The Democratic Socialists in the United States are advocating the adoption of a socialistic system like that prevalent in Sweden and other Scandinavian countries. With that objective, they insist that we wouldn’t have to worry about having a socialist country like the Soviet Union, Cuba, or Venezuela. Scandinavian economies, they point out, are high-income, growth economies with a high degree of economic equality. We should follow that model and we can achieve positive outcomes while enjoying free education, health care, child care, vacations, guaranteed pensions, and a universal income (paid by the state to every human who escapes abortion for the duration of life independent of whether one is employed or not).
It would be wonderful to live in such a state, it is assumed, since one could spend one’s entire life playing video games and snorting cocaine. But before joining the Democratic Socialists or moving to Sweden, one should learn a little bit more about Sweden, Scandinavia, and the nature of their economies. One might be surprised, for example, that Sweden and the other Scandinavian countries are characterized by the Swedes and Scandinavians as “capitalist,” market countries.
And these countries are economically successful precisely because a preponderance of their citizens are not interested in dedicating their lives to their devices and their drugs. In 2016, in the whole of the country there were 590 drug-induced deaths, which was down from previous years. The mean age of the majority of victims was less than 34 years, and opioids were involved in the vast majority of those deaths. On a per capita basis those deaths are substantially fewer than the 72,000 deaths (2017) from opioids in the United States.
To obtain a reasonably thorough overview of the Swedish economy, however, let us consider now the origins and decline of socialism in Sweden, then we will consider the nature of Swedish and Scandinavian capitalism in the present.
The Scandinavian Economic Model
The Scandinavian or Nordic economic model, according to the Swedish evaluation, is one of capitalism, not socialism. The economic policies that are characteristic of Denmark, Finland, Norway, Iceland, Greenland, the Faroe Islands and Sweden can be referred to as Nordic capitalism. True, these countries share commonality through their status as welfare states. It is also true that collective bargaining is carried out at the national level with a high percentage of the workforce unionized, but the economic foundation is still free market capitalism. See footnote [1] below.
The Nordic model is one of free market capitalism based on a high degree of private ownership. Norway is an exception to this in that Norway includes many state-owned enterprises and there is substantive state ownership among the stockholders in publicly listed firms. But the Nordic states support a “universalist” welfare state system designed to achieve individual autonomy and stimulate social mobility for their citizens. In these countries representatives of labor meet with employers to negotiate wages and labor market policies, a process which is mediated by the government. There is a general commitment to private ownership, a mixed economy, and free trade.
These national economies are small and sustain public spending at around half of the Gross Domestic Product. One reason for this is that there are large numbers of public employees in the fields of education, healthcare, and government service. The private economies are limited in scope with the benefit of producing raw materials in demand internationally. A large share of welfare benefits include transfers such as unemployment benefits (at around 70-90% of the wage, as compared to 60% in Germany).
How Did This Come to Be? The Advent and Decline of Swedish Socialism
The early socialists in Sweden were also Marxists, but unlike those in the Communist Party, they hoped for a ballot-box victory to ascend to national power rather than to sweep out the bourgeois political opposition with a revolution. As they were becoming influential enough to gain electoral power, the socialist party, the Social Democrats (SAP), willingly entered into alliances with other, non-proletarian parties. In forming blocs with other middle-class parties they gave concessions that were not in the interest of its working class base.[2] They compromised away many of the foundation principles of Marxism so that no thorough-going socialist system was ever implemented. Elements, of course, remained, but these were also eliminated later as shown below.
Of course the Swedish social democrats never officially abandoned their original Marxism (i.e., the theory of the exploitation of labor and the demand for state ownership and control of all of the means of production), they failed to present any plans for institutional reform: the state machinery was to continue unchanged under the monarchy and there were to be no nationalizations. It was at this time that the SAP established its ‘corporative’ structure for negotiations between employers, trade unions and government on social and labour market policies.[3]
In 1932, during the Great Depression, the Swedish SAP organized the first socialist government in Sweden, having achieved a majority in parliament. It accomplished this after eliminating from its 1932 electoral platform all references to socialism and to socialization of the means of production. A social consensus was achieved in which the unions accepted the rights of management to manage and the government recognized the right of the unions to represent the workers.
Sweden has the third-highest employment rate (76.2%) among all countries in the world. The top 10 countries by employment rate are: Iceland, Switzerland, Sweden, New Zealand, United Kingdom, China, Denmark, Netherlands, Germany, Norway. So three of the top ten employment rates are in Scandinavia. The sun has not set on employment in welfare state Sweden.
Thus, Socialism in Sweden failed to survive, although “socialists” did. But Sweden considers and calls itself unabashedly a capitalist economy and a welfare state, based on its considerable income redistribution.[4] A very important difference between the American and Swedish welfare state systems is that in Sweden, high taxes are not considered the responsibility of the very rich, top 1% or so of income earners. In the United States vast numbers of citizens of lower income pay no taxes at all. In Sweden, high taxes are the responsibility of everyone. Even lower income families can afford tax on their small incomes, since they receive government subsidies in many areas to cover their needs.
[1] See https://en.wikipedia.org/wiki/Nordic_model
[2] See https://www.truthdig.com/articles/how-swedish-socialism-failed/
[3] See Donald Sassoon, One Hundred Years of Socialism: The West European Left in the Twentieth Century, p. 44.
[4] Ibid., p. 44.