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Understanding the Social Democratic collapse

The Local · 13 Oct 2010, 10:05

Published: 13 Oct 2010 10:05 GMT+02:00

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In Sweden, where Social Democrats have been in government for 65 of the last 78 years, they just lost their second consecutive election and ended up with 31 per cent of the votes – their lowest support in a century. The situation in the other Nordic countries, formerly with strong Social Democratic parties, is similar: Norway 35 per cent, Denmark 26 per cent, and Finland 21 per cent. In France, the Socialists have been in disarray for some time, in Germany the SPD was supported by a mere 23 per cent and in the UK, Labour got 29 per cent.

This is part of a downward trend which has been visible since the 1950s, and the fall has been accelerated during the last decade. And this happens in a time of financial crisis and deep recession, when the traditional Social Democratic idea of big government, if ever, should have prospects of gaining support. Clearly, this phenomenon cannot be explained by temporary mistakes in election campaigns, one or two weak leaders or any of those other visible factors on the surface so often discussed in the media.

The fact that our societies are changing in several quite fundamental ways could explain much more of this shift. Trade unions traditionally support the Social Democrats and trade union membership has been falling for decades – from different levels in different countries, but the trend is the same. It is generally acknowledged that Ed Miliband won the leadership contest thanks to trade unions. They still retain the power over their parties, but their influence in society is decreasing.

For decades, Europe has been marching into the services society, seeing employment in manufacturing industry decreasing – thanks to globalization and technological development. This means that the traditional base for Social Democratic parties – workers – is getting ever smaller. On average, seven out of ten Europeans now work in the services sector, which is different from the manufacturing industry. Often, individual skill, rather than collective strength, is essential.

Economic freedom has increased throughout the world for 25 years, not least in Europe. Of course this is true for Eastern and Central Europe, but for Western Europe too. State ownership has decreased, markets have been liberalized, tax rates have decreased, foreign trade has opened up, choice in welfare services has increased and public monopolies have been dismantled. Many of these reforms were controversial at the time, but have become universally accepted afterwards. People don’t want to go back.

People have simply increasingly managed without too much government interference in their lives, and this has been appreciated. Combine this with rising incomes – however slowly in some European countries, fairly stable consumer prices – several categories of goods actually have actually gotten cheaper – and more people belonging to the middle class. Social Democrats have failed to see this and have not changed their policies or messages to appeal to this new society.

It has also become increasingly difficult to be a party for workers with policies that make it more expensive to hire people, that make work less profitable and that make the labor market less flexible. Paying vast amounts of people through social security for not working has become expensive, and many countries have large numbers of unemployed people hidden in statistics like sick leave or early retirement. This has also had a detrimental effect on work ethics. According to the World Values Survey, support for the principle of receiving contributions from the state when not working is declining.

Some have claimed that the absence of success for the left after the financial crisis can be explained by the centre-right taking over their policies and rhetoric. True, in half of the rich countries, the role of government in society has increased. But many countries have also continued to increase economic freedom. And above all, the countries that have stuck to the most classic Keynesian economic policies – like the UK – have been governed by Social democrats and their failure in crisis management has been spectacular.

The GDP of Sweden, Germany and the UK all fell by five percent in 2009 as the financial crisis struck. But the three nations have dealt with the crisis quite differently. The UK, which until the 2010 elections was dominated by Labour rule, is facing substantial problems. The public deficit has been twelve percent of GDP during the past two years and is expected to remain high. The British national debt is approaching 90 percent. The UK has simply not been able to cope with the massive increase in public expenditure which has occurred during the last ten years of Labour rule.

The center-right government of Sweden, on the other hand, has managed to keep the public deficit at a low level, whilst still reducing tax levels quite significantly. Germany, until recently ruled by a Grand coalition between the centre-left and the centre-right, has experienced higher deficits than Sweden, but much lower than the UK. If there is a lesson to learn from these three nations, it is that social democratic policies bent on increasing government expenditure further and further is simply not a viable recipe for Europe. Perhaps it is not surprising that Social Democratic parties in all three nations have recently experienced major setbacks.

New Labour represented the perhaps boldest step in attempting to renew Social Democrats, in embracing globalization, welfare reform and individual freedom. In the 1990s, there was talk of the new “middle” in European politics. This is all gone and partly reversed. The forces against such a development were too strong. It seems that the more clearly traditional leftist approach is here to stay, which would seem to guarantee the continuation of the downward trend and marginalization for European Social Democrats.

Johnny Munkhammar

Story continues below…

Member of Parliament, Sweden, Moderate Party

Nima Sanandaji.

Managing Director, Captus

The Local (news@thelocal.se)

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Your comments about this article

10:30 October 13, 2010 by rafa1981
So the scissors are ready to cut the welfare and selling "state monopolies" to friends at bargain prices.
11:51 October 13, 2010 by NickM
What a load of twoddle. The reason the Social Democrats have lost support is because they have sold-out working Swedes. Their economic policy is now almost identical to the Centre-Right - that's why Swedes have abandoned them.
12:10 October 13, 2010 by wiserthanmos
I see, this article stated many obvious reasons that contributed to the downfall of the lefties, except one that they're tried to hide or to avoid it, the REFUGEES' POLICIES! Are you sure that the refugees problems in Europe have nothing to do with the whole continent is moving toward the right? I would gladly give you just a few example, but then I realized, opss! Look at who wrote the artical!
12:27 October 13, 2010 by Sam1
NickM@ Absolutely right!!! Moderate now also stress on the working Sweds and business men and forget the presence of the other side so both will fall for same reason, there should be balance..

and Wirethanmos@...

Refugee matters are much less an issue than you might see in media, I though it was an Issue I check how much money is spent on Refugees in my kommun I found it was 2.7 % and on the elderly it was 14% and on the sick and retard 11 % etc etc...SD makes you feel like its 90 % on Refugees...I know Sweds who lived all their lives on Swelfare my friend and never worked so compare it with a new ref family they got 100 times more SWelfare help..an elderly man or Swedish man since others are left to die..first example is my dad he had prostate cancers and doctor in jamtland neglected him since they do not want to spend on a refugee through UNHCR has been 1 year in Sweden money for health...So they neglected him untill his cancer became serious..while our Swedish neighbour 89 years old get 3 employees to serve him a big araptment, etc etc...and guess what he has hardly worked in his life..

So stop being mean to immigrants siince you dont know what they go through and the figures are false most of the times.
12:47 October 13, 2010 by Bork
Both NickM and possibly wiserthanmos are right on, and the problem is the same for many other Social Democratic/Labour parties in other European countries. They moved to the right in the 80's, and even more so in the 90's with Tony Blair and Bill Clinton pushing towards neoliberalism. At the same time, it's harder for people to accept social welfare when it appears more and more money is being used to support refugees and unskilled EU immigrants, when the center-left parties refuse to acknowledge there's a problem, and blaming anyone who brings this up of being a right-wing neo-fascist and racist. That said, Sam1, I'd like to believe you. Can you link to the source of your information? The government needs to work harder to increase the employment rate in general for Swedes, refugees, and immigrants. Norway, Denmark, and the Netherlands have much better employment rates, including younger workers.
13:05 October 13, 2010 by xguild
! I though it was an Issue I check how much money is spent on Refugees in my kommun I found it was 2.7 % and on the elderly it was 14% and on the sick and retard 11 % etc etc...SD makes you feel like its 90 % on Refugees...!

Oddly I pointed out the fact that immigration (refuges) is not a problem for Sweden from an economic stand point and was accussed of being a bleeding heart leftist in a previous post on another article that mentioned refugees. You have to base opinions on facts, but unfortunatly elections are rarely won or lost on facts, but rather on opinion polls that are based on just that, opinions. Which coincidently are driven by media so while refuges are a small part of the economic problem in Sweden, if you read the paper or watch the news this issue dominates all media forums.

The point here is that the left may have very well lost this election because of the "Immigration Issue" regardless of wether or not their are any actual facts to support the idea that such an issue actually exists, at least to the extent that its being reported.
13:15 October 13, 2010 by wiserthanmos

First of all, the medias are the lefties Propaganda machines you dumb ass, show me one media that is on the SD's side? Remember chenel 4 huh? Second, not all Kommun are having the same shitload of refugees, do you understand that? Havn't you read just few days ago on this forum? There are so many asylum-seekers now in Sweden that they don't have enough places for them so the refugees have to camping outside? And so what if the Swedes are receiving the welfare from their gov't? After all, this is their country, right? It's a god giving right for them to ask from their gov't. The gov't suppose to take care of its own people first, because in the democracy country the gov't is...from the people by the people and for the people! Not from the refugees by the refugees and for the refugees!
15:24 October 13, 2010 by Syftfel
There is nothing to "understand" here. Nor does one need to write a dissertation about the fall of the pathetic social dems. The unvarnished truth is that Swedes simply got disgusted with these knowitall, tax-and-spend, social dems and their LO union lackeys, topped off by the marxist media auxiliaries at SVT. Their dictatorship lasted much too long. Let's wave a permanent goodbye to the social dem mental disorder and march forward to a new fair, revitalized, and free, Sweden.
15:40 October 13, 2010 by wiserthanmos
Not long ago, to invaded another country one must had a lot money, men and guns. But now, to invading an entire Continent one just needs to be poor, uneducated and desperate. These new invaders don't need to fire a shot, they don't need to do much except having more baby invaders and the societies that they've conquered will bow to their pressure. So let's borrow some quotes from Voltaire to describe the situations in Sweden and Europe shall we? "The multitude of books is making us ignorant." and "It is difficult to free fools from the chains they revere." So chew on it people!
18:50 October 13, 2010 by RobinHood
It is sad to see so many here dismiss Johnny Munkhammar and Nima Sanandaji's reasoned comments so easily. If The Social Democrats have moved too far to the centre, why have so many of its supporters abandoned them for the Moderates, and even the SD's?

The Swedish electorate has clearly tired of the Social Democrats and the left, and unless they can adapt, they will continue their slide into irrelevance. Sweden needs an effective opposition, and is depending on the Social Democrats for that role.

They are either going to get themselves a significant make-over before the next election, or face another significant walk-over. If they stick to their traditional values, they will never govern again. At least not until political gravity gets a grip on the Moderates, and the electorate are ready to vote for anybody than them. That might be a very long time from now.
22:37 October 13, 2010 by salalah
Here's RobinHood again, always wiling to take from the rich immigrants to give to the poor Swedes....

This time Sweden doesn't need the old politics of the Social democrats, who assumed that everyone is an honest person who wants to work hard and not cheat the benefits system. Moderates have not succeeded either with creating more jobs. Social upheaval is around the corner due to the jobs disappearing due to globalization. It is not the immigrants' fault the world is changing!
23:49 October 13, 2010 by Puffin
Captus describes itself as a right wing think tank on its webstie

Can't off hand think why the Local would think that it could give a good analysis of social democratic politics - but just shows the bias than is sometimes passed off as fact on these pages
05:31 October 14, 2010 by JoeSwede
Great Article. Good insight on the Socialist parties in all of Europe. The movement of labour from tradional to the service sector is huge. Also the fact that Keynesian response is very 1930s and that there might be better ways to respond that are healthier for an economy is good. What is UK going to do? I guess their currency is going to weaken...
10:15 October 14, 2010 by salalah
Keynesian forces work within closed markets with limited number of suppliers and prices which can be compared to eachother. With globalization, trade tariffs are needed to maintain a balance in one country, otherwise there will be no demand for products produced in one country due to the availability of cheaper products in another. Since the banking system and currencies in many countries are directed towards a local economy, they will not be able to adjust the imbalance. The only way to achieve balance is through one global currency and bank and almost-equal wages.
10:57 October 14, 2010 by here for the summer
Great Article . I would like to see more written like this about the Swedish economy and political opinion .
14:49 October 14, 2010 by glamelixir

Are you talking about the theory of the new world order?

I don't want to live when that happens.
20:13 October 14, 2010 by coswede
tea party baby!
00:12 October 15, 2010 by Emmaboda
Good bye forever, Social Democrats. You Swedes deserve a great government for a change. Must be a reason why Germany and Sweden are the countries that have economies that are progressing, not like what we got over here in the States and many other parts of the world.
01:55 October 16, 2010 by lordsandwich
@NickM, so since the Social democrats have more right wing policies their electorate has abandon them in favour of the centre right? That doesn't make any sense! If anything they should have abandoned them for the Left party, not for the centre right which won the election
17:12 October 16, 2010 by lafo
@lordsandwich I can only speak for Germany, but here the Social Democrats are also drifting to the right. While they were the government they made politics the centre right parties could only dream about. If CDU and FDP (centre-right here in Germany) had tried to pass the same laws, there would have been massive resistiance by the unions. But because the unions traditionally cooporated with the social democrats no real protest developed.

So many people here are disappointed by the social democrats, and just vote for anything but the social democrats or dont go voting at all. So the voters with "real" social democrat positions dont vote at all or vote the centre right. They do that because they just wanna show the social democrats that they dont approve of their postitions and not voting or voting for the right to get the power away from their social democrats is the only way they can think of. They hope the social democrats realize that they are doing something wrong and hope that they get back to their original values and not the neo-liberal Schröder-Blair-bullshit.

Sure, there is a Left here, and many frustrated social democrats vote for them. But again, I dont know if this is the same in Sweden, but here in Germany there's a massive campaign against the Left party in the media, saying their positions are unrealistic and they're all lunatics. You dont find a newspaper that's read by many people that says otherwise. So, some decide to vote the Left party anyway, but if you dont have much time to inform you yourself about their positions you just read the newspapers and you begin to think the Left party is unvotable. So you cant vote for the Lefts, you cant vote for the Social Democrats. What are you gonna do, if you want Social democrati politics? You either vote for the right just to show the social democrats how wrong their positions became or you dont vote at all.
17:58 October 16, 2010 by NickM
@Lord Sandwich, I never said the Swedish Social Democrats are "more right" than the Alliance. They are marginally to the left of them but the difference is hardly noticable especially in economic policy.

Why have people not voted for the Left party? Lafo explains it pretty well I think. Their leader has also been labelled an "alcoholic" and a "communist" by politicians from the two big parties in Sweden and the corporate media have lapped it up. Plus money buys you visibility and propaganda at election times and the big two are by far the richest.
22:42 October 16, 2010 by Shaikailash
(my comment posted yesterday 15/10 at 15:43 disappeared, I don't know why...hope just a tech issue) I post it again:

I think xguild, in hif first post (13:40 October 12, 2010 by xguild), made a super great point.

I cannot understand why so many Swedish citizens writing on this site seem to become more and more against the taxes and the welfare state they have, which ranks always at the top. I hope this is not the majority feeling, but it seems so, looking at the election results.

I fear that if this trend goes on, the Swedish themself (and not the immigrants) will destroy their own quality of life with their own hands!

Probably because you are too used to have services, childcare, high and free education, and today you cannot see the advantages compared to other European country. No speaking of USA, which is terrible from this viewpoint.

And, please, don't stick on TAX LEVEL comparison, you should be happy to pay your taxes and have a lot of good services in return. I'll explain why the tax burden rate is misleading, in brief.

Take ITALY, with around 43% of taxes, is much lower than Sweden. Well, if you calculate the REAL tax burden taking into account the black market, and the tax evasion (over 200€ billion), the tax burden in Italy for the honest paying citizens is around 55%!!! Far more than Sweden, but with half the services! No childcare, no family policies, low unemployment benefits, lowest-low R&D, and so on...

So please, pay your taxes and defend your model, rather than put all the blame on immigrants (of course you have to control it, but that is not the main and only problem!) and vote for crazy people that want to follow the american/british failing model!

I love your country, this is why I'm so worried for you. Don't take it bad.
19:33 October 18, 2010 by 2394040
The first lesson of history is that people never learn from it. Swedes need to read the history of their past, because they are headed in that direction. Back to the days where the nobility (or aristocracy, or whatever your wish to call it) had all the advantages and the average Swede had little or nothing. I believe it was Joseph Goebbels who stated that if you tell lies often enough, people will begin to believe them. Well, that still applies today.
09:48 October 19, 2010 by ghostwriter


There's still a working class. Just look at income disparities of any European country.

It's true that European work-sellers don't manefacture goods anymore. The working class today have low-paid, low-end jobs in the service industry. But it's still basically the same thing . The indifference from before is that the working class needs to stand up for itself by organizing workers and demanding higher salaries.
17:55 October 20, 2010 by Olsen
Who funds the Captus Think Tank? The comments are suspicious. In the United States many so-called think tanks are merely disguised propaganda machines that aim to promote the ideas global corporations want promoted.
02:35 October 21, 2010 by JoeSwede
With Socialist ideas coming to fruition in France and Greece, all of Europe is probably thinking deeply about where things are going. At least I respect the Swedish Socialist Party for better planning and honesty than similar parties to the south. The trick is to balance individual, group energy with individual, group incentives and proper safety nets. The country that can figure that out with tough competition from the emerging world will be the winner. I guess I'm stating the obvious...

Moving the retirement age up from 60 to 62. Is that so horrible? Am I missing something? Do the French not have other sources for retirement beyond the Gov. Social Security? In the US, there's 401K, defined benefit plans, SSI and other plans that allow for withdrawal prior to 62. Is the retirement age in Sweden 65?
13:13 October 21, 2010 by svenskamerikansk
But has the SD collapse come too late? We will see.
01:45 October 22, 2010 by JoeSwede
This might seem a little wierd but some of the platform issues pushed by the left and the socialist party remind me of the movie - city of Ember - generation after generation of people accepting certain thinking and then one day waking up to a new reality.

Another weird thought...

The idea that a society should overly prepare and adjust resources so that it can take care of a large group that is aging seems strange. Certainly some care must be given to the aging population but the central focus should always be placed on the current group pushing the country forward - those working. If there are more than usual size aging then that group must adjust and be more efficient with the allocated resources. Same goes for the younger group training to enter life.

Sweden is not dying....its best days are ahead of it.
13:20 October 23, 2010 by double concerto
joe swede...its best days are ahead of it.

Dream on:)
14:06 October 23, 2010 by roaringchicken92
It may generalize the phenomenon too much, but the writers nailed it on the head when they said social democracy/socialism/progressive liberalism/labor has ideas that just aren't relevant anymore. To keep saying over and over that "the ideas are great, they just haven't been implemented properly" is insanity. Conservatives and center-right types have accepted most of the good policies SDs proposed many years ago, but time moves on.... SDs have not. It seems its the journey, not the destination, that excites progressives and they just want to keep traveling the same route in perpetuity. As Thatcher said, "The problem with socialism is that it eventually runs out of other people's money". There's a similar bankruptcy of ideas as well.
04:03 October 25, 2010 by JoeSwede
double concerto and roaringchicken92

Good points :)
09:23 October 26, 2010 by NickM
@roaringchicken92: "As Thatcher said, "The problem with socialism is that it eventually runs out of other people's money"."

Yes, and Thatcher loved socialism - socialism for the rich that is by selling off all Britain's utilities and destroying manufacturing. Just like the Social Democrats and Alliance in Sweden are doing.
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