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Sadomonetarists And the Limits of Swedish Social Democracy

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Oy. Sweden, touted by the Washington Post as “the rock star of the recovery”, has been overrun by what Paul Krugman calls the Sadomonetarists who demanded high interest rates even when inflation was absurdly low. The result: Sweden has turned “into a tale of stagnation and deflation as far as the eye can see.” It's a painful lesson about the high price of austerity-crazed elites. But it's also an important lesson for US progressives about the limits of Social Democracy.

Why did the Sadomonetarists win in one of the most progressive countries on the planet? No doubt it's partly because the power of Finance has been rising around the world, both in their direct influence over political decisions and also in shifting the terms of public debate. But I think it's also traceable to 2 weaknesses in the way Swedes did Social Democracy:

1) While Swedish style Social Democracy did a lot of good, over time it also undermined the ability of grassroots folks to mobilize. It was remarkably good at building high-level consensus in cooperation between top-level folks in unions and corporations. But building a base that was fired up? Not so much. And so when economic circumstances changed, Swedish progressives weren't in a position to gear up and kick ass.

2) Swedish style Social Democracy encouraged Swedes to think globally – but as well meeting citizens of the world, not folks who were trying to build power and protect their flank. Leftie Swedes were very concerned about the plight of peasants in Nicaragua — and it's a good thing they were — but they didn't pay serious attention to the plight of Second and Third World manufacturing workers. Eventually that inattention came back to bite them as good paying manufacturing jobs in Sweden came under increasing pressure from globalization. Economists often talk about globalization as if was a force of nature, but it only appears that way to us because folks in a position of privilege and some power, like the Swedish left, hadn't tried to do anything about it.

I'm not arguing that Social Democracy was a mistake; it was one of the great achievements of the 20th century. But if you focus on building good policies without also focusing on building & maintaining grassroots power, eventually you will pay the price.

Or to put it another way, if we want to live in a more just, prosperous world, we need more organizers than policy nerds.

 



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