Sweden, after becoming the state as the most developed economically and socially, was entitled to the term "Swedish socialism", or "Swedish economic model." By the end of the sixties of the twentieth century, observers all over the world began to note rapid economic growth amid a broad policy of social reforms, and society remained relatively conflict-free. Thus, the image of Sweden as a successful state with serene residents was created, which created a rather vivid contrast with other countries around the world.
Swedish economy
Now the term "Swedish socialism" is used with different meanings and in different meanings, it depends on what to invest in this concept. The type of Swedish economy is mixed in nature, it combines state regulation with market relations, private property prevails in all spheres of production, and consumption is socialized. Another important feature of typical Swedish socialism acquired after the war requires special consideration. This is a very specific relationship in the labor market between capital and labor.
For many decades, the main component of Swedish socialism was considered a special centralized negotiation system: contracts were concluded and wages were established only with the participation of trade unions (and these were powerful organizations) and entrepreneurs. These were the main characters in each contract, and the trade unions built their policies strictly within the framework of the principles of solidarity, and the groups of workers were very different. Thus, the Swedish model of socialism was based on the full social protection of every worker.
Goals and Results
In short, the Swedish model of socialism is determined by two dominant goals: the first is the full employment of the able-bodied population, the second is the equalization of income. This is what determines the economic policy of the country. The labor market as a result received very rapid development with an exceptionally large public sector (the state here acts not as an owner, but as a redistributor). All this indicates the high economic results of the Swedish model of socialism.
If we consider the state system and its functions more broadly, we must admit that this is a huge complex of realities - both political and economic - that have managed to ensure a high standard of living. The scale of state policy is too voluminous to be able to outline all the features of the Swedish model of socialism. An unambiguous interpretation of this phenomenon is all the more impossible.
The main feature is the unique strength of the workers' movement of Sweden, which has been under the rule of the Social Democrats since 1932 (except for the period from 1976 to 1982), and cooperation with this party of trade union association has always been very close. That is why the labor movement intensified, practically all reforms were carried out and brought to an end. In short, the Swedish model of socialism has never changed the main goal of its policy - the adoption of full employment. The goal was unchanged, and the Swedish people warmly supported their government in this.
Striving for Equality
This is the strongest desire among the Swedish population. As early as 1928, P. A. Hansson, the leader of the Social Democratic Party, proposed the concept of the state as "at home for the people." Huge sections of the population, who had nothing to do with the labor movement, accepted it and joined the common cause of creating the country as a common home for all. Almost completely, the middle layers of the population support the Social Democrats and, accordingly, the Swedish model of socialism. This attraction is characterized by the fact that the whole nation has common interests, and this community only grew stronger over time.
To all of the above, it is necessary to add that another important (somewhat specific) factor has worked well for the good of the country: since 1914, Sweden proclaimed neutrality in foreign policy, it did not participate in the First or Second World War. And the reforms in the country were also carried out peacefully and gradually, especially since the ruling party for a record long was precisely the Social Democratic Party.
The main features of the Swedish model of socialism have evolved from historically distant times, this country almost always quietly moved to new formations, including feudalism and capitalism as well. The economy developed in a stable and favorable environment, reformism in the labor movement dominated (already in 1938 an agreement was signed between the union and entrepreneurs), the principles of relations between the labor movement and capital were not violated, although the search for compromises was always present, taking into account the interests of both parties.
Economics and traditions
Historical background and established culture have had a tremendous impact on the development of the economy. It took at least seven hundred years to define the Swedish model of socialism: entrepreneurship already flourished on these lands. At the time of the Vikings there were many enterprises manufacturing weapons, and Swedish jewelry was known throughout the world mastered at that time. For example, Strora Koppaberg, which is still one of Sweden’s largest exporters, was founded over seven hundred years ago.
The Swedish model of socialism, of course, has its flaws; nothing ideal exists in the world. For the economic system to function successfully, one must take into account the dynamics of pricing, the competitiveness of industry, and economic growth itself, since inflation is a huge danger. Only strictly defined methods can be used, supporting full employment, otherwise inflation cannot be avoided, which means that the effect on the economy will be negative.
In practice, the Swedes do not always succeed in combining this and that. Either unemployment or inflation. Thus, the Swedish model of socialism has advantages and disadvantages, and the latter are no less significant. Inflation is a threat to equality; full employment is a detriment to economic competitiveness. The mid-seventies of the twentieth century, with its especially intensified competition in world markets, showed this Achilles heel well. There was a deep economic crisis, and the features of Swedish socialism especially influenced the state model - it literally “stalled”.
When did the conditions change
Industry in many of its areas experienced a structural crisis. Most enterprises could not do without state aid, and the scale of subsidies was very large. Specialists in economics gave the most gloomy forecasts, but Sweden gradually emerged from the crisis. Moreover, since 1983, the country has begun a continuous economic recovery, which means that this model is viable because it was able to adapt to dramatically changing conditions.
Swedish socialism cannot be briefly described, because it will take a long time to dwell on the reasons for the effectiveness of a decentralized system of market production, to talk about the government’s non-interference in the production activities of each enterprise, about the labor market, where an active position minimizes the costs of the economy to the social sector.
The private sector maximizes production, and the state redistributes as much as possible a part of its profit with the help of the tax system. All this is necessary in order to increase the standard of living of the population, but not to destroy the fundamental parts of production. The main role in this is played by such infrastructure elements as cash funds owned by collectives.
That is why in the Swedish economy, the state is the main actor, distributing and redistributing national income through taxes and government spending. The latter reach record levels. For this, reformist ideologists called this activity functional socialism.
The opinion of some Russian experts
We also, of course, argue about what are the main principles of the model of Swedish socialism, whether this economic model is acceptable in other countries and whether it is advisable to implement it. And it turns out that this is not so simple. For many years, all of our most progressive intelligentsia turned their dreary gaze to Sweden as the beacon of triumphant social democracy, as a symbol of the triumphant ideology of progress, as the embodiment of a different path - not the disgusting capitalist and non-discrediting communist.
Not so long ago, the best furniture was the Scandinavian and the best cars - Volvo. But the bright ideal faded quite quickly when the former Soviet people had the opportunity to move freely around the world. Those who studied the life of the countries of Sweden from the inside claim that this economic model has long been decaying under the yoke of ideology, bureaucratization, multiculturalism (plus Islamic immigration).
A bit of history from a different perspective
As far back as the middle of the 19th century, Sweden was a rather backward country, for the most part agricultural, which had just begun industrialization. The economy in those days was not regulated by the state, taxes were not large, tariffs did not exist. Then laws were passed that encouraged free enterprise, and a patent protection system was introduced. Therefore, from 1890 until 1950 in Sweden, the pace of economic development was the most powerful in the world.
As already mentioned, Sweden did not participate in wars at all, and therefore the Second World War did not prevent its prosperity. The country tasted especially tasty fruits at a time when all of Europe was in ruins, and Sweden remained the only European country with an untouched economy and resources - both human and industrial. The Americans invested a lot of money in the form of assistance to the destroyed countries, which is why almost inexhaustible markets opened up for Swedish industry.
How is it to be surprised that even without the slightest interference from the state, all industries worked at full speed and absolutely everyone had jobs? That is why the very full employment of the population was achieved. As a result, by 1950 the tax burden did not exceed 21% of GDP.
How can ideology harm
These economic successes could not but strike the theorists of socialism in the head, and it was from here that the illusion of the existence of some other, third way — both capitalist and not socialist — was born. And the famous Austrian economist Ludwig von Mises warned that no third way simply exists, there is no compromise between such systems, they do not interbreed.
And the misfire was not slow to appear already in the 50s. All subsequent decades have shown the world how quickly government spending and taxes can grow: in the 90s, the former consumed 66% of GDP, and the latter more than 50%. It was the highest level in all of Europe. And the Swedes began to gradually abandon the principles of the Swedish model of socialism so that the country would not cease to exist.
While taxes were rising and government spending was increasing, control over the country's economy was tightening, and social engineering projects were being implemented along with attempts (unsuccessful!) By state planning. As a result, amateur performance in the economy of the population sharply waned, and with every year the dependence of the people on the state increased. The labor market has stagnated.
The fruits of error
What is lack of initiative among the population? Examples are visible to the naked eye: until the fifties of the last century, the world was amazed by the famous Swedish concerns, which opened in large numbers, and after the discovery of the "third path" this process abruptly stopped. At existing enterprises, labor productivity has fallen, but the cost of services and goods has risen sharply. Due to high taxes, a huge part of the economy went underground, and its scale is growing steadily.
Even the Swedish economists sounded the alarm: Niels Karlsson, an indisputable authority, noted the discrepancy between the reality of the “third path” and the ideas of success by his left-wing press. After 1950, not a single job was created in the private sector, but old jobs ceased to exist. You can compare with the same America: over the same years, employment there has grown precisely in the private sector by sixty million!
The same scientist cites the Stockholm Stock Exchange as an example: there are fifty Swedish companies whose shares are listed there, and not one of them has been created over the past sixty years, all were born much earlier. And in the same America: Apple, Cisco, Home Depot, Wal-Mart, Intel, Microsoft, and so on - everything is simply impossible to list. Is this legendary third way really good?
Government spending has become incredible, stifling all living things, literally forfeiture taxes, unemployment, low labor productivity - these are the flaws of the Swedish model of socialism in action. Back in 1970, Sweden was in fourth place in the world in terms of income. Now - on the fourteenth. It is very difficult to withstand such loads. The first cracks in the system that appeared in the seventies, by the mid-zero, forced the Swedish economy to crack at all seams. And this was recognized even by the leading theorist of the “Swedish model” - Rudolf Meidner himself.
Liberalism against democracy
This experiment did not only damage the economy, creating stagnation. The most detrimental in building a "common home for the people" and a state where universal prosperity reigns is the loss of self-determination and dignity by the nation, as the convinced liberal Niels Karlsson claims. Each individual, according to the classical theory of liberalism, is unique and valuable, and a truly virtuous society is built only on the principle of personal responsibility, individual freedom and respect for the freedom of one's neighbor.
According to Niels Karlsson, the citizens of Sweden have been deprived by the state of the need to engage in productive activities in order to feed themselves and their family, citizens sacrificed their freedom and gave the state all responsibility for their own destiny. He calls modern Swedish society unviable, overwhelmed by dependent sentiments. The lion's share of the income of each citizen is subsidized by the state.
