Opinion: The problems in Sweden are the problems in the world

With the coalition of the left’s 144 seats in parliament and the right-wing block’s 143, and with the ultra-right wing Sweden Democrats left out of the block, many might be wondering whatever happened to the cozy social democratic, progressive Sweden held up as a model of a modern welfare state. You need to look back in histoty to see why this is a watershed moment.

Stephen Hinton 2016, photo Maj-Lis Koivisto

With the coalition of the left’s 144 seats in parliament and the right-wing block’s 143, and with the ultra-right wing Sweden Democrats left out of the block, many might be wondering whatever happened to the cozy social democratic, progressive Sweden held up as a model of a modern welfare state.

The lack of clear direction in Sweden carries sobering lessons for us all. But before I clarify these lessons as I see them you need to go back in history to understand the predicament. Sweden was once a country of peasant workers with conditions close to slavery. Swedes were dirty – as witnessed by writer Lubbe Nordström who travelled the country to research conditions for his book on “filthy Sweden”.

Sweden was close to a feudal state. Swedes were illiterate, intoxicated and unorganized, but they pulled themselves out of it starting with the  hunger and starvation  riots in 1917. This marked the beginning of a new era of democracy where they self-organized into a folk movement that carried on through to the 1960s with Swedes campaigning against the atom bomb, apartheid in South Africa, protesting the Vietnam war and creating a powerful folk movement against nuclear power. Socialist Sweden culminated in the adoption of a defense strategy aligned with neutrality and foreign aid.

Folk democracy, though, demands centralization and rather than being a critical voice against capitalism and the folk movement developed into a voice for cooperation, healthy lifestyle and values.

The first result of this centralization was the Saltsjöbads agreement in 1938 between the Swedish Confederation of Industry and the Labour organization. This was an agreement to work in partnership between industry and workers rather than nationalization of the means of production. You could say that Social Democracy decided it could not defeat capitalism by confronting it head–on but would partner with it and develop from there. Or maybe you could say Social democracy thought would be better off partnering with capital rather than fighting it.

It has been said many times that Swedes are Social Democrats all of them. They want thriving industry, entrepreneurs growing rich, and at the same time state control of the essentials to ensure people are OK and the state watching industry to ensure fair play. They see the partnership of a state and capital. The state looks after workers and with health care, education and public transport gets them to work on time, healthy. And in return they see strong industry paying fair taxes on profits and giving back to the partnership.

So much so, up to the eighties labour market policy was part of industrial policy and worked with a framework of cooperation between government, labour organisations and employers’ representatives. The cooperation would ensure jobs stayed in the country, the government provided job training for the unemployed and advances in work environment and conditions continued.

At the heart of the Social Democratic idea is the notion that workers need money in their pockets to buy the products produced by companies owned by capitalists. So you have to have cooperation. Capitalism cannot function without Socialism. And Social Democrats are willing to expose Socialism to Capitalism if it is done in a democratic and fair way. Where did earlier notions like those of the need for people-owned means of production of the essentials go? I wonder sometimes if the Satsjöbaden agreement wasn’t a clever move to get the best deal that could be had at the time, rather than the beginnings of a Social Democracy that cozied up to capital. They hoped that future generation would be able to take the lead after the collapse of capitalism.

During the 80s, alongside accusations of the Nanny State coming from right-wing sources, the Employers’ organization pulled out of the tripartite agreement and wages started to stagnate as captains of industry saw they could earn more money by locating production abroad.

These captains also started putting a wary eye on their employees – understanding that their production apparatus basically left the factory at 5pm each day and the knowledge they bore left with it. Employers started to build knowledge into their systems and processes, minimizing specialisms and looking to destroy the once sacred career path offered to loyal employees.

A key concept of early socialism – a point Marx pounded on – was public ownership of the means of production of the essentials of life – including telephone networks, railways, health care, education etc. However, the Swedish Social Democrats believed so strongly in democracy that they believed public ownership could be given up as long as there was that strong democratic framework surrounding private companies.

They believed it to such an extent that they even believed in the “Good Job”. The good job being created by capitalists as part of tripartite agreement in exchange for the state being the “good industrial partner”. Indeed, the “Good Job” was to be the springboard for women’s equality. Women could enter working life and the children be looked after state-run and later independent day-care centres themselves offering the “good job” of day care nanny.

Sweden became a leader in privatization under the Social Democrats, to such a degree that the British Embassy had staff permanently following the Swedish experiment to give Conservatives back home good ideas.

The problem with Swedish-Style social democracy is that it stopped delivering for the worker. Wages did not rise, industries located abroad, and it handed the keys to the safe over when it deregulated  finance in 1984 letting banks control the money flow.

And of course, capitalism was not delivering either. As if to confirm Marx’s  theory of falling profits, the average rate of profit was falling, meaning less money for taxes and less investment and expansion and job creation.

The left having failed the workers, the right-wing seized on the opportunity to call themselves the new workers’ party, came to power and continued to dismantle the welfare state.

Being fed up with that, Swedes voted in the left again, but only by a small margin as voters fled to the nationalist Sweden Democrats. I can see why the Sweden Democrats are popular: they are against globalization that takes jobs, they are against bringing in multitudes of refugees before the suffering of Swedes at home is put right.  And they are against multi-national companies, including monopoly-owned media companies, dictating the direction Swedish culture should develop.

So you end up with confusion and no real winner. Can Social Democracy fetter capitalism to serve the people or can capitalism be democratically controlled to trickle down instead? Of the eight parties in parliament, only one, the left party (and former communist party) wants to do away with the accumulation of assets that characterizes capitalism.

Theoretically, there are major flaws in all these ideas. Capitalism will produce fewer and fewer profits despite government help. And the way CEO jobs are defined, they are duty bound to keep within the law and do all they can to make and keep their corporations profitable. That is to say ignore suffering and ignore environment.

But then they will be getting fewer and fewer well-educated, healthy workers. And fewer customers in Sweden. It is an end-game Marx foresaw and it is playing out in Sweden.

Social Democracy: a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

Social Capitalism: a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned by individuals but heavily regulated, subsidized and under democratic control through unions and state-capital-worker cooperation, among other things.

What Social Democrats call Social Democracy is none other than Social Capitalism. What capitalists call “efficient” really is a business model that works when costs and pollution are socialized and profits privatized.


Swedish politicians cannot turn hard left and demand State ownership and a stronger social sector as it would mean political suicide. They cannot turn hard right because that is occupied by a party they see has Fascist and Nazi ambitions. Capitalists cannot cozy up to the State as most other countries offer better deals, and Swedish consumers are stretched by the longest period of wage stagnation since the depression so they are not likely to raise sales by much.

The legacy of Saltsjöbaden is almost spent. Gone is the cooperation between Capital, State and workers. Gone is the trust in the folk movement. Gone is the will to make democracy work through engagement in unions, citizens’ pressure groups and study circles. Gone are the sons and daughters of the early pioneers of Saltsjöbaden ready to carry on the struggle. Gone are Sweden’s forests, reduced to timber plantations where half are now under 10 years old.

What is left is a glimmer of hope. A lone teenager on a school strike, sitting outside the Parliament protesting about the environment. A few Swedes forming cooperatives and other local self-help organisations. But at political level there is just one big gap. When it comes to the left showing moral leadership or the right coming up with a business -based solution the cupboard is bare.

I can’t leave the debate though without adding one glimmer of hope. That is moral backbone. It is morally wrong to set society up in a way that people suffer. You can go left or right but you must show the moral courage to set things up right. Taking suffering off the table is the only way to lay the foundations of what I call mankind’s most important project: peace.

Peace is what unites right and left, capitalists and workers, and different religions.


Footnote. I am working on a referenced version of this article. I will post references as soon as I have organised the list.


The slowing overall rate of profit.

Esteban Ezequiel Maito: The historical transience of capital: the downward trend in the rate of profit since XIX century https://mpra.ub.uni-muenchen.de/55894/1/
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