Palme and the Swedish Model

But at home, too, Palme represented a fundamental challenge to established interests — and stood in the best traditions of Swedish social democracy. He was committed to protecting an economy in which the vast majority of workers (between 70 and 80 percent during his tenure) were in trade unions, the state owned the majority of the economy, and the welfare state ensured that the basic necessities of life were available to all.

Olof Palme’s predecessor, Tage Erlander who was prime minister for twenty-three years without a break, was, beneath his calm exterior, a studied Marxist and a passionate socialist. In 1974 Erlander was asked what the future was for the ideas of nationalization and control over the means of production. He replied that today “50 percent of production has been extracted from the capitalist economy through taxation. If we can increase this (share) to 60, 70, 80 percent, then the welfare state will have become a form of socialism.”

That kind of economy had been built by the Left. In 1932 the Swedish Social Democrats won the election in the shadow of the Great Depression by promising full employment and a new economic policy. Ernst Wigforss, who was soon to become finance minister, attacked his right-wing opponents with a rhetorical question — “can we afford to work?” — and made the case that laissez-faire economists were undermining the economy by advocating that workers be left idle and poor.

From 1932 to 1990 the Social Democrats considered full employment their most important goal and made it the essential element their economic policy. In principle, unemployment never exceeded 2 or 3 percent during the entire period. Socialism through the expansion of the welfare state was the strategy, with the state sector aiming to become a sphere outside the capitalist production system with its profit-maximizing principles.

The political generation which created these reformist strategies had one thing in common: a deep democratic-socialist conviction. Palme and the politicians before him who built the world’s strongest Social Democratic Party were reformers because they sought to transform capitalist society. Incremental reforms based on social-democratic values with equal distribution of wealth, democratic decision-making, and freedom of expression as primary aims were the path to democratic socialism.

Seen in this context, the murder of Olof Palme was a political murder since it had enormous political consequences. When Palme crossed Sveavägen, in Stockholm, at 11:17 PM he was leader of the party which had won the 1985 parliamentary election by opposing privatization in the welfare system, which had introduced wage-earner funds in private companies, which opposed membership of the EEC (now EU), stood for non-alliance and neutrality in foreign policy, and resolved to maintain a public sector which extended over half the economy and was subsidized through the highest taxation in the world. The kind of social democracy which was to emerge minutes later, without Olof Palme, not just in Sweden but across the West, was a fundamental break with all of this.

After Palme

In 1980, Sweden was arguably the most egalitarian capitalist country the world had ever seen. Under Palme, the country had responded to the tumult of previous decades with a new wave of social-democratic policies: public universal childcare, housing allowances for pensioners and parents with young children, increased children’s allowances, and expanded free health care provision, including for abortion.

However, according to the OECD, Sweden today is the developed country in which the gap between rich and poor is widening most rapidly. As sociologist Göran Therborn demonstrates in his book Capitalism, the Powerful and the Rest of Us, when it comes to wealth distribution Sweden has become one of the world’s least egalitarian countries, comparable to Brazil, South Africa, and the United States.

Tax revenues from the economy rose during the 1980s to exceed 50 percent. Today it is around 43 percent, which constitutes a cut in taxes of seven percent of GNP since 2000, or a reduction of 240 billion Swedish Kronor (£20 billion) per year in public spending.

For decades, Sweden’s Social Democratic Party pursued a policy of full employment. In 1990, it changed course and made low inflation the primary goal. This reappraisal was to some extent dictated by Sweden’s entry into the European Union but it was also the policy which the domestic right-wing and their economic advisors had been advocating for decades. Since then unemployment has never fallen below 6 to 8 percent — three times higher than it had ever been before.

Over recent decades we have also witnessed a rampant neoliberal revolution driven by privately owned, profit-maximizing but publicly financed schools similar to those advocated by Milton Friedman. These schools are in the model of those which the “Chicago Boys” used to build free-market economics in Pinochet’s Chile — but even there they were subsequently abolished. In Sweden, one in every five pupils now attends a privately owned school, exacerbating the already pronounced racial and class segregation. For a number of years there has been a major crisis within the health care system due to a serious lack of resources and the failure to achieve the building of private hospitals.

After the 2018 election, the Swedish Social Democratic Party which had been the largest in the country for more than a century considered itself compelled to enter into a co-operation agreement with centrist parties, embracing a neoliberal program comprising tax cuts for high earners, the privatization of the labor exchange, and the deregulation of the market for rental accommodation.

Since the signing of this agreement support for the Social Democrats in the opinion polls has plummeted and the most recent polls indicate support only among between 22–23 percent of the electorate, which is less than Sweden’s largest right-wing extremist party, the Sweden Democrats.

To put it mildly, something has happened to Olof Palme’s party and his country. On the thirty-fourth anniversary of his murder, social democracy is in existential crisis. The paradigm shift I described brought about decades of decline — and there’s no sign of it ending soon.

Legacy

On days of remembrance, you might hear the odd Social Democratic politician express regret that so few people recognize Palme’s political achievements. But the modern party has practically eradicated everything for which he stood. In this vacuum Palme rapidly became just a part of history.

Olof Palme was no messiah. Like many politicians, he made mistakes. Many of his ideas failed to take into account changes caused by the end of the Cold War and an emerging era in which capital was no longer controlled by the nation state. But the murder of Palme was a moment of global significance — the end of a strain of radical, reforming social democracy that saw a world beyond capitalism and the age-old crimes of imperialism. Although it was Palme who was shot, it was a politics that died.

It was not replaced by any new social-democratic ideas, rather Europe’s center-left parties adapted to neoliberalism and its economic policies. Since 1986 social democracy has put forward no major policies to reform society, at least none which might challenge the business establishment’s control over the means of production. The wage-earner funds which were introduced in 1982 were revoked without protest by the right-wing government of 1991–94.

Social democracy’s strong and well-organized foes faced a more pliable and accommodating opponent after Palme was removed. Social democracy was no longer a distinct political concept. It had broken with a line of independent thinkers which had existed for over a century, with one of the party’s founding fathers Axel Danielsson putting in the first party program that its aim was “to distinguish ourselves from all other parties.” Today the Social Democratic Party is just one of the pack.

According to the official party line, it was hatred of Palme’s personality which was the motive for the murder. But the reason for this hatred needs to be examined. Palme’s personality was no doubt a contributory factor, particularly the rancor which characterized his style as a debater. But it was his political message that provoked this hatred. Palme became the target for those who detested what a confrontational, aggressive, proud, and confident labor movement which raised taxes and aimed to democratize might achieve.

Without such policies there would have been no hatred. The hatred of Palme was not aimed at a single provocative debater who had betrayed his upper-class origins; it was a very specific campaign against a person who stood for policies which threatened entrenched vested interests.

Olof Palme is often in my thoughts. His portrait hangs in my office. The Swedish model has provided an inspiration for left-wingers across the world. Our strong unions, our comprehensive welfare state, and gender equality have made Sweden a blueprint. In the United States, Bernie Sanders frequently references the Nordic welfare states and their free health care and free university education as a path to follow.

But today the Swedish Social Democratic Party is facing the opposite direction. Its international officer returned from a recent trip to America and declared Sanders too “radical.” Better to side with the billionaires. Today, the leadership of Palme’s party finds Pete Buttigieg more inspiring. For millions of Swedish socialists, however, Sanders is a role model and an icon. His contributions to the debates and his speeches are distributed on social media and taken up by celebrities. His proud embrace of the term “democratic socialism” still touches the hearts of social democrats, and everyone else who dreams of policies which aim to change the world.

The morning after Palme’s murder — March 1, 1986 — I woke to find my devastated parents comforting each other on the sofa in our tiny living room. They wept uncontrollably in the dim light. The TV was on. Strangely, I recall it as black and white, like a photograph. “They got him,” said my mother, without saying who she meant.

There were many who at that moment felt that Sweden would never be the same again. We now know that they were right. Thirty-four years have passed. We still have no idea who murdered our prime minister. But we know who mourns him. And we know who maintains his tradition.