The social democratic model in Sweden built on a class alliance. The labour movement was the backbone – but to rule the country it had to cooperate with the home market industry (which could accommodate to higher salaries for workers to make them into good consumers of their products) and municipal and state officials (who would take a key position in the welfare state).

When the class alliance partners eventually withdrew their cooperation – the domestic industry because it became increasingly export-oriented and mostly saw good conditions for the workers as an obstacle to business, the civil servants because they saw better conditions in becoming privately employed managers or becoming capitalists themselves with state money – the social democratic model collapsed.

But the collapse of the social democratic model is not a uniquely Swedish phenomenon. It can be observed throughout the industrial world. And, indeed, where there has been no organized cooperation between the state and popular movements such as in the US, as Peter Turchin has noted, the collapse has gone even further and is approaching civil war.

So what has happened?

Since the 1980s, downsizing, austerity and outsourcing have prevailed throughout the North Atlantic world, and all North Atlantic countries have lost much of their productive capacity. Capitalists now make more money by imposing tariffs and taxing the use of existing resources than by creating new ones, says Brett Christophers. The housing market is perhaps the most obvious example in Sweden, but there are others.

These developments have been facilitated by Western governments favoring what Christophers calls rentier activities, such as financial and real estate speculation, platforms, patents & copyrights, and government contracting, while the productive activities have become less attractive and passed on to Asians who have gratefully accepted the gift.

And when speculation replaces production as the main capitalist activity, the direct producers lose their political power. Few workers are needed in speculative activities. They are thus not able to threaten to withdraw anything. Therefore there is no need to take any account of them.

It is nothing new that capitalists prefer to engage in fencing and collecting duties rather than producing new things. The economic historian Charles Kindleberger, for example, has traced the rise and fall of societies back to the Italian city-states of the Renaissance and found a recurring pattern. A class faction will successfully streamline production, more and more people are drawn into this and society becomes richer. If the streamlining is sufficiently epochal, the country where it takes place becomes hegemonic, i.e. the pattern and Big Brother for the whole world. After three or four generations, this fraction of capital gets tired – it is hard work to organize production – and starts to live off its wealth instead, speculating in land, money and other assets. It has then become dominant in the whole society thanks to its efficiency, and when it gets tired, becomes rentier, the whole society gets tired. And stagnation, poverty, inequality and pessimism spread. And the country where it is taking place becomes a backwater.

George Modelski and William Thompson have traced the threads back to the Song era in China, and Bas van Bavel has gone as far back as Abbasid Iraq. The pattern is the same.

So can't something be done about it? Well, sometimes popular mobilizations can behave so threateningly that rulers have to get serious in order not to go under. The populist democracy of the French Revolution thus interrupted a twenty-year period of speculation and spurred investment in the textile industry; the revolutions of 1848 spurred investment in railways and steam engines: the unionization of the late 19th century drove investment in electrification and – unmistakably – the assembly line; the Russian Revolution, the anti-colonial movements in India and China, and the most impressive labour movement mobilization in world history in Scandinavia and the US drove investment in mass motoring, household appliances and mass consumption in general, plus formal legal equality worldwide.

Such recoveries are an intricate story. Developments in Sweden in the 1920s can show how it works. From below, popular movements organized food seizures, 90 percent union membership, countless strikes and cooperative projects, and a popular movement culture to tie it all together, with folk high schools, study circles, popular literature in books and magazines, and an entertainment scene in the bosom of the popular movement culture. From above, marginalized elites discussed how to create an "intelligent society", without the speculative and rentieristic features of the existing one, later dubbed the "the welfare state" but also including large public procurements and investments. The catchphrase was "We build the country", and the election in 1932 was won under the slogan "one can't bee too poor to work", making rubbish of the liberal philosophy of budget cuts.

Such alliances between popular movements and marginalized elites, argues Jack Goldstone, are necessary for this sobriety to be effective. Reorganizing society is not easy, it requires some kind of professional skills.

However, protests are not always constructive. More often than not, they degenerate into scapegoat hunting, in Iraq, Spain and decaying Holland against religious apostates, in late 19th century Europe against Jews and in today's decaying Europe against Arabs and Russians. This is something the rulers can live with; it offers no reason for sobriety, rather the opposite.

Some kind of credible direction for change is needed; it is not enough to yearn for the good old days without renegades and foreigners, at least it cannot be recreated. Goldstone argues that the program of social change, at least in Europe, has been cumulative, building from at least the 16th century on equality at its core. This is the one that popular movements and marginalized elites can agree on, sometimes.

At the end of the 18th century, it was enough to link equality to reason, according to the program of the Enlightenment. That wasn't enough in the long run, as we know, but a generation later it was also linked to cooperatives (and, in the case of the French revolutionaries, state responsibility for provisioning), and a couple of generations after that, unionization was added. Both of these gave a strong position to popular activists and organizers, and unionization in particular became a Swedish hallmark. The twentieth century program, the welfare state, gave a much stronger position to employed functionaries, while popular movements were sidelined. Perhaps this is one of the reasons why we find it so difficult today to build on the tradition of change: we no longer seem to believe that we are good for anything.

Perhaps especially in Sweden, where the rule of the functionaries lasted longer and were heavier than anywhere else.

**

Are those of us who see the shortcomings of current developments able to draw up an alternative?

The alternatives formulated in previous rentierization crises – 1789, 1848, 1890-99 and 1944 – were far-reaching. They often overturned old dogmas and did not settle for small changes. Some declared outright that the old elites had to go, others were content to propose methods of "rentier euthanasia", as J M Keynes put it. But they were all radical and concerned everything at the same time.

And as Jack Goldstone pointed out, they were all the result of a dialog between popular movements and critical elites. A dialogue that could often be acrimonious but ultimately proved relatively beneficial: an economy of speculation and profiteering was replaced by an economy that prioritized the creation of new value.

But dialogue requires popular movements that have the ability to gain respect through rebellion, constructive proposals and a cohesive popular movement culture. Preferably also the ability to think long-term and all-round themselves, so they have something to contribute to the end result.

 

 

Published by Folkrörelsestudiegruppen: info@folkrorelser.org

www.folkrorelser.org