SWEDISH SOCIAL DEMOCRACY AFTER THE COLD WAR

Whatever Happened to the Movement?

KJELL ÖSTBERG

Swedish social democracy holds a unique position in twentieth-century political history. For forty-four years, from 1932 to 1976, the Sveriges Socialdemokratiska Arbetareparti (SAP, the Social Democratic Workers’ Party of Sweden) held the reins of governmental power, and for twenty-one of the last twenty-eight years, the country has had a social democratic prime minister. The Swedish model has long been extolled as a successful prototype of a communist planned economy combined with free market capitalism. Furthermore, both researchers and political analysts have concluded that during the twentieth century, Sweden made great strides in the areas of welfare, equality, social consensus, and, more recently, gender equality. Generally, the focus has been on the SAP, whose strong organization, dominant political position, capacity for new ideological thinking, and, in particular, ability to carry out its program for a strong welfare state have drawn admiration or, at the very least, considerable attention. Academics and politicians Gunnar and Alva Myrdal, labour union economists Rudolf Meidner and Gösta Rehn, and politician Olof Palme each symbolize a social democracy that stands out as being somewhat more radical than that of other Western countries. On one occasion, French president Georges Pompidou, who was far from being a radical himself, said, “Le paradis — c’est la Suède — avec plus de soleil”: Sweden is paradise, only with more sun. The 1989 anthology published in English as Creating Social Democracy (Misgeld, Molin, and Åmark 1992), with contributions from Swedish and international researchers, denotes a high point for this phase in terms of both the international view of the country and Sweden’s self-image as being state-of-the-art.

But by no means has international research on social democracy ceased. In recent decades, a number of monographs and anthologies have explored how international social democracy, adjusting to new global conditions, has adopted a market orientation, shifting its focus from policy to the market. Titles include Social Democracy in Neoliberal Times: The Left and Economic Policy Since 1980; The Retreat of Social Democracy; Globalization, Europeanization and the End of Scandinavian Social Democracy; and Il socialismo davanti alla realitá. It is obvious, however, that Sweden and Swedish social democracy no longer represent a source of inspiration for international debate.

To be sure, references are still often made to the classic Swedish model, and it is not unusual to hear claims that some parts of the social welfare system implemented by the social democrats live on to a great extent in Sweden: for example, attention is often called to the family and equal opportunity policies or the collectively financed welfare system (Vartiainen 2001). At the same time, one is struck by the fact that social democracy has ceased to function as a creator of ideas (Andersson 2010). Little or no reference is made to new Swedish ideological innovation, and no Swedish debaters of ideas from the SAP or the trade union movement are mentioned or even included as references in the works that deal with developments in recent decades. Indeed, notwithstanding the titles mentioned above, research on social democracy has been extremely modest in recent decades, and, surprisingly, Swedish research on social democracy has largely ceased. Although the development of the Swedish welfare state has been the subject of extensive research (Blomqvist and Rothstein 2008; Rothstein and Vahlne Westerhäll 2005; Palme 2003; Lundberg 2003; Svensson 2001), only a handful of studies have dealt with the development of Swedish social democracy. These include Jonas Hinnfors’s comparative work Reinterpreting Social Democracy: A History of Stability in the British Labour History and the Swedish Social Democratic Party (2006) and Jenny Andersson’s recently published The Library and the Workshop: Social Democracy and Capitalism in an Age of Knowledge (2010).

The reasons for social democracy’s political reorientation in general and Swedish social democracy’s diminished standing as an ideological innovator in particular can, of course, be sought in many different quarters. Suggestions include the end of the long period of prosperity following the Second World War, which helped create both the ideological and material foundation for the Fordist welfare state; the fall of the Berlin Wall and the end of the Cold War, which caused many people to stop looking for a model combining capitalism and communism; and the breakup of the industrial society and the weakening of the classic industrial working class, the social foundation for Swedish social democracy, which in turn has led to shifts in the composition and organizational effectiveness of the SAP. Let us begin with this last aspect.

FROM LABOUR PARTY TO LIBERAL PARTY? THE CHANGING SOCIAL DEMOCRATIC MOVEMENT

For a hundred years, Sweden’s working class has been one of best organized in the world. With considerable self-assurance, the SAP has referred to this comprehensive organizational sphere as “The Movement.” In 1989, the SAP had 1.23 million members in a country with a population of a little over eight million. Most of the party’s members were affiliated through the trade union movement. Since World War II, the unionization rate in LO (Landsorganisationen i Sverige), the Swedish Trade Union Confederation, has been between 80 and 90 percent, and it has been among the highest in the world since the 1930s. Until the beginning of the 1990s, a significant number of LO’s members were affiliated with the SAP. The decision to affiliate with the party was made by the individual locals of the LO. Those individuals who did not wish to affiliate could ask to withdraw by entering a protest against the decision.

As recently as the 1970s, the party’s youth league, the Social Democratic Youth of Sweden (Sveriges Socialdemokratiska Ungdomsförbund, or SSU), reported having 60,000 members, and it has long been dominated by working-class youth. In the same decade, S-Women (Social Democratic Women in Sweden — Sveriges Socialdemokratiska Kvinnoförbund, or S-kvinnor) had 35,000 members. Children were organized into the Unga örnar (Young Eagles) and the Swedish Association of Christian Social Democrats into the Broderskapsrörelsen (World Brotherhood). A social democratic student society also existed off and on. At its height, A-pressen (the Swedish Social Democratic Press Holding Company) published some thirty social democratic newspapers.

But the social democratic family was even bigger than that. It encompassed a number of other organizations, even if the ties were not always formalized. In addition to the LO, the most important one, these included the Workers’ Educational Association, which organized thousands of study circles and lectures; a number of public high schools; and more than a thousand People’s Houses and several hundred People’s Parks around the country. Without doubt, organizations such as the Swedish National Pensioners’ Organization and the Swedish Union of Tenants could also be called members of the movement. Furthermore, an extensive co-operative movement collaborated closely with social democracy, with its own wide-ranging set of operations, including the insurance company Folksam, the co-operative housing society HSB, a motion-picture company, advertising firms, and even a national chain of undertakers.

Although most of these organizations were independent entities vis-à-vis the SAP and were open for membership to others, there is absolutely no doubt that they were part of a movement dominated by social democratic ideology. A study of the organizations invited to attend SAP congresses serves as a reliable yardstick for who belonged to “the movement.” The party never hesitated to safeguard the leadership of, for example, the union organizations or the co-operative housing society if it was challenged by communists or other opposition groups. It goes without saying that the chairs of LO and the labour unions have been social democrats members and that, even in other leadership posts, SAP dominance has been ascendant (Gidlund 1992).

While most of these organizations still exist, this entire “world of movements” is on the threshold of dissolution. The organizations’ ties to social democracy have weakened both ideologically and organizationally. In part, this is due to changes in the class structure and composition of Swedish society. Historically, Swedish social democracy has been one of the world’s most proletarian organizations, with particularly strong influence in traditional working-class milieus. The weakening of these milieus has led to the dissolution of many of social democracy’s most powerful strongholds. At the same time, the movement has had obvious difficulties in establishing new structures in the country’s dynamic, growing metropolitan areas.

Another factor that has contributed to the altered prerequisites for social democratic dominance is the weakening of traditional social movements in general and of political parties in particular. Sweden’s “popular movements” — the labour movement, the free church movement, the temperance movement, the women’s liberation movement, and the sports movement, to name a few — enjoyed their glory days in the first half of the twentieth century. In general, they were ascribed great importance for the democratization of Swedish society. Because most political parties have their roots in these movements, their members (especially those of the labour movement) have, to a great extent, been integrated into the political system.

In recent decades, however, the traditional social movements have been losing ground. Two developments — their inability to recruit members and the rise of the average age of movement members — also apply to Sweden’s political parties in general: since 1990, the total membership of political parties has decreased from 625,000 to a little over 250,000 today. This decrease has occurred simultaneously with the professionalization of the parties’ operations. Furthermore, a major increase in state funding, which the social democrats strongly supported and pushed through, contributed to this development (Östberg 2005a).

A decisive change in the SAP’s membership occurred when LO nullified its affiliation with the party at the beginning of the 1990s, thereby decreasing the party’s membership rolls from over a million to 250,000 at the beginning of 1992. Since then, party membership has continued to decline substantially, and today it stands at fewer than 100,000. The numbers for other members of the social democratic family have also decreased: in just a few decades, the Social Democratic Women in Sweden has lost 80 percent of its members. But the biggest decline occurred in the Social Democratic Youth of Sweden, which reported a membership of only a few thousand in 2009.

Other elements of the social democratic movement have also weakened considerably. Most important, LO lost half a million members — a quarter of its total membership — during the last decade. The co-operative movement experienced numerous financial crises, which led to restructurings and an attendant weakening of its ideological profile. Many People’s Houses have fallen upon hard economic times; some have been closed, while municipalities have taken control of others.

A particularly troublesome issue for social democracy is its weak press. At both national and local levels, it has traditionally been difficult for social democratic newspapers to hold their own against the liberal and conservative newspapers, which have a broad advertising base and resulting significant financial resources. Nevertheless, for a great many years, the major cities and most counties were home to a large number of social democratic newspapers. However, when A-pressen, the social democratic newspaper company, declared bankruptcy in 1992, most of the social democratic newspapers went under. The situation in the big cities is particularly distressing. The only newspaper with a nationwide reach is the LO-owned tabloid, Aftonbladet.

The weakening of the social democratic movement’s structure is an important contributing factor to the change in the membership’s social composition. Even though most of the union-affiliated members were, on the whole, passive, the dissolution of the union affiliation led to a substantial erosion of the SAP’s worker base. One expression of the broken relationship between social democracy and the trade union movement is the substantial decrease in the number of social democratic ombudsmen at workplaces. As recently as the 1990s, the party could recruit 100,000 activists, who made crucial contributions, primarily in election campaigns. Today, this type of organizational structure is steadily disappearing. Moreover, because of the collapse of its youth organization, the party has lost what traditionally was its most important source for recruiting leaders at different levels: by and large, most industrial towns lack any sort of social democratic youth league.

The altered social composition is particularly noticeable in the area of elected representatives within both the party and the political system. Proportionate to their electoral base, the social democrats are severely underrepresented by workers at political assemblies, and this underrepresentation becomes more and more perceptible as one moves up the hierarchy, with the imbalance being most obvious at the top. In Olof Palme’s first government at the beginning of the 1970s, half of the cabinet ministers had backgrounds as LO-affiliated workers; in the social democratic government that resigned in 2006, only two cabinet ministers were affiliated with LO.

The professionalization of politics has also meant that the share of career politicians — that is, leading representatives who lack professional experience outside of politics — has grown considerably. This has led to the coinage of a new expression, “political nobility,” which alludes to the fact that many new leaders are the children of an older generation of SAP politicians. At the most recent shift in party leadership, in 2006, neither Mona Sahlin nor Per Nuder, the leading candidates, had much professional experience outside of politics, and their fathers held prominent positions within the movement and the heavily social democratic public administration.

Until recently, the values that formed the basis of the labour movement’s egalitarian ideal dominated, even at the upper stratum of the SAP. Leaders with roots in the bourgeoisie also remained fiercely loyal to the movement and its values. Interestingly enough, the loosening of these ties in the 1990s was the predecessor for what came to be known as “the chancellery Right,” to be discussed below. Two social democratic finance ministers, Kjell-Olof Feldt and Erik Åsbrink — who created a stir when they left the government in the 1990s to protest the fact that their demands for the shift of the economic policy in a neoliberal direction were not met quickly enough — continued their careers as professional board members in the private sector, something that would have been unthinkable for a previous generation of finance ministers. Following their departure, a number of their colleagues likewise resigned from positions in the social democratic cabinet office. For example, financial advisors moved to the big banks or to core activities in the government, in particular within the Swedish Central Bank and agencies that create policy (Östberg 2005b).

However, Göran Persson, the party leader and prime minister from 1995 to 2006, stands out as a symbol of the inclination of the new generation of social democrats toward a bourgeois lifestyle. During his tenure as party leader, Persson had already attracted considerable attention when he became “lord of the manor” in a huge home he had built for himself and his family. Immediately following his resignation, he became a well-paid associate of the JKL Group, one of the Nordic region’s leading strategic communication advisors. In other countries, this development would probably not have attracted much attention, but in Sweden, where equality is still considered an ideal worth striving for and a guiding principle within the labour movement, it contributed significantly to a decline in the legitimacy of social democracy.

Another symbol-laden event occurred during the financial crisis of spring 2009, when new revelations implicated LO chairperson Wanja Lundby-Wedin in a scheme to give the directors of a pension company, half of which was owned by the trade union movement, huge bonuses at the same time that the workers’ pensions were reduced. When word got out that her combined income amounted to the wages of four or five workers, even more light was shed on the huge gap in living standards between the workers and their representatives.

From the very beginning, the SAP was one of the most proletarian political parties in the world. Voting by class, still practiced today, has also lasted longer in Sweden than in many other countries, even though this practice decreased after the turn of the twenty-first century. Whereas in the 1960s more than 80 percent of workers affiliated with LO voted for the SAP, in the 2006 election that share had declined to 52 percent. The second biggest “labour party,” the right-wing Moderate Party, received 13 percent of the LO votes, while the Left Party, the old Communist Party, received 8 percent. A simultaneous decrease in the working-class population means that the SAP’s electoral base has changed significantly. In 1976, 67 percent of the party’s voters were workers, 22 percent were low- and mid-level salaried employees, and 5 percent were upper-level salaried employees. In the 2006 election, 40 percent of social democratic voters were workers, who were affiliated primarily with LO; 40 percent were salaried employees, who were affiliated primarily with the Swedish Confederation of Professional Employees (TC); and 9 percent were upper-level salaried employees (Gilljam and Holmberg 1995; Oscarsson and Holmberg 2008).

“UNION-POLITICAL CO-OPERATION”: RELATIONS BETWEEN LO AND THE SAP

By international standards, the Swedish trade union movement has historically had a very high unionization rate and, since the 1930s, has also included a significant number of salaried employees. Sweden has three trade union organizations: SACO (the Swedish Confederation of Professional Associations) for university graduates or professionals with college degrees, with about 600,000 members; TCO (the Swedish Confederation of Professional Employees) for salaried professionals, with 1.2 million members; and the blue-collar worker-dominated LO, with 1.6 million members organized into fifteen trade unions, of which the Swedish Municipal Workers’ Union, the Swedish Metal Workers’ Union, and the Industrial Labour Union predominate. For several decades, the unionization rate has been slightly over 80 percent for the LO collective and just under 80 percent for the salaried employee groups. When the Liberal-Conservative coalition took government in 2006, it raised the fees for the unemployment benefit funds, which as a rule were administered by the trade unions. This caused the unionization rate to drop sharply, but it began to rise again as a result of the 2008 financial crisis.

While SACO and TCO are unaffiliated politically, civil servants in particular often have good relations with the SAP, and it is not unusual for TCO’s chairpersons to be recruited for important posts in SAP governments and their cabinets. Since 1898, LO has enjoyed a strong symbiotic relationship with the SAP. An important formal change in these relations — namely, the termination, mentioned earlier, of the union affiliation at the beginning of the 1990s — did not weaken the ties between LO’s leadership and the SAP. LO’s chairperson has a reserved seat at the highest level of leadership in the party, and the LO’s management committee and most of the general secretaries and lower-level elected representatives are also SAP members. One of the party’s primary tasks during the Cold War was to keep communists from holding union positions, and even if this policy is no longer upheld as categorically as it was previously, it is still very unusual for prominent leaders in LO or its labour unions to be anything other than social democrats.

The trade unions within LO still make significant contributions to the SAP and its election campaigns, and “union-political co-operation” is a core concept in relations between the party and LO (Johansson and Magnusson 1998). The close ties between LO and social democracy do not mean that significant conflicts of interest have not arisen over the years. A serious disagreement arose in the 1980s when the SAP government enacted the first neoliberal-influenced austerity program, which led to real wage cuts and widened social gaps. People spoke of a “war of the roses” between the government and LO. Furthermore, the austerity program carried out by the SAP government following the financial crisis in the early 1990s led to widespread protests from LO. The 1996 LO Congress constituted a high point in the area of frosty relations. When the party chairperson gave his traditional speech at the congress, always one of the defining moments of any congress, he was met with icy silence (Persson 2008). In the 1998 general election, only 54 percent of LO’s members voted for the SAP, a record-low figure for the period. Thanks to the efforts of LO chairperson Vanja Lundby-Wedin, relations between the party and LO have improved in the last decade. She has beem more willing to accept the party’s neoliberal course, and her political views are very close to those of Mona Sahlin, the new leader of the party.

Sweden’s relations with the European Union also led to a critical schism in some sectors of the trade union movement. While the SAP leadership has continued to push for EU membership, there has been strong opposition within LO. During both the 1994 referendum on EU membership and the 2003 referendum on the conversion to the euro, a clear majority of LO’s members voted against both (69 percent in 2003) — and several labour unions took an active stand on the “no” side. Despite this disagreement, however, LO’s leadership remained loyal to the party leadership (Oscarsson and Holmberg 2004).

Another area of tension involved the ratification of the Treaty of Lisbon: a debate ensued on how LO would counter the risk that the EU’s services directive would negatively impact Swedish labour laws and, primarily, the right to enter into labour contracts. In the end, LO’s leadership, as well as that of the SAP, categorically rejected all requirements that Sweden stipulate the clarification of these issues, which were so important to the union, as a condition for the ratification of the treaty.

CONFLICT AND COLLABORATION ON THE LEFT

Ever since the party split in 1917, the conflict with the Communist Party has been a priority for social democracy and LO. It intensified during the Cold War, when Prime Minister Tage Erlander coined the now-classic slogan, “Every union must be turned into a battleground against communism.” The Swedish Communist Party was one of the first to free itself from Moscow’s grip and was also one of the few communist parties to openly criticize the Soviet Union’s invasion of Czechoslovakia in 1968. In 1967 it changed its name to the Swedish Left Party–Communists. Immediately following the fall of the Berlin Wall in 1990, the word “Communists” was dropped from the party’s name, and it is now called simply the Left Party. The party has had limited parliamentary influence, receiving on average about 5 percent of the votes in parliamentary elections. However, during long periods of time, social democracy has needed the active or passive support of the communists to retain its power. This support was given without demands for anything in return; it was assumed that the communists would never take any actions that might bring down a pro-labour government. Until the end of the Second World War, the communists’ influence among the metal and mine workers, for example, was not insignificant. Since the 1950s, however, this has decreased markedly, in part because of the SAP’s successful efforts to isolate the communists and in part because of the Left Party’s altered social base: its roots in the working class have been replaced with middle-class groups such as teachers, social workers, and hospital personnel.

During the 1990s, the Left Party, under the leadership of the charismatic Gudrun Schyman, made considerable gains in parliamentary elections, and in 1998 it received 12 percent of the votes, its hitherto biggest share. With great skill, Schyman succeeded in playing on the pent-up criticism of the tough economic measures imposed by the social democratic government. In particular, she attracted to the party many women within the public sector. At the end of the 1990s, a more organized form of parliamentary collaboration, one that also included the Green Party, was established between the SAP and the Left Party. Undeniably, this collaboration represents a new chapter in relations between the SAP and the reformed Communist Party. At the same time, the Left Party had to pay a high price to gain admittance to the parliamentary “sanctuary.” This also coincided with the stringent economic measures that the social democratic government carried out during the same period in an effort to repair the damage to the Swedish economy brought on by the crisis at the beginning of the 1990s. The Left Party, mainly at the local and regional levels, had to take responsibility for sweeping cutbacks in, for example, the school system and health care. As a result, at the turn of the twenty-first century, the Left Party returned to a more normal number of votes. Gudrun Schyman’s resignation as party leader for personal reasons also contributed to the party’s decline. While Schyman became involved in the organization of a new feminist party, Lars Ohly, the new party leader, has had major problems with public opinion, not the least because he has been depicted as being too faithful to the party’s communist past (Hadenius 2008).

In recent years, the formalized collaboration among the SAP, the Left Party, and the Green Party has been strengthened even further. On the threshold of the 2010 election, the three parties formed an electoral pact with a view to forming a government together. If they had succeeded, another line in social democracy’s traditional reluctance to collaborate with the former Communist Party would have been crossed. At the time of this collaboration, the Left Party was forced to make more concessions, including a pledge to exercise strict budget discipline. (See the postscript to this chapter for a discussion of the 2010 election.)

Although at the union level, the current Left Party barely exists as a cohesive political force, some members of LO who are critical of the social democratic government’s neoliberal-oriented politics have expressed an interest in seeing the SAP expand its collaboration with the Left Party since, to some extent, it could balance the party’s swing to the right. This interest has been further reinforced by the current party leadership’s indication that it is more interested in collaborating with the Green Party than with the Left Party. The Green Party is further to the right on such matters as privatization and the loosening of labour laws and has, on numerous occasions, sought to collaborate with the Liberal and Conservative parties on these issues. In the fall of 2008, the attempt by the SAP leadership, headed by Mona Sahlin, to exclude the Left Party from a future government coalition and unilaterally pin its hopes on the Green Party aroused widespread protests among the social democrats who were active in the unions, and Sahlin was forced to back down.

Notwithstanding this attempted move to the right, a significant change has occurred in social democracy’s willingness to co-operate with other groups on the left. For many decades, social democracy’s standing was so strong that it could dismiss collaborative efforts, and a visceral anti-communism strengthened this position. Instead of moving closer to the new social movements that developed in the 1960s and 1970s, the party backed away from them. This was most evident in relation to the most powerful movement — the one that opposed the Vietnam War; rather than embrace that movement, the party chose to build its own solidarity organization, which failed to win the trust of young people. With respect to the environmental and women’s movements that were emerging, the distrust between social democracy and the young radicals was often deep and mutual. As a result, the party, to a large extent, lost the sixties generation (Östberg 2005b).

To some extent, the SAP has learned its lesson. When the growth of a new generation of radical youth around Attac, the alternative globalization movement established in 1998, appeared imminent, a new kind of openness emerged. For example, for several years, LO and Attac arranged joint summer courses aimed at finding opportunities for dialogue. Around the country, ABF (Arbetarnas Bildningsförbund, or Workers’ Educational Association), LO, and new social movements are collaborating in a “socialist forum,” something that would have been unthinkable prior to 1990 (Sörbom and Abrahamsson 2004). Of course, the fact that anti-communism lost some of its historical significance after the fall of the Berlin Wall has also contributed to social democracy’s relaxation of its previously rigid attitude toward collaboration with the Left.

SOCIAL DEMOCRACY’S ECONOMIC POLICY UNDER NEOLIBERALISM

Social democracy’s adaptation to a monetarist and neoliberal-influenced economic policy began as early as the 1980s. For many people, Swedish social democracy has represented somewhat of an ideal for traditional reformist welfare policy. The classic Keynesian policy was adopted in the 1930s, and in the 1950s, LO economists Gösta Rehn and Rudolf Meidner drew up an economic policy that was adapted to the long postwar boom with the aim of counteracting inflation and overheating crises. This policy, known as the “loyal wage policy,” was based on keeping down wage increases in the dynamic, export-dependent sectors of industry and supporting wage increases in the less expansive sectors of industry. The elimination of less competitive industrial sectors, which this policy caused, was compensated for with an effective unemployment policy. A high burden of taxation served to dampen inflation and at the same time made room for a growing public sector. The Fordist welfare state ended in Sweden in the 1970s, when the public sector’s share of the gross national product increased to 50 percent. Simultaneously, the long economic boom came to an end and the material basis for the widespread reform program was undermined to a considerable degree. Important sectors of Swedish industry — for example, steel and shipbuilding — were particularly hard hit by the structural crises of the late 1970s.

Between 1976 and 1982, when the deepest phase of the economic crisis occurred, the SAP was in opposition for the first time in forty-four years. When the party returned to power again after the 1982 election, the conditions for traditional social democratic politics had undergone a profound change. In part, the Swedish economy was seriously weakened by huge budget deficits, significant unemployment, and a high rate of inflation. No improvement in the economic situation could be discerned; the economy had slipped into a deep structural crisis, and industrial output hit rock bottom. Milton Friedman replaced Keynes as the guiding star for many economists. Nor did Swedish social democracy remain unaffected by these winds of change. In particular, a group of young economists who gathered around Olof Palme’s finance minister, Kjell-Olof Feldt, in what was referred to earlier as the “chancellery Right,” were attracted to the new ideas. Themes reflecting the economic change and the swing toward neoliberalism were already evident in the government’s first financial document, which offered this harsh message: “An upswing in industrial output must lead to an improvement in industry’s earnings situation. At the same time, consumption must be contained so that the country’s total savings can increase” (Feldt 1991). Anti-inflationary measures were given priority. Growth in the public sector would be drastically reduced. A halt to reforms at the national level was recommended, and expansion at the municipal level was restricted. In one fell swoop, an offensive devaluation of 16 percent reduced wage earners’ living standards by 4 percent, while the government stuck to its ambitions in regard to employment, proclaiming that it had entered upon a new “Third Way” when it came to “both saving and working its way out of the crisis” (Feldt 1991). It should come as no surprise that the policy was a controversial one and led to more clashes between the SAP leadership and LO. The conflict, which came to be called “the war of the roses,” had to do primarily with the consequences of the social democratic government’s redistribution policy. Moreover, in the mid-1980s, the government took the first steps toward deregulation of the economic policy, primarily the detailed regulation of banking operations and currency deregulation (Östberg 2009).

Simultaneously with the negative consequences of the social democratic government’s “Third Way” around 1990 — with overheating tendencies and increased inflation — a clearer course toward a supply-driven policy began to take hold. The crisis was explained in terms of endogenous factors — to a great extent, by the growth restrictions in the financial system, which is why continued deregulation was considered necessary. At the same time, marginal tax rates were reduced sharply as part of a comprehensive tax reform. An important symbol of this gradual move from Keynes to a standard national policy was the social democratic government’s decision, outlined in its 1991 budget proposal, to prioritize price stabilization over employment; combatting inflation would be the definitive goal for the government’s economic policy. Even more significant in the long run was the concurrent decision to apply for Swedish membership in the European Union (Svensson 2001).

In 1991 the SAP lost power to the Conservatives and the country suffered its most severe economic crisis since the 1930s. Liberal and Conservative governments in Sweden have had the incredible misfortune to come to power during deep recessions. The newly elected Conservative government, under the leadership of Carl Bildt, continued and expanded the market-based economic policy, which, in this serious situation, led to an unemployment rate of over 10 percent, a grave crisis for the Swedish krona, high interest rates, and a substantial budget deficit. In certain areas, important steps were taken to relax the public monopoly; in the schools, for instance, special funds were introduced that could be used for private “independent schools.”

The social democratic government’s return in 1994 signified only a limited extension of some form of recovery policy. Instead, in the second half of the 1990s, the government executed a very comprehensive policy of economic austerity. The policy proved successful to the extent that the budget deficit could be combatted but at a high price of cutbacks in the welfare system and widening social gaps. A government-sponsored evaluation showed that several vulnerable groups, including single parents, were hit hard by the policy (Palme 2003).

At the same time, several decisions increased the market’s influence at the expense of public policies. The most important of these was the independence of the Swedish Central Bank and thereby the monetary policy vis-à-vis political decisions. Another was the introduction of the SAP’s cherished budget ceiling, a brake on fiscal policy that automatically prevented excessive deficits in the national budget. With this decision, the party showed that it has come a long way from its Keynesian past. This “responsible” budget ceiling policy has become such a core component of social democracy’s identity that the Left Party had to accept the ceiling if it wished closer co-operation with the SAP — and it did.

Although Swedish social democracy had already begun its ideological reorientation in the 1980s, Sweden’s affiliation with the EU has greatly accelerated a market-based policy. As is well known, the EU has been a driving force in promoting deregulation and privatization, and Sweden not only has accepted its decisions but has often been the first EU member to implement them. Particularly noteworthy is the fact that no slowdown in this process could be discerned in the period from 1997 to 2002, when a majority of the EU countries were being run by social democratic governments. Quite the opposite, in fact. For example, the far-reaching decisions passed by the EU in 2002 regarding the deregulation of, among other entities, the energy market received the full support of the social democrats in Sweden. The SAP was also a driving force in the ratification of the Treaty of Lisbon in spite of its obvious neoliberal values and, particularly, the criticism directed at it from the trade union movement, which felt that it did not adequately protect Swedish labour laws. Leading Swedish social democrats often referred to the Third Way of Britain’s Labour Party in glowing terms, and SAP leader Göran Persson was always more than willing to mention his friendship with Tony Blair (Persson 2008).

Under the leadership of the social democratic government, widespread deregulation of parts of the infrastructure within the transportation and energy sectors occurred in the early 2000s. Developments aimed at market adjustments of some areas of the public sector also continued. More and more spheres within health care, eldercare, maintenance, and technical administration received tenders from private companies. In Sweden, the municipalities are responsible for most of these operations. There is no denying that municipalities and county councils with Liberal and Conservative majorities have led the way in terms of privatization and the sell-off of public sector enterprises; in general, however, the measures have been accepted and pursued by SAP-run municipalities. Only on rare occasions have the social democrats altered decisions made by a Liberal and Conservative majority.

In some areas, Sweden has been an international standard bearer for the marketization of the social system. A prominent example is the transformation of the pension system. In the 1950s, Sweden put into place a general pension system based on payroll taxes; social democrats likened it to the jewel in the Swedish welfare system crown. In 1994 this system was replaced with a system defined entirely by fees based on the lifetime-income principle. In addition, the Swedish pension funds, which previously were used primarily for public investments, particularly housing construction, have, to an ever-greater extent, been invested in the stock market — and thereby been subjected to the falling share prices of recent years.

Although significant parts of the Swedish welfare system have been market-based, exposed to competition, and, to some degree, privatized, the system is still publicly financed primarily by taxes. Among the general population, support for the public sector is considerable, and skepticism toward sell-offs and privatization is significant. Opinions also tend to be split along party lines. A very clear majority of SAP and Left Party sympathizers oppose the increased privatization of health care and eldercare, as well as the greater concentration on independent schools. They also want to prevent profit-seeking companies from running publicly financed enterprises. The SAP leaders, however, pay little or no attention to these points of view. In fact, Mona Sahlin, the SAP leader from 2007 to 2011, was very sympathetic to the “renewal work,” which is the way deregulation and privatization are often presented, and this attitude played a large role in her strategy to move the party to the right in order to contend with the Liberal and Conservative parties for the voters in the middle in the 2010 election.

THE PROGRAMMATIC ADAPTATION

The party’s altered economic policy has also found expression in changes in the party’s program. In this respect, the 2001 SAP Congress symbolizes a programmatic adaptation to neoliberalism. There is reason to believe that this also reflects the change in the party’s social base. Even before the First World War, the leadership of the party was put into the hands of a layer whose expressed purpose was to transform it into a responsible, reformist, parliamentary party. A strong leftist current was driven out in 1917. But even though the party’s ambitions to transform society were limited to a reformist perspective, the socialist goals persistently remained in the party program. Under pressure from Sweden’s Communist Party, the social democrats inserted wording into their program to the effect that they wanted to “do away with the capitalistic ownership of the means of production and put them in the hands of and under the control of society” (quoted in Gunnarsson 1980). The program was revised extensively in 1944, and the paragraph about goals and objectives that was approved at that time remained in effect, for the most part, until 2001. It read: “Social democracy wants to reshape society so that the right to make decisions regarding production is put in the hands of the people, to liberate the citizen from being dependent on every type of power group outside their control, and to leave room, in a society built on classes, for a community built on a foundation of freedom and equality, with people working together” (quoted in Gunnarsson 1980). Although this was no longer necessarily about putting an end to capitalism and the class society, the objective was still to put the right to make decisions regarding production in the hands of the citizens.

In 2001, in the party’s Protokoll Västeråskongressen (SAP 2001), the corresponding section was formulated as follows: “Social democracy wants to allow democracy’s ideal to put its stamp on the entire social order and people’s reciprocal relationships. We strive for a social order in which every individual can influence development on both a large scale and in everyday community work. We strive for an economic plan in which every individual, as a citizen, wage earner and consumer can influence the direction and allocation of production and the organization and conditions of working life.” Demands having to do with the right to make decisions regarding production have been excised. Citizens and wage earners should be able to influence the direction and allocation of production, but nothing is said about how and to what extent. Above all, the desire to completely transform society is absent. This is no longer about putting power in the hands of the people. The last remnants of any fundamental ambitions for transforming society have disappeared into thin air. A leftist current that wanted to maintain the previous goal of putting “the right to make decisions regarding production in the hands of the people” was rejected as being old-fashioned. Instead, the concept of “democracy” was proposed as the superior concept. Thus, in his remarks at the 2001 congress, party leader Göran Persson declared that “democracy” cannot be captured in a single form or in a few steps. It must move on different planes, in a continual interplay among human beings. It should come as no surprise that critics of such an amorphous definition tended to deconstruct the content of the concept of democracy.

With this general concept of democracy as a tool, the 2001 SAP Congress also confirmed the party’s adaptation to a neoliberal-influenced welfare policy. In response to criticism from congress representatives who believed that the new party program opened the door far too wide for privatization and for increased profits within the school and medical and social services sectors, the party executive’s reporter stated: “This is about recognizing the desire of human beings for greater freedom of choice and more influence” (SAP 2001).

At the congress, the core party leadership argued in favour of change, as did, for example, representatives of the student society. LO chairperson Wanja Lundby-Wedin underscored the fact that the party agreed to “the economic system we have today, to a market economy. We said ‘yes’ to a market economy because we believe that it is the economic system that can best create growth, growth that will then permit us to use trade-union and political power to ensure that our distribution policy is as equitable as possible” (SAP 2001).

SOCIAL DEMOCRATIC FOREIGN POLICY AFTER THE FALL OF THE BERLIN WALL

On the whole, social democratic foreign policy, which during the postwar period was identical to the official Swedish one, has been characterized by a palpable duality. Officially, it has been expressed as “freedom from alliances in peace aimed at neutrality during wartime” (Bjereld, Johansson, and Molin 2008). This policy made a formal association with either NATO or the EEC/EU impossible. At the same time, there was absolutely no doubt that, from an ideological standpoint, Sweden belonged to the Western camp — and not only ideologically. During the entire Cold War period, the Swedish military and NATO co-operated closely. Swedish and NATO air commands trained together; secure support roads and liaison routes were established; Swedish landing strips were lengthened to make them compatible with the requirements of NATO airplanes; and the air commands exchanged munitions. Furthermore, a far-reaching exchange of intelligence took place. For Swedish social democracy, this policy could still be accommodated within the framework of official doctrine. This was about a “reassurance policy” in case the neutrality policy was not respected. In actual fact, probably neither the United States nor the Soviet Union had any doubts as to where Sweden belonged: both sides used the designation “NATO’s secret seventh member.”

In the 1960s and 1970s, Swedish foreign policy became active, in particular in regard to the Global South. Nothing symbolized this more than Olof Palme’s criticism of the Vietnam War. Palme — and Sweden, for that matter — became an important dialogue partner for radical leaders in the South and a vital ally in the struggle for liberation from colonialism and the fight against apartheid. At the same time, Sweden functioned primarily as a bridge builder between North and South. In countries such as Portugal, the explicit objective of Sweden’s engagement was to prevent altogether developments that were considered too radical. Nor did the secret military collaboration with NATO come to an end. Olof Palme gave explicit instructions to his generals to see to it that his intense criticism of the United States during the Vietnam War did not jeopardize this collaboration. The fall of the Berlin Wall and the end of the Cold War changed the conditions for Swedish foreign policy in many respects. Swedish freedom from alliances still exists, but it has become increasingly conventional. At the beginning of the twenty-first century, the social democratic government removed the neutrality objective from Sweden’s security policy doctrine. Today, Sweden’s collaboration with NATO is close and broad-based, and the country is an active member of the Partnership for Peace.

Swedish membership in the EU has been of crucial importance for the development of the country’s foreign policy. In the fall of 1990, SAP Prime Minister Ingvar Carlsson stated that his ambition was for Sweden to join the European Community. Swedish neutrality was no longer an obstacle for such a course of action. In the fall of 1994, a referendum to join the European Community passed with a narrow majority — 52.3 percent. Even if Sweden is still not a member of NATO and has shown no interest in taking an active role in the EU’s military collaboration, Swedish foreign policy has, in substance, adapted to that of Europe through the EU’s joint foreign and security policies. In January 1992, at the same time as other EU members but contrary to the international criteria that had previously steered Sweden’s policy regarding diplomatic recognition, Sweden recognized Slovenia and Croatia. The reason given was manifestly political: Swedish recognition would, among other things, have “a positive influence on subsequent peace efforts in Yugoslavia” (Bjereld, Johansson, and Molin 2008). The independent Swedish voice in international assemblies has gradually been silenced. As recently as the 1980s, at meetings of the UN General Assembly, Sweden voted with the Global South as often as it did with Western countries on issues that divided these two blocs. At the beginning of the twenty-first century, however, the social democratic government did not support proposals from the Global South to the same extent, and in 86 percent of the cases, it supported the Western countries (Bjereld, Johansson, and Molin 2008).

Thus, Sweden was quick to recognize the breakup of Yugoslavia. The social democratic government also articulated its understanding regarding NATO’s 1999 military intervention in the Kosovo conflict. Following 9/11, Sweden has also been a strong ally of the United States in the so-called war against terrorism. In the UN, the social democratic government gave its support to the United States’s war in and bombing of Afghanistan and thereby to a different interpretation of the concept of “self-defence.” Following initial hesitation, the government repudiated the occupation of Iraq by the United States and its allies without UN sanctions even though, during the build-up phase, Prime Minister Persson pointed out that “a successful, short, intensive war could influence the economic situation as positively as did the Gulf War in Kuwait” (Bjereld, Johansson, and Molin 2008). Swedish munitions were used by the US alliance, and soon Sweden was sending police forces to occupied Iraq.

Under the UN’s command, Swedish soldiers also participate in the International Security Assistance Force in Afghanistan, as well as in the NATO Kosovo Force. Moreover, SAP foreign ministers and finance ministers have been active in enlisting Sweden in the war against terrorism by, for instance, pushing for the EU to tighten its anti-terrorism laws. In a noteworthy case, Sweden, in collaboration with the CIA, allowed the Americans to transport individuals from Sweden to Egypt, where they were tortured.

In addition, EU membership has served as an important lever for the normalization of Sweden’s and social democracy’s foreign policy. At the same time, EU membership has created huge disruptions within the SAP. In fact, a clear majority of party sympathizers voted against EU membership in 1994, and when the 2003 referendum overwhelmingly rejected Swedish acceptance of the euro, it was probably LO’s members, most of whom are social democrats, who decided the matter. Concurrently, the party leadership has continued to actively seek closer co-operation with the EU. Since the Liberal and Conservative parties and, in particular, the Swedish business community have promoted collaboration with the EU, in Sweden the EU has often been made to appear as an elite project directed against ordinary citizens. Prime Minister Carlsson’s appearance with Conservative leader Carl Bildt in the 2004 election campaign and the image of Foreign Minister Anna Lindh kissing Carl-Henric Svanberg, CEO of LM Ericsson, on the cheek during the 2003 euro campaign have come to symbolize this outlook.

As described above, Swedish social democracy has actively contributed to the use of the EU for economic reforms that move in a neoliberal direction. SAP leaders have also been powerful advocates of the rapid ratification of the Treaty of Lisbon and rejected all proposals to submit it to a referendum. Furthermore, the party has rejected demands from the trade union movement regarding union rights — for example, the validity of a collective agreement before it has been approved.

RADICAL SOCIAL DEMOCRACY: WHO CAN MAKE IT HAPPEN?

What are the requirements for a new, radical Swedish social democracy? To take this question to an extreme, one could claim that Swedish social democracy in the postwar period has had two allies: first, capitalism, which, in collaboration with a social democracy that was extremely friendly to business, made a contribution to the Fordist welfare state, and second, the social movements that, sometimes allied with and sometimes opposed to the SAP, pushed for more radical policies. One must not underestimate the importance of the wildcat strikes of the 1970s and of the new social movements.

Today, capitalism is hardly striving for a welfare state, and many would claim that the social movements are not visible enough. The neoliberal breakthrough of the 1980s and 1990s coincided with a decline in the activities of the social movements following their robust growth in the 1960s and 1970s. The women’s movement and, to a certain extent, the environmental movement pulled through the best. The women’s movement successfully adapted itself to a network-oriented strategy. In particular, it found an important base in academia where, in recent decades, gender research has become one of its most vigorous research areas, and many researchers and students have also been activists for the cause. However, the feminist movement has also used its skills to influence public opinion and politics. Prior to the 1994 election, the threat to launch special women’s lists played an important role in persuading the established political parties to increase female representation. At the beginning of the twenty-first century, most Swedish parties, including the SAP, declared themselves to be “feminist.”

One important reason for this breakthrough also relates to a significant tradition within the Swedish women’s movement: collaboration across class and party lines. In the matter of concrete issues such as violence against women, sexual exploitation, and increased female representation, for example, conservative women and Christian women have often been able to co-operate with radical feminists and socialists. The group Social Democratic Women in Sweden has frequently served as a bridge builder in such contexts. Sweden is not a gender-equal country. However, the main reason it always places at the top of the UN’s rankings for equal opportunity has to do with the relative strength of the Swedish women’s movement (Östberg 2005a). Prior to the 2006 election, several leading feminists attempted to launch a women’s party under the leadership of the Left Party’s former chairperson, Gudrun Schyman. However, what came to be known as the Feminist Initiative was, at least at the onset, a failure. In terms of public opinion, the party was fighting an uphill battle, which may have also reflected some degree of social backlash against the feminist movement in general.

Parts of the environmental movement were institutionalized in the 1980s by the Green Party, which has been represented in Parliament since 1994. While it was possible to find echoes of a discussion between “fundamentalists” and “realists,” the Swedish Green Party has, on the whole, adapted well to parliamentary work. In the early years of its existence, the Green Party refused to join any bloc even though it usually collaborated with the Left, but today it is part of an electoral pact with the SAP and the Left Party. At the same time, the party holds positions on privatization, labour laws, and support to small businesses that are closer to those of the Liberal and Conservative parties. A symbol-laden sign of the party’s development is its recent reversal regarding Sweden’s membership in the EU — from having opposed the membership on principle, it has moved to no longer demanding that Sweden withdraw from the union.

Other than this shift of the Green Party, opposition to the EU has served as a unifying, mobilizing factor on the Left. In both the referendum on EU membership in 1994 and the one on the euro in 2003, the representatives of different social movements collaborated with trade union activists and leftist sympathizers. The demonstrations at the EU summit in Göteborg in 2001 were among the biggest in recent decades, even though they left a bitter aftertaste because of the gunfire from the police, who nearly killed one of the participants, and the harsh prison sentences meted out to a number of demonstrators. It is obvious that leading social democrats — in particular, Minister of Justice Bodström — vigorously supported the repressive measures. The biggest mobilization in recent years was the demonstration protesting the war in Iraq, which brought together more than fifty thousand participants in Stockholm alone.

The emergence of the alternative globalization movement in the early 2000s heralded a revitalization of the social movements in Sweden, primarily among young people. Social forums still take place around the country on a regular basis. For a time, Attac also enjoyed a good deal of attention and support in Sweden. In contrast to earlier periods, collaboration of these new social movements with social democracy and the trade union movement has increased enormously. For example, LO has arranged special summer schools with Attac. Another expression of this new openness is the Socialist Forum, which ABF (the Workers’ Educational Association) and LO arrange in co-operation with different leftist organizations (Sörbom and Abrahamsson 2004).

It may be difficult to envision some obvious, collective internal force that could take charge of revitalizing the radical movement in Sweden. Many social movements — including the environmental movement, the women’s movement, the international solidarity movement, and movements that work against the deterioration of the welfare state — carry out important work but without a clear, common focus. The Left Party, whose youth league was an important radical force several years ago, expended considerable energy on taking seats in the 2010 election and therefore avoided taking any controversial stands vis-à-vis the SAP leadership.

Unlike the violent demonstrations that took place in many other countries, the protests against the consequences of the financial crisis have not been wide-ranging in Sweden in spite of the fact that large portions of the country’s industry have been hit hard. More widespread protests have only come from the traditionally adversarial automobile and mine workers. Within the SAP, a growing awareness of the party’s incapacity to draw upon new ideological approaches is perceptible. Groups of more radical young social democrats have begun to develop a more coherent critique of the party’s right-wing leanings. One of their pamphlets has the very telling title “Soon We Will March Without You” (Lundberg and Suhonen 2009).

POSTSCRIPT: THE 2010 ELECTIONS

In an almost overly explicit way, the outcome of the Swedish parliamentary elections in September 2010 confirmed the general theses of this chapter. The elections resulted in a disaster for the SAP. In the 2006 election, the party had lost power for the first time since 1994 to the right-wing alliance under the leadership of the Moderate Party. Its vote sank to 35 percent, the lowest ever since the right to vote was won in 1921. In 2010 it sank by another 4 percent to 30.7 percent. The proposed left-wing coalition with the Left Party and the Greens failed to take power, receiving 43.6 percent of the vote compared to 49.3 percent for the right-wing alliance. The Left Party also experienced some losses while the Greens gained a couple of percentage points. The Moderates gained more than four percentage points and became almost as influential as the SAP, which generated a totally new situation in Sweden. The social democrats have definitely lost their hegemonic position in Swedish politics. Another spectacular outcome of the election was that Sverige-Demokraterna, a relatively new anti-immigrant populist party with roots in the racist movement, received 5.8 percent of the vote and twenty seats in Parliament. While this resulted in the right-wing government losing its majority, so far the government has received support from the new party on most sensitive votes. The close “red-green” co-operation was at least temporarily dissolved after the elections, and the Greens have shown an interest in reaching agreements with the government on some questions.

A discussion of the reasons for the social democratic failure started immediately. Some have claimed that many party members felt uncomfortable working with the old antagonists in the Left Party or with the Greens, who are often seen as anti-growth. Others point to the ability of the right-wing government to handle the economic crises and to the popularity of Prime Minister Reinfelt. This popularity is in sharp contrast to the half-hearted support that SAP leader Mona Sahlin received from her own party members.

A central theme in the election campaign was the fight to win the middle class. It seems that the social democrats lost that fight and, at the same time, lost support from the working class. In 2002 almost 60 percent of the members in LO voted for the party, whereas in this election only 51 percent did. With reference to some of the central theses in this chapter, I suggest two other explanations. First, social democracy is no longer connected to a progressive reform policy aimed at building a strong public sector under democratic control. Today, its politics are influenced more by neoliberal ideas than by classical reformism. While the SAP was in power, this policy shift, which began in the 1990s, contributed to widening the social and economic cleavages in society. This makes the party less attractive for its traditional working-class supporters, while voters in the middle might prefer the original right to the pale copy from the left. Second, the movement that once simultaneously dominated important parts of Swedish civil society and governmental offices, central bureaucracy, and local political administration has faded away and lost substantial strength and influence. The program presented by the party in the 2010 election was not attractive enough to revitalize that movement.

In the wake of the election, SAP leader Mona Sahlin was pressed to resign. Because the new party leader, Håkan Juholt, was not recruited from the former top party leadership, many rank-and-file members thought he would be the man to take the party back to its roots. The policies pursued by the party’s new leadership have, however, showed few signs of a leftward turn. Håkan Juholt’s tenure as party leader was short and turbulent. Partly because of personal shortcomings, partly because of hostility on the part of the traditional central party hierarchy, and not least because the dominant right-wing daily newspapers launched an intensive media campaign against him, Juholt was forced to resign after less than ten months. He was replaced by Stefan Löfven, the chairman of the Metal Workers Union. Löfven soon declared his support for the party’s move to the right, accepting the ongoing privatization and deregulation policies and the controversial tax reforms of the right-wing government.