Swedish Socialism Revised

...Indeed, with his very Swedish stability and ploddingness—in contrast to Palme's much more flamboyant style—Carlsson may be the perfect person to bring Sweden back to the consensus style politics that has been one of the country's hallmarks...

...Similarly, my hostess seemed more amused than upset by the story about the officer...

...A mere two years later, the mood had changed radically: The issue now was the consequences for Sweden of entering the high-tech world...

...In the interim, attitudes toward entre-preneurship seem to have undergone an evolution I find extremely dramatic...

...In addition, the Social Democratic strategy of cautious backtracking from egalitarian and welfare-state ideals has created major tensions within the party...

...People behave as they behave...

...The guard outside the set of rooms he and his staff occupy was a decidedly un-intimidating looking young man dressed in blue jeans and a tee shirt...

...The budget deficit has been cut dramatically: Sweden has proved that transitional subsidies to faltering industries need not become permanent by letting the shipbuilding industry die (Palme decided to close down the one remaining shipyard last year), and by streamlining the steel industry to the point where what remains is profitable...

...The bullet was fired at close range from an angle taking into account the possibility that Palme might be wearing a bulletproof vest, and according to eyewitness accounts the killer acted in a calm, deliberate fashion...

...One family, by no means supporters of the Social Democrats or admirers of Palme, told me they walked around in a daze for the entire day after hearing the tragic news...

...When you're walking a tightrope, it helps if nobody is trying toknockyou down...

...Bizarrely, a rumor has spread among young people that he is a follower of Baghwan Shree Rajneesh and had been a popular rock 'n' roll singer...

...Instead, their major tool would be an immediate 16 per cent devaluation of the currency to put Swedish exports in a more competitive position...

...There was criticism, too, of the Finns' failure to inform the world of increased radiation levels emanating from the Soviet Union, although the Chernobyl radioactivity apparently wafted over Finland before it reached Sweden...

...The resulting dynamic is inflationary (the increases for the low-paid workers end up simply acting as a cost-driving floor to wage advances) and generates inequality...

...He is Swedish to the core," a friend told me...

...One afternoon in a restaurant, for example, a waiter putting down some bread had a twinkle in his eyes and a smile on his face as he cautioned, "Remember, you should always be sure to have 6-8 slices a day"—a reference to an old campaign of the Ministry of Social Affairs widely ridiculed as school-marmish...

...Since a devaluation creates domestic inflationary pressures by raising the cost of imports, the strategy would depend heavily on workers' keeping their wage increases below the inflation rate—that is, on the willingness of Swedish unions, always closely tied to the Social Democrats, to practice wage restraint...

...A commentator on the evening television news declared it was understandable that the West might be skeptical of the Soviets' willingness to abide by an arms limitation treaty if Moscow could not even tell the truth about a power plant accident...

...The American neoconservatives of the 1970s argued against antipoverty enthusiasts that government programs have a hard time lifting the poor out of poverty because people behave as they behave in spite of those programs...

...their 11-year-old daughter, frightened by the violence, asked to sleep in her parents' bed...

...As I sit eating breakfast, my hostess mixes lingonberry jam into filmjolk (a cross between yogurt and sour cream) for her two-year-old twins...

...The same, it appears, may apply to the negative effects of government policy alleged by supply-side enthusiasts...

...When not coaxing spoonfuls of the very Swedish concoction into the mouths of her youngsters, she reads to me from an article in the morning's newspaper...

...A suspect associated with the European branch of Lyndon LaRouche's organization was arrested shortly after the killing, released, then called in for questioning again, and has just been released once more...

...True, like the rest of Europe, Sweden has gotten a shot in the arm from falling oil prices...

...Now the Labor Court has ruled that because the Air Force did not fire him until three months after his sentencing, rather than within the permissible one month, his dismissal was illegal...

...Sweden is still Sweden, with high ambitions to be an egalitarian society...

...and in a recent poll of Swedish business executives, 92 per cent said they thought 1987 would be a good year for business...

...Many traditional Swedish industries were depressed, particularly shipbuilding and steel, and there was genuine concern about the country's ability to develop new sources of industrial dynamism to replace them...

...Far more surprising, though, is the extent of the change that has taken place during the past few years...

...The Social Democrats announced that they planned to overcome the economic crisis by pursuing a "third way" (a term curiously evocative of Marquis Childs' book in the '30s praising Sweden's "middle way...

...The wage agreements made with the central unions, for example, are becoming more and more irrelevant...

...I recall, too, writing in this magazine several years ago that it was unlikely a Swedish Steve Jobs (of Apple computer fame) would ever be featured on the cover of Sweden's equivalent of Time...

...Such incidents remind the visitor that abit of' 60s-style silliness lingers in what was the archetypical country—for good and for ill—of that era...

...Between 1982-84 industrial production increased faster than in the rest of Europe (but overall economic growth did not, because Sweden's service sector, including government services, is much larger than average for Europe...

...These agreements, reflecting the unions' egalitarian philosophy, tend to favor low-paid workers...

...virtually every week, the country has begun to be blessed with hostile corporate takeovers and greenmail, and the evening news on Sundays has taken to featuring a brief discussion of the week's stock market activity...

...Entering the building that houses the Prime Minister's office for a luncheon appointment, I noticed Palme's successor, former Vice Prime Minister Ingvar Carlsson, chatting casually on the street with a few of his aides...

...weeks later, the floral sea was 6 feet high and stretched half a block...

...From the way the murder was carried out, the authorities are inclined to believe it was a professional job...

...Earlier projections of poor growth prospects this year have all been revised upward in the past few months...

...The police have to date not uncovered the killer...

...In real life, meanwhile, employers in industries requiring skilled labor are anxious to give wage increases above the centrally dictated levels to attract and keep good people...

...In sum, the Social Democrats wanted to preserve as many features as possible of the egalitarian and welfare-oriented country they had created, while instituting some midcourse corrections to promote economic growth...

...I saw some graffiti in a men's room on the campus of the University of Uppsala that said "The CIA Shot Palme," but the public as a whole has been remarkably unreceptive to assassination theories...

...The policy has been reasonably successful...

...The marginal tax rates have been restructured so that 90 per cent of the taxpayers currently have total marginal rates (including local taxes) of 50 per cent or less, although the wealthy still face rates of 70-80 per cent...

...A 50-year-old worker's son in Sweden should be named Ingvar, and the only way to make his last name more Swedish would be to spell it with a 'K' rather than a 'C'—the 'C' indicates some pretensions somewhere among his ancestors...

...At a faculty seminar at Harvard in 1984, Palme said explicitly that his government sought to lower real wages...

...The economy was in serious trouble...

...The day following the assassination people began spontaneously to bring flowers to the downtown site of the shooting...

...Perhaps the most interesting development of the past few years, however, has been cultural...

...Even his name is right...

...He was described in considerable detail in the media but referred to only as "the 33 -year-old," because Swedish press ethics forbids publication of a criminal suspect's name...

...This represents the victory of the culture over the economist's world of incentives: Despite high taxes, when cultural winds shift, behavior shifts along with them...

...An Air Force officer, upon completing his prison term for espionage on behalf of the Soviet Union, had asked to have his old job back...

...The foolishness that once threatened to permeate the mainstream of society has retreated to its margins, and is today a subject of humor more than indignation...

...And as she read on, it turned out that the spy said he understood the Air Force might not want to take him back...

...Numerous respected observers argued that high tax rates, combined with a very egalitarian salary structure, constituted a serious disincentive to hard work and entrepreneurship...

...While security around political leaders has been tightened since the assassination, it continues to appear somewhat perfunctory...

...Unemployment has generally stayed below 3 per cent...

...The general feeling seems At the time of his death, Olaf Palme was leading Sweden along a tightrope the Social Democrats started to walk when they returned to office in 1982 after a six-year hiatus...

...The assassination last February 28 of Prime Minister Olaf Palme has had an emotional impact on Swedes every bit as great as the impact President John F. Kennedy's assassination had on Americans...

...Whentheprojectwas launched, the research group was despairing about whether Sweden could ever make the transition from sunset to sunrise industries...

...Today it is the rage among young people to speak of starting a business or of working hard in an existing big company...

...But there are clouds on the horizon...

...The image Swedes have of themselves as a practical, unflappable people notwithstanding, they filled the condolence books in this capital with messages consisting in large part of poems and letters addressed personally to their fallen leader...

...A few months before his death, Palme had to travel around to various districts to quell incipient revolts by Social Democratic faithful, who were upset over the government's "bourgeois" policy...

...In 1982,1 began serving on the international advisory board for a large research proj ect studying the future of industrial society in Sweden...

...Further, marginal tax rates in the high brackets would be brought down without reducing the total tax burden, admittedly making the tax system less progressive...

...Prime Minister Carlsson has his work cut out if he hopes to keep Sweden on the tightrope...

...He was merely seeking "security without performance"—that is, a pile of money from his ex-employer...

...at the same time, it is being buffeted by the political winds that buffet the United States...

...The Swedish stock market hits new highs Steven Kelman, author of Regulating America, Regulating Sweden, is associate professor of public policy at Harvard's Kennedy School of Government...

...In a sense, one might cite the phenomenon as a "nothing works" argument refuting supply-side claims about the enormous role of tax policy...

...This meant they would not try the Keynesian approach of stimulating economic growth through consumption—a la Francois Mitterrand's government uponassuming power in France in 1981—nor would they follow a free-market policy and allow unemployment to rise...

...The "third way" called for other cutbacks as well—especially in subsidies to declining industries—aimed at trimming the enormous budget deficit (amounting to 10 per cent of GNP in' 8 2) and easing pressures on interest rates...

...How different the dominant tones are these days in Sweden can be gleaned from the reaction to the Chernobyl disaster...

...On the domestic side, this year's Swedish budget, submitted by the ruling Social Democratic government, talks of deregulation" and "tax simplification...

...Olaf Palme was a good tightrope walker, and so is Ingvar Carlsson...