Globalisation and the liberals' Scandinavian (Swedish) dream

7 September 2006.

  • Ever since St Louis Post-Dispatch reporter Marquis W Childs published his Sweden, the Middle Way in the 1930s, Scandinavia, and in particular Sweden has held a special place in the heart of liberals in North America and Western Europe, people who feared and abhorred Communists, but who worried that the cruelty and excesses of capitalism could lead to a Communist revolution, which could not be suppressed simply by calling out the police or the troops. That something of this attitude survives, 70-odd years later, is shown by Professor Joseph Stiglitz' commentary in the commentisfree section of today's Guardian, entitled Making globalisation work, and which discusses what needs to be done to make globalisation work for everybody, rather than just a privileged few. Whether or not this will happen depends upon whether that privileged few see to their long-term, rather than their short-term interests (but, citing Keynes, Professor Stiglitz points out that «in the long run, we are all dead»). In the US and the UK, of course, it is the short-term interests - not least of those who profit from (others) waging war, that have won the day, with the result that, in Stiglitz' words «the US and others following its example are becoming rich countries with poor people». Thus, once again, as in the 1930s when the Great Depression harried world economy (with one notable exception, the Soviet Union), liberals in the «West» look to the Scandinavian example to save the day. Alas, they rarely seem to note how contested this example is in the Scandinavian countries themselves, and to what a slight shift in the balance of power between the two blocs could lead. Below, my response to Professor Stiglitz' commentary, as posted to commentisfree :

«But the Scandinavian countries have shown that there is another way. Of course, government, like the private sector, must strive for efficiency. But investments in education and research, together with a strong social safety net, can lead to a more productive and competitive economy, with more security and higher living standards for all. A strong safety net and an economy close to full employment provides a conducive environment for all stakeholders - workers, investors, and entrepreneurs - to engage in the risk-taking that new investments and firms require.»

Alas, what Professor Stiglitz - who, of course, does not reside in a Scandinavian country - doesn't seem to realise is that the policies that have characterised these countries, and which, I agree, have been largely successful in countering the downside of globalisation, are not graven in stone. The local «winners» in the globalisation process know quite well, that they can «win» even more (at least for the short term), if they don't have to pay to help the «losers». If the political parties that represent these classes and groups come to power in Sweden in the general elections to be held here on 17 September, we are definitely not going to see more of the type of investment Stiglitz recommends - rather more and more segregation in the schools with the continued weakening of the public school system and a strengthening of the a private school system financed by a «voucher» system, and a drastic dismantling of the safety net which has made the risk-taking inherent in the creation of new enterprises possible and acceptable for large segments of the population. The «Swedish model» will be abandoned for a US/UK model which is seen as more dynamic - by those who stand to profit from it. In that event, we shall probably witness more back-lash and more «crisis-driven change», even in this hitherto fairly calm segment of the globe....

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