SocialismToday           Socialist Party magazine

Socialism Today 148 - May 2011


Shooting down social democracy

In Tune with the Times: Olof Palme 1927-69

When the Wind Changed: Olof Palme 1969-86

Both by Kjell Östberg


Wonderful Days Ahead: a biography of Olof Palme

By Henrik Berggren


Reviewed by Per-Åke Westerlund

TWENTY-FIVE years ago, in February 1986, Sweden’s prime minister, Olof Palme, was shot dead on a street in Stockholm. Two days after the murder, 40,000 people gathered in Gothenburg, one of the many manifestations around Sweden. Shock and sadness were mixed with a growing concern that the Social Democrats’ golden age was over. No-one symbolised the welfare reforms more than Palme. Today, the Swedish Social Democratic Party (SAP) is in its deepest crisis since the 1910s, having ruined both its own reforms and its base in the working class. Two new biographies of Olof Palme put the SAP’s development in perspective.

The weight of the labour movement shaped Swedish society during the long period of social-democratic governments, from 1932-76. The party was ‘in tune with the times’, as the historian and socialist Kjell Östberg has called the first part of his Palme biography. It was a completely different party than today, with strong roots and support in the working class. This meant that SAP, particularly in the 1960s and 1970s, could be influenced by world events, increased class struggle, and radicalisation among young people.

Although capitalist rule was never seriously challenged, the stated ambition of the social democrats was to transform Sweden ‘step by step’ in the interest of the working class. The party programme talked about placing "decision-making over production in the hands of the entire people". In the 1968 general election, SAP got more than 50% of the votes. When Palme was appointed party leader and prime minister a year later, his congress speech was far to the left of any ‘red-green’ politician of today: "What more and more is perceived as the rich industrial nations’ failures are social tensions, the unreasonable gap between the classes, the concentration of power, environmental degradation, the difficulty of meeting people’s demands for participation". He predicted further radicalisation: "Now demands are growing for influence. In the workplaces, in schools, in residential areas, in economic life in general".

The pressure of the working class increased dramatically with the miners’ strike in the far north of Sweden in December-January 1969-70, expressing the expectations for change – against low wages and harsh conditions, but also for an end to the dictatorship of the employers in the workplaces. It was the first major strike since 1945 and the SAP leadership did everything to stop it, fearing that the class struggle would undermine what it considered to be the basis of the Swedish model: co-operation between the labour movement and the capitalists. It was also concerned about movements that it did not control.

But the miners’ strike was followed by many others in the first half of the 1970s, culminating in the forest workers’ strike in 1975. Within the labour movement there was strong support for the strikes. The answer from the SAP and the trade union federation (LO) leaders was extensive labour law reforms and study circles, meetings and speeches on workers’ participation and ‘economic democracy’. Henrik Berggren, editorial writer at the liberal Dagens Nyheter, says the SAP leadership had an "exaggerated fear of radicalisation". But this underestimates the strong pressure from the workplaces, rightly considered by the leaders to be a challenge to their own power.

From the 1930s, the social democrats had aimed for cooperation with the bourgeois parties and the employers. Especially from the end of the 1940s, the trade unions and the SAP governments offered ‘calm’ in the labour market: in exchange, the working class received rising living standards and comprehensive reforms.

But it was in the 1970s, under pressure of the radicalised strike movement plus the protests against the Vietnam war, that the reforms really took off. "It could be argued that never have such wide-ranging reforms been implemented in such a short time anywhere, as during Palme’s first seven years as prime minister", says Östberg. The state budget increased during the 1970s, from 26% to 38% of GDP. Among the reforms were improved health insurance, lowered costs for visiting a doctor, dental care reform, improved unemployment benefits, a retirement age of 65, a series of trade union rights reforms, housing grants, and increased child benefits. There was also a massive public housing programme, of one million new homes in ten years.

The radicalisation was particularly strong among women. The need for labour coincided with increased demands for equality. In 1966, 66% of women were housewives, in 1974 27%. In the 1970s, came reforms such as separate taxation (previously a married couple were taxed as one economic unit) and the right to abortion.

The radical reforms affected public opinion and even the bourgeoisie. Östberg describes the election campaign in 1970: "The bourgeois parties chose largely to accept the proposals – or to attack the Social Democrats for not being sufficiently radical". In 1976, the Wall Street Journal praised the centre-right election victory and the first non-SAP government in 40 years: "The Swedes have finally kicked out the Socialists". It was, however, this government that conducted large-scale nationalisations when the economic crisis of the mid-1970s reached Sweden. The bourgeoisie later regretted that they had become ‘social democratised’.

Olof Palme also personified the increasingly radical foreign policy of the SAP. In practice, after the second world war, Sweden co-operated with the US and Nato against the Soviet Union, while officially being a neutral country. In internal documents, the US State Department said that its views were transmitted to Europe via the SAP. In the 1950s, the SAP government even considered acquiring an atomic bomb.

But simply obeying the White House would not work. Public opinion in the 1960s radicalised more rapidly than in many other countries, particularly among young people and workers. Already in 1965, only 12% supported the US war in Vietnam. That same year Palme made his first high-profile speech criticising the US administration on Vietnam. It was followed in 1968 by a demonstration where Palme marched side-by-side with North Vietnam’s ambassador. Over Christmas 1972, when US planes dropped 20,000 tonnes of bombs on North Vietnam, Palme made a comparison with Nazi war crimes.

Palme reflected public opinion in Sweden, but also encouraged this opinion, giving the SAP the green light to criticise US imperialism. The criticism was necessary in order to keep their social base and limit the influence of the new left; it was possible because of the existence of the Stalinist states in the east. Trade and military cooperation with the US were not affected, however.

Palme’s radical positions were also useful for Swedish companies’ exports, particularly to ‘third world’ countries. Also US imperialism could use him as a messenger or mediator. Palme visited Cuba, for example, and spoke at a mass rally alongside Fidel Castro, who often praised Palme. At the same time, Palme warned Castro against supporting the Portuguese revolution of 1974-75.

While, in some contexts, Palme could even say that an "armed revolution may be inevitable", social democracy’s role was to try to curb and prevent revolutions. SAP and the LO, but also the Swedish state, gave aid to liberation movements, such as the ANC in South Africa and the MPLA in Angola, socialist parties in southern Europe, as well as to Solidarnosc in Poland in 1980-81. In all these cases, it was to steer these movements into a Swedish and European social-democratic, reformist path. For example, LO argued that "the Polish workers should refrain from all political and social changing activity".

Olof Palme’s image as a radical politician eroded gradually. The first big blow came with revelations in 1973 about IB, a secret intelligence service of the army which was led and organised by social democrats. The IB registered and monitored 30,000 people, mostly communists and trade unionists, and had its own workplace network. When the two journalists who uncovered the IB, Jan Guillou and Peter Bratt, were sentenced to one year in prison for espionage, 7,000 people protested in Stockholm.

It is now clear that IB activity continued even after these revelations, including sponsoring the Social Democratic Youth, SSU, to organise ‘education’ against the rest of the left. These methods were used against Offensiv (CWI Sweden), launched by Marxist SSU members in 1973. Östberg describes how "Palme followed with great commitment leftist developments throughout his life. When the [SAP] executive committee at the beginning of the 1980s discussed expelling Trotskyite infiltrators in the SSU he recalled: ‘It’s important that we block them early’." He suggested in particular that SAP should use the Swedish embassy in London for information on Offensiv’s British counterpart, Militant.

From the late 1970s, criticism increased from the SAP grassroots and the left. Expectations gradually faded about the promised ‘economic democracy’, that the power of capital would be broken. The social democrats’ alternative to growing socialist demands in the 1970s was ‘wage-earner funds’, launched by the LO. The normally cautious chairman of the metalworkers’ union, Bert Lundin, proclaimed that "with these funds, we take over gradually": 65,000 social democrats took part in party study groups on these funds and argued for workers to have power over companies.

The two biographies emphasise, however, that Palme and the SAP leaders never had any intention of challenging the dictatorship of the market. This was confirmed when the ‘wage-earner funds’ were later diluted so that they only became a new way to finance investment. The dilution undermined workers’ support for the funds, but it still did not satisfy the employers’ confederation, SAF. The toothless funds were attacked with an incitement campaign against ‘socialism’: over 50,000 people participated in a right-wing rally against them in October 1983.

So it was the capitalists that first broke the class collaboration of the Swedish model. As early as 1980, SAF had sought to challenge LO in the wage negotiation round but suffered a major defeat. After ten days of strikes and lock-outs the employers were isolated and workers won a 6.8% wage rise: 800,000 people marched in May Day demonstrations in support of the labour movement. The bourgeoisie then switched to a political offensive, with an austerity package in August 1980.

When SAP came back in government in 1982 the reform period was over. Right-wing economists influenced by the then new neo-liberal ideas became Palme’s main advisers. The goal was to increase corporate profits, and the new government began with a huge devaluation of 16%. The growth of the public sector stopped and, in 1983, cuts were introduced – medicine became more expensive and rents higher. In 1985, the deregulation of capital and finance started, leading to the deep banking and property collapse of the early 1990s.

In the 1980s, the Social Democrats also stood side-by-side with the right-wing parties in the hunt for alleged Soviet submarines. Simultaneously, JAS fighter aircraft became Sweden’s largest industrial project ever and arms exports flourished. When the labour movement backed off defensively and managed right-wing policies it resulted in public debate being driven sharply to the right.

But there were also counter forces. Union activists pushed LO to criticise the party’s right-wing course. In 1986, a new grassroots movement planned a conference of the trade union left. The murder of Palme, however, temporarily postponed this criticism from below. It was inevitable that the SAP would turn sharply to right in the 1980s: it did not want to challenge capitalist rule. Today, its programme is close to the conservative Moderates.

Swedish social-democratic reformism had a strong tailwind for decades. The Russian revolution, capitalism’s crisis of 1929-39, the Nazi defeat in the second world war, the liberation struggle in the former colonies, were all huge historical forces strengthening the international position of the working class for a whole era, and forcing the capitalists to avoid confrontation when possible. In Sweden, big businesses’ enormous profits were an additional important factor during the reform years.

But capitalism was only pushed back, and its reply would come sooner or later. Social democracy’s guiding principle, to constantly seek a new consensus, eroded and weakened the labour movement. The SAP was forced to break its own reforms – a public sector without profit interests, attempts at state control over industry and banks, housing subsidies and so forth. Wages, unemployment and sickness benefits were reduced and, finally, the ATP pension system – the SAP’s ‘trump card’ when introduced in the 1950s – was buried. When the post-war economic upswing was over, welfare reforms could only be defended by massive struggle, a line alien to social democracy. This requires a genuine socialist programme and a struggling workers’ party.

The far-right hated Olof Palme, and many older labour movement activists still admire him. In both cases, he is seen as a symbol of the post-war social-democratic movement, still delivering reforms as well as a few limited blows against the right. For socialists today, the lesson lies in understanding the limits of even progressive and sometimes far-reaching reforms and influence. Leaving capitalism and the bulk of the state apparatus untouched paves the way for their destruction.

TWENTY-FIVE YEARS after the biggest murder investigation ever in any country – 225 metres of documents are stored in the basement of Stockholm’s police HQ – who killed Olof Palme is still unknown.

The police made a mess of the investigation from the beginning. They followed a ‘Kurdish lead’, suspecting the Kurdistan Workers’ Party (PKK). Some time later, a Swedish alcoholic, Christer Pettersson, was declared guilty in a trial. He appealed, however, and was freed.

Wrong focus meant that more likely political motives were never properly followed up. In the years up to the murder, the rightwing in Sweden had conducted numerous smear campaigns presenting Palme as a Soviet agent or an extreme left-winger. Within the police and the military there were people celebrating his murder.

The effect of the murder was to delay the process of radical working-class criticism of Palme’s government. In that sense, it was a shot against the entire labour movement.

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