Globalization, Europeanization and the End of Scandinavian Social Democracy?

Citation

Aylott, N. (2001), "Globalization, Europeanization and the End of Scandinavian Social Democracy?", European Business Review, Vol. 13 No. 1, pp. 74-76. https://doi.org/10.1108/ebr.2001.13.1.74.2

The political and economic “models” identified with the Nordic countries have long excited the interest of outside observers. Although an American writer, Marquis Childs, was hailing the Swedish “middle way” as early as the 1930s, this interest really took off after the Second World War. Some saw Scandinavia – Sweden above all – as having resolved dilemmas that plagued other developed economies. Strong economic growth had funded a generous and universal welfare state, while labour relations were orderly and wage rises restrained. Politically, a humane and progressive centre‐left dominated government, yet often implemented social reforms with the consent of opposition parties. By the end of the 1980s it was not uncommon to see, in the social‐science literature, social democracy characterised not just as a family of political parties, nor even as an ideology, but as a regime type: the Nordic states were social democracies, whichever parties happened to be in office at a particular moment.

Not surprisingly, many Scandinavians took great pride in the admiring looks that foreign (mainly British or North American) observers were casting in their direction. But envy and hubris gave way to lament and anguished introspection from around 1990, when economic problems that had simmered for some time finally exploded in Sweden, which suffered its worst recession for over half a century. Some declared the death of the “models”, with either sadness or schadenfreude. A decade on, this book assesses the validity of the obituaries. Each of the nine contributors presents a chapter, which are divided into three main sections. In addition, the three (American) editors present a joint introduction. They do not conceal their normative sympathy for the social democratic model; the view that its basic characteristics can survive is considered an optimistic one. Yet their thoughtful discussion is balanced and objective, particularly when they address often‐used terms like internationalisation, Europeanisation and, of course, globalisation.

The first section, on economic policy, is the strongest. Its concern is mainly why, in the late 1980s, Norway and Sweden chose to prioritise price stability over full employment after decades of doing the reverse. Ton Notermans and Jonathon Moses have lowered the tone of their debate since their lively exchange in Politics & Society in 1993‐1994, but their views are largely the same. They agree that at the heart of these export‐reliant countries’ economic success were highly organised and centralised industrial relations, plus close relations between the dominant trade‐union confederations and the dominant social democratic parties. But whereas Moses reckons that liberalisation of credit and currency markets undermined the potency of such structures (particularly through their ability to secure real‐wage cuts, and thus enhanced competitiveness, through devaluation), Notermans offers the persuasive thesis that it was, in fact, the long, endogenous decay of these domestic structures (the nature of which he outlines) that finally led to policy reorientation.

The third chapter in the section, by Bent Sofus Tranøy, is another empirically rich piece, focusing on the abandonment of Swedish and (primarily) Norwegian credit and housing controls since the downturn of the early 1970s. Tranøy attributes the damagingly pro‐cyclical timing of this deregulation to “policy learning” and “fumbling” amid a period of rapid structural change in financial markets. Plenty of that was surely involved, in Scandinavia as elsewhere. How such an explanatory approach can be extended to produce generalisable theories and testable hypotheses for comparative analysis is not clear, though. Comparative statistics remain, in my view, an indispensable methodological device.

The other sections are somewhat patchier. The second, on the welfare state and social policy, begins with Duane Swank exploring whether internationalisation and/or Europeanisation has curtailed the famously expansive Scandinavian systems of public transfers, services and employment. An alternative view is that economic change might actually bolster the welfare state, as a cushion against socially disruptive consequences – a hypothesis to which Swank’s comprehensively assembled quantitative data lend some weight. Katie Verlin Laatikainen’s chapter on the prospects for equality between the sexes is gloomier, however. She presents several useful insights, derived from analysis of Sweden, of the social democratic “model of the employed woman” and the social services attached to it. But she argues that the advent of the EU’s economic and monetary union, especially its insistence on fiscal rectitude, can only retard equality in Scandinavia. The idea that public‐sector retrenchment, which has undoubtedly occurred, can actually be attributed to specific and long‐accumulating fiscal crises (a point Swank makes), rather than to external influences, is not considered. Ingebritsen’s brief chapter on the threat to Swedish and Norwegian alcohol regulation from EU single‐market laws, meanwhile, is rather superficial and uncritical of the policy and its effects.

The final section contains a chapter on each of the region’s three social democratic parties and their enduring problems in handling the issue of European integration. Several common threads emerge from the chapters by Geyer (on the Norwegian Labour Party), Jens Henrik Haahr (the Danish Social Democrats) and Lee Miles (the Swedish Social Democrats). One is that the EU offers an ideological dilemma for social democracy: it involves both dangers (to national policy‐making instruments, to national democracy) and opportunities (shaping supranational, and thus perhaps more effective, market regulation). Another common factor is that intra‐party divisions on EU policy tend to have the character of elites versus grass‐roots. A third, related observation is that internal dissent about integration is closely related to pre‐existing fault lines within each party. These include the disputes between materialists and post‐materialists, and between those whose interests lie in preserving the size and resource base of the public sector and those with a more direct interest in promoting growth in the private sector.

This last feature raises doubts about one of the main conclusions in Miles’s rather sloppy chapter. His suggestion that differences within the Swedish party over European policy have escalated from the status of “issue cleavage” to “structural strain” – that is, from being a conflict of ideas to being a conflict of interests – implies that the latter is simply a more intense version of the former, when the two are fundamentally different. EU membership does create winners and losers in material terms; but they are often pretty hard to identify (unless, arguably, they are farmers). That is the enigmatic nature of integration: economically, in principle at least, it promises something for everyone. Opposition to it usually flows from ideology and/or political values (even if its political exploitation is often opportunistic).

More general criticisms of the book are possible. It is already quite dated, with entries apparently completed more than two years before its publication (which, of course, may be the publisher’s fault). There is no concluding chapter. The Scandinavian model has often been characterised as, essentially, one of industrial relations, and chapters addressing this topic directly could have been included. As the editors point out, there are good reasons for distinguishing Denmark from Norway and Sweden, especially when discussing economic policy; even so, Danes might bridle at their country’s relative neglect here. On the other hand, more chapters or a wider purview can have costs in terms of focus and accessibility, and this is a tightly constructed, well‐balanced and generally well‐written collection. There is much in it to be recommended for researchers or higher‐level students of comparative political economy and the domestic impact of European integration.

Note to readers

In previous EBR issues, reviews have appeared here of some of the 12 titles in the Managing Cultural Differences series. These Gulf publications have now been acquired by Butterworth‐Heineman of Reed Elsevier, Inc. These books are now available from their offices in Oxford, UK (Kathryn.Grant@repp.co.uk) or Woburn, MA, USA (jennifer.pursley@bhusa. com).

The complete listing of their Butterworth‐Heineman business titles may be viewed at their Web site: www.bhusa.com; or catalogs may be requested by tel: 1 800/366 2665 or fax: 1 800/446 6520). In year 2000, the latest releases in the MCD Series edited by Drs Harris and Moran include: Managing Cultural Differences, 5th ed. with Instructor’s Guide; Intercultural Services; Competing Globally; and Business beyond the Curtain; Multicultural Management 2000; and NAFTA‐Best Practices – forthcoming in 2001, Eurodiversity.