See The Price of
for the
background to this
essay, especially
"The Politics of

Leaders of the Swedish labour movement:
Prime Minister Göran Persson of the SDP
and Wanja Lundby-Wedin, new president
of the Swedish Trade Union Association

Days of the Profits

Clear autumn light on a divided labour movement


Low-paid workers in the service trades and the public sector have been gaining influence.
Stockholm became a city of illuminating contrasts during the first weekend of September this year, as the crisp autumn light shone its blessings upon two very different gatherings of the political left.

One was the 24th convention of the Swedish Trade Union Association, commonly referred to as LO (Landsorganisation in Swedish). Founded in 1898, it was originally an association of male-dominated industrial unions. But due to changes in the labour market and the work force, it has become increasingly dominated by low-paid workers within the service trades and the public sector, the majority of whom are women.

This shift in LO’s composition was reflected in the election at the convention of its new leader, Wanja Lundby-Wedin, who began her career as an assistant nurse in the Municipal Workers Union. She thus became the first woman to be elected to what has been one of the most powerful positions in Swedish society. That power has been based primarily on three factors: LO’s intimate ties with the Social Democratic Party (SDP), which has dominated national politics for the past half-century; the sheer size of the association’s membership; and LO’s special relationship with the country’s most powerful business organization, the Swedish Employers' Confederation (”SAF” in its Swedish acronym).

Big business always regarded its special relationship with LO as a marriage of convenience, to be abandoned as soon as conditions permitted.
Declining influence

But all that appears to be changing, including LO’s dominant status among the labour force. Approximately ninety percent of Swedish employees are organized, and roughly half of them still fall within the province of LO. Workers in the remaining half belong to the two associations of white-collar unions, TCO and SACO, which are steadily gaining ground due to rising educational levels and associated job requirements. As a result of these post-industrial trends, LO’s exceptional influence is beginning to decline.

There are already serious strains in LO’s special relationship with the business community, which was formalized in the so-called Saltsjöbad Agreement of 1938. The SAF leadership always regarded that peace treaty between big business and big labour as a temporary marriage of convenience and, to a large extent, has simply abandoned it now that conditions permit. The most crucial of those conditions is the rise of neo-liberalism, including the deregulatory policies of recent Social Democratic governments. With a divide-and-conquer strategy based on separate agreements with industrial unions, SAF has succeeded in deepening the divisions within the LO confederation.

Thus, the LO that Wanja Lundby-Wedin now presides over is plagued by internal divisions, an increasingly problematical relationship with its no-longer reliable political instrument, growing competition from labour organizations more in tune with the post-industrial era, and declining influence in the eyries of big business.

The investment scandal illustrated the extent to which LO has adopted the logic and behaviour of the neo-liberal marketplace.
Bitter scandals

This was highlighted during the five-day convention by a number of events, including an investment scandal and a bitter debate over the European Monetary Union (EMU). The scandal arose when a newspaper revealed that large quantities of LO funds have been profitably invested in the company that has been most actively involved in privatizing the country's major hospitals-- a policy which, in public, has been opposed by LO and SDP leaders.

Over the years, there have been many similar disclosures of serious gaps between word and deed; but this one came at a particularly embarrassing moment, and illustrated the extent to which both major institutions of the labour movement have adopted the logic and behaviour of the neo-liberal marketplace.

The EMU compromise was a manipulative exercise that is hardly likely to improve relations between the LO hierarchy and the rank and file.
Membership in the EMU is opposed by over half of LO members. Nevertheless, the leadership-- in keeping with the wishes of Prime Minister Göran Persson-- attempted to push through a blanket endorsement, including a recommendation that all members vote ”Yes”. This proposal was bitterly opposed and rejected as dictatorial. But after some back-room wheeling and dealing, a two-thirds majority approved a ”compromise” by which the organization LO endorsed Swedish membership in the EMU, while refraining from any recommendation that all members vote ”Yes” in the national referendum that is expected to take place within the next few years.

It was, of course, a blatantly manipulative exercise that is hardly likely to improve relations between the LO hierarchy and the rank and file. That the manoeuvre ”succeeded” has more to do with the inherent tendencies of national character than with any enthusiasm for the EMU: Swedes generally dislike open confrontation, and are therefore easily manipulated in public settings such as the convention. It is a trait that has been enormously useful to the Social Democratic leadership as it has led the country, against the will of the vast majority, deeper and deeper into the morass of neo-liberalism.

The theme of the LO convention was "Democracy".
Reluctant support

As an entirely predictable result of all this, the Party is now supported by less than half of the LO membership which, for that and related reasons, has become increasingly alienated from the leadership of both organizations. Even among those who have yet to withdraw their support, the mood is far from agreeable. A key figure in one of LO’s largest service-trade unions explains his reluctantly continued participation on purely tactical grounds:

”The programme of the Left Party conforms almost exactly with the stated policy of LO, large portions of which have been ignored or trampled upon by the Social Democrats. I would have joined the Left Party long ago, if it were not for the political risks involved. If all of us leave, the neo-liberals who have taken over the Social Democratic leadership would almost certainly enter an open alliance with the liberals and conservatives, in which case the damage would be even worse.”

Despite that logic, a large segment of the LO membership has been less reluctant to depart, especially women in the public-sector and service-trade unions. Some have ceased to participate in politics, but most have shifted their allegiance to the Left Party. Its opinion-poll ratings have tripled during the past decade, from five to around fifteen percent, while the SDP has lost nearly a third of its support during the same period and has lately been hovering just over thirty percent.

The call for restraints on the the transnationals contrasted sharply with the policy of appeasement that has characterized Social Democractic parties throughout Europe.
Nearer to Palme

As though to celebrate its new prominence, the upstart party hosted a ”Stockholm Conference for Left and Progressive Movements in Europe” during the same weekend as the LO convention. Much closer to both the grave and spirit of Olof Palme, the conference was held just across the street from the churchyard where he lies buried.

Although considerably less well-funded than the LO congress, the left/progressive conference managed to attract representatives of socialist parties and like-minded NGOs from all over Europe, including several former client-states of the defunct Soviet empire.

One of the principal speakers was Susan George, vice president of ATTAC, the rapidly-expanding international network whose aim is to impose restraints on the power of transnational corporations, the driving force and the chief beneficiaries of global neo-liberalism*. Her call to organized resistance fell on receptive ears, and contrasted sharply with the policy of appeasement and retreat that has characterized Social Democratic parties throughout Europe during the past two decades.

SDP/LO attacks on the Left Party resemble those previously aimed at the Social Democrats.
For the most part, the conference was a fairly routine collection of seminars on a variety of subjects, with no scandals or heated disputes to offer the media. But the mere fact that it took place was an indication of the Left Party’s growing strength which, as noted previously, is based largely on defections from the SDP.

In an effort to counteract that trend, the SDP/LO leadership has launched an ideological attack on its tormentor, including a woefully misdirected broadside in Sweden’s leading newspaper just prior to the LO convention. With arguments highly reminiscent of those directed against the Social Democrats during the first half of the previous century, the Left Party was accused of being unreliable, fiscally irresponsible, and generally unfit to govern the country. The clear implication was that anyone who left the SDP for the Left was doing great harm to both oneself and the labour movement.

”Two more debate articles like that, and the Left Party will be bigger than the SDP.
Out of touch

The effect of this message on the LO rank and file was to increase both its alienation from the leadership and its interest in the Left Party. As the former head of a major LO union observed, ”Two more debate articles like that, and the Left Party will be bigger than the SDP.” Others raised the obvious question of how the SDP could choose to govern the country, as it has done for most of the past half-century, with the support of a party so lacking in virtue. With only one-third of the vote in the last election, the current SDP government is completely dependent on an alliance with the Left and Green parties.

The SDP/LO leadership’s apparent inability to foresee how its attacks on the Left Party would backfire is one of numerous indications that it has lost touch with its presumptive constituency. Others include the LO investments in privatization of the health care system noted above, and a range of ethical shortcomings displayed by assorted government ministers.

The Deputy Minister's failure to pay her taxes on time provided one kind of example to the business community for which she is supposed to provide leadership.
Of the latter, the most serious has been the failure of the Deputy Minister of Industry and Commerce, Mona Sahlin, to pay her taxes on time, thus providing one kind of example to the business community for which she is supposed to provide leadership. In the past, she has exhorted her countrymen with the proud declaration: ”I love to pay taxes!” It would appear that love is not enough.

It is not the first time that Ms. Sahlin has embarrassed herself and her party with her hypocrisy and financial delinquency; a previous episode cost her the opportunity to become Sweden’s first female prime minister. But her replacement, Prime Minister Göran Persson, merely shrugged off this latest relapse-- partly on the grounds that she comes across well on TV. It has been much the same with a range of other doubtful behaviour on the part of various government officials.

Everything appears to be subject to negotiation, may the most powerful interests win.
Principles no longer apply

To foreign journalists and other observers from abroad, the misdeeds of Ms. Sahlin and her wayward colleagues usually seem laughably insignificant in comparison with the more impressive forms of corruption to which they are accustomed back home. But at least until recently, Sweden has operated according to a fairly strict code of conduct, particularly with regard to tax discipline and fiscal responsibility. In that context, the failure of a government official to pay taxes or to misappropriate even small amounts of public funds has been a serious matter.

However, with his nonchalant reactions to such behaviour, Prime Minister Persson has signalled that such traditional principles no longer apply. In fact, it is difficult to discern in his government’s behaviour the consistent application of any principles, either in domestic or in foreign policy. Everything appears to be subject to negotiation, may the most powerful interests win.

That would certainly explain why Social Democratic governments of recent years have capitulated to neo-liberalism, the European Union and the violently imposed order of Pax Americana. From one perspective, that preferred by Prime Minister Persson, it is a strategy that has paid off: The economy is booming, unemployment is steadily declining, and no less a market authority than Merill Lynch has recently designated Sweden as the country most likely to experience favourable economic growth in the years ahead.

The SDP leadership is devoted to its theory that the only way to confront the power of global neo-liberalism and Pax Americana is to submit to it.
Blind submission

But from the perspective of the SDP’s traditional constituency, such signs of economic vitality are not enough to compensate for the damage that has been done to the society that they would prefer to sustain. As two members of the SDP’s youth organization pointed out in a recent article: ”People oppose cutbacks in social services, and they are sceptical toward the new pension system and the European Union. It is for such reasons that the SDP is losing support.”

That and much more like it has been said and written over the past fifteen years, but there is nothing to indicate that the leadership has paid any serious attention. Oblivious to its mounting loss of support, it has plodded on in blind devotion to its theory that the only way to confront the power of global neo-liberalism and Pax Americana is to submit to it.

For Göran Persson, who has often said that he would one day like to take a turn as a minister of the cloth, the appropriate passage from the Bible would seem to be Mark (8:36): ”What has a man profited, if he shall gain the whole world, and lose his own soul?”

-- Al Burke, September 2000   
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