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Home Opinion The battle to own the Nordic Model
Sweden • Social Democrats • Nordic Model

The battle to own the Nordic Model

Katrine Kielos - 13 February 2013

The Swedish economic formula of a strong manufacturing industry, high productivity and good jobs and social protection is the envy of much of the world – but who owns it?

Just two weeks before The Economist published a special report about the success of the Nordic model, the Swedish Prime Minister was at the World Economic Forum in Davos. The part of his trip that has since made it to YouTube was a comment about Swedish manufacturing.

“We used to have people in industry, but they are basically gone”, Fredrik Reinfeldt said.
The declaration came much to the surprise of Swedes at home. Half a million people are employed in the manufacturing industry. It is the backbone of the Swedish economy and much of the world (including The Economist) have lately looked enviously at its success.

Why was the Swedish Prime Minister then dismissing it?

There is a political battle going on in Sweden about The Nordic Model. Fredrik Reinfeldt's political genius back in 2005 lay in realising that he had to embrace it. The centre-right couldn't be perceived as being against the special brand of strong social bridges, high productivity and stable public finances that had made Sweden famous.

More importantly: they couldn't be perceived as a party who was just banging on about how terrible Sweden was and how the size of the state had to be cut.

Fredrik Reinfeldt rebranded the Swedish right and made history as the first centre-right leader to win re-election in Sweden. The social democrats didn't know what had hit them. Feeling robbed and shunted, with Reinfeldt shamelessly stealing their slogans and rhetoric, they finally went so far as to apply to the Swedish Patent and Registration Office to protect ”The Nordic Model” as a trade mark.
They won. And now the Social Democrats are the only party allowed to use it, certainly an innovative (if not desperate) way to defend yourself against political triangulation.

But, who get's to use a concept is a bit beside the point. The big battle in politics is always over the meaning of it.

Right now the four party coalition that brought Reinfeldt to power is in trouble. Both the Centre Party and the Christian Democrats poll under four percent, which means they wouldn't get a single seat in parliament if the election was today. At the same time the xenophobic party, the Sweden Democrats, are gaining support. This is happening in spite of new polls showing Swedes being more at ease with immigration than at any time since 1989.

The picture is more complicated than it might first seem.

If these trends continue Reinfeldt might however lose one of his last big trump cards over the opposition. He has not been successful with his big promises of fighting unemployment, he has managed to be perceived as economically competent, but the fact that he led a stable alliance of four parties was also a big part of the equation that kept him in power.

In the past Reinfeldt has been able to steer the debate away from his bad record on unemployment by pointing to the fact that it was unclear how the social democratic opposition would be able to form a government. Now it seems almost more unclear how Reinfeldt would form a government. This brings the debate back to unemployment.

And, actually - The Nordic Model.

Reinfeldt’s offer in 2006 was to keep the Swedish model. He would just make it slightly cheaper and combine it with some tax cuts. This sounded like magic to many Swedes tired of a rather arrogant social democratic party.

The basic idea behind Reinfeldt's economic policy was however that the Swedish economy did not produce enough low skilled jobs. Therefore tax cuts for the middle classed should be financed with deep cuts in the unemployment insurance system. This would pressure down wages and lower unemployment.

The tax cuts would then give the middle classes money to buy services with and help to create a bigger market for low skilled jobs. For example: it used not be very common for Swedish families to employ a cleaner and this was something Reinfeldt wanted to change.

The Nordic Model should become more “Anglo-Saxon”: less emphasis on manufacturing and more low skilled jobs in the service sector.

This recipe has not proved successful. Unemployment is higher than when Reinfeldt took office but perhaps more importantly the times have changed. After the financial crisis of 2008 the Nordic Model is suddenly the envy of much of the world. Countries are actively trying to copy its emphasis on manufacturing, high productivity and good jobs.

This puts Reinfeldt to his ultimate pragmatist test. Will he adapt, or will he stick to his policies?

His comment in Davos suggests that he might do the latter.

That might be very good news for the opposition.

Katrine Kielos is a columnist for Aftonbladet, Sweden and Scandanavia's largest daily newspaper

A contribution to State of the Left - Policy Network's monthly insight bulletin that reports from across the world of social democratic politics

Tags: Katrine Kielos , Opinion , Sweden , State of the Left , SOTL , Swedish Social Democratic Workers' Party , Sveriges socialdemokratiska arbetareparti , SAP , The Workers' Party – The Social Democrats , Arbetarepartiet-Socialdemokraterna , Fredrik Reinfeldt , Moderate Party , Moderata samlingspartiet , The Moderate Coalition Party , Moderaterna , The Moderates , Welfare State , Social Security , World Economic Forum , Triangulation , Göran Persson , The Alliance , Alliance , Mona Sahlin , Green Party , Miljöpartiet de Gröna , The Environmental Party the Greens , Miljöpartiet , The Environmental Party , Left Party , Vänsterpartiet , V , Red-Green Coalition , Immigration , Europe , Sweden Democrats , Swedish Democrats , Sverigedemokraterna , SD , Coalition , Centre Party , Centerpartiet , C , Christian Democrats , Kristdemokraterna , KDSweden , Social , Democrats , Politics , Unemployemnt , The Nordic Model ,

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