When neoliberalism came to Sweden

In 1981, Swedish Publish Service Television (Svensk Television or SVT) made a documentary about “the new liberalism”. The documentary consisting of presentations, interviews and debates was made by SVT’s Studio S , a program focusing on society and debate in contemporary Sweden during 1976–1984. Some of the contemporary topics presented and debated were seen as very sensitive and controversial as in cases of discussions about “video violence” and the Swedish royal family.

The episode about neoliberalism, or “the new liberalism”, was led by Pelle Bergendahl who opened the documentary by saying that the first scene with “liberate capitalism!” message was a funny way to “speak about something important that has happened in the Swedish political debate during the last years”. He also stated that this time, it is about “the Right’’ that appears with a “fighting spirit” and political will reminding of the 1960s Left.

During the beginning, Bergendahl’s states that the “new right” has gone from being a conserving force in society, often taking defensive positions, to being a force demanding radical changes with a “total and coherent ideology” that is not only about economy but also about social aspects, basic questions of democracy and a general understanding of society.

The documentary itself can be divided into three main parts: presentation of neoliberal ideas and their historical background, description of contemporary social, economic and political reality, interviews and debates. Here is the presentation of participants during the initial discussion.

Elisabeth Langby, former chairman of the Free Moderate Study Union, is affiliated to Moderate (Conservative) Party and a prominent columnist at right-wing oriented Svenska Dagbladet. FMSU (FMSF) was one of the early promoters of neoliberalism in Sweden.

Johan Hjertqvist, also with a background in FMSF, co-creator of market-liberal think-tank Timbro and the former chief editor at Näringslivets presstjänst (Enterprise press-service) and their magazine Opinion.

Representatives of the labour movement

Mats Hellstroem, member of parliament for Social-Democrats,

Lillian Hindersson, ombudsman at Kommunalarbetarförbundet (Kommunal trade union)

Macke Nilsson, journalist Norrländska Socialdemokraten and Aftonbladet, and a left-wing oriented writer from northern Sweden.

Before the debate started, Bergdahl presented “the neoliberal economic school” by a narrator speaking about capitalism and recent developments across the world.

The documentary stated that “tax-fatigue” and the economic crisis (in Europe) have led to the entrenchment of and higher popular support for new-capitalist ideas and new-capitalists stubborn attacks on all public services managed by the state and municipalities.

In this presentation, one can see the famous economist and (neo)liberal thinker Milton Friedman. Among other things, Friedman proposed that the government step aside so profits can rise, taxes be lowered, and the public sector reduced to deal with the inflation and provide a swing for the industry. He also stated that the government’s welfare policy (as in Sweden) was based on rising inflation and thereby threatening economic growth.

After Friedman, it is time for Hayek stating that “the extraordinary long prosperity which we have had, could not go on forever” because of the “accelerating inflation”. Hayek also speaks about how the welfare states are becoming unsustainable.

One of Hayek’s main points was that the government/budget deficit cannot be reduced without reducing welfare programs. Also, in the documentary, Hayek tells about his belief that governments worldwide will be forced to cut the welfare programs to the levels of taxation people are willing to pay for before the end of this century.

In comparison to neoliberal ideas, older socialist and social-democratic ideas are presented regarding aspects such as economy, employment and equality. Here is a political poster by Social-Democratic Party stating “work for everyone — increased consumption power.”

Hayek also mentions a new generation of politicians and other individuals who are proponents of libertarian ideas that one day will take place in politics and other institutions. One of them interviewed in the documentary was Danne Nordling who at that time, was active as a (neoliberal) economist. On the question if “capitalism is threatened today in some way” he answers:

“I think that we already have a half-socialist Sweden. We cannot speak any longer about capitalism because what we can see now is a system that has distanced itself from capitalism”.

During the documentary, Nordling states, among other things that “democracy is about reaching higher goals” as “personal freedom” which he exemplifies with the freedom to start companies, choose stores and consumption places.

Also, he mentions that the biggest threat against free enterprise is the ambition of the labour union movement to take over large parts of the business sector by “löntagarfonder” (employee funds). Two years after the documentary was made, on 4 October 1983 around 75 000 individuals demonstrated in Stockholm in one of the largest demonstrations in Sweden organised by liberal, conservative and right-wing actors against the proposal of employee funds.

“Do you want to privatise other parts of the public sector?” the reporter asks Nordling. After that, Nordling starts explaining how a hospital could be organised as a private foundation. After the presentation of Nordling, the documentary is back in the studio, and it is time for the first discussions, starting with Hellstroem.

During the documentary, Hellstrom's position was that if capitalism was to be “tested in its purest form”, it would lead to disasters and problems as “in military dictatorships as Argentina and Chile”. According to Hellstroem, the only thing Friedman and “Chicago boys” managed to accomplish with their program was to increase unemployment.

Hinderson got the question about Nordling’s views on privatising larger parts of the public sector, including health-care. She responded that “in accordance with fundamental views of rights for every human to have a good health-care”, the Swedish health-care system was created with the focus on the well-being of the patient and possibilities to influence. She also referred to the USA concerning examples with different health-care standards depending on one’s economic status in American society. Also, she gave the following questions to “the ideologists”: If one cannot afford to pay, what happens when one gets sick?

Macke Nilsson’s answer to the question “about these new economic school” was “It is a 19th-century view of man re-polished for our time”. He also spoke about a state-owned company in northern Sweden, for worn-out workers and that was producing materials for the Swedish armed forces. According to Nilsson, the company was on the way to being sold to a private person who would be able to earn a profit on these worn-out workers who have “invested their whole lives, their whole working passion for the forest industry and our welfare”. Also, it was an example of cruelty that was going to hit large parts of Sweden.

After the statements made by the left-wing oriented participants, Elisabet Langby answered that Nilsson is right about that the new ideas are similar to 19th century when liberalism was about struggle and uprisings against big organisations and interests of privileged classes, and that the new liberalism is about the same purpose as being against big governments who want to decide over individual humans. She stated that neoliberalism is a revelation of two myths: partly that the state (government) is souled by higher insights and goodness. And partly that everything has to be based on uniformity as concerning schools, culture and companies. Also, she quoted Karl Marx that “the state is a reflection of power structures in the society”.

After Langby, Hellstroem stated that neo-liberalism and Friedman’s ideas are a fraud by saying that abolishing regulations for small and medium-sized companies would not help such companies because SME:s will be without money, compared to big multinational companies that would find money anyway.

Langby responded that printing more money simply leads to more inflation. While Hjertqvist said that “in accordance with the Swedish tradition that we have, nobody here prefers as dismantle the social insurance systems’ ‘. Instead, Hjerqvist position is that “we are going to keep them (systems)” but not surly under control of communes, regions and the state. He stated that “we are going to give everyone a basic economic and social safety” by changing the ineffective taxation system towards some form of “minimum income” as negative income tax. Also, he mentioned that communities, associations, and cooperatives could play a bigger role in such a system.

Nilsson was not happy with Hjerqvists arguments and asked him if he as a young person ever talked to a young unemployed person by telling him:

You are now going to have freedom of choice when we privatise the health-care system.

Nilsson also stated that he has read literature about “new capitalism” or “new liberalism” and that in accordance with such ideas it is good with crisis because wages can be lowered and “we need mass unemployment in order to fix the society”.

As a reply to Nilsson, Langby stated that the problems in Norrland were because of uniformity policies and decision-making in Stockholm as wages should be equal in the whole country. She also stated that social problems in Stockholm regarding alcoholism and loneliness were party results of such policies. Nilsson disagreed and accused Langby and Hjertqvist of being naive as “representatives of the economic power” with “medieval ideas”.

One interesting thing is that both Hjerqvist and Langby emphasised that there was a big difference between neoliberalism and conservatism. Hjerqvist position was that the new liberalism was about “revolt” and distrust of society’s political coercion. He also pointed out that Thatcher as a conservative who promoted “traditional conservative politics” had more in common with Hellstroem and other social-democrats who wanted political power to coerce, more than Thatcher had in common with new liberal politics.

While Langby’s position, when she was asked by Bergendhal at the end of the documentary concerning her affiliation with the Moderate Party if there was “thought community” between neoliberals and right-wingers, she answered that SAF is an interest organisation in the first place while Moderate Party is a conservative party in the first place, and explained that Henry Lapage wrote a letter to her that he was “sad a little bit” for the supposed connection between neo-liberals and conservatives. Also, she stated that neoliberalism is a revolt even against big organisations, including those as SAF and Moderate Party who admire big state-power.

Now comes the part of the documentary focusing on SAF and similar market-liberal and right-wing organisations. This is also interesting because, when the documentary was made, Sweden was seen as a “socialist state/society” and as a “progressive utopia”. The organisations that are mentioned in the documentary later on as during the 1990s and 2000s achieved a high amount of influence in politics during periods of liberalisations, privatisations and regulations of different institutions and markets. This part of the documentary starts with some historical background concerning the “1968 revolts”, as the occupation of the Stockholm’s University student council house.

The documentary states that SAF in 1971 made “guidelines” on how to go against “the left swing”. Here, SAF’s legendary information chief Sture Eskilsson comes into the picture.

The documentary states that he is probably the main person who contributed to transforming a left-wing wind into a right-wing wind.

When the reporter asks him “So the traditional conservative powers are now standing up for social changes?” Eskilsson answered him “yes, one may say so” because the Swedish society is governed by ideas that Social-Democrats have represented. Thereby “the roles are exchanged” where social-democrats are now conserving while right-wingers are changing.

During this part, there is a shorter segment where Bjoern Malmberg, chief at LO (The Swedish Trade Union Confederation, the largest labour organisation in Sweden and historically connected to Social-Democratic Party) school information section states that SAF wants pupils and students to work for the companies “in a pleasant way” and with “as low wages as possible”.

Part of SAF training for journalist interviews. For example, how to answer a question as “Have you thought about the environmental damages you are creating?” by answering “It was not a question that I expected. I have to think for a moment”.

At the office at Valhallavägen 1966. Economist Rolf Englund, chief of SAF:s “Utredningsbyrå” (Investigation Bureau), who at the moment of the documentary was analysing Thatchers anti-inflation policies.

Opinion, was a magazine edited by Hjerqvist who explained that his goal with Opinion was to “butcher holy cows” regarding topics that were seen as controversial and that were “avoided” in the public debate.

Now back to the studio once more. The finalising part of the documentary is finishing with one last discussion. In this part, also Eskilsson is joining and taking place on “the neoliberal side”.

Since Nilsson demanded to make comments about SAF:s campaign, he started by saying “in one way I must say that I admire you and your skilful campaign”. After that, he spoke about an old right-wing ideology now presented as “neoliberalism” advertised with refined methods and large mobilisation of resources. He also stated that their campaign was about “shooting on democracy” and that “one cannot trust you”.

Eskilsson responded that “in the neo-liberal ideas, there is a conscious endeavour to limit influence from big organisations and state-power”. He also pointed out that SAF and their sub-organisations were in fact, a small organisation compared to left-wing organisations as the labour movement and their human and economic resources.

Hellstroem was not impressed. He stated that the SAF campaign did not give individual companies the space they deserved, as by getting the economic growth done. Also, he argued that SAF is hitting on the public sector while instead of that, SAF should cooperate with the public sector and the industry in Sweden:

It is not a war against the public sector what is needed — it is cooperation.

For Hellstroem, neo-liberalism was an “underground view on humans” where competition dominated and decided in private life.

The documentary ended with a shorter interview with “the man behind big public sector expansion in Sweden” — Tage Erlander, known as “the longest Swedish prime-minister” both in length (he was tall) and the number of mandates 1946–1969. He was also popularly known as “landsfader” (the land-father of Sweden).

Erlander concluded that the public sector could be reduced “if one does not care about equality” and that “we have strived after that it (public sector) will include everyone”. He stated that “those who do not have a need for an equal society, who have everything fixed, who can afford as much as they want as when it comes to health-care when they become sick, from this is not good”.

Another statement was that “Hayek was conducting propaganda” just before the start of the Second World War “at the time when we (Sweden) did not have a public sector”. Erölander finished by talking about “capitalism’s crisis is harder than anytime before” and “reactionary forces” who saw the public sector as a scapegoat.

Thanks for reading. For more information about neoliberalism as a set of ideas, please read my other article. You can also reward and support my writing via:

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Vladan Lausevic

Vladan Lausevic

I am active as a social and policy entrepreneur. SEEDS ambassador. Motto: I have no identity, I have only identities.