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Class Struggle Built the Finnish Welfare State

Lots of myths and half-truths circulate about Nordic countries like Finland. But make no mistake: socialists and militant workers built the Finnish welfare state — not an enlightened or pro-business elite.

Helsinki Senate Square, January 2017. Tyg728 / Wikimedia

Late last year, news circulated that freshly minted Finnish prime minister Sanna Marin, a thirty-four-year old Social Democrat, wanted to reduce the working week to four days and thirty hours. The plan quickly garnered international attention — Finland, it seemed, was yet again setting the standard for ambitious progressive reforms.

Marin rushed to clarify that the proposal was her own, not that of her center-left government — but the episode nonetheless highlighted the continuing appeal of the Finnish model, a sort of shining city on the hill for those outside the Nordic countries.

Often, discussions about the Finnish model turn into a debate about whether Finland is in fact socialist. The latest article to enter the fray was a December New York Times op-ed by Anu Partanen and her husband Trevor Corson. Partanen is a seasoned Finland hand in the US press, often called on to explain the particularities of the Nordic welfare states to US audiences. In the article the two argue that, far from a socialist redoubt, Finland is a “capitalist paradise” — surely balm to many liberals in the United States and right-wingers in Europe who wish to claim the welfare state’s accomplishments without giving in to the Left.

Partanen and Corson tout, among other things, Finland’s public education, childcare, and health care system — while noting that the country also boasts a robust entrepreneurial sector that benefits from these services. “While companies in the United States struggle to administer health plans and to find workers who are sufficiently educated,” the authors write, “Nordic societies have demanded that their governments provide high-quality public services for all citizens. This liberates businesses to focus on what they do best: business.”

So are the two right? Is Finland more capitalist than socialist?

Partanen and Corson aren’t entirely off base. If by socialism we mean the state socialism of the Soviet Union, it would be silly to call Finland socialist. The Nordic business sector is alive and well, as are electoral democracy and the press. Nor can we say that the Nordic countries have achieved democratic socialism. While unions are strong and the public sector accounts for a much larger share of the economy, it’s not as if workers own and control the means of production.

Finland and the United States are both mixed systems, with doses of socialism and capitalism. Yet Finland is clearly more socialistic than the United States. As Matt Bruenig has noted, state ownership and unionization in the Nordics are orders of magnitude larger than in the United States. “The Finnish government,” Bruenig writes, “owns nearly one-third of the nation’s wealth. For the United States to match that amount, the US government would need to move about $35 trillion of assets into public ownership.” And as for union density? “Around 90 percent of Finnish workers are covered by a union contract. To get America up to Finnish levels, it would need to unionize an additional 119 million workers.”

Partanen and Corson express shock that the Freedom House think tank rates Finland as freer than the United States, apparently associating lack of corruption and ease of bureaucracy with capitalism instead of socialism. But this assumes that graft and red tape are inherent to more socialist systems — and that their absence indicates a pro-business regime. Surely any self-respecting socialist would look at things like public ownership and union density as clearer indices of the “level of socialism” in a society than the existence of a private sector.

Crucially, the authors also get the history of the Finnish welfare state wrong. The pair acknowledges the role of the socialist left in Finnish history, but they also underplay it — noting Finland’s failed socialist revolution and the recent weakness of the Finnish left. Yet during the most active phrase of the welfare state’s construction, the Left was considerably stronger, with the Social Democrats and the Finnish People’s Democratic League (effectively the Communist Party of Finland’s electoral organization), often claiming about half of the country’s MPs.

Most important was labor militancy. So strong is the country’s history of strikes, in fact, that the recent walkouts — which brought out 60,000–100,000 people and triggered the fall of a government — were mostly taken in a stride: that’s what unions do, they go on strikes. And even those strikes were small compared to the great walkouts of yesteryear, including the general strike of 1956 (involving half a million workers) and a ten-day metalworkers’ strike in 1950, both of which demonstrated the labor movement’s potency and forced major concessions from capital. Finnish capitalists ultimately agreed to annual national negotiations that set the wages for all union workers.

The collective agreements were just one of the fruits of the decade from 1966 to 1976, the fastest stretch of development for the Finnish welfare state. A huge swath of the programs considered essential to the welfare state were passed during this period: universal elementary education, minimum pensions for families, universal day care, laws on occupational health and safety, and countless others. All were won through constant pressure from the labor movement and socialist parties, whether inside or outside the government.

It bears mentioning that the Finnish welfare state was often a compromise that satisfied neither labor nor capital. When it came to some services — say, health insurance or old-age pensions — unions preferred that capitalists foot the entire bill, while business naturally were reticent about this prospect. The state then acted as a middleman — offering the service as a public provision and therefore giving workers the programs and security they craved while freeing capital of the responsibility. Both pitched in taxes to fund it.

It would also be wrong to say the Left and the unions were the only political force behind the welfare state’s formation. Some welfare state supporters did so for technocratic reasons, believing — often with good reason — that state-oriented development would produce better economic results than simple reliance on the market. (Many of the state firms established in the 1950s were led by pragmatic capitalist managers recruited from the private sector.) Others pushed the welfare state for nationalist reasons, seeing it as a means to maintain the loyalty of the working class and develop Finland’s economy. However, even those who advanced such arguments found them easier to make due to the social heft of labor and the Left. A Centre Party secretary described the party’s task in the 1950s: to “go so left it even horrifies ourselves.”

The result isn’t socialism, but it is arguably the most humane model the world has ever seen. And crucially, it was not something decided in a technocratic committee or won simply through a campaign of moral suasion— it was the organic product of thousands of different struggles, some of them stemming from the traditional labor movement, others from the women’s movement (for maternity payments). An account of the welfare state that ignores these social battles gives people a distorted picture of what brought it about and how it can be won in other parts of the world.

In the United States, social-democratic gains will not be achieved due to the enlightened preferences of elites or the election of single president with all the right plans. It will take organizing and political struggle, particularly by the organized working class. Such organizing may not lead to a system that is a direct copy of the Nordic welfare state — but perhaps it will lead to a system of its own kind, one that even goes beyond the confines of the Nordics and presents a model that can, in turn, serve as a new example for Europe and all the world, a new shining city on a hill.