This article first appeared in Red Flag.
In the 1970s, Sweden’s main trade union federation and the social democratic party toyed with a “wage-earner funds plan”, sometimes called the Meidner Plan after one of its architects, the economist Rudolf Meidner. Many view the plan as a tragically untested experiment that could have turned Sweden into a socialist country.
For example, Peter Gowan and Mio Tastas Viktorsson, in a 2017 Jacobin magazine article “Revisiting the Meidner Plan,” claim that it was “one of the most ambitious democratic socialist policy proposals ever seriously considered in a developed economy. It would confront not only the question of who reaps the benefits of excess profits, but also the question of who owns, controls, and manages the workplace”. That is, the plan gave a glimpse of a managed, parliamentary, road to socialism. Its failure, they claim, was a result of the timidity of Sweden’s social democrats, rather than any flaws in the proposal itself.
The plan was designed to give workers shares in businesses, so that if the companies were profitable, some sections of the working class could skim off a little portion of excess profits through stock dividends. Unions would provide “representatives” for stock-holding workers on corporate boards and control the distribution of these dividends. All corporations would be majority worker-owned within 20 to 75 years.
Meidner assumed that workers’ interests – and even working class democracy – could be harmonized with the imperatives of profit-seeking in the markets. But any corporation competing for profits within a capitalist market needs to exploit its workers as much as possible just to keep up with its national and international rivals. He focused on cooperation between bodies that are supposed to organise workers and those of the profit-making of bosses – essentially, integrating unions into the management structure of capitalist enterprises.
Meidner believed that one of his plan’s great selling points was that it would give workers an economic interest in the success of their employer and encourage them to compromise. When workers controlled more than 50 percent of the shares, the need for class struggle would be eradicated because workers’ interests would be in harmony with those of their bosses. In theory, it was bad. In practice, it was worse. The Meidner Plan was a way to incorporate the trade union bureaucracy more thoroughly into the running of capitalism. Indeed, it was implemented to sabotage a militant working class movement demanding more than the social democratic government and Swedish capitalism were willing to grant them.
Sweden has an impressive history of radical working class struggles. Swedish workers were pioneers of the general strike in the early 20th century. By the time of the Great Depression, the country had the highest level of strike days of any European country. In 1932, the Swedish Social Democratic Party (the Arbetarepartiet–Socialdemokraterna, or SAP), was elected to government and remained in office until 1976. Long before the Meidner plan, the reformist SAP had established a tradition of class collaboration. It formed coalition governments with middle-class parties, sided with the main employers’ federation against workers on strike and concocted an agreement – signed by the bosses and the unions – banning solidarity strikes and “socially dangerous” strikes, and giving the bureaucrats of the biggest union federation the ability to overrule decisions of its constituent unions.
Before and during World War Two, Sweden’s trade with the Nazis protected it from bombing and invasion, and helped its economy stay profitable. Afterwards, Sweden’s mines and factories were intact to produce goods for a devastated Europe during the postwar economic boom. Sweden’s unemployment rate was in effect zero. Labour was in high demand. Workers had good bargaining power, and capitalists could afford to make some economic concessions to maintain their highly exploited workforce. The SAP was able to introduce free child care, public housing and health care – reforms that increased the supply of labour into booming industry.
That didn’t mean the capitalist class, or the politicians managing capitalism, were interested in the wellbeing of workers. Throughout this period, the SAP forcibly sterilised anyone perceived to be a potential “burden” on society. Welfare wasn’t meant to support the existence of non-profitable people, like those with serious disabilities. When general child support was introduced in 1948, authorities argued that the forced sterilisation rate had to be ratcheted up to prevent any growth in the number of social burdens.
During the 1970s, reformist parties across the world found themselves at a critical conjuncture. In Sweden, renewed class struggle emerged in 1968 and was sustained throughout the 1970s. Rank and file discontent led to a resurgence in labour militancy and growing rates of wildcat strikes. This was Sweden’s share of the struggle that was breaking out around the world at the end of the 1960s and throughout the 1970s. At the same time, however, the postwar boom was coming to an end. It was no longer easy for capitalists to make concessions to the working class. Reformist governments had depended on capitalists permitting them to redistribute some wealth to workers. That was getting harder and harder.
The capitalist class began to attack union demands, using their power under the SAP’s decades-old agreement. To maintain union strength, in 1976 the unions withdrew from the agreement. Local bargaining became more important. Industrial militancy and shop floor strike committees flourished. In 1976, Sweden had 276 wildcat strikes – the highest rate in the country’s history. Rank and file workers’ organisation could advance to challenge capitalism itself, but that would threaten the bureaucratic rule of the trade union officials and their reformist allies in parliament. Or the workers’ movement could accept cooption and defeat. The social democrats chose not to confront the capitalist class, but instead to take the teeth out of the workers’ movement by offering a compromise that gave the capitalists wage caps and the demobilization of workers. In exchange, workers were promised future decision-making power in workplaces. The Meidner Plan was born.
The compromise strengthened the old agreement between the trade unions and the employers’ association, giving bosses extra powers. Company profitability had to be maintained if wage-earner funds were to grow, so fighting bosses with strikes that halted the flow of profits contradicted the plan. Meidner blamed the economic crisis of the 1970s on workers’ high wages. So he tried to convince them that it was in their interests to cap wages and maintain the competitive edge of Swedish capitalists. In his own words: “We were aware of the risk that powerful unions which are guaranteed full employment are strong enough to jeopardize the stabilization policy through aggressive wage claims … Our preference was for collective self-discipline imposed by the unions’ own wage policy.”
The plan wasn’t to challenge capitalism. It was to force workers to defend the profitability and competitiveness of their boss. As the plan’s implementation drew closer, the SAP did away with references to workers’ participation in decision making because the capitalist class rejected the idea. When the entire point of the plan was to placate and defend the capitalists, such a capitulation was predictable. While some protests were organized to defend the more “radical” parts of the plan, the SAP had no interest in encouraging workers to struggle in defiance of their bosses. From the party’s point of view, if the implementation of the plan provoked workers’ struggle and class combativity, it would have undermined its whole purpose. When the plan was implemented in 1983, it still capped wages, but in exchange it just allowed the unions influence over how new taxes would be invested.
Because the SAP viewed the capitalist state as the means by which society could be transformed, it had to defend and maintain the national state, and therefore the national economy of Sweden. Time and time again, it repressed workers’ self-organisation to defend capitalist production relations – while claiming it was building workers’ power by implanting more reformist bureaucrats into the structures of capitalism. The Meidner Plan was a way of attacking workers’ organisation at a time of capitalist crisis. Social democratic and labour parties across the world found themselves in the same position as the SAP and looked to similar solutions.
In Australia, the Labor Party and its allies introduced the notorious Prices and Incomes Accord in 1983. Union officials agreed to suppress strikes in exchange for promises that wages would be maintained by the state and a few social reforms would be handed down by the Labor government. Much like the Meidner Plan, it was presented as a victory because unions were being incorporated into the decision-making processes of capitalism. Meidner’s plan was a model for the Accord. The Amalgamated Metal Workers Union (AMWU) in Australia funded expeditions to Sweden to study it. Leading members such as Laurie Carmichael upheld Meidner’s plan as proof that the Accord could work.
In 1985, the AMWU’s newspaper, the Metal Worker, carried an article titled “The Accord is essential.” In it, the Meidner Plan was hailed as “the Swedish accord”:
“Like Australia through the Prices and Incomes Accord, Sweden is attempting, with success, to improve economic growth, while reining in inflation … To achieve economic recovery, Swedish unions have agreed to limit wage rises across the board to five percent a year. But, said Bloomberg [the general president of the Swedish Metalworkers’ Union], restraint by workers had also resulted in a marked increase in company profits but the benefits of this were being distributed in a way to make industry more efficient while improving skills in the workforce.”
Australia’s Accord was a disaster. Within a decade, median earnings had dropped by 7.1 percent. Union militancy was crushed: no longer fighting for better wages and conditions, unions instead defended “national competitiveness”. Profits came first. Recalcitrant union militants were persecuted and driven from the movement.
Since the introduction of the Meidner Plan, Sweden’s workers have faced austerity, privatization of state assets, deregulation of the economy and rising inequality. The richest 10 percent in Sweden own 60 percent of the wealth, and welfare services have been attacked over and over again in the absence of a workers’ movement that could fight to defend them.
The Meidner Plan wasn’t a path to socialism. It wasn’t even an advance in workers’ rights within capitalism. It was a defeat for workers and an attack on their power to organise. It encouraged loyalty to bosses and to the capitalist system that exploits us. It was a surrender masked as a victory. It enshrined the profit motive and tried to convince workers it could be harnessed in their interests. But our goals can’t be advanced by maximizing capital’s profit. Our strength isn’t in boardrooms or shareholders’ meetings. Our power comes from the fact that we make everything in society run. When we stop, the world stops, and when we struggle, we can build a new kind of society – one in which the rule of profit has been overthrown.
Paul D'Amato is the author of The Meaning of Marxism and was the editor of the International Socialist Review. He is the author of numerous articles on a wide array of topics.
