Anders Borg's confession and the false accusation of guilt
In 2005, Anders Borg admitted that It wasn't welfare that caused the 1990s crisis, without a misvalued exchange rate and poorly managed macroeconomic policy. Despite this, welfare was blamed. The Moderates used this narrative to push through attacks on wage earners, privatizations and cuts. As early as 2006, when Fredrik Reinfeldt won the election, an austerity policy was initiated that led to a gradual and extensive deterioration of working conditions and the public sector.
Unemployment and class struggle in the early 1900th century
At the turn of the century, Sweden was characterized by widespread poverty, high unemployment and sharp class conflicts. The state gradually began to expand social safety nets. After World War II, the public welfare system grew as the state invested more than it received in tax revenues during recessions. Investments in housing, education and industry created full employment and economic stability.
The People's Home was built on investments – not abundance
The widespread myth that the welfare state was financed by excessive consumption is incorrect. The community center was built through government investments and strategic loans.The state played an active role in managing the economy, leading to stable growth and full employment.
1970s: Systemic crisis and industrial closures
In the 1970s, the Bretton Woods system collapsed when Nixon abruptly delinked the dollar from the gold standard. This led to currency turbulence, inflation, and global economic crises. The oil crises hit Sweden hard and accelerated industrial closures. The large industrial companies lost power to the financial sectorThe unparalleled efficiency of large corporations under Keynesianism had lowered their profits. They were forced to turn to the financial sector to afford technological and product development.
The 1980s: Deregulation and the neoliberal offensive
In the 1980s, neoliberal ideas began to take hold. Deregulation in the financial sector created an unhealthy loan economy and increased speculation. Banks were given free rein, which led to a property boom – but also enormous risk exposure.
The 1990s crisis: How Sweden crashed
When the Swedish krona fell and interest rates soared in the early 1990s, private debt exploded. The government's response was to cut public sector spending, even though it was a macroeconomic shock rather than the fault of welfare. Demands for budgetary discipline and austerity policies became the new norm. Göran Persson's austerity policy cemented the dismantling of welfare.
2000s: Financial crisis, the Alliance and the weakening of welfare
When Fredrik Reinfeldt came to power in 2006, it was with the promise of modernizing Sweden. In practice, this meant massive tax cuts, sell-offs of public property, and policies that undermined the bargaining power of wage earners. The iron-fisted wage law illustrates how the government actively suppressed wage increases through the work line and precarious employment. The 2008 crisis hit hard, but the government used it as an excuse for further cuts. The effects on the labor market and social security became clear.
The economic debate and alternative solutions
A common argument is that Sweden must have strict fiscal policy frameworks, but this picture is challenged by modern economic theories. Mixed economy discusses alternative models which can provide a more sustainable economy. Furthermore, economic policy has often been guided by ideological beliefs rather than scientific findings, which is criticized by Per Lindvall.
What do we learn from history?
The Swedish welfare state has gone from expansionary to defensive, with every economic crisis used to push through austerity. From the Nixon shock to the 2008 financial crisis and Reinfeldt's privatizations, we have seen a clear movement from social security to market-driven policies. History shows that these changes were not inevitable, but the result of political choices.
Very good summary of how everything turned from our development to disarmament of social capital and independence!!
The community of values is ongoing
to dissolve in the 2000st century. Business perspective takes over. National struggle for the earth's resources. Geowar has been in effect.
Business perspectives have always been relevant. The difference from before is that back then there were industrial business perspectives, with their needs for both workers and customers and thus the need to somehow satisfy both. Today, speculative rentiers are in control.
In Sweden, for example, banks account for more than a third of all business profits, something they earn on mortgages for increasingly expensive housing. Which means that it becomes more profitable to let prices rise than to build new ones, plus prices are driven up more the less is built. A vicious spiral.
I have just ordered Jan Glete: Networks in Business, which according to the publisher's text is about how the so-called business community from the 60s became increasingly conservative and guarded the status quo instead of investing in something new. If what I'm reading is correct, I'm coming to believe that this also played a role.
One factor is, for example, very clear – that the entire bourgeoisie rabidly defended itself against the opening to the world at large, which was indeed the positive thing that Palme stood for. No, for him it was the old industrial countries that mattered, and nothing else.
And then we have the factor that Alfred Chandler describes: that the large industrial companies had an overproduction crisis from the late 60s. They became so efficient that they couldn't sell everything they could produce, there weren't enough customers.
But instead of creating new demand in, for example, poor countries, they chose to focus on borrowing from rentiers, who thereby gained decisive power over the business world. And while industrialists, who have to think about complicated production chains, are dependent on both workers and consumers, rentiers can ignore both. See https://gemensam.wordpress.com/2024/07/22/om-hur-de-producerande-storforetagen-forlorade-sin-makt/
It's fascinating in a way that Chandler wrote about this back in the 90s – but no one in the political circles of the time took note of it. Instead, they blamed the workers. Even the socialists did it.
Yes exciting