Full Employment and the Swedish Model

Full Employment and the Swedish Model


PAUL JAY: Welcome back to The Real News Network.
I’m Paul Jay in Baltimore. We’re continuing our series of interviews
with Bob Pollin about his new book, Back to Full Employment. And he joins us again from
Amherst, Massachusetts, where he is codirector and founder of the PERI institute. Thanks
for joining us again, Bob. ROBERT POLLIN: Thank you very much, Paul,
for having me again. JAY: So in terms of modern history, one of
the models that’s often pointed to, at a country that kind of tried to marry Keynesianism and
that form of capitalism that seemed to have been working to some extent, was in Sweden.
And you talk about this in your book. So discuss that model a bit. POLLIN: Well, I think that’s a very, very
rich model with a lot of lessons for countries throughout the world. I myself, in work I
did several years ago in Kenya, actually, on employment opportunities in Kenya, was
thinking about the Swedish model in writing the book on Kenya–and still thinking about
it in a book about the United States. So it isn’t so much about Sweden, per se. The idea is that, okay, we have the Keynesian
tools that can promote employment. We do know that at a certain point you will create inflationary
pressures, and so that how do you maintain a full-employment economy that benefits workers.
And the best way to do it is when you have strong unions that are committed to full employment.
And they will maintain wage increases that are roughly consonant with productivity growth,
so that you do not get upward price pressure, because every time you get a wage increase,
that’s roughly in step with the economy’s capacity to produce more goods and services.
That’s a productivity increase. And it was really due to the unions themselves that attempted
and implemented this policy. In fact, the innovators here were two outstanding
union economists, Rudolf Meidner and [%[email protected]”rIIn]. (I don’t know how to pronounce the names correctly.
I’m sure I’m mangling them.) But they were very important economists in thinking about
how to achieve and sustain a full-employment economy, precisely by empowering workers.
Empowering workers gives workers the sense of responsibility [inaud.] oh, well, we are
going to take responsibility for dampening whatever inflationary pressures may result,
and yes, we can sustain a little bit higher rate of inflation, but we will make sure that
prices and wages do not go up excessively, precisely because we the workers, we the unions
have the power to do it. So I think that is a very rich model. They
were able to maintain unemployment for 20 years or more at around 2 percent, and the
inflation rate was basically stable, even though you had oil price shocks in Sweden
as well. JAY: But but over time, the neoliberal pressure
took over Sweden as well and the power of finance asserted itself, and they started
undoing that model. POLLIN: That’s right. Well, the Swedish model
is still a lot better than the U.S. model [crosstalk] JAY: Well, everything’s better than the U.S.
model. POLLIN: –yeah–and the rest of Europe. So
Sweden still stands out as a very–as a country that’s performing much better, has much lower
levels of inequality. But, yes, a lot of the model has been cut back. But we have to have
something to grab on to when we think about how to build out and come up with alternatives
out of the Great Recession and the disaster that neoliberalism has inflicted both in the
United States and the rest of the world, and I think there’s a lot to learn from the Swedish
model. I don’t say it’s perfect, but I think if we think about policies of moving from
where we are today, not just thinking about a utopian alternative that we can envision,
but policies starting with where the world is today, in the neoliberal swamp, I say that
the Swedish model has a lot to offer for moving us forward. JAY: Okay. We’re going to pick up this discussion
about the Swedish model and such a little further in the series, ’cause we’re going
to come back to, keep revisiting many of these issues. But we’re going to–in the next part
of this series of interviews, we’re going to pick up on the next chapter of Bob’s book,
which is “Globalization, Immigration, and Trade”. And part of one of the ideas Bob raises
is this idea of the reserve army of the unemployed actually becomes the whole world, and global
workers and low-paid workers and global unemployed workers used as a lever against North American
and European workers. So we’ll pick that up in the next part of our series with Bob Pollin
on The Real News Network.

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About the Author: Oren Garnes

41 Comments

  1. This is total crap, we have a living standard here that is sinking day by day, having a job and just get by is pointless and that is what this is, slavery is another word.
    Also the flood of immigrants to this country is killing our way of life FASTER than anybody can understand…..

  2. So that's why Sweden is consistently ranked among the top countries in the world, especially to live in day to day?

  3. Could have saved this section and just combined it with another. That aside, model this model that, we have the best economic model for what it's designed for. Shift all the costs to labor and extract every dime you can from the productive sector of the society giving It to the politically connected, not the poor like si many still belive. I call it the "Whimpy" model. I'll gladly pay you in thirty years for your labor today. Then when you go to cash in your deferred compensation you find it al

  4. Some truth to that, 25-30 years ago it worked pretty well, to be fair.
    But that was before the "new" multicultural Sweden picked up speed on the road to
    destruction.

  5. For some reason swedish socialdemocrats don´t even mention either Gösta Rhen o Rudolf Meidner.The main architects behind Swedish model have been removed from the history.A discrace!

  6. Sweden doesn't spend their entire budget on militarization with nothing left for its citizens but debt like the US does…..

  7. Wtf are you talking about, all the Swedish come to Norway for work because there is no jobs in Sweden, and they get 2 times more paid here

  8. Because Norway has been blessed with a profusion of natural resources. Moreover, they also have a very large state sector and strong public works (albeit not as large as Sweden).

  9. This idea of "capitalism with a human face" is dead and buried – never to return. Pollin needs to understand that the powers that be have no interest in reform. The only solution now is revolution. That is the only way working people will have justice – they need to take control instead of delegating it to capitalist employers and politicians.

  10. Why is everyone citing the postwar (WW2) model as the ideal one? Even if you want to ignore McCarthyism, revolutions in individualism (remember how rock and roll was regarded?)

    It's still a model that presupposes perpetual debt. And you're citing this in the middle of a debt crisis! At very least, most seem to abhor debt slavery and being beholden to creditors, yet advocate debt based solutions. You want a sustainable system, or more of the same?

  11. We had full employment 6 years ago. Globalization and mechanization have little to do with the labor market as far as unemployment is concerned. The problem is the lack of demand.

  12. debt is not evil per say, too much ok, but some, no problem, as long as the ROI is greater than the interest on the debt

  13. Yes, thats true, except the same thing could be said for sugar. But when planning a healthy diet you don't place sugar as one of it's elemental components.

  14. "Capitalism was founded on debt"
    Whether I agree with you or not, that should be a problem for you.

    "debt as a percentage of GDP"
    Is debt calculated the same since 1970s? Yes. Is GDP? Not even close. You can't actually measure growth w/o fixed calculations.

    "real wages have remained unchanged"
    Is inflation calculated the same as 1970? No? Then why are you using it as a comparative? Either cite 1970s calc'd numbers or 2012's, but use for both time periods to compare.

  15. Here's an example of what I'm talking about:

    Current unemployment is listed at 8.5%
    Great Depression unemployment dropped to 24%
    Current unemployment calculated the same way as it was in 1930's is 22.5%

    You see why I insist on proper comparisons?

  16. How the Swedish model was dismantled by trators inside of the Social democratic party "Dokument Inifrån – Novemberrevolutionen" (in Swedish) The "Social democrats" of today can not be considered socialists but very right wing.

  17. As a Norwegian, I have a moral obligation to explain to the world that Swedes aren't anything to look up to!

    (Couldn't resist.)

  18. the first part of your comment is so wrong that i dont know where to start.
    e.g. wage arbitration. wages should be set by the market. if you have skills needed then you will be paid more than others who dont.
    re the second part …
    low productive corporations should go out of business. that is the natural order of the world. those organizations which use the resources most efficiently will survive because they will be able to provide products and services at a lower cost to PEOPLE.

  19. Wikipedia.en:
    Simula is a name for two simulation programming languages, Simula I and Simula 67, developed in the 1960s at the
    { not Swedish , but } Norwegian Computing Center..

    Simula 67 introduced objects, …
    Simula is considered the first object-oriented programming language. As its name implies, Simula was designed for doing simulations {MODELINGS}.
    There are other models, but they're not simulating, and not for sale.

  20. right now were having a "bourgeois" government (the alliance) in sweden, however it's election very soon and the red-greens seem to be winning.

  21. Swedish nationalists made substantial gains in the last 24 hours of the 14 September, 2014 elections for the independence, national identity, and self-determination of the native Swedish nation. The foreigners showed disloyalty to their own relatives and nation to come to Europe.  Such disloyalty is not welcome in Europe.   Multiculturalism is the self-destruction of any culture. Love your own culture?  … then protect your culture!  Want to have disloyalty? … then embrace multiculturalism!  Love is by nature loyalty to one's own people, culture, and values!   
    To hell with The New World Order beast which eats nations and digests them for energy!  Kill that beast!  International capitalism undermines the power of the voters by giving power and authority to international corporations instead of the national governments! This is the grave injustice around the world in our time!  Join the movement for the liberation of Europe from the traitors in government and the immigration invaders!  Long live national identity, independence, and self-determination! This is the only way to true liberty!

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