November 24, 2015

IT IS taboo for mainstream politicians in the U.S. to look beyond our borders to find inspiration about how to better run our own society. When comparisons between the U.S. and other countries are made, Democrats as well as Republicans recite the exceptionalist myth that "the United States is the greatest country on earth, period."

In the first debate of the Democratic primaries in October, Bernie Sanders broke with this stifling tradition. He argued that there is a great deal we can learn from countries such as Sweden, Norway and Denmark. As he put it:

[W]hen you look around the world, you see every other major country providing health care to all people as a right, except the United States. You see every other major country saying to moms that, when you have a baby, we're not going to separate you from your newborn baby, because we are going to have medical and family paid leave.

According to Sanders, being a "democratic socialist" means fighting for progressive measures like these. However, in a more recent speech aimed at explaining to a mass audience what "democratic socialism" means, Sanders reverted to the more U.S.-centric approach. Rather than Scandinavia, his reference points were Franklin Roosevelt's New Deal and Lyndon Johnson's Great Society.

Sanders stated that programs such as Social Security and Medicare illustrate what socialism means to him. The only difference between the U.S. and Scandinavia, then, becomes a matter of degree--whereas the welfare state in the U.S. is anemic and limited, it's robust and expansive in countries like Sweden.

On the one hand, we should welcome Sanders' praise for "democratic socialism" and his frequent appeal to the virtues of Scandinavian social democracy. This is certainly a breath of fresh air compared to the patriotic, pro-capitalist chest-beating we're accustomed to getting from most Democrats and Republicans when anyone questions American capitalism.

Indeed, Hillary Clinton's response to Sanders exemplifies everything that's wrong with the way mainstream politicians approach the issue: "[W]e are not Denmark...We are the United States of America...[W]e would be making a grave mistake to turn our backs on what built the greatest middle class in the history of the world."

Still if Sanders' defense of the welfare state and the "democratic socialist" label is valuable, it also should be greeted with a measure of skepticism. The crux of the issue is this: Is socialism nothing more than a generous, well-funded welfare state such as we might expect to find in Sweden or Denmark?

IT'S IMPOSSIBLE to settle this question simply by choosing to define the word "socialism" differently from Sanders. A better approach is to ask: How well does the Scandinavian model actually work?

This much is obvious: Scandinavian-style social democracy has many benefits for working-class people, and it would represent a massive advance for workers in the U.S. to win even a fraction of the reforms at its core.

Take Sweden. The unionization rate is extremely high--more than 85 percent of the workforce enjoys the benefits of union organization and collective bargaining. Indeed, compared to the U.S., the Swedish labor movement is, across the board, much stronger, better organized and united.

This strength is the key reason why Swedish workers were able to force the passage of ambitious reforms that benefit the working class as a whole. They include: free medical care coverage for all from cradle to grave; free tuition for university students; guaranteed free housing for all; subsidized child care; paid parental leave (13 month leave at 80 percent pay); extensive unemployment benefits (including cash transfers as well as job training and retraining programs); generous pensions; provision for the disabled; and care for the elderly.

As a result of this, poverty rates in Sweden are very low compared to the U.S. This is largely because social democratic governments in Sweden were committed to ensuring full employment. For most of the 20th century, Sweden averaged around 2 percent unemployment--a shockingly low figure when compared to the U.S.

Income and wealth inequality are also much lower than in the U.S. This isn't just a Swedish thing--the same is true in most Scandinavian countries. Denmark, for instance, has the most equal distribution of income among all OECD countries and one of the lowest infant mortality rates. By contrast, the U.S. is the third most unequal and has the third highest rate of infant mortality.

SWEDEN'S PRO-worker reforms would never have been passed without a powerful, united, well-organized labor movement with a political arm--the Social Democratic Party (SAP)--that was capable of advocating for the interests of the working class as a whole.

Reforms aren't simply handed out under capitalism. Class struggle is a key ingredient. It's no coincidence, then, that in the decades leading up to the Social Democrats coming to power in the 1930s, Sweden experienced high levels of class struggle.

In 1902, unions held a three-day general strike demanding voting rights for all men and women. In 1909, there was a month-long general strike, this time demanding that employers grant union rights to workers. The strike lost, but labor militancy remained high for the next two decades.

In May 1931, a general strike by timber and pulp workers in the town of Ådalen was met by brutal state violence. Troops opened fire on a demonstration by the workers, killing five people.

This was the background to the Social Democrats winning the largest number of seats in national elections in 1932. They formed a coalition government with the right-wing Agrarian Party, and in exchange for agricultural protection, passed sweeping social reforms, including public works programs, unemployment insurance, pension increases, shorter working hours for rural workers, and paid vacation time for all workers.

But the ability of the SAP to win reforms also depended on other factors. Because of its geographical location, Sweden was able to remain neutral during the Second World War, but during the late 1930s and 1940s it was a major supplier of raw materials and parts to the German arms industry and, as a result, its economy expanded rapidly.

This economic boom, based on servicing the Nazi war machine, gave Swedish bosses the ability to make concessions to workers that wasn't possible for employers in other capitalist countries. Meanwhile, the Social Democrats paid for reforms by taxing wages, wealth and inheritance, but left taxes on corporate profits low.

After the war, Sweden benefited from the fact that its infrastructure and industry were intact. Its economy continued to grow quickly as it sold materials for reconstruction to the rest of Europe. The Social Democrats took advantage of this to institute wage policies that drove less efficient, low-paying employers out of business. They also used tax policy to encourage reinvestment of profits.

The postwar boom of the 1950s and 1960s led to labor shortages. The Social Democratic government responded by making it easier for women to enter the workforce--this was the origin of Sweden's progressive policies on state-funded child care, paid family leave, abortion rights, anti-discrimination laws and so on.

SWEDEN'S ECONOMIC model was based on its special position in the world economy and a deal struck by the Social Democrats with the country's capitalists. The latter were promised high profits based on exporting to the world market, and in exchange, workers received social reforms and a high social wage.

But what the Swedish Social Democrats did not do is also significant. By and large, the SAP has made no attempt to challenge capitalist ownership and control of industry.

Indeed, the Social Democrats have always taken the capitalist framework for granted, with the exception of a brief period of radicalization in the 1970s when the SAP advocated the gradual replacement of capitalist control of industry with a form of working-class ownership and control.

However, once this attempt to gradually go beyond private ownership of industry was defeated in the late 1970s, the SAP returned to its more familiar strategy of brokering a compromise between capital and labor within the confines of capitalism. But such compromises come with concessions--such as when the SAP was obliged to appease the ruling class by passing labor legislation that restricted the right of workers to strike, while making lockouts by employers easier.

Still, when the world economy was growing and Sweden could maintain high levels of exports, it appeared that the SAP's model of negotiating pro-worker reforms within capitalism worked. But when growth in the rest of the world inevitably slowed down, cracks in the class compromise began to appear.

In early 1970, there was an unofficial strike by thousands of miners demanding higher wages and better working conditions, which spread to other Swedish workplaces and even led to unofficial strikes in Norway and Denmark. The miners refused to be represented by their official union and elected a special strike committee instead.

The following year, there was a major strike wave by public-sector workers, including teachers, rail workers and army officers, to which the government responded with a lockout.

Sweden proved not only vulnerable to declining international trade, but also to corporate globalization. By the 1980s, major Swedish corporations like Electrolux and Ericsson were employing a significant percentage of their workforce in other countries. Other Swedish corporations bought foreign companies, merged with foreign competitors or were the targets of foreign takeovers. For example, General Motors acquired a 50 percent stake in the Swedish car manufacturer Saab in 1990, bought it out completely in 2000, and then sold it to a Dutch company in 2010.

As British socialists Colin Sparks and Sue Cockerill noted in 1991:

To an increasing extent...Swedish capitalism has outgrown its own state. It has less material interest in its deal with the Social Democrats and less need to pay the high taxes and wages or accept the other restrictions which are the price it was forced to pay for a docile workforce.

HOW HAS Scandinavian social democracy fared in the last three decades?

The first thing to note is that the same neoliberal shift in response to the crisis of the 1970s and early 1980s that occurred elsewhere--associated with figures like Ronald Reagan and Margaret Thatcher--took place in Scandinavia as well, leading to austerity, privatization, deregulation and rising inequality over the last 30 years.

In the last two decades in particular, income and wealth inequality grew faster in Sweden than any other OECD country. That's true in part because Sweden was beginning from a more egalitarian baseline, but the figure is still telling. Poverty and unemployment have also been on the rise, whereas they were virtually nonexistent in the postwar period.

Neoliberal pension "reforms" have eroded the longstanding system by which seniors were guaranteed a generous, reliable benefit. The new marketized system shifts risk onto individual workers, resulting in a less predictable, less secure system.

Investment in care for the elderly and spending on health care has also declined considerably. Since the 1980s, hospital stays have been shortened and the number of beds has declined. Meanwhile, the private, for-profit medical sector has grown.

Disinvestment in the welfare state decreases the standard of living of workers, but it also has troubling political consequences. This is because declining investment in public programs causes a decline in the quality of services provided, which in turn causes relatively well-off workers and the middle class to opt out of public programs and seek private solutions. The result is a general weakening of public support for the welfare state.

And it hasn't just been right-wing parties cutting the welfare state. In many cases, social democratic and self-described "socialist" parties have taken the lead in shredding programs they once supported.

Swedish workers are still strong enough to protect many of the gains they made over the course of the 20th century. They still enjoy cradle-to-grave medical coverage, extensive unemployment benefits, and so on. Working-age families in countries such as Denmark still receive about three times more aid than their American counterparts. But the fracturing of the welfare state and the recent rise in poverty and inequality is real.

WHY HAVE the major social democratic parties in Scandinavia been retreating and drifting to the right since the 1980s? To answer this question, we have to examine the limits of the reformist perspective underlying social democracy.

Reformism, simply put, is the idea that capitalism can be fixed by state intervention on behalf of working people. Reformists see the state as a neutral vessel that any class can wield for its own purposes. They agree with revolutionaries that capitalism, left to its own devices, causes inequality and recurring crises. But they differ in believing that government action can solve these problems and achieve long-run stability and social justice within a capitalist framework.

The trouble with the reformist approach is that the state under capitalism is not a neutral vessel that workers can take hold of and operate in their interests. Under capitalism, every government, no matter what political party rules, relies on tax revenues, which in turn depend on the health of the capitalist economy. When capitalist economies go into recession, funds for social programs come under pressure.

As the Marxist economist Robert Brenner wrote, "The old saying that 'What is good for GM is good for everyone' unfortunately contains an important grain of truth, so long as capitalist property relations remain in force."

This may not seem like a problem when the economy is healthy and the labor movement is strong enough to force the capitalist class to compromise and accept higher levels of taxation and social spending. But in the long run, recessions and economic downturns cannot be avoided under capitalism.

When that happens, there is tremendous pressure on all political parties committed to maintaining the capitalist order--including social democrats--to find ways to jump-start economic recovery and ensure that capitalist profitability is restored. In this context, the compromise between labor and capital breaks down, and the ruling class demands policies that will restore profitability at the expense of labor--and all political parties unwilling to go beyond the capitalist order are obliged to heed their call.

This is why we can find innumerable examples since the 1980s of self-described socialist politicians cutting back on the social safety net, reducing taxes on corporations, weakening the bargaining power of unions, privatizing public services and easing regulation of the financial sector. This is exactly what happened in Scandinavia from the 1980s to the present.

The cause of this isn't simply opportunism on the part of politicians. The root problem is that in periods of recession, reformists find themselves trapped by the unfortunate fact that the welfare state is dependent on capitalist growth and profitability to fund its social safety net.

This dependence on capitalist profitability would be less of a problem if the system could be managed and downturns avoided. But as the economic meltdown of 2008 and its mutating aftermath has vividly demonstrated, the global capitalist system is not easily tamed. The fundamental problem is that capitalist growth is an inherently unstable, unplanned process that inevitably generates crises.

Sooner or later, booms give way to busts, and reformists will face a dilemma: Stick with capitalism and do whatever is necessary to restore growth and profitability, or give up on reformism and try to move beyond capitalism altogether.

THE UNWORKABILITY of reformism in practice is one factor underlying the case for a revolutionary approach to social change--the case that socialism must be an alternative to capitalism, not a reformed version of it.

Rather than keeping the class power of capitalists intact, revolutionary socialists propose that we bring the means of production under public ownership and democratic control. Rather than relying on a crisis-prone, ecologically destructive free market system driven by profit, revolutionary socialists advocate a sustainable, planned system dedicated to promoting human development. Rather than aiming to preserve an unstable compromise between oppressor and oppressed, revolutionary socialists want to get rid of oppression altogether.

This doesn't mean that revolutionary socialists are against reforms under capitalism. There's no question that the reforms won by the Swedish workers' movement over the course of the 20th century are impressive and inspiring. No revolutionary could say that it wouldn't be an incredible step forward if workers in the U.S. made similar gains.

But the fact remains that progressive reforms under capitalism are perpetually precarious and vulnerable to attack as long as the 1 Percent remains in firm control of the basic structure of the economy.

As long as pro-worker social programs depend on revenue from the capitalist growth machine, there will be tremendous pressure--particularly in periods of economic downturn--to tend to the needs of capitalist profitability first and foremost, even when those needs conflict with the interests of workers.

We support many of the economic and domestic policies that Bernie Sanders has championed in his presidential campaign--single-payer health care, free college tuition for all, subsidies for child care, and extensive parental leave benefits.

But to win even modest reforms in a period of long-term capitalist crisis will require mass social movements and a high level of working-class militancy. Running as a candidate for the Democratic Party not only does not build such movements, it ultimately serves to co-opt and demobilize them.

More than that, we need a movement that sees the fight for immediate reforms as a step towards dismantling and replacing the capitalist system entirely.

The lessons of Scandinavian social democracy are that it is possible to win significant reforms under capitalism, but unless we get rid of the entire system, reforms will remain permanently vulnerable in an anarchic system driven by ruthless competition for profit.