The Swedish Elections-Defeat for Socialism?

...Nevertheless, from a democratic socialist point of view, the key question is not how much the Meidner plan contributed to the Social Democratic defeat...

...This was that especially profitable firms escaped with wage increases smaller than they could have afforded to pay...

...Around this time the conservative daily Svenska Dagbladet commissioned a poll regarding the Meidner plan...

...Socialism was on the agenda in Sweden in the form of a plan for "employee capital funds," which grew out of some motions at the 1971 Congress of the Swedish Confederation of Labor (LO) and was accepted "in principle" at the LO Congress in June 1976, just months before the September elections...

...It is interesting that these proposals were adopted without significant resistance from either the nonsocialist parties or the Swedish people...

...That this current is hardly represented at all among leaders of the nonsocialist parties is an interesting commentary on the nature of the Swedish political system...

...The Meidner plan represented a departure from the "functional socialism" idea...

...Apparently, Party leaders judged a vigorous defense of the abolition of private ownership would produce electoral catastrophe...

...There was something very Swedish about the plan...

...THE MEIDNER PROPOSAL was a scheme for introducing socialism to Sweden—a "worker control" socialism rather than mere state ownership...

...This is not necessarily because a majority of nonsocialist voters do not desire cutbacks: survey data show that a majority of nonsocialist voters believe welfare spending should be cut back, and a not insignificant minority among nonsocialist voters believes in radical changes away from government "interference...

...During the '60s a Swedish Social Democrat named Gunnar Adler-Karsson invented the concept "functional socialism" to describe the Swedish road to socialism...

...The opposition parties made the Meidner proposal one of their main campaign issues...

...There was a flip side to this coin of basing wages on the type of work done and not on the profitability of the individual firm...

...An article in Tiden stated that the question of abolition of private ownership of the means of production was now on the verge of being solved...

...They used classic antisocialist arguments: the adoption of the proposal would lead to an "enormous concentration of power" among trade-union bosses, freedom would be threatened, Sweden risked going down the path of Communist dictatorship...

...It showed that close to twothirds of all Swedes were against it, including about one-half of LO members...

...A second very Swedish aspect of the proposal was its almost bizarre gradualism...

...Depending on the percentage of profits put aside, and depending on how profitable the firm was and how much stock it previously had outstanding, there would, after some years (20 to 30, for example), arise a situation where the employee capital fund took control of the company...

...The power to appoint members of corporate boards would be delegated by the central employee capital fund to the union locals at the firm, and to branchwide councils whose directors would be appointed by the national unions representing the workers in that branch and by other unions as well (so as to prevent "group egoism"), the power to appoint members of corporate boards...

...Thus appeared an unintended effect of LO's wage-equalization policy, the "excess profit" problem...

...Under the plan, socialism would be achieved not by gradually removing firms from private ownership, one by one, but rather by gradually taking over ownership of large numbers of firms—one year the employee capital funds would own 2 percent of the shares, the next year 3 percent, and so on...

...It was widely, and correctly, noted after the defeat of Sweden's Social Democratic party that the new "bourgeois" government was unlikely to turn back the clock on the welfare-state policies for which Sweden is renowned...

...In their report to the 1976 Congress (preceded a year earlier by a study document that was the basis for discussions by union activists), they rejected various of the proposals that had been floating around for dealing with the "excess profit" problem, such as progressive corporation taxation or direct transfers of cash from high-profit firms into "branch funds" that might directly help struggling firms...

...In other words, a radical change from the Swedish mixed economy...

...Now, in fact, this argument is not correct, since LO's stance in central negotiations certainly obtained more for low-paid workers than they would have gotten through other forms of negotiation, not the least because LO had a tacit ally among more profitable and / or high-wage firms...

...So, although LO had adopted the proposal at its June Congress, Olof Palme and other Social Democratic leaders persistently refused to endorse it, speaking instead in generalities and arguing that they would have to await the report of a governmental commission of inquiry with representatives of all the parties, and labor and management—expected around 1979, before taking any definite position...

...Meanwhile, a lively intellectual debate ensued among Party theoreticians—in books and in articles in the Social Democratic theoretical organ Tiden—as to the merits of "worker control" socialism as opposed to "state ownership" 139 socialism...

...It will be hard to say exactly how important the issue was for the Social Democratic defeat until the scientific analyses based on survey data have come out...

...Shortly after the LO Congress, the nonsocialist parties went on the offensive against the Meidner plan...

...As part of this policy, lowprofit companies have not been allowed to get away with paying substandard wages to their 138 workers by pleading hardship...

...It is hard to say how much change these proposals will actually produce, but the changes could be significant, especially since the unions are devoting considerable resources to educating their local officials in how to use their powers under the new law...

...As LO fought harder for wageequalization in the late '60s and early '70s, complaints from high-pay workers increased...

...About 18,000 union activists participated and gave their overwhelming approval...

...These proposals give unions the right to negotiate over traditional "management prerogatives," such as changes in production methods, personnel policies, and work environment...

...Socialist critics of the Meidner proposal within the Social Democratic party argued that there was a danger that society might not be able to exert control (on behalf of consumers, for example) over worker-owned companies...

...Communists and Maoists in the union were especially active in agitating among high-wage workers...

...From LO's point of view, the major advantage of central negotiations is that it gives the labor movement a chance to implement a wageequalization policy emphasizing wage increases for the low-paid workers...

...Under the Meidner proposal, by contrast, profits would stay in the firm—the only thing that would leave would be stock certificates created de novo for a sum corresponding to a portion of company profits...

...In fact, the report rejected progressive corporate taxation or branch transfers in large measure because they took capital away from successful firms that could be used for investment...

...It proposed to continue a tradition in the Swedish trade union movement of a "responsible" concern for maintaining high level of industrial investment...

...But here I would like to discuss a different theme...

...For, in a sense, socialism itself was on the agenda in the Swedish elections, and it lost even before the ballots were counted...

...The giddiness proved, to put it mildly, premature...

...One might compare this with the reception of Social Democratic proposals for codetermination, which were passed by Parliament in 1976 and are going into effect this year...

...The theory was, brutally, that such firms would have to "shape up or ship out"—a theory that could be applied thanks to the active labor-market policies by the Social Democratic government endeavoring to get new jobs for workers displaced by firms going bankrupt...

...After LO officially accepted the employee capital fund plan "in principle" at its June 1976 Congress, giddiness became rampant in the Party, particularly its left wing...

...What Meidner and his associate Anna Hedborg came up with ("instead," one is tempted to add) was a plan for the gradual transfer of ownership of all but small firms to the unions...

...What little criticism appeared came more from the left than the right...

...By this he meant that ownership of property was in fact a bundle of prerogatives, and that a Social Democratic government could gradually whittle away the various prerogatives without formal ownership rights being transferred...

...Group interest could be presented as trade-union militancy by arguing that "low-pay workers don't benefit because we hold off from getting everything we can from the company—only the company benefits...

...But the "excess profit" problem was clearly a threat to continued LO emphasis on wage equalization, and at the 1971 LO Congress Rudolf Meidner, senior researcher for the organization, was asked to prepare a report for the 1976 Congress on how this problem could be dealt with...

...Clearly it meant that private ownership of the principal means of production would be abolished...

...Ever since the 1950s collective bargaining in Sweden has been highly centralized, so that the basic contract is worked out through national negotiations between LO and the Employer's Federation...

...After the draft of the Meidner proposal came out in 1975, LO arranged a series of circles to discuss the idea...

...Swedes, including members of these parties themselves, generally refer to the nonsocialist parties as de borgerliga partierna"the bourgeois parties...

...q 140...

...Instead, one should consider the significance of the fact that in the Western country where the labor movement is stronger than in any other, and where it had been in power for nearly 50 years, the advocacy of an end to the private ownership of the principal means of production still produces resistance from much of the population...

...The 1976 election results in Sweden indicate that, whatever the ideological merits of these different approaches, Social Democratic parties in advanced industrial societies may be headed for electoral trouble if people perceive that major changes in the structure of property ownership are being proposed...

...It might be noted, however, that after the election a number of somewhat bitter commentaries appeared in the trade-union newspaper LO Tidningen about the Party's "defensiveness...

...It is the fact that the Social Democratic party leadership did not even . join the battle, but retreated without a fight...

...Instead, it was proposed that some percentage of a company's profits each year should be set aside for new issues of stock that would be put into a central "employee capital fund" whose directors would be appointed by the labor movement...

...We are missing an important and disturbing aspect of the Swedish elections by reassuring ourselves that the election did not represent a rejection of the welfare state...

...IT SHOULD certainly not be the role of American socialists to moralize about the stance that was taken by the Swedish Social Democratic leadership...

...the task for Social Democracy was to deal with the question of how socialized production could be made human and nonalienating...

...In no country where socialism had been introduced, Center party leader Thorbjorn Falldin told his party's congress shortly after the LO Congress, had freedom been preserved...