Utopia sustained: The Nordic model of social democracy

According to what one could call the ‘golden age narrative’, social democracy is a political ideology that came to fruition in the post-war decades but has since run up against its limited shelf life. This narrative plainly does not fit with the experiences of the social democrats in Scandinavia. From the premise that the Nordic model of social democracy has fared well in the restless context of globalisation and neoliberalism, there is reason to ask: what lessons can be learned?

The proposition of a ‘golden age’ of social democracy running from the second world war to the 1970s indicates that the social democratic movement and the welfare state it created have been in decline ever since. This idea can lead us to the premature conclusion that social democracy has run its course. It can also quite easily take our attention away from the basic values of the social democratic movement, and instead prompt us to believe that specific policies – for instance public ownership of key industries – are the defining features of social democracy. One of our ambitions in putting forward a book on The Nordic Model of Social Democracy has been to level a critique against this golden age narrative.

Admittedly, it is true that state ownership of key industries and control over macroeconomic measures were essential features of the 1950s and 1960s, and that the level of public ownership and control has waned in Scandinavia since then. Yet it is also true that the welfare state has expanded and refined continuously over the seven decades since the second world war. Welfare benefits have been extended to new spheres of life, and the health system coverage goes beyond anything the post-war citizen could ever have imagined. With the expansion of secondary and higher education, opportunities for social mobility have increased. Coupled with a more diverse labour market and the maintenance of social equality, the Nordic societies are arguably more capable of providing individual liberty today than ever before. Our argument is that social democracy as a guiding ideology has been defended more robustly than is often recognized, and that there is good reason to believe it will be able to meet future challenges.

German politician and author Eduard Bernstein is famous for his statement that the final goal meant nothing to him, and that it was the movement towards social and economic improvements which was most significant. In a modern world, this implies the need to analyse the scope for political action and then to work systematically for progressive aims, without any illusion that a utopian, all-encompassing solution to all our problems is likely to appear. It echoes Roy Jenkins’ call in his contribution to the New Fabian Essays in 1952 to be ‘radical in the context of the moment’, a phrase that illustrates how pragmatism and governing capacity have been essential to the social democratic movement. Faced with conditions where majority electoral support was a realistic prospect, social democrats gravitated towards policies that could be viably implemented while remaining radical in the sense of relentlessly pursuing the aim of greater equality – and thereby greater liberty – for all.  In the Scandinavian countries, as in western Europe as a whole, this strategy also reflected an underlying cleavage on the left: while social democrats were inclined to seek alliances, and were relatively eclectic with regard to means, the far left would maintain that specific means (such as state ownership) must be intrinsically linked to the aims of the socialist movement.

According to American political scientist Sheri Berman, the dominance of social democracy during the 20th century, at least in Europe, was founded on what she has termed “the primacy of politics”: a fundamental belief in the power of politics, which has been the very hallmark of the social democratic ideology. The main division in politics is then between those who believe that society can and should be shaped through a process of democratic collective decision-making, and those whose core belief is that non-democratic entities, in particular the iron laws of the economy, are the driving forces of history and should remain unchecked by political decision-making.

In Berman’s model, this puts social democracy at odds with both orthodox Marxists and classical liberals. Whereas the first tend to view politics as merely a reflection of structural changes in the economy, the latter believe that the role of politics is simply to manage a limited number of public goods, such as law enforcement, leaving the stewardship of society and the distribution of wealth in the hands of the unregulated and impersonal forces of the economy. To both these ideologies, which are usually placed on opposite ends of the political spectrum, it is imperative that the economy, by historical necessity, constitutes the driving force behind societal developments.

The opposite view to this line of thinking is represented most prominently by social democrats who believe that democratically elected authorities could and should regulate the economy in order to create an improved society and a better world. Therefore, the political and ideological debates of the early 2000s were, as Berman puts it, “different in form, but […] not different in kind” from those of the 19th and 20th centuries. To Berman, this is most clearly seen when examining the claim that neoliberalism and globalisation have, by necessity, resulted in a race to the bottom, in which welfare systems have been destroyed and decision-making power transferred from democratic institutions to unchecked markets. A vital counter-argument from the social democratic movement in the Nordic countries is that stewardship of the economy should be grounded in democratically elected institutions, precisely because economic systems are the products of political decisions and could therefore be changed through political processes.

The belief in the power of politics and the ability to solve our common challenges through collective political action is the common thread of social democratic history. Today, the main challenges for the Nordic model of social democracy concern the accommodation of globalisation and increased internal diversity. Growing inequality is a visible effect of globalisation, and one which social democratic parties have found it difficult to counter effectively, where the logic points to greater rewards for those with higher skills. Nevertheless, international trade does not by necessity lead to widening inequality and welfare state retrenchment. Despite decades of a supposedly neoliberal hegemony, the Scandinavian countries remain admired not only for innovation and competitiveness but also for their family policies, gender equality, and participation in the labour market. The evolution of a more multicultural society has required adaptation but not dramatic revision of this model, thus rejecting the argument that social democracy requires small and ethnically homogeneous societies.

What it does require, however, is the ability to create and the willingness to share. The former relates to a productive economy through high (and skilled) employment, the latter hints at community cohesion and continuous attention to welfare reform, to ensure that services are kept not only fair and proportionate but also sustainable. Today, as before, the social democratic approach is all about making a difference in people’s lives through incremental but systematic reform. It is about seeking power and influence where available while continuing to look for opportunities for improvement through further reform. The focus for successful social democratic parties has been in the direction that society is heading rather than an idealised past or a utopian future. The social democratic credo is that the future is created not by impersonal and ungovernable economic forces, but by collective political action. It is a credo that is well and truly alive in the Scandinavian countries today, which has shown a remarkable ability to adapt to a changing environment.

Nik Brandal, Øivind Bratberg and Dag Einar Thorsen are authors of The Nordic Model of Social Democracy, published by Palgrave Macmillan. The book was launched at the Fabian Society’s Midlands and Northern Fabian Regional Conference in Sheffield on 16 March.