Colin Sparks Archive | ETOL Main Page
From International Socialism 2 : 51, Summer 1991, pp. 91–103.
Transcribed by Christian Høgsbjerg.
Marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Sweden has proved an attractive example to various currents on the left. The Labour Party has for long regarded the achievements of its Swedish fellow thinkers as an ideal towards which any social democratic party shold aspire. Kinnock’s enthusiasm is the continuation of a tradition which goes back at least to the 1950s. More recently opposition groups in Eastern Europe, for good reason bitterly hostile to Stalinism, have put forward Sweden as an alternative to the rabid free market ideology which informs the actions of their post-1989 governments. In this article we will look at just what the nature of this ‘Swedish Model’ is, how it came about and what its future will be.
It is important to begin by recognising that the reformist image of Sweden as an earthly paradise is not simply an illusion based on wishful thinking. The Swedish Social Democrats, in power more or less continuously for more than 50 years now, have carried out real reforms, and the working class has experienced real gains. In particular, the social wage is at a very high level. To anyone familiar with the decay of social policy, health and welfare in the UK, Sweden is indeed very much like an earthly paradise. For example, someone who is ill – not an emergency case – can expect to see a specialist within a couple of hours of their first contact with the health system. Medical care is not free, costing around £6 to visit a doctor and around the same for each day in hospital, but it is of a very high standard and Sweden has good infant mortality and longevity records. In education, although compulsory schooling stops at 16, more than 90 percent of pupils go on for at least two more years of education and 85 percent of them continue for three years. Thirty five percent of young people go on to university level education.
The one million immigrants in Sweden (roughly 12 percent of the 8.5 million population) are entitled to education in their mother tongue and can take Swedish as a foreign language free. The government funds about 30 nationals, and 1,200 local, immigrant organisations. A subsidized newspaper appears in 12 immigrant languages. The Swedish Broadcasting Authority provides programmes in Finnish, Serbo-Croat, Greek, Spanish and Polish and since 1986 there has been an Ombudsman Against Ethnic Discrimination.
Pensioners form around 18 percent of the population and benefits for a retired industrial worker on average wages are just over 70 percent of earlier net income. Just over 90 percent of Sweden’s pensioners live in their own homes and around 20 percent receive some form of home help.
The child care policy, considered by many Swedes to be a major disaster area, provides public child care for 48 percent of children aged between four months and six years. Thirty seven percent are cared for by a parent at home. By the age of six 98 percent of children have places in at least part time public day care and compulsory schooling starts at seven. The government plans to provide public child care for all children between four months and six years whose parents wish to take it up although it is its failure to achieve this objective which is regarded as such a serious disaster.
Under the Act on Equality between Women and Men at Work, not only are employers prohibited from discriminating against a person because of her or his sex but they are legally obliged to take active measures to promote equality at work. If an employer discriminates against a person as part of a conscious effort to promote equality, then the rule against discrimination is waived. Women make up 38 percent of all MPs and 40 percent of those of the ruling Social Democratic Party. In 1987 average female hourly wages in manufacturing were 89.6 percent of male wages.
Sweden was never a member of NATO and has given substantial support to liberation movements. In recognition of government support for the ANC, Sweden was the first European country Nelson Mandela visited after his release. Compared with the Labour Party, the GLC, Liverpool, Lambeth, Sheffield or Haringey Councils, the Swedish Social Democrats are serious social democrats.
They remain, however, social democrats. The economy they have managed is a highly capitalist one: 85 percent of industry is privately owned and only 10 percent is nationalised (the other 5 percent is held by co-operatives). Much of that nationalisation was carried out by the only governments in Sweden since 1932 containing no social democrats: the right wing governments which were in power between 1976 and 1982. Private ownership of industry is very highly concentrated, and control even more so. In 1985 the percentage of shares held by the biggest single owner in each company averaged 29 percent. While 50 percent of adults held some shares, these holdings were mostly very small and control remains in very few hands. The average of the largest single owners’ shares in the voting stock of the 100 top companies was 47 percent Of these big capitalists the very biggest is the Wallenberg family which controls businesses accounting for more than one third of the value of the Swedish Stock Exchange. If the working class has made real gains in Sweden in the last half century, it has certainly not been by means of the expropriation of the ruling class.
The deal between capital and labour in Sweden dates from 1932, but the pervasive social peace of the country disguises the fact that the nature of the deal, and the balance between the two classes, has shifted over time. Social peace has not always been a Swedish characteristic. The first union in Sweden was the Typographical Association founded in 1846, but when the main trade union federation, the Landsorganisationen i Sverige (LO) was founded in 1898, it had less than 40,000 members. Although there had long been some industries, particularly in mining and forestry, large scale development was relatively late and in 1900 48 percent of the population was still engaged in agriculture. The new working class, and its trade union organisations, quickly confronted the question of the franchise. In April 1902 LO led a three day general strike for a universal franchise and by 1907 even the Conservative government was forced to concede an unequal manhood suffrage. By 1919 universal and equal suffrage was won. The employers were also reluctant to concede trade union rights and faced another mouth long general strike in 1909. Despite overwhelming support, even from workers whom the union officials instructed to stay at work and from non-union members, the employers eventually won and were able to impose national wage agreements on the unions. Despite this weakening of the unions which took some years to overcome, and unemployment which reached as high as 30 percent of union members in 1920, the years from 1910 to 1930 were characterised by a series of labour disputes. These struggles culminated in the famous and bitter strike in the Adalen Valley in the spring of 1931, when soldiers shot down five workers.
The political response to this working class militancy followed the general European pattern quite closely. There was a struggle inside the Social Democratic Party after its 1889 foundation which led to the victory of an openly reformist wing under Hjalmar Branting. Unlike most European countries, however, the fact that Sweden did not enter the First World War meant that the sharp division of 1914 was not duplicated immediately in the Social Democrats. There were pro-war tendencies inside the Social Democrats – three members were expelled for writing that Sweden should join with Germany to defend ‘Western civilisation’ against Russian barbarism – but the party as a whole was not confronted with the hard and immediate choices which faced socialists in the belligerent countries. Neutrality, and the ability to trade with both sides, meant a rapid growth in many Swedish industries, but at the same time as the capitalists were enjoying record profits the working class experienced increasing food shortages and low wages.
The 1917 revolutions thus found a warm welcome from large sections of the working class. There were substantial demonstrations in the spring of 1917 in many large cities, and revolutionary propaganda had ensured that large sections of the army rank and file were not prepared to fire on workers. The left of the Social Democrats broke away to form a new ‘centrist’ party, the Social Democratic Left, which later split again. The majority became the Communists. A Swedish version of 1917 did not seem impossible. By the autumn the bourgeois government was unable to hold on to power and was forced to call elections. The official Social Democrats emerged as the largest party, with 31.8 percent of the votes, while the Social Democratic Left gained 8.1 percent of the votes. The Social Democrats played a vital role in stabilising the situation for capitalism: they entered a coalition with the Liberals despite the fact that the electoral system was still rigged in favour of the upper classes. With them in government, the left was isolated and while strikes and demonstrations continued throughout 1918 the Social Democrats were able to play in Sweden the same role as their big brothers in Germany, although with much less blood spilt.
In neither their first government nor in the remainder of the 1920s did the Social Democrats either carry out any of the major social reforms or achieve the kind of class peace for which they were to become famous. These innovations were the product of the government they formed in 1932 in the wake of the Adalen massacre. They had fought the election on what we would now call ‘Keynesian’ policies, developed by the Social Democrat Ernst Wigforss. The centrepiece of this policy involved public works, for which the unemployed were to be paid normal wages. Despite their electoral success the Social Democrats were not a majority and in order to form a government they were forced to make a deal with the extremely right wing, indeed proto-fascist, Agrarian Party (today the Centre Party). In 1933, in return for their votes for social reforms and tax rises, the Social Democrats gave die Agrarians agricultural protection. This was the first, political, plank of the long social peace.
With that parliamentary majority, interrupted only for 100 days in 1936 when the Agrarians tried to govern alone after falling out with their partners over rearmament, the Social Democrats carried out a number of major reforms. In 1934 subsidies for housing construction were introduced and an unemployment insurance system established. In 1935 pensions were raised substantially. In 1936 the working hours of rural labour were shortened by law. In 1937 there were measures to aid mothers and young couples setting up home and in 1938 a mandatory two week paid holiday for all workers was introduced.
The other side of the coin was a deal between LO and the Swedish Employers Federation (SAF) which resulted from talks initiated in 1936. The ‘Saltsjobaden Agreement’ of 1938 set up a permanent Labour Market Council which functioned as a national negotiating body. The employers agreed to police their members over things like sackings, while LO undertook to make sure that workers stuck to national agreements and did not take secondary action or attempt to establish a closed shop.
These measures of class collaboration were attempted in other countries at about the same time. The fact that they worked in Sweden was because the employers were able to make concessions in ways that, for example, the British ruling class could not make to the MacDonald government in 1931. Underpinning the concessions was the boom in Sweden which resulted in large part from the rearmament drive of the late 1930s. The Swedish economy was particularly closely tied to the German military machine, exporting vital raw materials like iron ore and engineering products like ball-bearings. Thus, while Sweden remained neutral in 1939, this neutrality ‘spoke German’ for the first few years. The Social Democratic government placed no barriers on exports to the Nazis and allowed them to move troops from Norway through Sweden to Finland in order to participate in the attack on Russia. After 1943, when it became clear that the allies were winning, neutrality increasingly ‘spoke English’, or perhaps American. Iron ore and ball-bearings were both exports to the Nazis which had to be curtailed, under pressure.
Social reform, resting on rapid industrial expansion and high profits resulting from a war drive was thus the initial shape of the compromise developed by the Swedish government. This policy did not represent an attack on the capitalists: reforms were financed out of the taxation of wages, wealth and inheritance, while taxes on company profits were kept at a very low level. The dominance of the Social Democrats was nowhere near as certain as it might seem with hindsight and certainly the bulk of workers were still prepared to fight for better wages and conditions. In 1945, in common with many other countries, there was very substantial strike action, led by engineering workers, and the future of the Social Democratic government was uncertain for several years. An alliance of the Social Democrats and the LO leadership was able to head off this struggle and to survive a series of economic and political crises in the late 1940s. In large part the survival of the reformists was because Swedish capital was able to take advantage of the post-war reconstruction boom, being one of the few countries in Europe with intact infrastructure and industry: GDP grew by an average of 4.5 percent annually between 1946 and 1950. The political situation was stabilised by 1950 with the formation of| Social Democrat-Agrarian coalition. On the Agrarian side this rested upon agricultural protection and the support for a shift towards large scale mechanised capitalist farming. On the Social Democratic side it meant a continuation of social reforms, within the framework of limited state direction for the economy. The most important element in this was the ‘solidaristic wage policy’. This idea – put forward by two Social Democratic economists, Rehn and Meidner, and first adopted in 1951 – is a key example of how, in an expanding world economy, the Swedish Social Democrats were able to deliver social advances to the working class which were also beneficial to the capitalists.
The Rehn-Meidner model was first of all a wages plan. It was based on the notion of the central determination of wage levels. The reasoning ran that a small industrial economy like Sweden could only survive and expand if it was competitive on the world market. Thus the basic determinant of wage levels was the international competitiveness of those sectors of the Swedish economy which traded on the world market. These industries in the ‘exposed sector’ – steel, motor vehicles, electrical engineering and so on – set the level of wages for the whole of the Swedish working class. The aim of the ‘solidaristic wage policy’ was, in its initial stages, to set national wage levels for particular kinds of work. These were applied irrespective of the ability of a particular employer to pay. So, in pursuit of ‘solidarity’, all fitters and all carpenters would be paid the same whatever the state of the companies they happened to work for. For workers, this had the obvious advantage of limiting the ability of capitalists to set up sweat shops with low pay and lousy conditions. For the capitalists, however, it had the effect of driving the backward out of business and making sure that wages in the most profitable companies were kept under control. Combined with a taxation policy which penalised distributed profits very heavily but left reinvested profit strictly alone, this policy meant that Swedish capitalism was under a very strong collective pressure to invest and to substitute machines for labour. Productivity might be expected to grow sharply, and it did. For the economy as a whole, including the expanding service sector in which productivity gains are very difficult to achieve, the average annual growth for productivity in the 1960s was 4.9 percent per annum. In other words, the Social Democrats obliged the capitalists to behave like proper capitalists.
The obvious problem with this policy was that those capitalists who were less efficient would be under pressure from wage levels and from better equipped competitors and would regularly close down. In an expanding economy – growing at an average of 3.5 percent per annum in the 1950s and 4.4 percent in the 1960s – this problem was a relatively small one and could be handled by retraining and mobility policies designed to help workers shift from one industry and region to another.
So successful was this overall policy, and so rapid was the expansion of Swedish capitalism during the 1950s and 1960s, that the real problem was shortage of labour. In order to sustain the rapid growth, the Swedish economy needed more and more workers. These they found firstly through the reduction in the agricultural workforce, secondly through immigration (largely from Finland but increasingly from the Mediterranean countries) and thirdly by drawing women into the workforce. Many of the policies which seem so progressive at first sight can be understood in terms of this need to expand the labour force. This is particularly true of the childcare provisions. Taken on their own, these make it much more simple for women to enter and re-enter the labour market, but in most economies this has simply meant that women become a low paid ‘reserve army’. Combined with training opportunities, uniform wage levels and anti-discrimination policies, they have been intended to ensure that low paid and low skilled reservoirs of women workers in service industries and so on do not develop and impede the overall drive to productivity and growth. The very high participation rates of women in the Swedish economy have been achieved in large part by means of removing as many obstacles as possible to female participation particularly in the areas of childcare, training and on the job discrimination.
In the years after 1951, then, the Swedish Social Democrats were able to achieve what looked in reformist eyes something very much like a miracle. They had done a deal with the capitalist class in which the latter made good profits while the working class got some very substantial crumbs from the table. In particular, since many of the social reforms which benefited the working class were in the form of the social wage rather than simple take-home pay, the benefit for all workers was relatively much greater than other countries which enjoyed high living standards: the provision of services through social labour is much more efficient than doing the same thing on a piecemeal basis and, what is more, it is readily assimilable into a rhetoric of social progress.
As in all social life, however, the very success of Swedish reformism produced the factors which have led to its current crisis. The first of these was the fact that Swedish prosperity was very heavily dependent on the growth of the world economy, and this was and is something quite outside the control of Swedish Social Democrats. One could say that they had been ‘lucky’ with the dates of their parliamentary victories in a way that the British Labour Party has not been. Labour bore the burden of modernising British capitalism in 1945 and were then ‘cheated’ by the electoral system of a majority in the years of boom which resulted. The first faltering steps of their Swedish cousins had been underwritten by a rearmament drive, and their period of greatest advance coincided with the longest world boom in the history of capitalism. When that boom ran out, in the aftermath of the oil crisis of 1974, the problems of the Swedish economy were very sharply illuminated.
The development of very large and capital intensive, export-oriented industries in Sweden, which was the aim of Social Democratic industrial policy from 1951 onwards, has meant that almost all of the major sectors of the economy are very vulnerable to the trade cycle. The motor industry is a case in point: in 1988, 76.4 percent of the products of car production were exported and no less than 91.7 percent of the products of the truck and bus sector went abroad. Admittedly this is an extreme case, but in 1987 exports accounted for 61 percent of the products of the mining industry, 46 percent of the chemical industry, 51 percent of the steel industry, 46 percent of wood products, 66 percent of pulp and paper, 65 percent of engineering overall (including automotive products), and 70 percent of the total product of electrical engineering and electronics. The three largest export markets are Germany, the UK and the USA.
This vulnerability to the state of the world market can be seen in the sharp swings in trade balance. In 1978 there was a positive balanced Skr 5m. The next year, with the start of the world slump particularly in the UK, there was a negative balance of Skr 5m. The balance worsened and remained negative until the start of the recovery in 1983 and remained positive up to 1987. This fall in demand led to a crisis in many sectors of Swedish industry, followed by closures and layoffs. We should be cautious in assessing the depth of this crisis, particularly as compared with the UK, since at its worst, in 1981, GDP fell by only 0.3 percent and grew in every other year, and the unemployment peak in, 1983 was 2.9 percent. Nevertheless, the effect of this mini-slump was to illustrate that full employment, one of the jewels in the reformist crown, depended not upon Swedish government policy but upon the vagaries of the world economy. Once again the luck of the Social Democrats held: a right wing government came into power in 1976 and had to manage the slump, losing office again in 1982 to the reformists.
The second major consequence of success is the internationalisation of the decisive sectors of the Swedish economy. This has three aspects. The first is that the Swedish ruling class is extremely worried about the possibility of the development of trade blocs which will exclude it from its major markets. It is therefore extremely keen to enter the EC as soon as possible in order to benefit fully from the single market which contains its two biggest export markets. The Social Democrats, on the other hand, were opposed to entry since, while the Delors plan may look like rank Communism to the average British Tory, it looks like a return to the 1920s to the average Swedish worker. More substantially, they argue that entry to the EC will remove their ability to control social policy and thus undermine their ability to win working class support. Recently they have reluctantly come to accept the inevitability of EC membership, but they are keen to negotiate special terms.
The second major problem is the extent to which the centre of operations of large sections of Swedish capital is no longer located in Sweden. Swedish owned companies employ some 450,000 workers abroad, while the total Swedish labour force is only 4.5 million and the domestic industrial labour force around 1.5 million. The most extreme example of this internationalisation is perhaps Electrolux, the well known manufacturer of electrical goods. Of its total of 140,500 employees, 111,000 work abroad. Ericsson, the telecommunications manufacturer, employs 70,900 people, of whom 50 percent are abroad. The effect of this is to change the relationship between Swedish capital and the Swedish state. These giant companies are no longer tied to Sweden and they are therefore no longer completely subordinated to decisions taken by the Swedish state. They can bargain much more keenly for concessions since they can, as a counter, make the convincing threat that they will move all their operations abroad: in 1990 Ericsson made precisely that threat.
The third aspect of the internationalisation of Swedish capital is the extent to which it is fusing with capital elsewhere. This is in part a more general case of the second aspect and takes the form of the export of capital. In 1985 this totalled Skr 14,000 million but by 1988 it had reached Skr 44,500 million. In the same year domestic gross fixed capital formation was Skr 40,000 million and capital inflows amounted to Skr 7,900 million. The other part is merger with, or takeover by, a foreign company. Thus in 1988 the Swedish company ASEA merged with Brown Boverei of Switzerland to form ABB, one of the largest electrical engineering companies in the world. In 1990 General Motors took over the automotive division of Saab and only government action prevented Renault taking over Volvo.
To an increasing extent then, Swedish capitalism has outgrown its own state. It has less material interest in its deal with the Social Democrats and less need to pay the high taxes and wages or accept the other restrictions which are the price it was forced to pay for a docile workforce.
The third major consequence of the success is the changing structure of the labour market. The provision of health care, nurseries and education, social services and all the rest of the paraphernalia of social reform meant the creation of huge numbers of jobs. It was the expansion of this sector which partly accounted both for the low level of unemployment and the high female participation rate. These, however, are all classic service industries in which, at current levels of technology at least, it is much more difficult to raise productivity than in the manufacturing sector. Although you can replace a welder by a robot, it is not yet quite possible to do the same with a nursery school teacher. The first consequence of this is that, while increasing investment can continue to raise the productivity level in manufacturing, the overall rise in productivity of the economy as a whole slows down sharply as the service sector grows in importance. While in the 1960s the average annual increase in productivity for the economy as a whole was 4.9 percent, in the 1980s it was 1.2 percent and seems to be continuing on average to fall. This would not matter too much if it was not for another, unintended, effect of the ‘solidaristic wage policy’. In theory, this meant equal pay for equal work and said nothing about equal pay for unequal work: there was nothing in the original plan which said that there should be any link between the pay of welders and the pay of nursery school teachers. The idea was that wages should be set with reference to the competitivity of the ‘open’ internationally exposed sector. In practice, while centralised wage determination did have the effect it was intended to, it also had the effect of compressing wage differentials between different types of workers.
This is because in a situation of long term full employment and very high trade union membership, both trade union pressure and the need to recruit and retain workers mean that employers in the sheltered sector have to pay wages which more or less shadow those in the open-sector. Thus in 1989 hourly earnings of industrial workers rose by 10 percent, while those of all employees rose by 9,5 percent This is desirable from the point of view of the working class, in that it reduces the material base for exploitable divisions within the proletariat and goes some way towards meeting deep seated egalitarian ideas, but it is extremely undesirable from the point of view of the capitalist class, since it reduces the financial incentive to job mobility between sectors. Thus, while the solidaristic wage policy continues to push labour towards the more efficient firms within a given sector, the fact that employment in public services is both relatively secure and relatively well paid means that it is difficult to attract workers to move across sectors.
A further consequence is that levels of both internal prices, which are related to wage pressures both in the open and the protected sectors, and of taxation, which covers the costs of the wages in the public sector, will be higher than they would otherwise be. Quite apart from any personal discomfort this may cause capitalists in their embodied, consuming aspect, it adversely affects them in their disembodied, accumulating aspect too. In the long term, these pressures lead to inflation, plus either a diversion of products from exports or an increase in imports.
Most interesting of all from the revolutionary point of view is the effect this has on the bargaining system itself. The working class in Sweden is very well organised. Eighty five percent of all eligible employees are trade union members. Ninety percent of blue collar workers and 75 percent of white collar workers belong to genuine unions. At the same time there is effectively full employment – indeed in the last couple of years, with unemployment under 2 percent there has been ‘overfull’ employment. These are, of course, the classic conditions in which workers gain self confidence. Equally obviously, it is in periods like this that LO and the Social Democrats are supposed to pay back the employing class for the concessions made earlier. It is their job to make sure that self confidence does not produce any serious change in the balance of class forces. The national negotiations, and the control of the central fulltime officials over the union apparatus, remain a very powerful force, but there are signs that they are starting to break down. If we look rather more closely at the 10 percent increase in the hourly earnings of industrial workers in 1989, we find that only 4.6 percent of that rise was accounted for by official negotiations. The remaining 5.4 percent was ‘wage drift’. Some of this will be the result of employers offering local incentives to overcome particular labour shortages, but in part at least it is evidence of the ability of groups of workers to make gains independently of the national officials.
We must be very wary of how we interpret this: there has been no massive strike wave in Sweden in the last few years and there is little evidence of industrial action independent of the bureaucracy. There is, however, some evidence. In 1990 the government announced a two year wage freeze and this was welcomed by the leaders of LO as a necessary measure to save the Swedish economy. There was, however, widespread rank and file discontent with this position and in the Stockholm transport system a group of ex-revolutionaries were able to organise a short but very effective unofficial stoppage in protest. So widespread was the discontent that in the end the government was unable to carry through its plan.
All of these factors together seem to point to the fact that the Swedish model of class harmony, social reform and profitable capitalism is coming to an end. The re-emergence of the spectre of world slump in the course of 1990 has accelerated the approach of the crisis. Although the Swedish stock exchange fell by more than 40 percent in 1990, representing a much sharper fall even than in 1931, it is not true that Swedish capitalism is about to collapse. It does, however, want to move into a much stronger position. One sign of this is that the main bourgeois parties, the Conservatives and the Liberals, finally, after years of ineffectual squabbling, managed in October 1990 to stitch together a convincing alliance for the forthcoming election. Big business is certainly taking these parties much more seriously as a potential alternative to the Social Democrats. The employers want wage and tax differentials widened to provide ‘incentives’ for job mobility and to reward their lackeys. They want the strict employment laws which protect workers, particularly part time workers, modified to strengthen their own powers. They want an ‘open borders’ policy in order to allow them to suck in labour during periods of expansion. Although they dare not yet say it, the direction of their thinking on ‘mobility’ suggests that they also want the right to expel labour in periods of contraction: the guest worker system lurks at the back of their minds. They want unemployment compensation reduced from 90 percent of the regular wage to 75 percent in order to force workers to take any job offered them. They want to ‘reduce absenteeism’: by taking control of the sick pay scheme they hope to intimidate workers into coming to work even when they are not fully fit. They want employment in the public sector cut back sharply. And they badly want to join the EC.
The Social Democrats have responded to the threat that their former lovers might desert them by trying to prove just how difficult it would be to live without them. They have tried to show that they are the ones who can deliver everything the bosses want with the minimum of fuss. The 1990 attempt at a wage freeze was a first round. More recently, they have begun to try to dismantle aspects of the welfare state. Total Swedish tax revenue was 56 percent of GDP in 1990, while the OECD average was 39.4 percent. Sixty one percent of GDP goes into public expenditure and rather more than half of that is in social benefits. One part of the programme, cuts in jobs and benefits in the state sector, is as yet only a threat which the Social Democrats have not been able to carry through. They have, however, managed to ‘reform’ the tax laws. The minister in charge of tax changes, Eric Asbrink, openly boasts that he takes his inspiration from Reagan’s US policies. Income tax in Sweden is split between local and national government. From the start of 1991 only the top 15 percent of wage earners will pay any national income tax at all, although the 30 percent local income tax will continue. In order to keep up revenues, the government will extend VAT to almost everything apart from education, welfare and banking. The result is predicted to be a net rise of 3 percent in the annual inflation rate. Corporations will continue to pay hardly any tax at all on reinvested capital.
The fact is that even to carry through these tax reforms the Social Democrats were forced by the unions to make concessions to shield those who would suffer most. The capitalist class is clearly looking round for a Swedish Thatcher. If the bourgeois parties win the next election, it might well find one. The scale of the assault would be very large and its effects very serious. Swedish unions organise a high proportion of the working class, but they are very heavily bureaucratised – making the EETPU look like Athenian democracy without the franchise restrictions. These bureaucrats have spent their whole lives in cahoots with the bosses and the government: they are not even former strike leaders who have gone rotten. The official movement will find it very difficult indeed to mount any serious opposition to a determined ruling class offensive.
That is not to argue that all is doom and gloom. It is simply that the days of the Swedish model as a beacon for Social Democrats everywhere are fast passing into history. They did a temporary deal with capitalism; they did not change the beast and they certainly did not kill it. In the emerging period of sharp conflicts the working class is not entirely disarmed. We argued above that there were signs of self-confidence at the local level. There are also signs of political opposition to the left of the Social Democrats. 1990 saw a significant left split from the official party’ which formed a centrist organisation called ‘The Workers’ List’. It campaigns under the slogan of ‘For a Workers’ Party Worthy of the Name’ and its leadership advocates left reformist solutions to the crisis. It initially attracted considerable support from workers, both in terms of membership and potential votes. There is no way of telling how well it will do in a real election, but the betting must be that at best it will become a small left irritant which provides no real solution for Swedish workers. The fact of its existence, however, demonstrates that there is an audience for socialist ideas to the left of the Social Democrats.
Unfortunately, there is no substantial revolutionary left organisation which can take full advantage of the opportunities which are likely to arise. 1968 produced a large radical left in Sweden, but it was dominated by various brands of Maoists. As their illusions in China and Albania went down the road to ruin, the vast majority of these militants either moved to the right or dropped out of political life. The other tradition which flourished in Sweden, the followers of the Mandelite Fourth International, succeeded in building a more enduring organisation with some working class base. However, as that political current has degenerated, they have moved quite sharply to the right. They will not be able to respond to the opportunities of the developing crisis.
Our own ideas are represented in Sweden only by a tiny handful of people. There is no doubt that they will have the opportunity to grow in the next period, but their immediate perspective must be the establishment of a stable national organisation rather than dreams of leading the struggle for power. For the first time in more than half a century there is a real opportunity for revolutionary ideas to gain a foothold in the Swedish working class.
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