Clearing up the confusion about the Nordic countries and socialism
Yes, socialism had and has a role to play in countries such as Sweden, Norway and Finland.
Are the Nordic countries socialist? What is their relation to socialism? There often seems to be a great deal of confusion around this issue, so therefore it is time to clean this up. Are they socialist? Are they social democracies? Are they neoliberal?
Are the Scandinavian countries socialist, economically? Some history
They are not fully socialist societies, but it is important to note what they have historically achieved and done.
During the second quarter of the 20th century, the Nordics countries began to develop progressive taxation, welfare states (such as old-age pensions and unemployment benefits), workforce unionization and large public sectors.
In the first notable instance of a leftist political party assuming power in the Nordics, the Social Democratic Labour Party won the 1932 elections in Sweden. It was promising a reversal of liberal austerity measures, public works and a social welfare state in the short-term, although these reforms were not considered to be their complete long-term goals.
During the late interwar as well as the war years, some of the nations began to organize their economies on a more planned basis as well, which has a more directly socialist connotation that is relevant for this topic. This policy was encouraged in Norway and in Sweden by Labour Party and the Social Democratic Party respectively. Because of the left-wing Labour government (1945–1951), Norway retained much its previous planning after the war, making Norway the most planned economy in the western world outside of the Eastern Bloc.
‘’In 1945 the socialist Labour Party won a majority in Parliament. Many of its members and supporters wanted to turn Norway into a socialist society with a centrally planned economy. Norway should develop a national plan; competition is a nuisance and would not lead to a social optimum. New inventions and technical improvements within one firm should, for example, immediately be shared with all the other firms within its industrial branch. But such sharing could only be implemented in a planned economy. Such attitudes led to an expansion of the Norwegian wartime regulations. The Lex Thagaard and several other decisions made by the government and the parliament in 1945 and 1946 can, according to Espen Søilen (2002, 29), be seen as “a step on the way to a permanent form of a planned economy.’’
Norway’s economic policies after the Second World War were devised or inspired by the Nobel-Prize winning economist Ragnar Frisch and Ole Colbjørnsen, who both advocated a planned economy and believed such a system was needed to narrow income inequalities. Macroeconomic planning was also combined with a social welfare system and Keynesian spending to even out business cycles.
Although conservatives sometimes today refer to the Nordics as their preferred free-market economic system, the conservatives of that time saw the economic policies in Norway as being highly problematic. To Hayek and the economic liberals, it was a country being managed by their ideological rivals and the most definitive step towards socialist planning in the western world:
‘’Hayek stripe and participant in the 1947 founding meeting of the Mont Pelerin Society, fought fiercely but in vain against the Oslo School and the centrally planned economic system that was established in Norway after the war.’’
Similar developments took place in post-war Finland:
‘’The Finnish economy was built around the characteristics of economic growth, a strong export industry, wage work and rational planning. The main tenets of Finnish welfare policy were earnings-related social benefits, widening public services and collective labour market agreements built on a highly unionized labour force from the late 1960s onwards. State-owned companies played an important role in industrial production. Prices, wages, the movement of capital, interest rates and rents were regulated by state authorities and thus, ultimately, by the parliamentary political system, partly in collaboration with labour market partners’’
Generally, the characteristic of the Nordic economic policies at their post-war height (not necessarily what social democrats fully intended, but rather a compromise between parties), were progressive taxation, universal welfare states, active labor market policy, strong labor unions, economic planning and public ownership of industry.
Even today, although neoliberal reforms have been implemented since the 1990s, many of these characteristics remain. The share of wealth (aka the market value of property) owned publicly is 31.7% in Finland and the share of workers in a union is nearly 90%. As Matthew Bruenig writes at the People’s Policy Project:
‘’None of this is to say that Finland is a full-blown socialist society, whatever that might look like. It definitely could and should be more socialized and left wing than it is. But in saying this, we should not lose sight of how different Finland really is from the United States. To match the Finnish economic model, the United States would need to not only build a social democratic welfare state, but also socialize $35 trillion of assets, unionize 120 million workers, and move 25 million workers into the public sector.’’
So they are not socialist societies, because they have not yet moved to the majority of the economy being socially-owned. But the Scandinavian countries are without doubt, vastly more socialist than many other countries. Social ownership of the means of production is still fairly extensive after decades of neoliberal privatization. Sweden has 48 state-owned enterprises, and Finland and Norway have 67 and 74 respectively. Prior to the neoliberal reforms of the 1990s, Sweden had an array of nationalized industries, including iron mines, railroads, steel, forests, restaurants, electronics and aerospace. This is why it is perfectly reasonable for leftists to talk about these countries. It is not that they are socialist, it is that they are what more practical socialist policy making may look like in practice.
There is a long history of the socialist left looking towards the Nordics. For example, the Italian Communist Party cited the Nordics as examples of its preferred policies during the 1970s and 1980s. Bernie Sanders (a democratic socialist) has talked about the Nordic countries as having many things he would like to see in America.
They are also not really ‘’social democracies.’’ There is no such thing as a country being a ‘’social democracy,’’ per se. This is because social democratic is more of framework for achieving certain ends and the name of historical leftist political parties. A country being a social democracy would somehow imply that social-democratic political parties are politically hegemonic and have achieved all of their goals, the latter point being simply untrue.
What social democrats advocated
It is also important to understand what the ideology of social democracy actually was and what they advocated.
Social democrats were and are socialists. After 1918 and the end of the First World War, social democracy composed the reformist wing of the socialist movement, with communism composing the revolutionary or radical wing.
The Nordic social-democratic parties represented various shades of this political practice, with the exception of the Norwegian Labour Party, which was revolutionary and communist until 1927 and then centrist Marxist afterward. According to some social scientists, the revolutionary orientation of Labour forced otherwise fairly intransigent Liberals and Conservatives to concede pro-worker policy reforms much earlier than in other countries.
The Swedish Social Democrats won the 1932 elections on a promise to reverse austerity and increase social welfare in the short-term, and to realize socialism in the long-term. Ernst Wigforss wrote in a now famous election pamphlet:
‘’Against this humiliating submission under an economic mechanism, which is man’s own creation, the Social Democrats place the demand that rational beings can never let go, that man should be master of his tools of production and not their slave. It can be expressed in many ways. In a time of unemployment, it almost takes the form that all citizens of society have the right to work, that they must therefore organize their economic life, so that they through society’s bodies decide on jobs. The control over economic life required for this, the power over the means of production, over capital and the management of capital, which is necessary to make people work,
That the public works, which the Social Democrats now want to start, are only a step towards such a citizens’ domination of their work, is for no one hidden. Only experience can show how far it alone can lead to easing the crisis. But it clearly expresses the aspiration of the socialist movement to free the forces of production from the shackles imposed on them by the private capitalist order, to free people from being servants of the economic organization, and to enable them instead to master it. It is the real economic freedom that is a worthy goal for the people to strive for.’’
The Swedish Social Democrats wrote in their 1932 election manifesto:
‘’The weaknesses and dangers of the private capitalist system are exposed as never before. The wealth of natural resources, capital and labor is greater than ever. This, together with the extraordinarily highly developed technology, should lead to a richer and easier life for the people. With the productive resources of never-before-known measures, which are at the disposal of mankind, an even and good supply should be easily enough secured for all. Instead, we see a crisis unfold, seeking its victims in all walks of life. The enormous productive forces could not be controlled under the system of capitalism.’’
In other words, they had little confidence in the capitalist economic system as a general concept. In so far as the Swedish Social Democrats advocated extensively reforming capitalism; the goal was to limit the severe inequalities before more substantial changes could be seen as reasonable, build unity among the proletarians, limit material depravation of the working-class and create the historical and material conditions for socialism, as advocated by the social-democratic Marxist and welfare minister, Gustav Möller. Möller is widely considered to be the founder and main theoretician of the Swedish welfare state.
‘’It should be noted that Gustav Möller, although a firm anti-revolutionary and political enemy of Left-Socialists and Communists, did not consider social reforms as the general aim, or even long-term main purpose, of Social Democratic politics. He thought that before nationalization of industry could take place and socialism be introduced, it was necessary to develop the productive and human forces of society, and this could be done primarily by implementing a large number of social reforms. His reason for this was that the level of production was still so low that even if its fruits were to be more equally shared, they would not suffice to give the working classes a reasonable standard of living. In the meantime, it was essential to build a system of social reforms as a means to ensure the right to pensions, free education, unemployment insurance, health care, housing, etc. to make the working class strong enough for the transformation to socialism.’’
Swedish social democracy also advocated a different kind of welfare state from the non-socialists and the bourgeois parties. Not keen to repeat the state paternalism of Otto von Bismarck, the programs were organized as universal. They were set up with a most limited degree of means-testing and cash benefits were preferred. Parts of the Swedish labor movement very much opposed the idea of a controlling and paternalistic state bureaucracy.
The 1944 party program of the Swedish Social Democratic Labour Party declared the party’s ultimate goals to be:
‘’The goal of the Social Democracy is to transform the economic organization of bourgeois society, to have control over production in the hands of the whole people, the majority is liberated from dependence by a minority of capitalists…’’
‘’A planned public economy aimed at to make full and effective use of society’s productive resources, to provide employment for the entire able-bodied population, and to ensure that all citizens have a standard of living commensurate with the returns of the common work.’’
This is a very explicit statement of socialism, which was continued into the next programs of 1960 and 1975.
The Finnish Social Democrats represented a moderate point between the revolutionary communism of the Norwegian Labour Party and the more calculated gradualism of the Swedish Social Democrats. Their position was more similar to the variant of Orthodox Marxism associated with the German Social Democrats (and thinkers such as Rudolf Hilferding), which advocated class struggle within the context of a parliamentary democracy.
Väinö Tanner, who was the leading figure of Finnish social democracy for much of the 20th century until 1963, described his party’s position as such:
‘’After all, we are “Marxists,” a designation that we consider an honorable title.’’
‘’You still don’t have to give up the class struggle. The whole state every life is a continuous class struggle. It is practiced by all parties, although it has been tried to be explained only as characteristic of the Social Democrats. It is practiced by the right, relentlessly defending the interests of capital. It is persevered by the Agrarian Union on behalf of its own interest groups. We are practicing it as vigorously as before. It has only changed its character as circumstances change. Now we are fighting — no longer with the barricades, but with the ballot.’’
Lets not give people on the left (particularly reformist socialists) too much of a hard time for talking about the Nordic countries. Upon closer investigation, one would find these countries are indeed very indicative of that politics, and their history shows it.
They may not be fully socialist societies, but the Nordic countries have had socialist movements capable of contending for political power and even governing for extended time. We may not be able to make Nordic-style progress until, America too, gets its own socialist movement commensurate with its historical Nordic counterparts.