Beyond the Swedish Model

Petter Nilsson

Sweden shows the promise and limits of the welfare state.

Interview by
Michal Rozworski

So many of the debates on the contemporary left come back to the legacy of social democracy. Some pine for a return to this seemingly idyllic time, while others point out its inadequacies and urge us to look beyond the welfare state. Since the Swedish experience in the postwar era came closest to fulfilling social-democratic ideals, it is enormously instructive for these discussions.

I spoke with Petter Nilsson of Sweden’s Left Party about social democracy in his country and its broader meaning. The interview has been condensed and edited for clarity.

Michal Rozworski

Sweden is still seen by many around the world as a model for the welfare state but it has changed dramatically over the past couple decades. Can you give a quick summary of what it means to look at Sweden, as you’ve put it, “without illusions”?

Petter Nilsson

There’s this joke on the Swedish left that everyone would want the Swedish model, and the Swedes would want it perhaps more than anyone. What’s considered to be the Swedish model peaked in maybe the late ’70s, early ’80s and has since gone through quite the same developments as the rest of Europe with the neoliberal wave.

Because Sweden started at a high level of wage compression and equality in terms of gender, it is still very equal compared to other European countries. Yet, at the same time, we have the fastest growth in class differences within the OECD.

When the Social Democrats turned rightwards in 1986 or so, a lot of the developments that had taken place in other European countries came to Sweden in a few swift blows. In just a few years, we had huge increases in class differences and this affected our universal welfare system.

This system was always based on the high wage compression, which included the middle class in the same welfare system as the rest. Its members felt that since the quality of welfare programs was so high, they were prepared to pay taxes to finance them. But as soon as financing for the welfare sector is cut, then quality drops, and the middle class opts out for private solutions.

Michal Rozworski

What happens when you break out of this virtuous circle that creates equality and wins support for high-quality services? How does undermining services lead into a different kind of vicious circle?

Petter Nilsson

There’s this misconception about the Nordic welfare state: that it was only possible because of a high level of trust within the population. In the last few years, research has shown that it’s actually an effect of the universal welfare system that people come to trust each other and then the welfare system becomes a further reflection of this.

But if you look, for example, at Milton Friedman’s more polemical works, he says that if you want to cut the welfare system, you cut the subsidies and run it on deficit for a few years so that the quality drops — then people won’t be interested in defending the welfare system.

This is actually what the right wing normally does when it comes to power: they cut subsidies so that the quality of, for example, public schools drops, and then they propose private schools. People start saying, “Well, if public schools are so bad, then we have to have a private alternative for those who can afford it.” This was an ideological attack and an explicit strategy to undermine trust in the welfare system.

At the same time, in Sweden, 80 to 90 percent of the public says that they would be willing to pay a higher level of taxes to fund higher levels of welfare. So the expectation of welfare programs is still quite high — it’s just not being pushed by any political party other than the Left Party.

Michal Rozworski

What do you think accounts for this disconnect between the high support for the welfare system and willingness to pay for it on the one hand, and what’s actually happening politically on the other?

Petter Nilsson

In Sweden, the Social Democrats have been in power for over eighty of the last one hundred years. They had a political project. The idea was to produce a population that was homogenous and equal. There was also an actual strategy to knock out less competitive capital and therefore transfer funds to more productive sectors. Sweden had perhaps the most successful Fordist strategy of all countries.

This produced something unique. We had a social-democratic party in power with a social-democratic state that produced people with a social-democratic mindset. By the late 1970s, this ran into contradictions. A few things stopped working: wages were kept lower in the private companies that had the highest productivity to transfer them to the public sector, but the corporations ended up with super-profits.

The wage-earner funds were a proposal to solve this conflict. Sweden had attained political democracy with the right to vote. We had public democracy with the welfare state. And now we were going to have economic democracy by actually buying corporations for the working class.

To make a long story short, the limits of the Fordist strategy became apparent in the late 1970s. The welfare state was always being bought with productivity gains. The division between labor and capital stayed basically the same, but the level of productivity growth was such that you could buy welfare gains even though capital had the same level of profits.

In the early ’70s, there was a wave of wildcat strikes. This was a protest against this model that had worked so well between say ’32 and ’79. After that, the Social Democrats become a traditional, Third Way social-democratic party. They set an inflation target, allow unemployment to rise, and Sweden becomes a traditional European country.

What happens next is that the right-wing parties, which could never unite until that point, do so. They become very successful and win two elections in a row, which was unheard of before. That polarizes the Swedish political system, and the Social Democrats now feel that they have to win back the middle-class swing voters who went to the right-wing coalition.

Michal Rozworski

What is the struggle over the future of the Swedish welfare state then? Are you going back without nostalgia to something that was, or will it have to be something different?

Petter Nilsson

I think there is a danger in becoming nostalgic about the Swedish welfare state. I grew up at the peak of the Swedish welfare state, and it was in many ways a better society than what we have today. At the same time, it was riven with internal contradictions.

The New Left of ’68 had a lot of critiques of the welfare state that we shouldn’t forget: that it was centralized and bureaucratized, that it was hard to push through changes. We shouldn’t return to that.

At the same time, the Social Democrats themselves don’t understand the genius of the welfare state: it produced a society that had a collective subjectivity. There were institutions within society that interpolated, for lack of a better term, people as a collective entity. However, if you have privatization and a consumer model, people start acting as neoliberal economic subjects.

To move forward we have to defend what’s left of the welfare state as a kind of boundary of what can be privatized and what the political right can achieve. At the same time, we have to start thinking about other types of collective enterprises that can produce a society that, in the next step, will push forward for a more collective, universal welfare state — and these will have to be new forms. The big questions are how to produce a new universal, collective form of subjectivity, what types of institutions can produce it, and how they can survive electoral defeats.