The Nordic Model Past Glory or the Way of the Future? By Urban Lundberg

Transcription

1 The Nordic Model Past Glory or the Way of the Future? By Urban Lundberg Friday University The Nordic Countries A Model? The Welfare State and Globalisation 22. September 2006 Kalevi Sorsa Foundation For many decades, the concept of the Nordic model has been a standard term in international discussions. Initially Sweden was often described as the model-country above all others. Progressive intellectuals in France and the United States used the Swedish experience as a basis for new arguments in their respective domestic debates. A well-known example is the American journalist Marquis Childs book Sweden: the Middle Way from 1936 in which he uncovered the tricky path in between communism and capitalism that later became an integrated part of the self-image of Swedish Social Democracy. Gradually Norway and Denmark were added, and nowadays the concept covers all five independent Nordic states: Sweden, Denmark, Norway, Finland and Iceland. However, the idea of a specific Nordic model is a later invention. In academic circles it was introduced in the 1960s, but it was not until 1980 that the concept entered the wider political debate. Some researchers claim that the term model in this context emerged at a time when the Nordic countries already had begun the reform process that threatens to undermine the basis for their specificity. What then is it that unifies the Nordic countries, and how can we explain their similarity? Here, of course, we have to consider geographical, linguistic, and geopolitical factors. The Nordic countries are small states at the outskirts of Europe with ethnically and religiously homogeneous populations which share a common history. In particular, the religious commonality of Lutheran Protestantism is sometimes mentioned as an important explanation behind the similarity of the Nordic countries in general and the Nordic model of welfare in particular. The Nordic model is 1

2 said to be based on a Lutheran work ethic and Christian ideas of equality. Thus, there is a tendency among historians to explain the distinctive features of the Nordic countries against the background of a long historical development, which can be followed through the centuries all the way back to the Kalmar Union [ ]. In this sense, the Nordic model is surrounded by an air of nostalgia. Five distinguishing features However, despite its historical roots, the Nordic model is mainly a concept that captures how the Nordic societies have been organised in modern times. Five distinguishing features are reiterated in almost all studies. First, the Nordic countries are characterised by a strong state, or more exactly, by a large and expensive public sector. Second, the social welfare systems are to a large extent financed by taxes; public service and social security systems are universal and inclusive. Third, most studies stress the autonomy of the labour market and the trustful cooperation between the state and the labour market organisations. Fourth, there is a tendency toward gender equality, partly as the result of an advanced family policy. And finally, the development of the Nordic model is highly associated with the strength of the social democratic labour movement. A model with impediments It is certainly possible to object to the description of a particular Nordic model, which under the influence of the social democratic labour movement has developed in a certain direction. Even in the Nordic countries, other actors within politics and bureaucracy alike have influenced and informed development. Many welfare reforms were underpinned by broad social compromises. Nor was the direction of the Social Democratic compass always as obvious as scholars later wanted to maintain. The Nordic model, was not constructed in advance on the drawing table, but rather in hindsight, in the rear-view mirror, to quote the Swedish historian Bo Stråth. Others believe that the talk of a Nordic model glosses over important differences between the Nordic countries. Finland, for instance, allows itself only with great resistance to be slotted into the thesis of the critical significance of Social Democracy, not to mention Iceland. When one delves more deeply into individual policy areas, the countries demonstrate a substantial wealth of institutional variation. The pension system in Denmark substantially differs from the one in Sweden, and the Norwegian health care sector differs in many respects from the one in Finland, and so on. Despite these internal scholarly challenges, the talk about the crisis of the Nordic model has nothing to do with either new empirical findings or new and more reliable theories. Of greater significance are the trials that many researchers believe the Nordic welfare societies are facing. 2

3 The Nordic model, with its universal and income-related social insurance system and taxfinanced public sector, is now regarded as a model constrained by impediments. A recurrent picture is that the prerequisites for a successful polity based on the values of the labour movement have been lost. Globalisation of the financial markets and the Europeanisation of the goods and labour markets have, combined with an ageing population and incipient tax saturation, have undermined the economic and social foundations of the Nordic welfare state. Furthermore, immigration and migration is often added to long list of challenges that awaits the Nordic countries in the future. However, to many researchers, the ultimate proof of the crisis of the Nordic model is that Nordic Social Democracy in the 1980s and 1990s was instrumental in a number of reforms whose content deviates from that which is usually associated with Social Democratic policy. This involved the abandonment of Keynesianism, the lowering of benefits, the introduction of more stringent eligibility requirements for social insurance programs, the privatisation and management reforms in public sector service and so on. Here we also find examples of more radical reorganisations of welfare policy, such as the Danish flexicurity in labour market policy and the 1994 Swedish pension reform. In both cases, it is still hard to grasp the consequences upon the formation of special interest groups in society. Another line of thought questions whether it is possible to preserve the distinctive features of the Nordic model in an increasingly integrated Europe. One could say that in recent years, some vagueness has arisen about the status of the Nordic model. This vagueness is not only associated with the problems that are piling up on the horizon: ageing populations, the mobility of workers, and increased wage competition, etc. Of equal importance is the role of the very concept of the Nordic model, and its function in the transformation processes that already have begun and most likely will continue for many years to come. How far can we distance ourselves from the historical design of the Nordic model without making the talk about its distinguishing features merely ceremonial? How much internal flexibility and national variation can the concept capture before it, so to speak, begins to lose its contours? And finally, how should the distinguishing features of the Nordic model be understood if they no longer can be explained by referring to the dominant position of Social Democracy? In the following sections I will discuss this overall problematic from the perspective of three separate but yet interrelated problem areas. The first problem area concerns politics as such, or more specifically the room for political manoeuvre. The second deals with Nordic cooperation, or the meaning and importance of Nordic cooperation. And finally I will address the question of models as a basis for political action. What is the difference between a model and a political vision? 3

4 The room for political manoeuvre To begin with the room for political manoeuvre, it is safe to say that the labour movement and Social Democracy have traditionally enjoyed an exceptional position in studies of the development of the welfare state. For many years, the design of the welfare state was equated with the conditions, vigour, and strategic capability of Social Democracy. Where Social Democrats were well organised and successful, the welfare state grew large and encompassing; where they were weak and fragmented, the circumference of the welfare state shrank. This Social Democratic interpretation has especially dominated studies of the development of the welfare state in the Nordic countries. One can say that the Nordic welfare model has become an archetype of what happens when a reformist labour movement is powerful enough to influence social development. Politics as wanting something or choosing something? In academic circles, the social democratic interpretation is often captured in the phrase politics matter. This may seem self-evident. Yet the importance of politics has always been questioned. What does day-to-day political practice mean in the long run, against the background of heavy social processes such as the industrialisation of western economies or the constant transformations of modern capitalism? In recent years, many researchers have applied institutional perspectives on social development; that is, the way in which choices made in the past systematically constrain the choices open in the future. From this perspective, the Nordic model is not the result of politics, rather of a particular Nordic Sonderweg, that the individual countries had adopted already at the beginning of the twentieth century. As the Swedish historian Klas Åmark underlines in a new book on the development of the welfare state in Sweden and Norway, politics is not only a question of wanting something in the famous words of Olof Palme but often about choosing something among opportunities that you are not able to fully control. Perhaps I should underline that the Nordic model is hard to imagine without considering the dominating position of the labour movement. On this particular point most researchers agree. However, that does not suggest that the Nordic model is the result of a single social democratic post-war Master Plan. New pension systems are built on the remnants of old systems and labour market regulations are sooner or later formalised into inert structures that are hard to change. Also, national experiences should be considered. The Swedish post-war experience differs from the Danish, Finnish, and Norwegian partly because Sweden was not to the same extent involved in the tragedies of the Second World War. Together, these factors indicate that the Nordic model, despite its international dimension, has emerged in the national context. Some researchers would even claim that its main function has been to confirm the status of the indi- 4

5 vidual nations. It is on the national level that political actors have chosen their ways among roads constructed by earlier generations. Certainly there exists a common Nordic labour market and mutually recognized social insurance systems, but these expressions of togetherness must be seen as an extension of national efforts. There has never existed a Nordic power with the authority to nullify decisions taken by the national parliaments. From this narrow constitutional perspective, the Nordic countries have always been independent and fully able to equate politics with wanting something. European cooperation and the judicialisation of politics However, it is also from this narrow constitutional perspective that the European Union represents a new context for the choices that Klas Åmark talks about in his book. There is not time here to address all possible implications of the European integration. In many areas the environment, labour market regulations and corporate taxes there is still a need for minimum regulation that counteracts social dumping and guarantees that welfare systems will not be undermined in international competition. The problem is that such binding regulations would require a unanimous decision in the Council of the European Union, which we can regard as unrealistic. Another possibility, of course, is to increase the number of issues on which the Council can make decisions with a qualified majority, but there is great danger in this as well. There is a risk that it would rebound, hurting the Nordic countries and their opportunities to pursue and finance an independent distribution policy and establish the requisite national structures and labour market bargaining systems. Another, less obvious, effect of the European integration is that it strengthens the forces that work to advance the position of the judiciary at the expense of the political system. Only judges armed with the powers of judicial review, it is argued, are able to overcome the complex coordination problems deriving from the proliferation in levels of administrative and state agencies in an era of convergent economic markets. At the supranational level, there is not much space for public deliberation; however there is a great need for standardised legal norms. It is too early to say what this means from a Nordic point of view. Europe represents both a threat and a possibility. In the future, the traditional conflict in industrial societies between labour and capital politics and markets at least to a greater extent, must be analysed within the framework of a superior conflict between representative institutions and judiciaries. An illustrative example, in this context, is the controversy in the Swedish town of Vaxholm, outside Stockholm, in the autumn of 2004 when a Latvian construction company refused to sign a proper collective agreement. The case, which became the target of a heated political debate, was taken to 5

6 the Swedish Labour Court, which eventually decided to send it to the European Court of Justice for a final opinion. The question at stake is whether the industrial action taken by the Swedish trade unions conflicted with the European Union legislation on the free mobility of service providers. Independently of the outcome proceedings in the European Court may take several years before a final ruling the conflict in Vaxholm indicates that the judicialisation of politics is a trend that proponents of the Nordic model will have to consider in the years to come. Comparisons as political practice The Nordic model is hard to digest. As already mentioned, it mainly exists as a contrast to the rest of the world. Internally, the Nordic countries display a number of important differences in almost all dimensions that are relevant to the concept as such. In a report about the Nordic model of welfare published in 2006, a group of Nordic historians came to the conclusion that Norden was best described as a model with five exceptions. It is only when we compare the Nordic region with other comparable countries, with regard to the design of the welfare state, the organisation of the labour market and gender equality, and so on, that the distinguishing features appear. Norden as a normative yardstick for social development This brings us to the question of the meaning and importance of Nordic cooperation. In recent years, researchers have started to observe that political actors learn from each other. The politicians meet in various international settings and discuss their respective experiences. Before important reforms, they study each other s mistakes and envy each other s successes. Cooperation is not necessarily the same thing as developing common solutions (something which has proved to be very difficult in the Nordic context). Rather, comparing is a learning process to adjust measures taken in other countries to one s own circumstances. For such reasons, researchers increasingly talk about comparisons as a particular political practice ; that is, that political outcomes on the national level must be understood against the background of a world of more or less good examples. In this sense, Nordic cooperation is probably unique in the world. The opportunity to arrange meetings where most of the participants are allowed to speak their own language is most likely an important aspect, which furthermore has contributed to the idea of a common Nordic identity. Alongside the explicit expressions of this cooperative spirit, such as the Nordic Council and the Nordic Council of Ministers, there exists a rich variety of various cooperative bodies. In international settings, such as the UN, ILO and the World Bank, the Nordic countries often ap- 6

7 pear jointly. Concerning the Nordic model of welfare, one should mention the development of a common Nordic social statistic, which national actors could use for comparisons and social criticism. Especially in Finland, the concept of Norden was eventually filled with such critical and future-oriented potential. As the Finnish historian Pauli Kettunen has shown in a number of articles, the concept of Norden proved that Finland did not belong to the Eastern bloc, but also that the future was already inscribed in the Finnish society. The future in this respect referred to everything that already had been implemented in rest of the Nordic countries, especially Sweden. With whom do we compare, and what do we compare? If comparisons as are important, it is even more important with whom we compare, and above all, what we compare. What is used as a basis for the evaluation? Is it the degree of universalism, the autonomy of the labour market, or the level of union density? Or is it rather the degree of privatisation in the social service sector, or labour market flexibility? Comparisons are never innocent. Historically, the image of a Nordic model received the status of a normative yardstick for the individual countries to live up to or be measured against. The 1961 Finnish pension reform, for example, was partly justified as a reform that would transform Finland into a more Nordic country. Here, Norden was associated with words such as modern, and well-functioning. On this matter, there may be reason to worry about the future. It has to do both with whom we compare, and what we compare. Today so-called benchmarking or best practice is a growth industry. Individual nations are subjected to a never-ending flow of assessment. We have the continuous surveys and reviews of the OECD. We have the Lisbon Process adopted by the European Union in 2000 which may be best described as a huge comparative hothouse. The problem is that the criteria applied in these settings, the normative yardstick if you wish, often works in the opposite direction to the values that we are used to associate with the Nordic model. One can say that the Nordic countries no longer are as faithful to the Nordic dimension as they used to be. But we can also say that the Nordic countries nowadays are subjected to a great number of comparisons, the normative content of which they are unable to control. Model or vision? The issues discussed so far raise questions about the concept of a model as such, or more exactly, the use of models as a basis for political strategies. In terms of perspective, there is a great difference between a model and a vision. Where the vision begins with criticism of the current state of affairs aimed at openings among the opportunities and constraints of the future, the model represents a fixed position, or a cross-section, established in contrast to history and the international 7

8 context. For researchers and politicians of the 1960s, the Nordic model not only accentuated the distance to a recent past. It also corresponded to an almost spatial experience a geographically delimited example of functioning democratic socialism between communism in the East, capitalism in the West, and the underdeveloped countries in the South. Where the superpowers and their allies were defined by the size of their armies and their economic systems, and the developing countries were placed in a civilising stage theory, the Nordic model was judged based on the quality of social welfare and the strength of the reformist labour movement. Norden a role model for others or a model among others? Model is an ambiguous word. It can refer both to a role model for political action and a generalised or simplified image of reality. At the 1963 SAMAK meeting in Oslo (The Joint Committee of the Nordic Social Democratic Labour Movement), Swedish Prime Minister Tage Erlander depicted Norden as an example for large parts of the world when it came to political democracy, social security, and individual freedom. The Labour Movement had been the dominant force behind what he described as nothing less than an economic, cultural, and social revolution. Thus, it was through looking backwards at their own history and outwards toward a world fraught with conflict that Tage Erlander and other leading Nordic politicians could hold up their societies as models for others to emulate and for themselves to safeguard. For proponents of the Nordic model this created a peculiar dilemma. In setting themselves up as guarantors for an existing institutional order, their future came to rest more upon the welfare state already built and less upon that which could be promised, in the words of Danish sociologist Gøsta Esping-Andersen. This point is actually very important. When we talk about the Nordic model today, we do it less in the progressive sense of an example to follow, and more in scientific and neutral meaning of the word, as a simplified representation of reality. We have the Nordic model, but we also have the Anglo-Saxon and Continental models. Furthermore, models are static and hard to change. They emerge in the contrast, rather than in the political struggle. They are threatened or endangered and constantly faced with new challenges. Attempts at adjustment are easily transformed into deviations from the main track. To apply a model on a changeable world is like buying trousers for a growing child. Models easily end up in a condition of permanent crisis. In this sense, the task of saving the Nordic model for the future resembles the task of saving Venice from sinking below the surface of the sea. It is noble and admirable, but also invincible and expert oriented. It is not visible in the everyday life of individual citizens, and it does not capture the mind of the electorate. In continuation of this tendency, the very word reform may 8

9 be discredited. Reform, which used to represent popular improvements, nowadays often stands for various retrenchment measures: budget cuts, enhanced work incentives, management reforms in public sector service, and so on. From a social democratic middle way to an apolitical growth model Models are abstractions, not visions. They look outward and backward, not inward and forward. My intention is not to exaggerate the importance of visions. The values associated with the Nordic model are still popular among the electorate. As non-socialist parties all over the Nordic region have begun to realize, it is almost impossible to win an election in the Nordic countries with an outspoken conservative agenda. And as I mentioned earlier, the Nordic model has proved itself to be competitive enough in the global economy. However, it is no longer the tricky path in between communism and capitalism that attracts the attention of foreign commentators. Rather they are interested in a fairly apolitical growth model which combines Danish labour market policies, Swedish austerity measures and Finnish human capital production. According to the American economist Jeffrey Sachs not in any way a social democratic intellectual Finland has been able to organise its brain power better than any other country in the world. If the Nordic model during the build-up period was mainly associated with social democratic values, the present transformation period is better described as a neutral project which also attracts conservative politicians and intellectuals. When the social democrats move toward the middle of the political spectrum, adopt a liberal outlook and ascribe to an individualized concept of freedom, their political agenda become easier to imitate. But there are also other risks connected with the tendency to downplay the visionary element of politics. Those risks have to do with the active engagement or participation in the organisations that once contributed to the image of Norden as a progressive region of the world. The Nordic model may not have been the result of a well thought out Master Plan, but at least it answered wishes and high hopes that fuelled the political debate and strengthened the citizens sense of purpose and their readiness to make up their mind about the conflicts of interest which emanated from society. Concluding remarks The Nordic model was established in contrast to a recent past and an international context fraught with conflict. However, it should have emerged from the presentation so far that this image has become increasingly difficult to sustain with the passing of years. The concept is still a vital reality in scientific and political discussions, even though it has been adapted to a new context and filled with new content in recent decades. But with every report published, history be- 9

10 comes further removed and the international context more present. A new legitimacy seems to be under construction, less concerned with the conflict between labour and capital, and more focused on social welfare as a precondition for economic growth in a global environment. A future to create or a future to avoid? There is a risk that the efforts to secure the Nordic model for the future will become an exclusive task for social engineers and professional politicians. This is not as strange as it sounds. Many issues on the political agenda demand an expertise beyond what we can expect, even from the engaged citizens who constitute the basis for democracy: ageing populations, coordination problems within the European Union, etc. Faced with such challenges, the traditional structures for decision making within the labour movement tend to appear ceremonious and out of fashion. If there is an adequate way into the future, why follow an uncertain democratic road. One of my purposes with this presentation has been to show how the concept of the Nordic model actually contributes to this problematic. By clinging to a certain understanding or description of society, the visionary power is drained out of democracy. The future loses its character of something open and promising that we are building together, and transforms into something closed, disquieting and alarming that we have to avoid. On this point, I suppose, it is possible to discern three recommendations from my presentation. First, it is important to safeguard the room for political manoeuvre; second, to be careful with the normative yardstick for social development; and third, to work out political goals that look beyond the possibilities and limitations of the Nordic model. A model is something that we inherit from the past, not necessarily something that we should project on the future. As Olof Palme once said: Visions are for political democracy, what the mirage is for the camel. If it was not for the mirage, the most stubborn Bedouin would not be able to chase his camels through the desert, not even to the nearest oasis. References Childs, Marquis Sweden the Middle Way New Haven: Yale University Press. Christiansen, Niels Finn & Pirjo Markkola Introduction. In The Nordic Model of Welfare: A Historical Reappraisal, edited by Niels Finn Christiansen et al. Esping-Andersen, Gøsta Three Worlds of Welfare Capitalism. Princeton: Princeton University Press. Hirschl, Ran Towards Juristocracy: The Origins and Consequences of the New Constitutionalism. Cambridge: Harvard University Press. Kettunen, Pauli The Nordic Welfare State in Finland. Scandinavian Journal of History

11 Kettunen, Pauli The Power of International Comparison: A Perspective on the Making and Challenging of the Nordic Welfare State. In The Nordic Model of Welfare: A Historical Reappraisal, edited by Niels Finn Christiansen et al. Lundberg, Urban A Leap in the Dark: From a Large Actor Approach to a Large Area Approach. The Joint Committee of the Nordic Social Democratic Labour Movement and the Crisis of the Nordic Model. In The Nordic Model of Welfare: A Historical Reappraisal, edited by Niels Finn Christiansen et al. Musial, Kazimierz Tracing the Roots of the Scandinavian Model. Image of Progress in the Era of Modernization. Florens & Berlin: European University Institute & Humboldt-universität. Petersen, Klaus Constructing Nordic Welfare? Nordic Social Political Cooperation In The Nordic Model of Welfare: A Historical Reappraisal, edited by Niels Finn Christiansen et al. Stråth, Bo Den nordiska modellen: Historisk bakgrund och hur talet om en nordisk modell uppstod. Nordisk Tidskrift 69. Stråth, Bo Folkhemmet mot Europa: Ett historiskt perspektiv på 1990-talet. Stockholm: Tiden. Zaremba, Maciej Den polske rörmokaren och andra berättelser från Sverige. Stockholm: Norstedt. Åmark, Klas Hundra år av välfärdspolitik: Välfärdsstatens framväxt i Sverige och Norge. Umeå: Boréa. 11