Daily Editorial Analysis

Scandinavian social democracy (GS Paper 2, International Relation)

Context:

• In elections held in Sweden recently, while the Social Democrats returned as the single largest party according to preliminary results, a fractured mandate left it with only 107 of the 349-seat strong Riksdag (Swedish legislature) and 30.33% of the vote share.
• The major gains among the Right was made by the far-right Sweden Democrats who won 73 seats and 20.54% of the votes.
• Incumbent Prime Minister Magdalena Andersson of the Social Democrats conceded defeat and resigned, even as Moderate leader Ulf Kristersson is expected to form the government with other right-wing parties offering support.

Immigration Issue:

• The rise of the Sweden Democrats (SD), a party with origins in the neo-Nazi movement in the country, to the mainstream of the Swedish polity has much to do with the centring of the discourse over immigration in the country.
• Several voters have expressed their concerns with rising immigrant violence and control of crime.
• The SD has taken a strident position against immigrants, Sweden played a major role in allowing refugees fleeing the Syrian, Iraq and Afghanistan wars to seek asylum in the 2010s by promising to make it extremely difficult for asylum seekers to enter the country.

Socialism and social democracy:

• Terming the political-economic system in the Scandinavian countries, despite its strong welfarist basis and emphasis on collective bargaining as “socialist” would be a misnomer.
• For one, the term “socialism” is associated with the regimes of the erstwhile Communist bloc, which had a heavy preponderance of the state in not just the ownership of the major means of production but also in political life with a one-party system drawing its ideological basis for rule on behalf of the working class.
• Following the collapse of the Soviet Union, new socialist regimes in recent years have sought to distance themselves from the one-party model in the so-called “second world”, instead focusing on retaining the functioning of market economies, while emphasising redistribution of wealth and a greater preponderance for the state in this process.
• The regimes in Latin America led by ruling parties in Venezuela, Bolivia and recently in Chile, can be termed “democratic socialist” seeking to achieve socialist goals of redistribution and restructuring of formal democratic and liberal institutions in vastly unequal and elite driven systems.

The ‘exceptional’ Scandinavian model:

• In the Scandinavian countries, on the other hand, the systems are more akin to typical “social democracies”;

1. reliance on representative and participatory democratic institutions where separation of powers is ensured;
2. a comprehensive social welfare scheme with emphasis on publicly provided social services and investment in child care, education and research among others, that are funded by progressive taxation;
3. presence of strong labour market institutions with active labour unions and employer associations which allow for significant collective bargaining, wage negotiations and coordination besides an active role in governance and policy.

• All these countries also follow a capitalist model of development, allowing for entrepreneurism and funding of welfare policies through a large degree of wage taxation in relation to corporate taxes.
• Norway is an exception with high corporate income tax rate imposed on extractive activities,the country is a major producer of oil and gas.

Commonalities inScandinavian countries:

• The commonalities in the Scandinavian countries;Norway, Sweden, Denmark, Finland and Iceland, on many of these counts are measurable.
• For example, among countries in the Organisation for Economic Cooperation and Development (OECD) (featuring most high-income countries in the world), Iceland (90.7% of the workforce), Denmark (67%), Sweden (65.2%), Finland (58.8%) and Norway (50.4%) have the highest proportion of the workforce belonging to trade unions.
• Education is free in all the Nordic States; health care is free in Denmark and Finland and partially free in Norway, Sweden and Iceland ; workers get several benefits, from unemployment insurance to old age pensions, besides effective child care. Therefore, labour participation rates in these countries are among the highest in the world (even among women).
• The five Nordic nations rank in the top 10 among OECD countries in government expenditure on health and education if calculated as percentage of GDP.
• The countries have undertaken a series of steps in deregulation of industry and privatisation of some public services since the heydays of the Keynesian era till the 1970s but they retain the emphasis on welfare, taxation and investment compared to the rest of the world and Europe in particular.
• This has helped these countries achieve significant outcomes — high levels of international trade and participation in globalisation, economic progress, low levels of inequality and high living standards.
• In the most recent UNDP report, Norway ranked second among countries in the Human Development Index (0.961), Iceland stands at fourth (0.959) Denmark at sixth (0.948), Sweden at seventh (0.947) and Finland at 11 (0.940).
• The Nordic countries ranked the highest in various indices on press freedom across the world and in indices measuring gender equality.
• They were placed among the top 20 countries in GDP per capita (PPP, $) according to the World Bank’s recent data.

Key features:

• One key reason for the thriving social democratic model in the Nordic countries has been their relatively smaller and more homogenous populations enabling focused governance.
• The “corporatist” model of involving interests of both capital and labour, mediated by the government at many levels, has allowed these countries to transition from agrarian to industrial to post-industrial (in some cases) and knowledge/service economies relatively smoothly.
• The tripartite consensus approach has also emphasised social policies “that facilitate expansion of modern production, and thus more and better paid jobs”.
• The increased immigrant populations in countries such as Sweden has brought new strains in its social democratic model and its safety nets.

Political resemblance:

• The other commonality is the political presence of the Social Democratic Parties in these countries.
• Norway is ruled by the social democratic Labour Party in coalition with the agrarian Centre Party; Denmark is ruled by the Social Democrats who are supported by the Red-Green Alliance, the Socialist Peoples’ Party and the Social Liberal Party; Finland’s government is led by the Social Democratic Party in coalition with the Centre Party, the Green League, the Left Alliance and the Swedish People’s Party and Iceland is ruled by a coalition led by the Left-Green Movement, which overtook the opposition’s Social Democratic Alliance as the leading left force in the country.
• These social democratic parties consolidated support by mitigating the effect of the global economic crisis in the 1930s.
• In contrast to other social democratic parties in Europe who faltered against the Nazis in Germany for example, the Scandinavian social democrats “fortified democracy, entered into broad alliances with agrarian parties based on favourable agricultural prices and universal social security… gave less priority to issues of ownership than to economic expansion, more jobs and increasing tax incomes….This lead to equal citizenship rights and pragmatic class compromises”.

Present scenario & Way Forward:

• While social democratic parties today no longer enjoy the dominant presence in the political party systems of these countries, they are still the largest organised forces in most Nordic countries.
• The pole position for left of centre/ social democratic parties in these countries, because of thriving labour and environmentalist movements in civil society, has helped generate a political consensus on the welfarist model resulting in even right-wing/ right of centre parties keeping them more or less intact.
• The key differences between these parties have been on social and immigration related issues and some commentators believe that the rising influence of the SD in Sweden will not be a threat to its welfarist model despite the roots of the far-right party.
• In many ways, the Nordic model of social democracy offers lessons to the developing world, including countries like India despite the myriad complexities of diversities, differential internal development and histories.