“Nordic Social Democracy: the
Modernizers
Paolo Borioni, “Fondazione
Istituto Gramsci”
A feature of nordic socialdemocracy
• The first idea was parity between the
labour market parties
• The second idea was a virtuous circle
between efficiency, solidarity and equality
• self-organised (partly state funded)
voluntary system of unemployement
insurance: the Gent (or Ghent) model
The Ghent system and ALMP
• difficult to discriminate between ‘involuntary’
joblessness and ‘voluntary’ forms of idleness.
Voluntary insurance offered a way out of this
• The workers themselves had to carry the main
burden; it would be in their interest to closely
control all applicants
• This paved the way for Active Labour Market
Policies: activation, upgrading programs
Norway
• Progress Party (FrP) wants to use 150 billion
Euro of the Oil funds to dicrease the level of
taxation. This would undermine welfare
• Present rules about oil money: 1) Oljefonden
must be kept apart from current public budget; 2)
From this fund for other purposes only less than
4% of Gnp per year
• FrP got 22% in 2005 and is the second biggest
party
The left wing government since
2005
• Despite temptations welfare societies and
public policies are supported: the left wins
in 2005
• Social-democracy: oil money only to
strengthen the welfare state and remaining
under the threshold of 4% per year of Gnp.
• Left wing victory in 2005: An inclusive
welfare state is apparently not a feature of
an age of shortage/poverty alone.
Why wealthy Norway wants welfare
and saving money in Oljefonden
• Strength of public policies and public initiative:
public and semi-public oil companies have a
share of about 50% of the oil plants. Shell and
Bp have less than 10% each.
• Preventing inflation
• 70% of oil dug out in an age of relatively low oil
prices.
• Oljefonden as a future “insurance” for public
policies and welfare
Welfare as modernity
• 57% of women supported the left wing in
Norway
• Welfare is perceived as a factor of
modernity: an infrastructure of individual
freedom
• Welfare state and confidence in public
policies have a mutual positive
strengthening effect
Expenses for free education
DK: right wing government since
2001
• Part of the nordic and danish electorate which
used to vote Social Democracy resent Soc.
Dem. flexicurity reforms of the 1990ies
• Conservative party (Konservativ Folkeparti)
genuinely keen on introducing sensible tax-cuts
• (Liberals/Venstre, the biggest party) advocate for
“skattestop” (no raise of taxes in no field for no
reason). Tax reductions only in the long run and
very gradually
DK: Social Democratic Reaction
• the party tried to react to it and put forward
their slogan “we choose welfare”
• Welfare workers think that new liberal
slogan “Denmark can afford it all” is
untenable.
• salaries must to be raised in the welfare
sector to prevent people leaving for better
paid jobs and therefore a shortage of
hands in welfare state.
DK: Soc Dem strategy and the
2007 election
• Center-left coalition was in the lead until
november 6th. Until then, the debate had been
mostly about welfare
• According to opinion surveys the main worries
for most danes have not to do with high taxes,
but rather with welfare and immigration
respectively.
• after a few days of campaigning, in which swing
voters had closely followed the welfare debate,
they must have felt reassured about welfare
• The center right won againg
Social democratic discourse in
Sweden
• Former social democratic premier G.
Persson said The World Economic Forum,
declared that Sweden was the third most
competitive economy in the world
• a society characterized by very high taxes
and very expensive welfare programs can
be perfectly competitive
Sweden: A subtle neo-liberal
strategy
• Swedish conservative government intends to cut
the rates of income taxes, especially the highest
and the lowest rates as a stimulous to work
more
• Incentives to go back to work: lower
unemployment and sickness insurance benefits
which could undermine the “Gent model”
unemployment insurances. The latter, being
managed by the unions, explains the very high
degree of union membership (above 70%)
Un-hegemonic neo-liberal nordic
discourse
• The neo-non-socialist leaders today often
voice their appreciation for the welfare
state
• Although both the swedish and the danish
prime ministers once used to support a
rather radical idea of what Anders Fogh
Rasmussen in his book from the early
nineties called Minimumsstat
Swedish reforms of the Gent model
• since January 2007 it has been made
significantly more expensive to be a member of
a state-supported, but unions-managed
unemployment insurance
• no longer possible to get any tax allowance for
the cost of membership in unions-managed
insurance
• In a town like Stockholm, consequently, less
than 20% of the younger workers are members
of a union
• Attack on the nordic model and on social
democratic participation
Gent model reform in Dk
• switch power and influence from the old
management system (traditional cooperation
between unions and employers managing
“flexicurity”) to municipalities
• So, governments acquire more control upon how
long and for what reasons unemployed are
given the chance to upgrading education rather
than a “compulsory” job they are offered
• Tendency to more “workfare” and less flexicurity
Expenses in Almp: in general (left),
per unemployed (right)
Expenses in R&D
5,0%
4,9%
4,5%
3,9%
4,0%
3,5%
3,5%
3,1% 3,1%
3,0%
2,6% 2,6% 2,6%
2,5%
2,5%
2,3%
2,2% 2,2%
1,9% 1,9% 1,9%
2,0%
OECD-average
1,7%
1,1%
1,1% 1,0%
0,9%
Ireland
Italy
EU25-average
1,5%
1,0%
0,5%
Portugal
Spain
Norway
Canada
UK
Netherlands
Austria
France
Belgium
Germany
USA
Denmark
South Korea
Iceland
Japan
Finland
Sweden
Israel
0,0%
Soc Dem Reaction
• wage earners can count on acceptable
unemployement benefits for relatively long
periods
• one of the factors compelling companies
to offer good and relatively well paid jobs
• neo-liberal workfare approach at risk of
undermining this stimulous to innovation
and high quality production/funding of
welfare
Social democratic strength
• Dk: 25% (historical low). Potential coalition
about 45%. Economic and organisational
problems
• Sweden (last survey): 43% (higher than
the conservatives altogether). Potential
coalition 56%. Strong Hegemony, with
some new problems.
• Norway: 32%. Coalition 47%. Majority in
parliament. Hegemony, though threatened