nazis.
At the outbreak of war the limitations of Keynesian economics were apparent as unemployment climbed to 10%. But the war opened a new window of opportunity. Swedish capitalism was able to satisfy its desire for profits and markets - the very factors which drove the capitalist powers Britain, Germany and the USA to war - through its policy of neutrality: The Swedish bosses warmed their hands on the flames of Europe, especially through trade with Germany which doubled between 1938 and 19÷1. In 1941 - 43 75% of Sweden's trade was with areas under German occupation. One lucrative market was vehicles and equipment for Germany's Russian front.
The Social Democrats' wartime politics reflected these economic realities. Despite winning 53% of the vote in 1940, the leadership preferred a coalition in which they were a minority outnumbered by bourgeois ministers. Wage cuts and repression followed. Communist Party members were 'registered and hundreds of left-wingers herded into labour camps because of their opposition to the Nazis. Newspapers which criticised Hitler were heavily censored. German soldiers were allowed through Sweden on their way to occupied Norway and to the Russian front.
For the capitalists both foreign and domestic policy are dictated by their economic interests. In the post-war period, 'neutrality' did not unduly interfere with the bosses business interests. Meanwhile. it allowed leaders of Social Democracy like Olof Palme to appear radical on questions of foreign policy, verbally opposing the Vietnam war and supporting the PLO, while at home they pursued conservative policies. Today even this has changed, with the Swedish Government giving staunch support to the imperialist mobilisation in the Gulf. The
hypocrisy of the capitalists is boundless. The Nobel Peace Prize originates from Sweden which today is the ninth biggest weapons exporter in the world. Nobel Industries is one of sweden's biggest arms manufacturers. The fiction of Sweden's neutrality has now been smashed by the revelation of covert liason between the Swedish general staff and NATO.
Neutrality: however, enabled the Swedish economy to emerge unscathed and even strengthened from the inferno of the second world war. This. and its wealth of mineral and natural resources, gave Swedish capitalism enormous advantages in the post-war period. Swedish steel and timber, bought with Marshall plan dollars, was used to rebuild Europe. The development of the long economic upwing of 1950-75, with Swedish capitalism conquering new markets, allowed the Social Democrats' consensus politics and the system of annual agreements by the Employers' Federation and the unions to acquire a certain stability.
With 85% of the workforce in trade unions -
the highest level in naturally sought to elsewhere, they leant 'police the workers.
leaders into the stat gone further in Swer The Social Democrats of government' even were concerned. The the 'quaint customs'
1:1-.- 1 1 11. - -
the world - the bosses buy industrial peace. As on the workers' leaders to The integration of these e apparatus has perhaps den than anywhere else.
became 'the natural party as far as the capitalists leaders pay lip service to of the labour movement
ike May Day, but are torougniy pourgeois in outlook. Decades of rule has cemented a multitude of links between the party tops and the captains of industry. Since leaving the Finance Ministry Feldt has become political adviser' to Volvo boss Pehr Gyllenhammar!
In many respects they reflect the thinking of the strategists of capitalism more faithfully than the three conservative parties, which have been reduced to little more than right-wing pressure groups after years of political exile. A recent poll revealed that 70% of employers prefer a Social Democratic government. The bosses fear that an open bourgeois government will meet far greater resistance from the working class.
This pro-capitalist leadership consolidated a seemingly impregnable position in the labour movement, during the long post war boom which offered the scope for social reforms. But today capitalism is devouring the gains won by the Swedish working class. Since 1982. Social Democratic governments have been governments of counter-reform, dismantling the model they are credited with having built. Before the party won the 1982 election, Offensiu the journal of the Swedish Marxists, warned that "a totally new situation is arising for
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Swedish Social Democracy: For the fi
since the war the Social Democrats forced to administer a capitalist cri world capitalist crisis will no longer space for reformist policies."
Despite the boom of the 1980s, public spending has been cut from 68% of GDP in
1982 to 58% today: A massive transfer of wealth has taken place. The top 5,000 salary earners saw a rise, in real terms. of 39% between 1980 - 87, while workers as a whole got 0.25%. 1+5,000 children now live in families below the poverty line.
The leadership's turn to the right has accelerated since this February's crisis. They entered a pact with the Liberals, dropping all their 1988 election promises. A squeeze on council spending was enforced and VAT was raised to 25%. But all this was just a curtainraiser for October's austerity package. New Finance Minister Allan Larsson warned the press that his cuts would unleash a 'human storm' and pose a severe test to the parliamentary system. Sick pay and childcare are badly hit. Private medicine and childcare are to be encouraged. Low unemployment, the boast of every Social Democratic administration since the war, is to be abandoned. Some forecasts warn of 5% unemployment by 1993.
One union leader has warned that without a change of course the party faces catastrophe. The 1991 election raises the prospect of defeat and possibly a coalition - for which the present pact with the Liberals is a preparation - or more probably; a bourgeois' government dominated more than ever by the more rightwing 'Moderates'. A new Moderate-led government would not be like that of 1976-82, which itself provoked a massive strike movement. It would attempt a Thatcherite showdown with the working class.
SAF's proposals provide a foretaste of what is to come. They read like the infamous 'Ridley Plan' drawn up before Thatcher came to power. They call for the privatisation of railways, post and all public utilities; 'market forces' to determine health, child care and care for the aged; private pensions and social insurance to replace the state system; education vouchers and the sale of all council houses. The plan is so explosive that while it appeared in the Financial Times it has not yet been reported in the Swedish press!
Behind these developments is a special crisis of Swedish capitalism. These are not merely temporary or cyclical problems, although they are aggravated by the approach of recession. The contradictions arise from Sweden's tiny home market and its massive dependence on the world market. Marx pointed out that the narrow enclosure of the nation state is one of the fundamental barriers to the development of
rst time will be sis. The provide
the productive forces. Swedish capitalism partially overcame these limits for a period. pushing outwards onto the world market, to the extent that today the production and sales of its major companies are overwhelmingly based outside the countr!
sixty-two per cent of the employees of the top 25 industrial companies work abroad: 80% of Electrolux employees, 81% of ABB's and 89% of SKE's are outside Sweden. Eighty to 90% of the sales of these big corporations are abroad. Compelled to locate production closer to its markets, afraid of being shut out of a future 'fortress Europe' and because of higher protits (the top 20 companies earned 29%% more from capital invested overseas than from their domestic operations during 1987-1990). this tendency is gathering momentum with an exodus of capital.
Swedish direct investment abroad has increased eight-told since 1982. The bulk of this investment is in the EC as 1992 draws close. During the first six months of 1990, Swedish companies topped the league for cross border takeovers in Europe, ahead of France (2nd) and Britain (3rd). They spent 26.2 billion on 96 aquisitions. As the boss of Stora, now Europe's largest pulp and paper company. declared: "If Sweden will not be a member of the EC. Stora must be." A Volvo executive confessed "when Volvo expands now, it does not do so in Sweden but in Belgium." Reflecting these pressures, the Social Democrat's October package contained a 180 degree policy turn with the announcement of an application to join the EC. Yesterday's objections, based on Swedish 'neutrality, have evaporated.
There has been a speculative investment:
shift 23.75
towards
billion
purely was in-
Car production SAAB.
An exodu of capital blunting Sweden's technolog edge
ical
WIR
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540 New 199, swer
MIR Year
"SwI
:den can
• longer
with the
illusion
of a
national
economic olicy based
on
Keynesian principles."
Financial
Times
ive
old
vested in overseas real estate
rise in two years. Swedish inve
office space in Brussels. After
are the main buyers of real
London.
Falling investment in industry means
Sweden's competitive position is slipping
While the bosses and the Social Democratic
leaders blame the working class and exhort
them to work harder for less pay, the real cause
is disinvestment. In the 1980s the share of
company profits reinvested fell from 65% to
15%. Next year investment in industry will
shrink by 15%. Sweden's technological edge it has more industrial robots per head than any
country bar Japan - is being blunted
While large scale overseas investment has
been a feature of Swedish capitalism throughout the post war period, today there is a qualitative change. In 1989 overseas invest ment exceeded domestic investment for the first time. There is a tendency for companies to scale down their Swedish operations and even disengage. Several including ABB, IKEA and Tetra Pak have moved their head offices out of Sweden and many more could follow. The capitalists are pulling the plug on the country's high living standards and welfare staie.
The 'internationalisation' of Sweden is closing off the options for an independent reformist model. This is spelt out by the Financial Times, 29 October: "Even Sweden can no longer live with the old illusion that it can pursue a national economic policy based on Keynesian principles of demand management. The outside world (ie world capitalism - LC) is now dictating what it can and cannot do...
"There is a depressing familiarity about this for anybody who remembers the experience of the last Labour government in Britain bereen 1975 and 1979 and the Mitterand economic experiment of reflation in France during the early 1980s"
The message from this mouthpiece of the bosses is clear. No matter what policies social democratic parties are elected upon, if the! remain tied to the framework of capitalism, their policies will be dictated by big business internationally. The experience of all such governments since the late 1970s has been the abandonment of the 'old illusions' in a policy of reformns. To safeguard the living standards and social reforms that Swedish werkers are justifiably proud of, they must struggle to re-win their powerful organisations to the ideas of socialism and Marxism. More than ever. their struggle must be internationalist in outlook, linking up with workers around the world. The old idea of the Social Democratic leaders that it was possible to build an independent Peoples' Home' in Sweden has failed
Amid the new economic shocks,
in 1989, a ten-fold estors own 15% of the Japanese, they
estate in central
growing
numbers of workers are taking the first steps in
such a struggle. Even previously conservative
groups have mored. Teachers struck last year
against the destruction of national pay
agreements and a cut in holiday entitlement.
Rail workers struck against an increase in their
retirement age from 60 to 65. Most of the recent movements have been unofficial. 1990 saw a rash of illegal wildeat strikes.
One of Gorbacher's advisers. Giorji Arbator,
described the Swedish Social Democrats as "a
disciplined party that does not allow disruptive elements - something that is very common among other Social Democratic parties". There are certain parallels between the Social Democratic bureaucracy: used to one-party rule and unaccustomed to dissent. and the ruling bureaucracies of the Stalinist states. The leadership even have their own internal Stasi' network of informers - 10.000 according to some reports — who spy on the membership and left activists and have links with the state secret service SAPO.
But with the collapse of its 'model: this monolithic control is breaking down. Party membership has slumped. In Gothemburg it has fallen from 17,000 in 1984 to 13,500 today. Despite the collapse of Stalinism in eastern Europe. the Left Party (VP) - formerly the Communist Party — is now at 9% in the polls, its highest level for 15 years. In spite of the VP leaders right-wing policies, the party is gaining as a receptacie for the enormous discontent of Social Democratic workers.
The February crisis triggered an explosion of anger against the party and trade union leaders. For weeks LO leader Stig Malm was hounded from meeting to meeting by angry workers demanding his resignation. Only 22% of union bureaucrats were prepared to support Malm in i private poll. An editorial in the capitalist Dagens Aybeter said "Malm's authority in the branches and in the opinion of the members is next to zero"! Petitions circulated on building sites demanding the resignation of the builders' union leader. When a snap election looked possible, the Stockholm area SSU (party youth wing) and some trade unions discussed standing alternative candidates to the official party list. At the party Congress (held once every three years) 500 workers and youth supported a lobby called by the supporters of Offensiv to demand socialist policies.
These first stirrings of discontent from below point to a wave of opposition that will engulf the right-wing leadership in the coming battles. Marxism, which today is alone in advancing a programme and strategy to defend the acheivements of the Shredish Labour movement from the attacks of the capitalists, stands to make enormous gains.
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