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Saving Swedish Social Democracy From Itself

Daniel Suhonen

Sweden was once a paragon of social democracy. But after years of austerity and a deteriorating welfare state, a left-wing challenge is finally growing within the Swedish Social Democratic Party.

Olof Palme, head of the Swedish Social Democratic Party, speaks to a crowd on May 1, 1968 in Stockholm, Sweden. (Getty Images)

Interview by
Noa Söderberg

The average Swedish worker still has it considerably better than the average American one: paid vacation and maternity leave, sector-wide collective bargaining, cheap unemployment insurance. The country’s social welfare state offers free health care, free education, and subsidized cheap childcare.

But there is increasing uncertainty about how long these working-class victories will be defended. Labor law is neoliberalizing and union power is weakening, the housing market is in a permanent crisis, and retirement programs are growing increasingly dysfunctional. Austerity did not come in one fell swoop in Sweden, but by a thousand small cuts. The Sweden of 2020 is one with a growing role for private health care and schooling, as well as one with a far-right party attracting votes from disaffected workers.

Part of the problem is the fact that the Social Democratic Party that pioneered the Nordic model is losing its way. Yet there has been no organized movement to address and repel the crisis from within the party. Until now.

The organization, called Reformisterna, has grown substantially since its founding in early 2019. Its goals are clear: ending the party’s neoliberal tendencies, turning away from austerity, and massively reinvesting in the public sector. At the time of writing, they consist of roughly four thousand members.

Reformisterna cofounder Daniel Suhonen talked to Jacobin about what happened to the Swedish welfare state, why working-class gains always have to be defended, and how he hopes to do just that.


NS

How did the Swedish welfare state end up in a crisis?

DS

Sweden has taken an extremely neoliberal course. From the 1940s through the 1980s, the Social Democratic Party built a substantial welfare state with a big public sector and high taxes. Back then, what the Right wanted was to liquidate this welfare state. But a few decades later, around 2005, new ideas emerged on the Right. The liberal-conservative Moderate Party replaced the idea of eradicating the welfare state with the idea of taking it over. They wanted to transform the public sector into a place for profit. In large parts, they succeeded. They came into power in 2006 and stayed there for eight years.

Today we see the result — an extremely deregulated welfare state. Parts of it, such as the school system, have been privatized in ways that are exceptional even by international standards. We are the only country on earth where private schools receive public funding and legally turn that into profit. Meanwhile, the right-wing parties have continued to lower taxes, depleting the welfare state’s resources. They do this partly so that they can say, “this system doesn’t work,” and then argue for even more privatization. Some right-wing think tanks have spelled out this strategy directly.

At the same time, we remain stuck in an old idea of our country as a socialist paradise, just like the rest of the world does. We take pride in our equality, even though income inequality is constantly rising. It’s delusional, but this idea sits deep within us. After all, during the postwar era, we had perhaps the best-organized working class of all democratic countries. Ninety percent of workers were union members, and there was a massive class vote for the Social Democratic Party and the Communist Party. That’s taken three to four decades to dismantle, but now it’s done.

Another reason for this delusion is that the people in charge of the Social Democratic Party have no interest in breaking us out of our predicament, so they prefer not to talk about it. It’s a tragic situation. Corporations are extracting enormous sums from the publicly funded welfare state, the Right wants to weaken it even more by diminishing its socialist elements, and the Social Democrats don’t want to do anything about it, since they themselves are inspired by neoliberal ideas and are partly to blame for all of this.

NS

Why did the Social Democrats choose the neoliberal path?

DS

When Social Democratic prime minister Olof Palme returned to power in 1982, he faced difficult circumstances both in Sweden and internationally. There was the election of Ronald Reagan and Margaret Thatcher, the 1979 oil crisis, budget deficits, and slow growth in the Swedish economy. The Keynesian social-democratic model was struggling. The party decided it couldn’t expand the public sector further and set off looking for different policies. In this period, a small group of politicians and officials with clearly neoliberal ideas gained influence within the party, seeking to save the welfare state through cuts and lower taxes. And they got their way.

Shortly thereafter, in the early 1990s, we had a huge economic crisis as a result of the deregulation of the domestic financial sector. When the Social Democrats returned to power in 1994, promising to save the welfare state, their solution was cutbacks. Since then, we’ve had permanent, slow austerity. The Social Democrats who are around today have never carried out any substantial reform agenda. Instead, they have learned that “being responsible” equals belt-tightening for the Swedish economy.

In the process, the Swedish Social Democrats embarked on the same journey as the Democratic Party in the United States and Labour in the UK — cutting ties with the working class, disciplining union power, and pushing intellectuals away from them. In 1990, they got rid of the policy that automatically made you a party member when you joined a social-democratic union. Before that, union members had formed an absolute majority within the party, but now the party is practically owned by its officials.

Industrial groups have also bought their way into the party. This began in the 1980s when there was a political fight over employee ownership funds (which never became reality). Trade groups began serious operations to influence the party’s internal policymaking, setting up networks for “business-friendly” Social Democrats and paying for parliamentary inquiries about health care. The steel and nuclear power industries began intense lobbying efforts. As part of the campaign to join the European Monetary Union (EMU), corporate groups hired hundreds of Social Democrats. They lost the referendum on joining the EMU. But now they work at the Government Offices.

In short, I have sympathy for the party’s decision to deregulate a few rigid state monopolies back in 1985, and understand that some cutbacks were necessary to save our economy in the mid-1990s. But today, that policy has been kept on life support for way too long. The problems facing us are different, and the party has no idea how to react to that. That’s what we’re trying to create through Reformisterna. We want to do what was done in 1932 — to bring forth a new economic policy and a new welfare policy to lay the foundation for a social-democratic renaissance.

NS

What are the contents of your manifesto?

DS

It’s a road map for doing what social democracy is meant to do: engage people and win elections. The first chapter, about a new economic policy, is the most important one. We need to get away from the slow austerity that has been in place since the 1990s. The first step will be to remove the state’s self-imposed budget limits, which hold us back from real investment in the public sector. When that’s done, we can invest large sums in welfare, a new pension system, and conversion to a green economy. It’s sort of like a New Deal for the Swedish welfare state. Translating to the international context, it’s similar to the Labour election platform, minus the employee ownership funds. It’s a very progressive manifesto, and maybe the most radical Swedish social democracy has seen since 1944.

Although I hate him, I’m very inspired by Milton Friedman and his theory of crises — the notion that it’s important to keep ideas constantly alive, so that when a new crisis hits, alternative ways of thinking will be ready and available. That way, things that were previously deemed impossible suddenly seem necessary. In 2008, the Left didn’t really have an immediate response. In fact, there was almost no substantial criticism of capitalism and how it works, apart from the very simple “it’s wrong.” We are trying to be part of a more developed criticism and to bring forth new ideas before the next crisis.

NS

What’s your strategy for winning?

DS

We come from within the Social Democratic Party and want to reactivate its classic democratic structures. I think it takes about the same time to dismantle something as to build it, so if we grow organically, we will become sustainable. Social Democrats from all over Sweden have joined Reformisterna and are putting forward policy proposals to their local party chapters, in line with its manifesto. We have done the same thing here in the Stockholm chapter.

We also write opinion pieces and hold general agitational meetings. Right now, we are organizing a spring tour with speeches at party and union sections throughout the country. In 2021, the party is going to hold a central conference to decide what message to bring into the elections in 2022. Reformisterna’s plan is to push our agenda and fight for our proposals there.

In order to succeed, we are also going to need Social Democrats who don’t join Reformisterna to support our policies anyway. More and more of them seem to be doing just that. In November 2019, Social Democratic finance minister Magdalena Andersson told the newspaper Svenska Dagbladet that she would like to get rid of the state budget limits. In a way, she was telling us that we’re right.