Unspinning the Swedish elections

OK, so the glee of the right regarding the loss of the Socialists in the Swedish elections on Sunday was getting to me. Even though the new government, The Moderates, won by a squeaker, the end of the Swedish model has been triumphantly splashed across the world’s business pages.

But as Peter Lindert has pointed out, the end of the Swedish model has been proclaimed before, yet it still persists: an annoying example of how a society can have high taxes to provide low poverty and well-funded public services. Damn them! They should be complete basket cases according to conventional thinking; and their bretheren, too: the Danes, Finns and Norwegians.

Thanks to New Economist for pointing out this article from Open Democracy to me:

We still love the Swedish model

Sweden’s election turnaround is less of a shift to the right than it appears, says Mats Engström in Stockholm.

Many people around the world seem fond of the Swedish welfare system. … The Guardian journalist Polly Toynbee named Sweden, in October 2005, “the most successful society the world has ever known.” The United Nations puts Sweden among the top six in the league-table for human development.

Admired, respected, even revered around the world – but no longer, it seems, by Swedes themselves, who voted on 17 September 2006 for a change of government. The Socialdemokraterna (Social Democratic Party) had been in power since 1994, only the latest phase of a political hegemony that had seen it govern for all but nine years since 1932. Now, the centre-right alliance led by Fredrik Reinfeldt’s Nya Moderaterna (New Moderates) will take its place. To many observers, it seems as much a change of regime as a change of government.

The model won…

So have Swedish voters indeed rejected their famous model? My answer is no, on two grounds. First, there is the tightness of the vote: the “red-green” side (the Social Democrats and its allies) received 46.2% of the vote against the four-party Alliance for Sweden’s 48.1%. The close result will be reflected in the balance of power in the new Riksdag (parliament), where the left bloc will have 171 seats to the right’s 178.

Second, there is the changing profile of the opposition itself. In its earlier incarnation, the Moderaterna was seen by many voters as a rightwing party which threatened public welfare. In order to win, the party has had to rebrand itself, embrace the welfare state – the essence of the “model” – and try to look more like the model’s principal defenders, the Social Democrats.

…
But the rebranding was, to a great degree, also a cloning. “Every promise the Social Democrats make on social welfare, we will agree to and improve”, Reinfeldt said in one of his campaign speeches. The Nya Moderaterna also focused on the key centre-left issue of jobs, albeit with a centre-right twist. Reinfeldt’s tax-cutting emphasis switched from the rich to the low-waged, and his labour-market policy combined attacks on unemployment-benefit levels with increasing the incentives to work. He survived furious attacks by trade unions to emerge with higher credibility than the Social Democrats in fighting unemployment. In Swedish terms, this is indeed a political sensation.

In the last televised debate before the vote, the Greens tried to remind voters that the number of adults of working age in Sweden is, at 76%, among the highest in the OECD countries. The people, evidently, were not convinced.

The opposition also succeeded in overcoming voters’ wariness of a coalition of four distinct parties which in the past had competed against each other. This time Reinfeldt was able to bring them together under the banner of the “Alliance for Sweden”, creating an impression of unity not seen on the right for decades. The alliance was able to weather two bad campaign moments: an internal fight over cutting property taxes, and a bugging scandal when Folkpartiet liberalerna officials were found to have hacked into the Social Democrats’ computer system, using the information in their campaign.

The government lost…

But a change of government when annual GNP growth is running at more than 4% (and at 5.6% in the second quarter of 2006) requires the incumbent to lose as well as the opposition to win. Göran Persson had performed impressively in restoring stability to the Swedish economy after the crisis of the early 1990s, and earned his election victories in 1998 and 2002. Indeed, he never planned to stay in power and contest a third election, but the murder of foreign minister Anna Lindh in September 2003 changed the Swedish political landscape. After it, Persson never regained the same energy that he had in the earlier, successful years. In this election campaign, he often seemed irritated, even arrogant.

The problem extended beyond personality to become one of trust, especially over the issue of social exclusion. Many voters came to sense a contrast between the prime minister’s depiction of Swedish society and their own experience. “Only 1,500 young people have been unemployed for three months or more”, he declared in one televised debate. That might be true in terms of the official statistics, but anyone who visits Sweden’s poor urban areas where large numbers of immigrants live can sense that tens of thousands operate outside the labour market.

A state committee recently reported that more than 20,000 young people (in a country of 9 million) are neither in work nor education. Göran Persson made no reference to their plight. The Social Democrats were also unable to escape accusations that they had concealed the true levels of unemployment by omitting the high numbers of people on long-term sick leave from the count. Persson’s apparent complacency over jobs and the labour market probably hurt his party’s credibility on other issues.

Furthermore, the election result was influenced by the fact that smaller parties made significant gains in the election yet fell below the 4% threshold to enter the Riksdag. Among them were the anti-immigration Sverigedemokraterna and the Feminist Initiative; each drew most of its support from working-class and/or leftwing voters who might otherwise have voted for the red-green bloc.