Over the weekend Swedish voters re-elected the center-right coalition that has governed the country for the last four years. This is historic, since it is the first time since the 1930’s that a center-right government has won two elections in a row. The Economist even proclaimed “the death of social-democratic Sweden.” It is perhaps even more surprising when one considers the early years of the center-right coalition. Not used to governing, due to the traditional dominance of the social democratic party, the first year of Prime Minister Fredrik Reinfeldt’s government felt like amateur hour, with poorly rolled out policies (the Minister of Defense abruptly resigned after he was not consulted on reductions in the defense budget) and controversies over several ministers’ failure to pay required government fees and using unlicensed (and untaxed) cleaning services in their homes. Many also thought the global financial crisis would be the death knell for the center right government. The government finally found its footing, however, and the voters gave them continued confidence to run the Swedish ship of state.
More interestingly perhaps, voters also sent a new party, the Swedish Democrats, into parliament, and they will be the swing vote that could make or break the current center-right coalition, since the coalition of four right of center parties came up just short of its own majority. The Swedish Democrats rode into parliament on promises to stop further cuts in pension benefits, limiting further immigration to Sweden, and boosting measures to promote Swedish culture, history, and heritage. Over the last decade or so the Swedish Democrats have risen from a position of simple meddlers, with questionable connections to extreme right wing groups, in local county politics, to an established party with 20 seats in the Swedish parliament. This has garnered a bit of unwanted attention around the world. For example, American media outlets such as the New York Times and the Washington Post have covered the strange rise of this populist party in Sweden. Many Swedes feel embarrassed, because the success of the Swedish Democrats at the polls just doesn’t jive with the traditional image of Sweden as a progressive and open-minded society.
But how do you explain its rapid rise in Sweden, and the same tendency in many other European countries such as France, Denmark, and Holland, over the last decade or so? While many would point to narrow minded people and simple racism, the real explanation may be found in Sweden’s, and Europe’s, embrace of globalization.
Thomas Friedman wrote in his 1999 classic The Lexus and the Olive Tree of the “golden straight jacket” of globalization, which would discipline nations to remain competitive in a global marketplace. Sweden has not only accepted Friedman’s straightjacket, but fully embraced it. Over the last two decades Sweden has undergone a major transformation. State companies have been privatized, the media market has been liberalized, charter schools are now allowed to operate, the government pension plan has been complemented with a private option, and welfare benefits have been pared down to more affordable levels. The U.S. libertarian and free market Reason magazine has even suggested that America should look to Sweden for free market solutions in education and welfare policy. Along with these economic and social reforms, Sweden has also become a member of the EU and given up its claim to neutrality, becoming a trusted partner of NATO. That’s quite a march for a country that previously espoused “the third way” in politics and economics.
All of these reforms have been sustained efforts, regardless of the party that happened to be in power at any given time in the last two decades, and they have largely been successful, allowing Sweden to remain competitive and innovative, while preserving the basic structure of its welfare system. Today, the Swedish economy is one of the strongest in Europe, and can show relatively low unemployment figures even in the current global economic climate (but unemployment among the young and immigrants remain high). Furthermore, a recent OECD ranking puts Sweden ahead of the United States in terms of global competitiveness. Indeed, these achievements go a long way to explain the center right coalition’s recent electoral success.
All is not well, however. While most Swedes have benefited from the reforms, some, — notably retirees who worry that their benefits will be cut further and low skilled laborers who have difficulty finding employment in Sweden’s technology driven economy — have been left behind. Others are worried about the loss of Swedish heritage and traditions, as the country embraces globalization and its ever changing whirlpool of cultures, perspectives, and peoples, and where nothing seems to remain the same for very long. As in many other countries, these concerns can easily be translated into fears about immigrants and their place in society.
This is where the Swedish Democrats find their voters, and there are enough of them out there to send them to parliament and put the ruling center-right coalition in a true pickle. Efforts by the political and media establishment to paint the party and its voters as narrow minded pariahs has not helped; that just further fuels the party’s image as a fighter against the system made up of politicians, businessmen, and the intellectual elite who care little about “middle Svensson” (Sweden’s equivalent to Joe Sixpack).
All nations trying to grapple with globalization should heed this lesson from Sweden: No matter how much you profit from globalization, you will also have to manage and embrace the minority who feel squeezed, marginalized, and left out by it. If you don’t, they may end up as spoilers in an election near you.