Sweden: the machine stops
Andrew Brown
Gothenburg `The Royal Swedish Envy' is a byword here: Like most of the things that Swedes are proud of, it is difficult for a foreigner to understand, but on Monday it both brought down the government and jeopardised the central wage agreements on which the whole economy is based. PTK, the negotiating cartel which represents the whitecollar workers in private industry, called out on strike 17000 people at five large firms L.M. Ericsson, Volvo, Atlas, Copco, Boliden, and Saab Scania, as well as the officers of the Swedish Merchant Marine, In itself this strike is serious enough. Twenty-four hours after the strike starts, at eleven on Tuesday morning, all production at Volvo will have stopped, and by the end of the week more than 150 ships, carrying about 20 per cent of the country's exports, will be confined to port. SAF, the employers' confederation, has replied by locking out a further 6000 workers at the factories involved, and will next week lock out between 200,000 and 250,000 more. But the real problem is that, if the strike is settled on the sort of terms which PTK now seems willing to accept, then the agreements already reached by LO, the bluecollar workers' central organisation, with SAF and the public employers, and the agreement reached by civil servants, are likely to break down. All these agreements are conditional on no one else getting more than the workers covered by them.
The PTK dispute is over a rather refined sort of wage differential. PTK's spokesmen say that they are willing to accept the same as LO but that the offer which they rejected would have given them grossly inadequate compensation for the wage drift which only the privately-employed LO workers enjoy. Since the publicly employed LO workers' Jealousy of this wage drift was one of the main causes of the great strike last year (in which PTK took no part) the present conflict is being fought in a minefield. One false step by either side and the entire labour market will blow up.
It seems a sad end to a wage round which began well enough when LO and SAF managed to agree on a surprisingly restrained two-year agreement in early February. Last year's strike administered a dreadful and salutary shock to everyone involved. At the time, I watched the vice-chairman of the metalworkers' union delivering his May Day speech, and be rattled happily away for ten minutes about the workers' struggle in Nicaragua and El Salvador before stumbling through the passages that explained why no one would be going to work in Sweden when the weekend finished. But the real trouble is that all the institutions of this country are built on the assumption that the economy will continue to expand. Now that Sweden is actually getting poorer, these vast political machines have gone out of control. Everyone knows that the coming strikes and lockouts will do nothing but impoverish all concerned, but the unions involved can do nothing to stop themselves. Envy must be satisfied.
It was envy, or rather the grim Swedish determination to see to it that no one gets away with anything for which the rest of us do not receive compensation, that brought down the second, and probably last, 'bourgeois' coalition government between the Moderate, Centre and People's Parties. Previous 'bourgeois' governments had promised repeatedly to do something about the country's tax system, but the problem was, and is, so vast that nothing was done except to link tax thresholds to the rate of inflation. This is something that the labour movement, and especially LO, cannot tolerate since the people who pay most tax benefit most, in absolute terms, from a raising of the tax thresholds. Again, this money is not taken from the poor. If anything, it is taken from the foreign bankers who finance the budget deficit. What LO finds intolerable is that the poor don't get the money. The labour movement's propaganda, if not its thinking, on taxes is based on the assumption that all income is potentially tax, and that people should be allowed to keep only what the government and their less fortunate fellows think is good for them. As a result of this attitude, 85 per cent of the population in full time employment now pay more than 50 per cent tax on the top slice of their incomes.
In February the government finally promised to lower the marginal rate of tax 'for the overwhelming majority of full time workers' to 50 per cent or less within three years, and to make a start on this reform this year. The labour movement attacked this programme with enormous glee and vigour. It made no odds that the Social Democrats have themselves started talking about the need for a complete overhaul of the tax system. Any reform put together by the `bourgeois' parties could be represented as an attack by the haves on the have-nots. Since everyone in Sw.eden (envy again) considers himself a have-not, this attack was obligatory under Swedish political rules. These rules also made it necessary for the government to offer to consult with the Social Democrats and the unions before doing anything to execute its proposals. It was clearly understood that these consultations would break down and leave everyone free to accuse their opponents of trying to impoverish the voters, so there is no reason to doubt the report that Kjell-Olof Feldt, the economist who represented the Social Democrats in these negotiations, rang Olof Palme at two in the morning of 24 April to say 'What shall I do? They are agreeing to everything I can think of.' The Centre Party and the People's Party, represented by the Budget Minister (and putting him up against Feldt was like sending Lord Longford into the ring with Muhammed Ali) had agreed to abandon the index-linking of tax scales, and not to do anything at all about reforming the tax system until 1983.
The Centre Party appears to have been led to this agreement by the feeling that, since it was only an electoral accident that had removed the labour movement from power, it was the clear duty of a government with a majority of only one vote to carry out, wherever possible, the policies of the opposition. The Moderates find this reasoning unacceptable, and announced that they would not tolerate the agreement, reached by the other two members of the coalition government, with the Social Democrats. As far as the People's Party was concerned, this Moderate reaction was the whole point of the agreement, which offered a splendid chance to humiliate their coalition partners in public. It was inconceivable to the bright young men of the People's Party that the Moderates would actually resign on a point of principle. After all, the next elqction is certain to return a Social Dernocratic government, and where will the Moderates be then?
They did not ask themselves until it was too late what would happen to the People's Party, also, in such an election. But when the eight Moderate ministers finally resigned on Monday, Goesta Bohman, the Party leader and Minister for Economic Affairs, announced that they would vote with the Social Democrats if the Opposition wished to bring down the government on a vote of confidence. The Social Democrats have not yet said what they will do, but the prime minister, Falldin, has said that he will consider his options 'during the next few days' while he attempts to settle the PTK strike.
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