Sweden’s declining ordoliberalism (a)

It is time I caught up with political events in Sweden. Most Americans or Antipodeans hardly ever hear anything about Sweden from their news media: “a far-away county”, just like Czechoslovakia was to Chamberlain, 70 years ago: plus ça change… The reason I have not done so earlier is that many Swedish pages in Wikipedia and all the Swedish media, both printed and broadcasting, are hardly ever also given in English, or indeed any other language. So much for globalisation…

There is a 4-yearly general election coming up on 14 September 2014. Details of the parties and leaders: http://en.wikipedia.org/wiki/Swedish_general_election,_2014.

Tweedledum and Tweedledee: This time after 2 lost elections the Social Democrats have chosen a leader who is not in Riksdag. Stefan Lövfen has policies that are close to those of the Moderate Government: a classic Betongsosse. This is not translatable into English, it means literally a concrete social democrat, meaning an old-style social democrat.

The Alliance Government has been reducing taxes for those in employment ever since taking office in 2006. The same tax deductions have not been extended to pensioners. Pensioners, it seems, have not earned their pensions by paying for them in advance. However retired workers have not yet been labelled “dole-bludgers” – a term I first heard in Australia in the 1970s.

These tax deductions naturally benefits middle-income earners more than the poor, the unemployed or the retired. There have been five separate reductions in taxes, so the gap has been growing. Swedish National Pensioners’ Organisation (Wikipedia) has its own website (also in English!) at http://www.pro.se/Om-PRO/Kontakta-oss/Engelska/. PRO argues that pensions are a form of saved income from work and so pensioners are unfairly discriminated against by differential taxation.

The crux of the matter is that the bourgeois Alliance Government has reduced taxes for those in employment no fewer than 5 time since taking office – in 2007, 2008, 2009, 2010 and 2011. This has reduced the national tax income of governments quite drastically, and of course the decline is cumulative, growing each year. Statistics Sweden has calculate that between 2007 and 2012 the amount lost has been SEK 400 billions, while for 2012 alone the loss was SEK 83.6 billions: see the Swedish Wikipedia (for details in Swedish).

This is in effect a transfer of wealth from poor to the rich workers. In combination with decreasing welfare provision to health, education and welfare it marked the return of neoliberalism in Swedish governance, the first since the Bildt Government of 1990.

Sweden has also been subsidising the banks in a number of ways. If you can read Swedish look up “sveriges statliga subventioner till bankerna” (Sweden’s public subsidies to the banks). This is of course an incentive for banks to take risks during an economic boom to make a profit on speculative investments, calculating that after the crash and ensuing slump they will receive whatever subsidies they require to keep them afloat, including using the nationalisation of the debt to collectivise it, then selling again when the boom returns and inflation minimises losses to the public. See Wikipedia on Swedish banking rescue. See also: https://ordoliberalism.wordpress.com/2013/07/15/the-swedish-bank-crises-of-1992-and-2008/

With the Social Democratic policies almost identical to those of the Moderates the other political parties on both sides are pursuing their own policies. But the two main parties, the Moderates and the Social Democrats both appear to have lost support to their allied parties – the Greens and the Left, and above all to the Feminists (F!), and the Alliance Parties to the Centre Party, the Christian Democrats and the Liberals.

So there is a rush to the centre on both sides of the political divide. The Feminists (F!) are a new force in Swedish politics and all the parties rush to claim they are more feminist than the others: it’s quite tragicomic…

I am going to stick my neck out here and go for a Moderate Party win in September. I can’t see how the Social Democrats can hope to win when their policies are almost identical to the Moderates, when they are dependent on the Greens for governmental support, and when the Moderates have shown that they, too can maintain a tight budget. At worst, the growing popularity of the Sweden Democrats, may result in a hung parliament in which they hold the balance of power. Bu we shall see.

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