The narrative of progressive taxation, job creation and good public services has been lost to paying structural deficits and concerns over mass immigration. As the left loses popularity, the far right is gaining momentum.
In the United Kingdom, the Labour party suffered a great defeat in this year’s general election, losing 94 seats. It went from winning 35 per cent of the popular vote in 2005 to 29 per cent in 2010. With the new leader, Ed Miliband, taking position recently, the party must now unify and support itself in the fight against austerity measures that the new government is lining up.
In Sweden, a similar story has unfolded. The Swedish Social Democratic party, the Socialdemokraterna, lost in 2006 and in the recent election last month. Their egalitarian appeal has lost touch with the people of Sweden, especially amongst people living in the south. In 2002 they won 39.9 per cent of the popular vote, followed by 35 per cent and 30 per cent respectively.
In their first term, the conservative coalition government in Sweden lowered taxes and reduced spending and quality of public services. Unemployment amongst young people now stands at a quarter and the least well-off have suffered from cuts to welfare state benefits and free market reforms to services.
The British Conservative party’s populist rhetoric on cutting the deficit, which they conveniently use to explain the economic downturn, failed to win them enough seats to form their own government. Their mandate for cuts, aided by the Liberal Democrats, appears to have some public support thus far.
The Tory party has taken great interest in the Swedish Moderata (the dominant centre-right party) recently – looking for ideas on deficit reduction, and free-market reforms of public services. The Swedish ‘free school’ model, which is heavily criticised by the left in Sweden, is a flawed, unfair model and is championed by Michael Gove.
The comprehensive spending review, due on October 20, will codify the dismantling of public services and reforms that will not only waste public money but hit the poorest the hardest – similar to the actions taken by Swedish prime minister, Fredrik Reinfeldt, in his first term.
Giving parents and businesses the freedom to set up their own schools has resulted in richer neighbourhoods having more choice and availability of good performing schools. A similar system has been set up in the Swedish healthcare system, giving the best public services to the most well-off.
In a time when unemployment is high, and likely to grow under spending cuts to the public sector, the shortsightedness of this government is perplexing. Announcements to reduce the size of the welfare state whilst making thousands of people redundant merely resembles the mess that Margaret Thatcher made during the 1980s. Whilst encouraging people to become unemployed and at the same time attacking the state support that helps those out of work rely does not add up.
In terms of growth, Sweden came out of this recession in the best possible position. However, in the quest for raising their gross domestic product, the unemployment rate hit nine and a half per cent in June – now down two per cent to around the same level as the UK.
The ineffectiveness of the Socialdemokraterna in Sweden led to their historic second defeat in September. The Labour party must take heed of the defeat that both they and other European social democratic parties suffered. We must retune and get in touch with the public.
Odd article in a way, in that while the stalemate is political, obviously the economic arguments are very old. At a meeting of the Fabians during Conference week on inequality and insecurity, it was indeed mooted that the defeat in Sweden was an ‘endophenotype’ (marker) of a rejection of socialism as a solution to economic problems. The unfortunate subtext in voters turn to socialism only when the economy is doing well. We, of course, know that it is rubbish. However, it is a pervasive idea. There are some like me, and in the older generations, who believe that Keynesianism sometimes needs to be brought into bail out rampant monetarism. For voters, this is more tangible in whether the bankers and free market have got it ‘all right’, as far as the best interests are concerned. This is one of the things that Labour should be discussing more vigorously. For example, some voters blame Labour for not punishing the bankers more, but it’s clearly a thorny issue as the bankers contribute so much to our GDP currently. (The GDP: public debt debate is outside the scope of this comment). I would be wary of those espousing a political stalemate, as this can too quickly be used as an argument of a rejection of socialism. Dr Shibley Rahman (@shibleylondon)