Sweden’s parliamentary election on 9 September 2018 resulted in the weakest performance for the Social Democrats since near-universal male suffrage was introduced in 1911. Then, the party got 28.5 per cent of the vote; this time, it managed 28.3 per cent. An entire century of electoral advance was wiped out. Even so, party headquarters greeted the outcome as a semi-victory, and the leader Stefan Löfven—a staid, middle-aged family man—went partying (with his wife) late into the election night. The ambitions of Swedish Social Democrats today have become quite modest. Historically, the sap—Socialdemokratiska Arbetareparti—was the most successful by far of all the world’s labour and social-democratic parties. For over half a century, between 1932 and 1988, it got over 40 per cent of the vote in every election, in a system characterized by proportional representation, multi-seat constituencies and a range of parties. No other Swedish party has surpassed the 30 per cent barrier since World War One. As late as 1994, the sap won over 45 per cent of the vote. It governed the country without a break, except for a ‘summer holiday’ administration in 1936, from 1932 to 1976, and then again from 1982–91, 1994–2006, and 2014–18. At time of writing, one cannot exclude the possibility that the sap will continue to dominate a post-2018 coalition.

Social democracy arrived in Sweden via Germany and Denmark, and the Danish comrades served as the original role models for the first generation of Swedish reformers. But from the mid-1930s on, the Swedes became the universally recognized master of their class. The sap administrations of 1932–76 were eminently successful as governments of social reform: cautious, gradual, well-prepared. They could point to full employment, a prosperous open economy that was competitive on world markets, a generous welfare state and an egalitarian society which, by 1980, had the lowest rates of income and gender inequality in the world. The proposal of the sap-led trade unions for ‘wage-earner funds’ in 1976 was perhaps the most far-reaching concrete measure for a socialist economy ever put forward by mainstream social democrats. The country’s social-democratization was thoroughgoing enough to keep the 1976–82 centre-right coalition of ‘bourgeois’ parties—as they are officially known in Sweden—on the track of full employment and social rights.footnote¹

It was the sap leadership itself that started the socio-economic Counter Reformation in the early 1980s. The neoliberal turn began as a kind of crisis management. Export industry was becoming less cost-competitive. The remaining textile and garments producers were wiped out, Korean and Japanese firms finally outcompeted Swedish shipbuilding, and the steel and forestry sectors were compelled to downsize. Profitability was low, and so was investment. The balance of payments was in the red for 1978–81, and the share of profits in value added fell from 30 per cent in the 1960s and early 70s to 24 per cent in 1978. This was portrayed as a threat to jobs, although employment levels kept up amid the international crisis. The economists of Sweden’s trade-union federation, lo, as well as the sap agreed that wages would have to be held down and profits pumped up. The main tool to achieve this was a 16 per cent devaluation of the currency as soon as the sap returned to government in 1982. The party leadership castrated the proposal for Meidner’s wage-earner funds of any real transformative potential, although a watered-down version was officially passed as a symbolic gesture to party and trade-union congresses.footnote²

The 1980s witnessed the international breakthrough of neoliberal economics. A group of sap economists formed a seminar to learn about the new ideas from Chicago, managing to get the ears of the Finance Minister, Kjell-Olof Feldt, and the governor of the Central Bank. Marketization and the control of inflation became the new priorities of Social Democratic policy. In 1985, this cabal pushed through the deregulation of Sweden’s credit and capital markets. Feldt reported that when he presented the proposal to Olof Palme, the Prime Minister replied, ‘Do what you want, I don’t understand anything anyway.’ These decisions, together with the reorganization of the long-somnolent Stockholm Stock Exchange, opened the floodgates to speculative financial capital, both foreign and domestic. The stock exchange rose from 12 per cent of gnp in 1980, to 68 per cent in 1989 and 128 per cent in 2012—by which time it was larger than the figures for the leading ‘shareholder value’ countries: 115 per cent for the us and 123 per cent for Britain.footnote³ This in turn generated a home-grown financial crisis in 1991, which brought an end to full employment in Sweden, reduced gdp by 4 per cent, and cost the taxpayers another 4 per cent of gdp to bail out the banks.

The sap was lucky that a ‘bourgeois’ coalition—led by the Moderate Party’s hawkish Cold Warrior, Carl Bildt—was in power from 1991 to 1994, to deal with the fallout from this pricked financial bubble. This was a task it performed very badly, paving the way for the sap’s return to office in 1994, with 45 per cent of the vote.footnote⁴ The Social Democrats managed to restabilize the economy and free the country from its dependence on New York bankers. However, the achievement was a short-term one, brought about with harsh austerity measures, and did not include any rethinking about privatization, marketization or ‘new public management’—inserting corporate-business practices into public services—let alone any egalitarian concerns. Instead, the bourgeois and sap-led coalitions that have alternated in power since 1991 have operated as relay runners in the promotion of inequality and profiteering. Together they have lowered taxes on inheritance, wealth and residential property to zero, made capital income less taxable than labour income, and tightened the scale of social benefits, while making them harder to access. Two years ago, Forbes magazine declared that ‘Sweden Heads the Best Countries for Business for 2017’, referring to a country run by Social Democrats.footnote⁵

Economic inequality has soared. The rate for disposable income has increased by 60 per cent since 1980—from a Gini value of 0.20 to one of 0.32 in 2013—taking the country’s income distribution back to the 1940s, or perhaps even the late 1930s. Two-thirds of that increase can be attributed to political decisions with respect to taxes and social transfers, and just one-third to a more inegalitarian distribution of market income. The current Swedish income distribution bears some resemblance to the English one of 1688. The average member of the richest 0.1 per cent has a disposable income, after tax and transfers, 38 times greater than that of the median-income earner. At the time of the ‘Glorious Revolution’, England’s temporal lords had an income 30 times that of urban middle-class merchants and traders.footnote⁶ Wealth distribution has worsened even more, resulting in the most uneven pattern to be found in Western Europe, on a par with those of Brazil, South Africa or the usa.footnote⁷ In 2002, Sweden’s top 1 per cent owned 18 per cent of all household wealth; by 2017, it had risen to 42 per cent.footnote⁸

Other inequalities are also deepening. The National Education Authority (Skolverket) has found that a quarter of school credits can now be attributed to the social class of a student’s parents, up from 16 per cent in 1998. The educational class gap for life expectancy at the age of 30 has widened since 2000, by two years for women and one for men: up to six years shorter life for both sexes, when compared with the highly educated. Gender inequality is an exception and has not increased. The gains of ‘1968’ and the feminist movement have not been reversed, and continue to have an impact on a thoroughly secularized country without a significant religious right. This does not mean that Sweden has been liberated from male domination and chauvinism. But it did mean that the international MeToo movement, when it reached Sweden, became a series of nationwide collective protests against sexual harassment led by female professionals, including policewomen, academics, physicians, lawyers and bankers.