The Swedish model in 2015: a ‘safe haven’ or a ‘Nordic noir’?

University of the Witwatersrand Fiction versus a startling reality I am positively surprised by the increasing number of people coming up to me asking for travel advice on Scandinavia. As is often the case, they admit to ultimately having been swayed by the dark landscapes and fictional characters in Nordic noir novels or television box sets. Simultaneously, foreign observers find the new political landscape in Sweden puzzling and worrying and rightly so. Having slowly witnessed the deconstruction of the old ‘Swedish model’, a new element appears to have cemented the belief that Sweden truly has changed: the rise of the Sweden Democrats. How could an anti-immigrant party on the Far Right become the 3rd largest party in the country? Initially, it would be easy to dismiss the Sweden Democrats as yet another European anti-immigration party on the Far Right, occasionally flirting with Fascism but portraying themselves as ‘neither Left nor Right’. As is then the case, the focal point gravitates towards immigration and multiculturalism for supporters and opponents alike. This might be a convenient and logical approach, but it also leads to the wrong precision. The Swedish model offers an insight to why. A blend between capitalism and socialism: the Swedish model The Nordic literary crime genre is heavily indebted to the Marxist writer-duo Maj Sjöwall and Per Wahlöö. In the 1960s and 1970s Martin Beck series, they expertly managed to portray some of the social tensions and cracks that existed within the Swedish welfare system at the time. Since then, the Swedish (or Nordic) model has been more than just a stage set for the drama that unfolds in the crime novels. In fact, through disturbing examples, they all seem to illuminate the illusion or decay of this model. During the decades preceding the 1980s, Sweden presented itself as an exception, where crude classifications became, if not invalid, then at least open for questioning. The ‘third way’ or the ‘Swedish model’ highlights the uniqueness of the small and developed countries in Northern Europe, becoming convenient labels to portray some of these characteristics. Even among its critics, the model was often regarded as a successful synthesis between capitalism and socialism, between free enterprise and social planning. Although the definitions of the Swedish model vary, most observers agree that the following characteristics could be attributed to it: a relatively decommodified wage relation (independent from market forces), public commitment to full employment, welfare state universalism, a large social service sector, egalitarianism (in particular with regards to women) and a class compromise between capital, labour and farmers (and later also white collar workers)1. Broadly speaking, the society could truly be portrayed as egalitarian, with a solid social safety net stretching from free education to universal health care. The demise of the Swedish model and the rise of financialisation The deconstruction of the Swedish model coincides almost perfectly with the deregulation process that was put in motion during the 1980s, and the infamous banking crisis that followed soon thereafter. This also marks the launch of a remarkably rapid and widespread financialisation2 process in Sweden. Seen from this perspective, the subsequent transformation could be summarised in the following four points. Firstly, Sweden has embraced a free market ideology with gusto, and in many respects gone further than AngloSaxon countries. The financialisation process has become highly visible in overall daily life, not least as market mechanisms have been encouraged to enter previously ‘sacred’ areas such as health, child and elderly care. Neoliberalism has penetrated the Swedish society profoundly and with little social and political resistance. Politically, the country has transformed itself from a role model for those wishing to implement reforms often associated with the Swedish Social Democratic Party to a ‘poster boy’ for European parties on the Right, aiming to pursue an agenda with a limited role of the state in education, health care and so on3. Secondly, the change in macroeconomic, including monetary policy has evolved remarkably during the period. An overriding political ambition to achieve and maintain full employment was replaced in 1991 by that of a low and stable inflation. The central bank has been at the forefront with regards to inflation targeting, whereas government policy has changed to encompass a range of measures seemingly incompatible with the ‘old’ Swedish model, such as income tax cuts, large scale privatisation programmes and policies aimed at achieving budget surpluses and government debt reduction. Thirdly, the financial system previously underdeveloped, protected from foreign ownership and one of the most regulated in the world – is barely recognisable. Today, Sweden and the Swedish krona rank disproportionally high in terms of stock market capitalisation and turnover in the foreign exchange and derivatives markets. Having been a pioneer by imposing a transaction tax on financial instruments during 1984-91, the country now belongs to the most vocal opponents of the European Union (EU) financial transaction tax proposal by the European Commission.