Scandinavian social democracy

The Nordic model of social democracy offers lessons to the developing world, including countries like India despite the myriad complexities of diversities

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. This meant that the coalition that the Social Democrats were part of, which included the Centre Party, the Left Party and the Green Party, were left with 173 seats, as opposed to the right-wing coalition led by the Moderate Party, which bagged 176 seats. The Moderate Party itself won only 68 seats, two lower than its previous tally in 2018, but the major gains among the Right was made by the far-right Sweden Democrats who won 73 seats and 20.54% of the votes, according to preliminary tallies.

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. Some members of the coalition — the Liberal party’s representatives — have expressed unwillingness to be part of a government that had the support of the Sweden Democrats and that has put a spanner in the works in the new government’s formation.

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. But does the rise of the polarising presence of the SD — which is not expected to be part of the new right-wing government but could lend issue-based support to it — threaten the political and social consensus driven Nordic model as it is called in Sweden and other Scandinavian countries? To answer that question, we need to understand what is meant by the Nordic model, or if U.S. Senator Bernie Sanders’ version is accepted, “democratic socialism”.

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.

In the Scandinavian countries, on the other hand, the systems are more akin to typical “social democracies” — reliance on representative and participatory democratic institutions where separation of powers is ensured; a comprehensive social welfare schema with emphasis on publicly provided social services and investment in child care, education and research among others, that are funded by progressive taxation; 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).

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 (data as of 2019). 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.