IMPASSE & BREAKTHROUGH - IN SWEDEN
Stephens, John D.
After the Contradictions of Social Democratic Policy The onset of stagflation in the '70s has stimulated attacks on the welfare state and its chief proponent, social democracy. The...
...Thus, the only solution to this problem— providing for reinvestment and also benefiting the employees—is to let the accumulated capital accrue to the employees as a collectivity...
...My purpose here is to examine the development of the welfare state under social democratic auspices, with a particular focus on Sweden, in order to shed some light on this debate...
...q 318...
...The party won that election in 1932 and was returned to power in 1936...
...Recapitulation of the Swedish path is not an option 317 for America in the current period...
...One of these policies, the solidaristic wage policy, contributed directly to increasing centralization in the economy...
...But the democratization of ownership and control will not necessarily lead to a totalistic, utopian reorganization of work and thus to a decline in efficiency...
...This is precisely what the Meidner group suggested: a portion of the profits of each enterprise should be transferred to the employees collectively in the form of newly issued shares of stock...
...Thus in America and in Britain demands for democratic ownership and control are less likely to be successful...
...In Britain, a wageearner fund proposal would appear to be an ideal solution to get the Labour party, and the country, out of the current impasse...
...a delay might be desirable for strategic reasons, given the weakness of American labor and the left...
...All of the bourgeois parties but especially the Center party attacked the Social Democrats for promoting political and economic centralization...
...The Wallenberg family owns a major interest in 70 corporations (including SAAB and the Skandinaviska Enskilda Banken, the largest bank in the country), which employ 20 percent of all the workers in private industry...
...5) Bureaucracy and Centralization • A number of labor's policies increased centralization in the economy and in the polity...
...SAF entered into negotiations with LO, the blue-collar trade union confederation, and concluded an agreement two years later that established the routinization of collective bargaining and labor peace in Sweden...
...The political results for the Social Democrats were more ambiguous, since, in most cases, in the face of unified TCO and LO support for the program, two bourgeois parties, the Center and the Liberals, took the prolabor position...
...Notes See, for example, R. Emmett Tyrell, The Future That Does Not Work (Garden City: Doubleday, 1977...
...At the core of the party's appeal was an antigrowth, antitechnology current and a romantic vision of the solidarity of small-town and rural life of bygone days, adding an irrational element to Swedish politics that had been absent before...
...The events of May 1980 served to dramatize the crisis...
...These fluctuations, Korpi argues, cannot be explained by long-term structural changes but rather by the changing content of policy...
...The important issues in the elections in which the Social Democrats suffered setbacks appear to have been directly connected with their unqualified commitment to growth at the expense of the environmental issues (for instance, nuclear power), regional balance, and decentralization...
...This defeats the purpose of the plan, as would any scheme that attempts to compensate employees' wage restraint with another kind of consumption...
...After an extensive analysis of survey data collected by SIFO, I found no indication that such developments had occurred...
...In the '70s, this wave was followed by the "green wave," which focused on environmental concerns...
...Zetterberg also argues that the LO proposal for "wage-earner funds" was so radical that it generated great public opposition in much the same way that radical programs in 1920, 1928, and 1948 had led to Social Democratic setbacks...
...6) Concentration of Wealth • The labor movement's economic and labor-market policy resulted in increased concentration of wealth in the hands of the richest individuals and financial concerns, the owners of the most productive and technologically advanced enterprises...
...The trade unions indeed were committed to technological change and increasing productivity...
...The redistributive impact of public expenditure also varies greatly with the incidence of taxation, and with the distribution of transfer payments and free or subsidized public goods...
...Sweden, like many other Western democracies, experienced a leftist upsurge in the late '60s that in 1968 helped carry the Social Democrats to their greatest electoral triumph in the postwar period...
...3) Reduce consumption and compensate employees with increasing control over the enterprise...
...Since it appeared that the Social Democrats would stay in power for a long time, SAF's members recognized that compromise was necessary...
...I have documented this in detail in my recent book The Transition from Capitalism to Socialism...
...This, however, is only a sham version of the first alternative...
...There are some ambiguities in his argument, since he does believe that some form of the Meidner proposal will pass—but not one, it seems, that would result in a radical (if gradually instituted) transformation of the patterns of ownership and control of capital...
...the pension-fund issue would be a vehicle for raising the question of increased democratic ownership and control...
...The question is, how are employees to be compensated...
...This does not always, or even usually, result in increasing democratization of control over the economy...
...Thus Korpi links these setbacks, indirectly, to the compromises on which the welfare state was built...
...Yet, the British labor movement is weaker and the American very much weaker than is the Swedish labor movement...
...Without that incumbency, the labor movement cannot be sure that the government will uphold its end of the deal...
...Voting rights of the shares in the funds would be held both by the employees in the enterprise in question and by the provincial boards...
...As in other cases where deep divisions of class interest are involved (for instance, the pension issue in the 1950s and the workers' control issue in the '70s), various parties and interest groups are likely to present different proposals...
...The white-collar unions in the TCO (and the TCO itself) are not part of "the labor movement" (though they are part of "the trade-union movement"), because white-collar employees are not arbetare (like the German Arbeiter...
...Worker-controlled enterprises have shown themselves capable of producing efficiently and of competing with privately owned firms...
...Perhaps we can learn from Swedish social democracy's mistakes as well as from its success...
...Labor organization also explains over 60 percent of the variation in income distribution among these countries...
...But even in proportionate terms stockholding is more concentrated in Sweden than in the United States...
...The sociologist Hans Zetterberg, director of the Swedish Institute for Public Opinion Research (SIFO), presents a picture with the most negative implications for the future of social democracy...
...This is particularly true of the solidaristic wage policy, which resulted in the trade unions actually demanding less from the most profitable enterprises than they would have under decentralized collective bargaining...
...This last alternative is the only viable option for social democracy...
...This lack of employee influence on issues concerning control obviously further hindered any positive response to the issue of dehumanization of work life...
...the voters clearly rejected the party's orientation toward increasing state interventionism, as well as any attempt to go beyond its traditional policies...
...For instance, city planning and land-use policies were designed to benefit the public as a whole...
...Incidentally, as Michael Harrington points out, all advanced capitalist societies are subject to increasing state interventionism...
...Given these directives, the group had to, and did, come up with a proposal that would transcend the compromise between labor and capital, which had limited Social Democratic policy up to the '70s...
...4) Regional Imbalance • Labor-market policy was pursued in such a way that it increased the depopulation of Sweden's north by socializing the costs of labor mobility and ignoring the social costs of that mobility...
...On the contrary, in countries where labor parties exercise little influence, such as France, this intervention is essentially a form of collective capitalist planning...
...LO would be able to demand equal pay for equal work across the economy, regardless of the ability of the company to pay (the "solidaristic wage policy...
...The Social Democrats' defeat in the 1976 election has been explained in a number of ways that can be divided into two broad categories: the first emphasizing long-term changes in Sweden's social structure, the second the immediate issues of the 1976 campaign...
...Yet the individual using a public park or a municipal subway is much less aware of gain than the individual denied a housing permit is aware of loss...
...From the point of view of the long-term viability of social democracy, most important has been the development of its program for "economic democracy...
...In the U.S...
...The translation for the word arbetarrorelsen is "labor movement...
...Its leadership favors the third option but does not have the membership with it...
...After the party won the struggle for political democracy in 1917, it attempted to advance the more radical elements of its program in the election campaigns of 1920 and 1928...
...The Social Democrats and LO will almost certainly present some version of the third choice outlined above and SAF and the Conservatives some variety of the second choice, probably an individual share scheme with options to sell after a given period...
...On this issue the Social Democrats lost many votes in the last weeks of the campaign to the Center party, and these votes indeed provided the margin of victory for the bourgeois coalition...
...This program both addresses the contradiction of the capitallabor compromise of the years 1930-65 and transcends that compromise...
...This 1938 agreement laid the groundwork for the development of economy-wide bargaining between SAF and LO (and later also TCO, the confederation of the white-collar unions) in the immediate postwar period...
...The evidence clearly supports Korpi's contention that long-term changes in the social structure are not undermining the Social Democrats' electoral base...
...Although he finds no evidence that the electoral defeat of 1976 was the result of a public reaction against the welfare state, he argues that the Social Democrats were on the wrong (the unpopular) side of three key issues: nuclear energy, socialization (the "wage-earner fund" issue), and government bureaucracy...
...After 44 years in office, in which it built up one of the most highly developed welfare states in the world, Sweden's Social Democratic party was turned out by the electorate in 1976, and was kept out again in 1979 (albeit by only 0.1 percent of the vote...
...Under these conditions, in the 1982 election campaign, the issue could be an asset for the Social Democrats rather than a liability...
...In 1976 it brought the Center's leader, Thorbjorn Falldin, to the prime ministry...
...Over two-thirds of the variation in the level of public expenditure is explained by the last two factors, which in turn are highly correlated to the percentage of the labor force that is organized...
...Lindhagen writes that the 1976 electoral defeat was the culmination of a long series of elections, beginning in the early'60s, in which the bourgeois bloc constantly increased its share of the electorate, while the Social Democrats' share stagnated (except in 1968...
...LO published a report on the subject in 1971, and the issue dominated Swedish politics from then until 1976, resulting in the passage of a whole series of acts that substantially increased employees' decision-making power, not only over their immediate working conditions but also over the broader policies of the enterprise...
...6 One reason Heilbroner misestimates the probable effects of the plan is that he does not recognize the centrality of the creation of new sources of capital accumulation to the plan...
...and capital retained control over technological change and investment...
...Lindhagen links this to the structural changes of the postwar period: the depopulation of Sweden's north, a socialist stronghold...
...We might add to Korpi's analysis that the Social Democrats' setbacks were not only brought about by past policy commitments, but these commitments in turn were directly connected with the contradictory aspects of the compromise between labor and capital, which had led to the development of Sweden's welfare state...
...Without economic and political power, labor is not strong enough to make effective wage demands that are a threat to accumulation...
...In a word, this method of socializing control restricts some people's decision-making rights for the benefit of the public, but it does not give the right to the general public as individuals so that they have a sense of participation in the expansion of democratic control...
...Without a government policy of steering investment to assure regional balance, the subsidies to increase labor mobility in turn subsidized businesses to move to the country's southern part or for new businesses to establish themselves there...
...Local bargaining carried on after the central bargain was agreed upon proved ineffective, since the employers were no longer threatened by the strike weapon...
...Even the final settlement, which LO hailed as a victory, means a real wage loss for Swedish workers...
...Both agreed on the desirability of maximal possible growth...
...The Meidner group's proposal also was to suggest new sources of capital accumulation, and ways to reinforce employee influence through participation in ownership...
...Yet labor's response was not to retreat as it had done in 1920, 1928, and 1948...
...The core of the compromise between labor and capital, as developed in postwar Sweden by the joint policy of the Social Democratic party and LO, was a trade-off...
...And so, over a period of approximately 30 years, most enterprises would come under employee control...
...But that is not likely in this case...
...Taken as a whole, it is nothing less than a program for the transition to socialism...
...There is a definite difference between a white-collar employee and an arbetare...
...The original proposal, which had called for formal ownership of the funds by the trade unions, was vulnerable to attacks by the bourgeois parties and press on the ground that it would concentrate too much power in Sweden in the hands of the unions...
...1) Dehumanization of Work Life • The policy of promoting maximal growth through structural rationalization carried out under capitalist direction resulted in a dehumanization of work life...
...SAF, the employers' federation, has argued for a number of years now that Swedes are living beyond their means and that consumption, public or private or both, would have to be cut to provide for adequate sources for new investment...
...These victories and policies, along with continued growth in labor organization, stimulated a reassessment of strategy on the part of the leading elements of capital, as represented by SAF, the employers' federation...
...The wage-earner funds issue is central to this program because it is the only way the Social Democrats can deal with Sweden's present economic difficulties in a progressive way...
...therefore the public sector is not very highly developed or redistributive...
...The labor movement—which in Sweden means the Social Democratic party and LO 3—received 309 redistribution, primarily through public-sector expansion...
...2 Others have linked the decline of social democracy to long-term changes in the social structure, such as the shrinking workingclass portion of the population...
...Falldin's militant, moralistic antinuclear stance was certainly a key factor in the Center's impressive showing in 1976...
...But this should not be cause for pessimism...
...The new proposal was indeed quite radical, as it called for transfer of a certain portion of company profits to the employees in the form of collectively owned shares of stock...
...Wolfe concludes, as a consequence of this error, that social democracy was almost politically dominant in the advanced capitalist world in the 1950s and early'60s...
...The funds' board would be chosen in a general election by all individuals with pension "points" (by those who have made contributions to the public pension plan that is compulsory for all wage and salary earners...
...It might be argued that the economic stagnation of the West universalizes the situation that has led Swedish social democracy to propose wage-earner funds: the only way out of the current crisis that does not ask employees to accept rollbacks for the capitalists' benefit is to develop some system of collective capital accumulation...
...In its legislative outcome this political campaign was highly successful: labor got virtually everything it wanted, despite the adamant objections of the employers' federation...
...Comparative Politics, October 1978...
...By the late 1940s, with about three-quarters of the blue-collar workforce organized, workers' wage gains would have been translated into increased inflation and deterioration of Sweden's export market, a key concern for a small export-dependent country such as Sweden...
...These two often are called "two branches of the same tree...
...But most of these issues were more vigorously promoted by the Center and have helped the bourgeois bloc politically...
...It is in fact fair to say that they propelled the bourgeois bloc into power...
...Such an argument has both its negative and positive sides...
...3 In Sweden, "the labor movement" consists of the Social Democratic party and LO (the confederation of blue-collar unions...
...even before the nuclear-power issue came to a head, the Social Democrats were doing considerably worse in the polls than in earlier years...
...the decline of the mill towns (bruksamhalle) relative to the rise of the big cities and their suburbs...
...Elsewhere, new investment is under control of capital and thus subject to the typical criteria of highest-rate return, without regard to social costs...
...In any case, the issue did not help the Social Democrats...
...WHILE THIS POLICY left the control of accumulation of capital largely in private hands, the Social Democrats did make some inroads into capitalist control of the economy...
...This is not to say that the labor movement will win...
...The long-term result, like that of previous plans, would be the development of a form of relatively decentralized market socialism in Sweden...
...6 I see only three choices that can increase the level of investment: (1) Reduce consumption and let the accumulated capital accrue to the capitalists...
...To maintain very low levels of unemployment, the policy went well beyond Keynesian demand management to encompass a comprehensive labor market and wage policy aimed at reducing the unemployment/ inflation trade-off, while equalizing wages (the RehnMeidner policy...
...From the mid-'60s on, the Swedish labor movement was successful when it could transcend the terms of that compromise, while it failed when it could not do so...
...Social Democracy and the Welfare State IT IS PERHAPS one of the greatest myths of contemporary social science, perpetrated by Marxist, liberal, and conservative social scientists alike, that the political economies, class relations, and distribution patterns of all developed capitalist democracies are essentially the same...
...The central directive the LO congress gave the Meidner group was to develop a proposal that would complement the solidaristic wage policy in ways that would counteract the concentration of wealth...
...The sociologist Walter Korpi is less pessimistic 4 In his response to Lindhagen in Tiden (in 1977), he argues that the most important characteristic of Social Democratic 311 support had been the cross-fluctuation from highs in 1962 to lows in 1966, back to record highs in 1968, and then to the low of 1976...
...I am prepared to argue almost the opposite: though the proposal may not pass for political reasons (that is, continued bourgeois government), the Swedish labor movement will continue to push for the passage of wageearner funds because, from the labor movement's point of view, they are the only workable solution to the key problem facing Sweden today: the search for a policy that will both insure sufficient rates of reinvestment necessary for economic growth and result in a distribution of income and wealth that is acceptable to the labor movement...
...7) Socialization • The labor movement got into political trouble for not addressing this issue over long periods of time and then being forced into dealing with it by the contradictions of its own past policy...
...Marxists see in it the logic of capitalist development...
...But while it is clear that privately held wealth is very concentrated and has become more concentrated in postwar Sweden, the situation changes considerably if one includes the public pension fund...
...Survey evidence on the nuclear-power issue is quite unambiguous...
...Thus "corporatism" is a product of compromise between labor and capital, stimulated by a situation where labor is too strong to be shut out of the system yet not strong enough to take control of the accumulation process (too weak to push through a socialist program...
...Though all capitalist democracies have developed some form of "welfare state," the level of nonmilitary public expenditure varies greatly from well over half of the Gross Domestic Product in such countries as Sweden and Austria to under a quarter in the United States and in Switzerland...
...Though organized labor and the left will have to compromise with capital as long as most production is privately owned and controlled, perhaps by anticipating the contradictory results of that compromise we can avoid their worst aspects...
...The Center party, formerly the Farmer's party, emerged as the chief promoter of these concerns, and so the "green wave" carried that party from the status of the smallest bourgeois party in the mid-'60s to the largest in the mid-'70s...
...As of now, though, no public opinion polls have been taken on the most recent LO-Social Democratic plan, so we do not know how the change in the objectionable trade union ownership provision will change the picture...
...The shares accruing to the funds are new issues, in effect, forced reinvestment of a portion of the profits...
...These figures may be somewhat deceiving since Sweden is a much smaller country than the U.S...
...This allowed the Center party to take the political lead in these areas—and to become the main beneficiary of the Social Democrats' decline in the years 1968-76...
...The rightwing attack has sought to link causally social democracy's program—redistribution through public-sector expansion—to the economic problems suffered by the West.' Left critics, among them Alan Wolfe, credit the success of postwar capitalism to social democratic management, while attributing the current decline of capitalism to its inability to transcend that system...
...But some of these responses also had their own problems...
...True, all these societies are characterized by political democracy and economies dominated by private ownership of the means of production, with some state intervention in the form of public expenditure and Keynesian macroeconomic policy...
...Conservatives view this pattern as the "logic of industrialism...
...Many analysts, including Hans Zetterberg, have argued that the Meidner Plan contributed to the Social Democrats' defeat in the 1976 election...
...Unfortunately for the Swedish labor movement, this solution to a problem (one is tempted to say the problem), itself became a problem—a political liability...
...Finally and perhaps most important from the point of view of adverse political reaction was the fact that the policy of encroaching public control on economic decision-making rights had highly visible victims but practically invisible beneficiaries...
...Through fiscal policy, selective taxation, and trade-union wage pressure, distributed profits were to be squeezed...
...Labor really has only one other alternative: to give up being a movement for reform and simply attempt to administer the status quo efficiently...
...Shop-floor dissatisfaction was highlighted by the result of a survey of living and working conditions in 1968, high turnover in industrial production, and a wave of wildcat strikes in 1969...
...See also his book The Working Class in Welfare Capitalism (London: Rutledge and Kegan Paul, 1978...
...The next phase in the program for economic democracy was launched in the fall of 1975 with the publication of the "Meidner Plan...
...WHAT DOES the new Swedish model say about the prospects of social democracy and socialism elsewhere...
...First, let us look at the problems that were created at least in part by the labor movement's policies up to the mid-'60s...
...5 The coincidence of the Social Democrats' decline with the rise in public concern for environmental issues, decentralization, and more balanced regional growth argues that Korpi's analysis is correct...
...The parliamentary commissions will report in 1982...
...many people are told "you can't" on different issues, and nobody is told "you can...
...The Contradictions of Social Democratic Development THE SWEDISH EXPERIENCE helps elucidate the dilemmas of social democratic development —of a pattern of political economy that is the result of compromise between capital and a strongly organized and politically cohesive labor movement...
...Among the alternatives acceptable to the labor movement, the most probable outcome is some modification of the plan in which the consumption restraint for economic control trade-off would be retained but the level of employee ownership and control (or just control) is limited to, say, 49 percent of the shares or board seats...
...Sweden is the ideal case for an examination of the various hypotheses on social democracy and the welfare state...
...If we view the pension fund as the "property" of future pensioners, then we can see the trend toward a dispersion of wealth...
...Zetterberg argues that these cases sparked public resentment to the government bureaucracy, or to "the concession state," as he calls it...
...Though the proponents of the second category emphasize the issues of the elections, they differ widely in the implications of their analysis...
...2) Lack of Employee Influence on the Shop Floor • The highly centralized nature of the Swedish labor movement, which had facilitated the wage and structural rationalization policies, now blocked any advance on control issues in the immediate workplace, since these were difficult to deal with in central bargaining...
...This issue fired and fit in well with the Center party's romantic appeals to the past...
...This might be done either by having an individual share plan in which the stocks could be sold after a period of time or by having a collective share 316 plan in which the employees receive dividends on the stocks but not voting rights...
...The Swedish Labor Movement's Response ON BALANCE, the Swedish labor movement— both the unions and the Social Democratic party—has responded positively to the contradictions of its past policy, particularly when its responses are compared to those of social democracy elsewhere...
...The polls show that on this proposal the labor movement did not have the support of the electorate...
...The renewal of social democracy in Sweden (and in most other countries) now depends on its transcending the traditional strategy and on its continuing push for a program of economic democracy initiated in the 1970s...
...In "The Swedish Promise," his December 4, 1980 article in the New York Review of Books, Robert Heilbroner likened the role of the Wallenberg family in Sweden to that of the Rockefellers in the United States—but this very much understates the case...
...2) Reduce consumption, put the formal title of the accumulated capital in the name of the employees, but let the capitalists retain control of capital...
...Since LO did not consider this policy viable in the long run, it developed an alternative policy aimed at structural change in the economy...
...The issues of ecology and nuclear power, regional imbalance and decentralization have been coopted politically by the Center party, though the Social Democrats did come up with policies on the environmental issue (emphasizing the work environment), regional policy, and decentralization of power (emphasizing increased employee decision-making rights...
...All these structural changes have eliminated the pockets of working-class community and culture that used to insulate substantial segments of the working class from the influence of bourgeois society...
...But because economic stagnation makes redistribution through public-sector expansion much more difficult, questions of ownership and control should probably not be delayed—though in the U.S...
...Briefly, I would argue that in countries where organized labor is very strong and socialist parties are in government (alone or in coalition), a type of corporatist bargaining develops among organized labor, the government, and capital, in which labor trades off wage restraint for the expansion of redistributive public expenditure...
...Cross-national comparisons show that these differences can be attributed primarily to the organizational strength of labor, the incumbency of socialist parties, and the existence of highly centralized bargaining...
...This portion of employee-owned stock would continue to increase in relation to privately owned shares until, after a period of approximately 30 years, the employees would own a majority of stock shares in the firm...
...Of course, the institution of the comprehensive pension plan in 1960 is related to the increasing concentration of private wealth since the existence of such a plan reduces the incentives of working- and middle-class people to save for their old age...
...This clearly would force some low-wage companies out of business...
...In the U.S., only 20 percent of the labor force is organized, there is no socialist party, and bargaining is decentralized...
...Yet this was not the whole story...
...On the one hand, it provides the left with a clear rationale for raising the issue of collective ownership and control as a response to immediate, pressing problems of the economies of advanced capitalist societies, such as the need for new sources of capital accumulation...
...But the polls also show that few voters were really interested in the Meidner Plan, and those who were interested were to be found mostly at the ends of the political spectrum (left-wing Social Democrats, Communists, and Conservatives), rather than among voters who might swing from one political bloc to another...
...The policy's major"negative effect" was that, if carried out properly, it contributed to the concentration of wealth...
...The proposal was modified, in part to eliminate some aspects that had aroused popular opposition...
...2) the current economic stagnation means significant expansion could occur only through significant rollbacks of private consumption...
...Thus neither the experience of these countries nor that of the advanced capitalist world as a whole gives us 310 any indication of the viability (or inviability) of the "social democratic model...
...The effect of these policies was to reduce structural unemployment through increasing labor mobility and to shift workers to high-productivity and high-wage sectors...
...The first revision called for the employees' funds to be developed through taxes on both the wage bill and profits...
...In Sweden, 80 percent of the labor force is organized, the Social Democrats were in power from 1932 to 1976, bargaining is greatly centralized, and the public sector is highly developed and effects massive redistribution...
...This policy could hardly have been carried out in a country lacking the conditions that prevail in Sweden, since it requires a high level of labor organization, a centralized apparatus for wage negotiations, and socialist participation in government...
...Thus the policy would upgrade average wages and the overall productivity of the Swedish economy, while reducing the inflationary impact of high employment...
...Social costs of technological change were not calculated in the capitalist ledgers...
...In order to avoid the errors of Alan Wolfe's analysis that equates state intervention with social democratic influence in a country, it is important to recognize that the ends of state interventionism vary with the power relations between classes...
...Yet only in the housing market has the actual investment decision itself been socialized...
...The employees, of course, cannot withdraw all capital gains of an enterprise in wages and salaries, for then there will be no growth...
...In Zetterberg's view these three factors, together, brought the Social Democratic party to the end of its rope...
...This precipitated a strike and lockout...
...Unless the Swedish economy is to be driven to ruin, consumption must be restrained in order to pay for capital accumulation...
...Let me make an educated 315 guess based on past study of Swedish politics...
...Heilbroner's contention rests on his assumption that such a democratization of ownership and control relations would result in a decline, perhaps a drastic one, in efficiency...
...This downturn of popular appeal was linked temporally to a series of "affairs," most important among them the tax cases of Ingmar Bergman and Astrid Lindgren...
...The 1980 revisions, presented in the form of a joint LO-Social Democratic proposal to a parliamentary commission, suggest that 24 funds be developed, one in each of Sweden's 24 provinces...
...The structural rationalization and solidaristic wage policies forced less efficient businesses to close and the workers to move to other jobs...
...The old strategy of growth and public-sector expansion is exhausted because (1) public-sector expansion is reaching a point of diminishing political returns...
...5 A summary of this analysis will appear in Comparative Political Studies, Summer 1981...
...This commitment prevented them from opposing changes in work organization and technology even when such changes lowered the quality of work life...
...Clearly, there are limits to the reorganization of work in any industrial society, and these are even greater in a society such as Sweden, which is and will continue to be a market system heavily dependent on exports and thus on competition in the world market...
...In countries such as Sweden, state intervention will represent the same sort of compromise between labor and capital that exists in the rest of Swedish public policy...
...What are the chances for the passage of this proposal...
...3) Ecology and Nuclear Power • The labor movement's commitment to maximal growth in order to finance redistribution was a key 312 factor in its strong support for nuclear power, and also made it a latecomer to environmental protection issues...
...At this point, the party modified its program and campaigned on Keynesian reflationary policies and in its 1932 campaign on the expansion of the public sector...
...The first phase— the expansion of employee decision-making rights in the enterprise—was initiated in large part as a direct response to two contradictory consequences of past policy: the dehumanization of work and the lack of employees' influence on the shop floor...
...On both occasions the party met with serious electoral setback...
...Centralized bargaining was a prerequisite for the corporatist policy arrangement I mentioned earlier...
...This fund, now invested largely in housing (though it is also the largest shareholder in Volvo), is Iarge enough to buy all the shares of all companies 313 listed on the Swedish Stock Exchange...
...So I would question Heilbroner's prediction that the present version of the plan will be rejected because it is not workable...
...Four years earlier, the LO congress of 1971 had appointed a commission headed by economist Rudolf Meidner to study some of the negative effects of the solidaristic wage policy and to suggest solutions to these problems...
...Aside from public-sector expansion, labor-market policy was a key part of the labor movement's strategy...
...3) the contradictions of past policies would only continue to accumulate, leading to further political decline...
...Comparative historical work bears out this interpretation: centralized bargaining never develops until more than 40 percent of all wage and salary earners are organized, and until social democrats form a stable government...
...There is some truth to Hans Zetterberg's image of the "concession state...
...The workers released by these companies would be provided alternative j obs through an "active labor-market policy" consisting of job retraining, provision of unemployment benefits, moving costs, information on employment possibilities, and public-works jobs...
...TCO is the swing group...
...The profits of the shares would be used to augment the present pension funds...
...Furthermore, the public pension funds account for half of the total gross savings and half of the credit supply in the country...
...But as its subsequent policy produced an increasing concentration of wealth, labor was forced to address the question and found that its only option was to suggest increases in social ownership—as we shall see...
...It is my thesis that the pattern of welfare-state development represents a compromise between labor and capital and that the fall of the Social Democrats from power is a direct result of contradictory aspects of that compromise...
...these were the necessary preconditions for increases in the level of living conditions and for the financing of state redistributive policies...
...The Social Democrats have been successful both in emphasizing their traditional issues, redistribution and employment, in new ways as well as in promoting entirely new issues, in particular workers' control—thus addressing some of the contradictions of their past policies...
...The word arbetare, in the singular, is translated as "worker" or "laborer...
...TCO can only give its wholehearted support to the LO-Social Democratic position if its members come around, which means that the labor movement faces a substantial educational task...
...2 Alan Wolfe, "Has Social Democracy a Future...
...The Liberals and the Center will not oppose a united TCO, at least not stridently...
...As previously explained, union and employer centralization was in part a result of labor's political and organizational strength and led to a number of innovations in wage and economic policy...
...Leftist parties use their tenure in office to expand redistributive public expenditure, to lower unemployment, and so forth...
...Because it could not gain support for its own more radical policies, labor came to a compromise with capital that entailed suppressing the issue of socialization...
...Korpi's side of this debate is summarized in "Social Democracy and Welfare Capitalism," Acta Sociologica 21 (1978): 97-112...
...This outcome is possible but not the most likely...
...This shift was stressed by Meidner when I interviewed him at the Eurosocialism Conference last December, but the change was also apparent in public statements by Meidner and Palme at the conference...
...The causal chain is clear enough: union strength is a source of power at the bargaining table, as well as the main source of the political mobilization potential of leftist parties...
...After a disastrous local election in 1966, the Social Democrats initiated a new industrial policy and subsequently a new policy of equalization expressed by the slogan "Increased Equality," which helped lead them to the electoral victory of 1968...
...An individual share system, as proposed by the Conservative party, will not work since lower- and middle-income earners will sell their shares to increase their consumption level...
...A historical examination of the Swedish case elucidates this pattern...
...In the Swedish debate, the emphasis has shifted from wage policy to capital formation since the publication of the original Meidner proposal, which is the only version of the plan available in English...
...Aside from Keynesian economic management, selective decision-making rights of capital in such areas as manpower policies, pollution control, and job safety have been socialized...
...However, the debate in Sweden has not been conducted in these terms...
...Early in its history, the Swedish Social Democratic party's program was socialist, not welfare statist...
...The Social Democratic government asked for and received wage restraint from LO...
...Yet social democracy in fact was in power for only a very small fraction of this period in any of the six major capitalist countries (Japan, the United States, France, the United Kingdom, Italy, and Germany...
...But, on balance, the program must have benefited the Social Democrats, since otherwise they would have been without an issue in the early '70s, for by then they had exhausted the potential of their traditional 314 program for "equalization through publicsector expansion...
...In his recent, interesting article mentioned earlier, Robert Heilbroner draws somewhat pessimistic conclusions...
...The problem it faced was that by suppressing the issue for so long, it had failed to build any support for its position on it, even within its own ranks...
...The role of centralized bargaining is more ambiguous...
...LO wanted a solution to the problem of wage restraint paying for new reinvestment, whose benefits accrue to the capitalist...
...In such countries as France, taxes are very regressive and transfe . payments go disproportionately to the better off...
...The Social Democratic sociologist Jan Lindhagen, writing in late 1976 and 1977 in Tiden, the Social Democrats' theoretical magazine, argues the former position...
...Emboldened by the presence of a bourgeois government, SAF initially offered a wage increase of only 2 percent while inflation was running at 12 percent, and refused to budge on its offer...
...The proposal came out less than a year before the 1976 election, and so the labor movement did not have sufficient time to prepare the electorate properly for it...
...but let me briefly outline my argument here...
...The proposal was revised in 1978 and again in November 1980...
...Actually, the evidence is somewhat ambiguous...
...Since it attempts to compensate consumption restraint with another form of consumption, the consumption foregone must be much greater than the consumption received, even with large economic growth, if the plan is to generate new investment...
...These commissions, which contain representatives of the various parties and of the principally affected interest groups (in this case SAF and the trade unions), usually present unanimous recommendations...
...The public generally resented the interventions of the state, constantly forcing the individual citizen to get state permits—in order to build a house, to buy foreign currency, to buy agricultural land, and so forth...
...In fact, the patterns of class relations and the structure of the political economy vary greatly among capitalist societies, and these variations are not random but highly systematic, and the relative power of capital and labor in a society is the key variable that explains these variations...
...15 families together with 2 corporations hold majority control of 200 large industrial concerns employing almost 50 percent of all employees in private industry...
...In Sweden, taxes are progressive, and lower-income 308 groups get proportionately more of the transfer payments and free and subsidized public goods...
...Privately held wealth is very concentrated in Sweden...
...Let us compare the polar types, Sweden and the United States...
...Such an outcome would be a victory for social democracy, since such limits could easily be changed later...
...and the decline of the secondary sector relative to the tertiary sector...
Vol. 28 • July 1981 • No. 3
