The "welfare state"
fades in Sweden...
gaining credibility while they were in the Olof Palme "extended a hand" to the outgoing government parties, offering them "constructive cooperation over and above the dividing lines of parties and coalitions."
This February, Palme made a new major overture to the Center Party and the People's Party with the aim of neutral-
Palme presses austerity
LEiF AUMQUIST -82.
izing their opposition and widening the rift between them and the Moderata Samlingsparti. According to Palme, there was now sufficient agreement about the economic situation, how to deal with unemployment, income-distribution policy, and foreign policy to permit extensive collaboration between the SAP and the
Palme's February overture was the crowning touch to a series of shifts and adjustments with respect to the SAP's position in opposition and during last years's election campaign.
the election campaign, the SAP made a lot of noise about the "fractured front and misrule of the bourgeois parties." It thundered against their "exaggerated and unjust austerity line"
"antilabor policy." It showed in figures how the standard of living had declined by more than 10% in 1976-82 and that, after five years of constant decline in real wages, the average real wage was now lower than in 1974.
The SAP documented the massive redistribution of income "from the poor to rich," denouncing the clippers' economy" as well as the furious speculation in stocks, real estate, jewelry, gold, and silver.
It promised a "cleanup" of this situation, an "equal sharing of the burdens," and at the same time a "rigorous, dynam-
Palme offers the outstretched hand to the chief of the bosses federationthe workers show more reluctance (DR) A half year has passed since the Swedish Social Democrats regained governmental power, after being in opposition for six
With more seats in parliament than the three bourgeois parties together and with the support of the Swedish Communist Party (the Vpk), the Social Democrats were able easily to oust the bourgeois "center" coalition from the government. Olof Palme could resume the place at the helm that he sought so eagerly.
The former government parties, the Center Party and the People's Party, suffered a stinging defeat (the People's Party saw its vote nearly cut in half; it got barely 5.9%). On the other hand, the furthest right party, the Moderata Samlingsparti, which was outside the coalition, scored
It was the six years of falling real wages, growing unemployment, social and massive redistribution of income from the worst off to the best off that brought the bourgeois government
The Social Democrats (SAP) had also been suffering a decline of their popularity before they left the government in 1976, and they had a difficult time reopposition. Nonetheless, through waging an energetic electoral campaign, and above all as a result of the negative experience of the years of bourgeois government, they reemerged as a positive alterof most working people. They were also able to increase their vote among government employees and middle layers, as well as to get a larger share of the youth vote.
At the same time, tens of thousands of bourgeois party voters shifted from the "middle-of-the-road" parties to the more aggressive and dynamic rightist party, which served as the main channel for a
"the socialist threat" and "too much power in the hands of the unions."
AN ABOUTFACE BY THE SOCIAL DEMOCRATS
While the election campaign and the results reflected an increased polarization in the society, the Social Democrats in power over the past months have done everything possible to dampen the class
On the night of the election itself, ic, and progressive economic policy" coupled with an energetic jobs program that would "provide work for all in
The truth today is that the Social Democrats not only continued the austerity policy of the bourgeois parties but tightened it and stepped it up. The conditions for the working people have gotten notably worse.
### GROWING UNEMPLOYMENT
January, there workforce (among youth, the figures and 7.5%). This is 6,000 less registered unemployed than a year ago (what accounts for the difference is that a lot of jobless have been put on relief work and various other schemes have been set into operation.)
In December 1982, there were people looking for work for every job
If you combine the official and concealed unemployment (i.e. those workers in retraining programs, doing relief work, or involved in other such schemes), the number of jobless goes up to 390,000 or
At the present time, 70,000 persons are doing relief work. In the past year, the number of youth involved has dou-
along with a couple of er profits for the corporations, and raise thousand of jobs in shipbuilding, and stock dividends.
If you also include those who have been partially or entirely excluded from the labor market (that is, people with part-time jobs or who are not registered as looking for work), the figure comes up to 566,000 (54,000 more than a year ag°), that is ingood, time you include, finally, people retired early - 302,000 in January 1983, half of whom have been obliged by varying degrees of pressure to take early retirement because of the situation in the labor market and who, therefore, can be considered concealed unemployed - the figure comes up to 715,000 people in Sweden who are unable to get the work they want!
The number of people suffering prolonged unemployment is increasing, as well as the number of jobless who are not collecting unemployment benefits. Before long, 50,000 Swedes will be forced to depend entirely on social welfare (according to the calculations by the National Labor Confederation, the LO).
In the last two years, municipal spending for home relief has increased by 90%.
This situation is the worst since the second world war. It is a far cry from the so-called welfare state with the full employment that was supposed to go with
And the trend is for things to get This represents a drastic change for the Swedish people.
A STRUCTURAL CRISIS
The origins of this development lie primarily in the following factors;
Sharpened international competition, with the corresponding growth of "excess capacity" in the traditionally important industries in Sweden - iron mining and steel, shipbuilding, and the lumber and paper industry.
- Continued difficulty for Swedish business either to keep up with international competition in the traditionally important export sectors or to find sufficient substitute markets or new "niches."
A conscious policy by the Social that is over and above the large-scale layoffs that have already occurred.
As usually happens in capitalist crises, certain regions (such as Norrbotten in the far north) and certain sections of the population (women, youth, immigrants) are being especially hard hit. crisis is no longer confined to any one region or section of the population but is
The development of this crisis has been partially moderated by new gains by (such as machine and special-steel production, electronics, biotechnology, road and hydraulic construction, and the conversion of traditional shipbuilding to construction of oil rigs and other new lines).
The Swedish car industry (VOLVO but also SAAB) is continuing to make gains for the time being. The Swedish oaper and pulp industry has benefittec rom the devaluation of the krona. dustry is also getting a shot in the arm from the new and very controversial Social Democratic proposal to build a Swedish fighter plane (JAS), which calls for spending 25 billion kronor in the coming
However, these are countercurrents in the context of a structural weakening of the Swedish economy, which will continue to be reflected in a trend toward increased unemployment. severe budget strains, with a deficit of 190 billion kronor forecast for fiscal year 1983/84, and the possibility of a 20 billion kronor balance-of-payments deficit in the same period, the room for major new steps to stimulate the labor
This also weakens the "security net" that is supposed , safeguard the society against economic I ups and downs.
SOCIAL DEMOCRATIC AUSTERITY
WITH CAPITALIST APPLAUSE
But there are also other dark clouds on
"Fantastic! Unbelievable! Unimaginable! The sky is the limit! (English in the original)." According to the financial publication Affarsuarlden, that was the reaction on the stock market floors in the late fall of 1982 and the beginning of mid-February, another financial paper, Veckans Affarer noted:
'The big Swedish companies are rolling in money. Never before have they had this sort of liquidity. The ten biggest firms — headed, of course, by VOLVO -have over 35 billion kronor in liquid
"However, excessive liquidity has become a problem for the economy. Investing in Sweden is no longer an attractive
Instead, panies want to place their money abroad. But the Riksbank (the National Bank) is imposing restrictions on this. situation, the companies prefer to put their money in short-term investments
In the first four months after the SAP won the September 19, 1982, elections, the wealth of stockholders increased by 50 billion Swedish kronor! I wonder if this is not a record accomplishment for a workers party in power.
the response of the government, of the party that before the elections talked in such contemptuous terms about the bourgeois parties "speculation economy"?
"Basically, I think that it is healthy that the stock market has gone up, said the finance minister,
"And we'll see to it that there is no sudden drop."
Thus, the devaluation fell on fertile ground. But a lot of capitalists stressed that an isolated measure was not sufficient. In order to increase investment, it is also necessary to cut real wages, the employers association, the SAF, intoned. It demanded loosening of the restrictions on foreign transactions, a "more flexible"
and lower taxes. among the lowest in Western Europe!)
Democratic government to stop the ex- the Swedish horizon. Immediately after pansion of the social service sector (which before could absorb a lot of those pushed out of industrial production and whose taking office, the new government got off to a rip-roaring start by ordering a
16% devaluation of the krona (which in
As the government has done them one good turn after another in more and more areas, the capitalists are becoming positively delighted.
growth was accompanied by a sharp in- one blow drastically increased the prices crease in employment of women who had previously not worked outside the home.
- The acceptance by the trade-union leadership of the main features of this development and of the Social Democratic government's policy. At the same time, it itself has become an advocate of ductivity and for more automation.
The result is that the number of industrial jobs has dropped from 1 million (in January 1982) to 990,000 in December of the same year, and to 970,000 this January. more miners are threatened with layoffs in northern Sweden. years, the authorities plan to eliminate 3 to 4 thousand jobs in the specialized steel industry, of the one third of mass consumption goods that are imported). In fact, Palme's government was in such a hurry to come in like a lion that the new finance minister, Kjell-Olof Feldt began the negotiations for the devaluation with the other Scandinavian finance ministers before the Palme government was even formally in-
The result will be a direct cut of about 5% in the real wages of workers as the devaluations's effects are felt. At the same time, the big companies will realize windfall profits of about 5 billion kronor.
This measure was consciously designed to "give investors in industry a boost."
But its primary result was to throw the stock markets into a tizzy, promote high-
A "TIGHTER" BUDGET POLICY
- The government's project for so-called wage earners funds, which offer possibilities for a certain increase in the influence of the trade-union and state bureaucracy over investment policy in return for holding down wage demands, has been put off pending "further study. It is supposed to come back for consideration in a "moderated" form. (The original proposal has already been "moderated" four or five times.)
So, the capitalists have also lowered their tone. During the election campaign they had raised a terrible commotion about the wage earners funds, claiming that they represented creeping socialism. (This claim was totally unfounded since
23
the funds were never to be given a majority or even a key minority position in decision making. And the trade-union members themselves would never be able to exercise any direct influence over them!)
- Big capital could also take comfort in the fact that the government, despite its election promises, has not moved against state subsidies to encourage workers who buy shares in the companies they work for, a "reform" that was introduced in 1980 over the Social Democrats' protests. "The stock market got a shot in the arm from that," the financial press
- The decision to build the JAS fighter plane came at the same time as the news that subsidies for state enterprises are going to be cut, municipalities are going to be pressed to reduce their spending, and all this was accompanied by talk of a "tight-budget policy." lighted the capitalists.
- Irritation that, despite everything, the SAP intended to fulfill, more or less, its four symbolic election promises including, higher pensions, better medical insurance, and increased support for building day-care centers (financed by indirect taxes!) was quickly The capitalists were reassured when it became clear that there would not be too many reforms in those areas, but that to the contrary the Social Democrats were beginning to discuss slaughtering a lot of their old "sacred cows." That
### IRON ORE PRODUCTION
1,000 metric tons 1975 32,639 1976 30,526 1977 25,416 1978 21,486 1979 26,619 1980 27,184 1981 23,225 1982* 15,313
*To November Source: Statistics Sweden duction and a "tight" budget policy to reduce the budget deficit and foreign
The bourgeoisie could also take comfort in noting that the Social Democrats had changed their attitude to some "symbolic" questions of foreign policy. They did a turnabout and decided to stay in the Inter-American Development Bank, which they had severely criticized before. And the government abstained in the UN vote to condemn Indonesia for aggression in East Timor, which reflected Indonesia's growing role in Swedish trade.
It was not for nothing that the executive director of the Chamber of Commerce commended the new government's "extraordinarily reasonable economic po-
The fears that many capitalists had about what the 1982-83 contract negonegotiations. In so doing it broke a tradition that had been maintained since 1956. The metalworkers union signed a separate contract with its "own" bosses that departed from the LO leadership's principle of a "united wage policy with priority to the worst off." (That is, a special clause providing for some compensation for the worst-off workers if their wages lag too far behind the best paid categories.)
The metalworkers union was sharply criticized for its action by the other LO
Then, shortly afterward, after a little boxing, after some resistance from the SAF to the compensation clause and some symbolic strikes, the Palme government "convinced the employers" to accept the mediators' offer on the table, which was very similar to the original LO proposal. Notably, this included the compensation clause. in mid-March, LO and the SAF signed a contract providing for a 2.2% wage in-
The "beating" Leif Blomberg talked about became a beating for the entire working class! The same thing seems to be in store for the government employees and white-collar workers in the private sector in the on going negotiations.
The calculations the finance minister and the government included in the financial plan accompanying the new budget for 1983/84 call for a drop in real wages tiations would bring have been quieted.. of between 4% and 5% (over and above is, they were discussing imposing charges to make social services pay for themselves, reducing the adjustments of retirement benefits for increases in the cost of living, and increasing the waiting perthe payment of sick benefits, among other things.
When the budget was presented to parliament at the beginning of January, it was greeted by the financial press as "better than we feared." The projected deficit was less than what had been planned. The budget included a package of concealed cuts in the form of reduced compensation for inflation in public expenditure, which will not fail to have an
Would the unions be out for revenge after five years of falling real wages? Would there be discontent in the unions if the installation of the new government was not used as a lever to secure their
RECORD CUTS IN REAL WAGES
The LO leadership soon made it clear that it, for its part, was "going to give the government's new economic policy a chance to succeed by restraining wage demands." It presented a record low demand for wage increases - 2.2% for one the effects of the devaluation and the increases in indirect taxes). It looks as if this projection is going to be fulfilled.
But this will not fail to provoke re-
THE EXPECTATIONS THAT FOLLOWED THE ELECTIONS
At the start of the latest contract negotiations, Finance Minister Feldt de-
"Industry seems to have a certain confidence that a Social Democratic government can influence the big organizations year (plus limited supplements for cer- that operate on the labor market so as effect on social spending. Although there was an increase in programs to promote employment (by 1.5 billion kronor), there was a general freeze on reforms.
Pressure was to be stepped up on the municipal governments. More support was allotted for firms that showed a willingness to enter new export markets. They were to be given additional export credits. There were to be rewards for innovations, as well as bigger appropriations for training and research. All this was designed to accelerate shifting over to new markets and to reduce dependence on the traditional export sectors.
All of this was in accordance with the Palme government's doctrine "third way" to economic growth. It is supposed to make it possible to avoid massive policy to stimulate the labor market and by bold export ventures, combined with stimulus to investment to increase pro24 tain groups). At the same time, it declared that it was ready to do its bit to keep down local demands for adjustments above the national-contract level.
The new chairman of the big metal workers union, Leif Blomber, opened his first negotiating campaign as head of the confederation with the following state-
'Let's take a beating, even though it's going to hurt after the new year when increases are expected in rents, prices, and
"To demand full compensation for ininflation would be star gazing. This is not going to be a fat contract. essential to move quickly so that people know where they stand."
The leadership had to "move quickly" alright, that is, before the workers could what was happening. up the process more, the metalworkers union even broke away from the central to avoid mistakes and misunderstandings in the conduct of wage policy.
"Business knows that we have a capital of confidence that we can call on now that we are going into a period of decline in real wages."
There were a lot of implications in the Social Democrats voted back into government a half year
Kjell-Olof Feldt, the Finance Minister, distinguishes the
"third way" from expansionary and belt-tightening sued by other industrialised countries.
Boosting private consumption higher inflation, while a tough line would result in unemployment and a considerable waste of resources.
expansionary and belt-tightening mea-
Priority will go to employment but, in erable fall in real incomes and living standards.
(Financial Times January 11, 1983)
ago, that reflected the hope of hundreds of thousands of workers in Sweden that they would "guarantee jobs, " "defend the various forms of social insurance, and "build a future for Sweden." (These were the SAP's election slogans!) That is, the vote the SAP got reflected the opinion of these workers that it would do this better than another, openly capitalist, government.
Most workers had no very high hopes. They did not expect the SAP government to carry out any big operations, to introduce any anticapitalist measures. They did not expect any basic rejection of "necessary belt-tightening." But they did have a certain hope that a SAP government would do a better job than a bourgeois one and that they would ers raised the demand for a political strike against the austerity policy of the government of the bourgeois parties then in power and its attacks on employment. These and other forms of action that developed in the past period have not failed to leave their imprint. But it is hard for the workers in Sweden today to link up immediately with these experiences in an entirely new situation.
A BEGINNING OF UNEASINESS of governm last year, a general wait-and-see attitude set in. People have been waiting to see how the new government will act, what it will do about its elections promises, what the effects of its measures will be.
But a wait-and-see attitude does not future capbenefit from that.
become known as "crisis consciousness" in public debate had
Most of the SAP's voters were militant sections of workers, which are probably ready for some form of sacrifice and to give some time to a government ticism and distrust of the new governthat people had a certain confidence in, or at least saw as the lesser evil.
This situation was reinforced moreover, by the fact that the change of government came about in a "cold"
The SAP was not lifted into government on the crest of a wave of workers mobilizations. That does not mean that there have been no workers struggles in
The fight waged in 1980 an employers association that thought it could win in a frontal assault on the level of workers wages was sold out by the leadership of the trade-union movement and ended with a traditional
"compromise." demoralization and skepticism among the most militant groups of workers. But it was also a new experience for many other Swedish workers.
Sweden's first workplace occupations - in a mine in central Sweden and in a textile factory in the north - did not end
But they introduced a new element into the Sweden of the 1970s mean total passivity. That is particularly true among the hardest hit and most now beginning to show an open skep.
This skepticism is also beginning within the Social Democratic "movement" itself.
When the state mining corporation, the LKAB, threatened layoffs at the Svappavaara mines in the far north of the workers had a certain confidence in the government. They openly discussed occupying the mine, welding the gates shut, and defending themselves against attacks. All this was conceived of as a means of putting pressure on the government and the Social Democratic Party.
"The pot keeps boiling. If you are standing on the brink and thinking of miner Eilert Stalnacke said. "I think that the only thing to do is to weld the gates shut and face them off."
When it became clear that the government did not intend to assure continued operation of the mine but rather to "put it in mothballs," there was an outburst
Accusations of a "sellout," "betrayal" and "a bureaucratic mental-
Above all, study
And LO's evening paper, Aftonbladet, wrote in an editorial:
"The party has been obliged to follow a different policy in government than in opposition, and that is cutting a bit into its capital of confidence."
Jan Nygren, chairman of the Social Democratic vouth organization, the soc ialdemokratiska Ungdomsforbundet (SSU), described the situation as follows;
"Neither I nor other SSU members can say that we are finding the same enthusiasm as before. Questions are being raised. A feeling of uneasiness is spreadinfiNow is the time to raise criticisms and concerns, because time is running
Before we know it, elections will roll around again."
There were also protests by steel and ity" were hurled at the government.
shipyard workers against the closing of
(which they do not have to this day).
It snowballed to include tens of thou-
But the occupation talked about never took place. The traditional Swedish footdragging and the lack of a conscious, organized political force dissipated the resistance and wore out the workers.
But this example, along with others
It is the awareness of this, that the next elections are only two and a half years away, that prompted the Social Democratic government to introduce a series of unpopular measures right away. It did so in the hope that in this way it would get more maneuvering room later, ands of workers. Some sections of work-. has made an impact on new sections of
Seats and in the hope also that it would get a boost from a certain economic upturn.
The wait-and-see attitude that set in after the change of government is beginning to turn to irritation and uneasiness
Change in %
Parties
Vote%
Social Democrats
+2.7
45.9
Moderata Samlingsparti
+3.3
23.6
Center Party
15.5
-2.6
-4.7
People's Party (liberals)
55.9
-
Communist Party (Vpk)
5.6
-0.5
Christian Democrats
1.9
1.6
-1.6
Environmentalists
Changes in No of Seats 166 +12 86 +13 56 -8 21 -17 20 in some sections of the Swedish working
The task of socialists and union militants is to translate this into activity and a political alternative, into initiatives in strugggle and organization. this way can the defeat of the bourgeois government in the 1982 election be extended into a defeat for its policy. Only in this way can it be caxried forward into a radical change of course for the Swedish workers move-