Bribing the unions
Andrew Brown
Stockholm About a year after reaching this country I became shop steward in the small factory where I then worked. There were only five employees, but a couple of the new arrivals were aggressively British in their attitude to labour relations. To avert trouble, I pointed out to the smooth and in- variably suntanned district organiser that I had been a union member longer than they, and should therefore be elected to the post. He elected me. Three or four months later the branch membership had been reduced to one, and I attended the district con- ference on wages in perfect democratic agreement with myself. It was a day off work with all expenses paid, and I was vaguely curious to learn what had been negotiated on my behalf.
We were told how much each factory should pay on top of the central agreement — I don't know why, since the district organiser later rang all the small employers himself to tell them what to do. Then we were given detailed advice on extracting larger wage rises unofficially, so that they wouldn't show up on the books and reveal to the employers' confederation (SAF) that our employers were breaking the national agreement. They could have been fined by SAF if caught.
The district organiser went on to mention a rash of bankruptcies in the region (he blamed the Government for these) and to give us a pep-talk for the coming election campaign, in 1979. We were all members of the Social Democratic Party, since our membership fees formed part of our union dues. 'The "bourgeois" have turned "wage-earners' funds" into a dirty word,' he said, 'so we must call them "economic democracy" instead. No one can be against economic democracy, can they?'
That is the question on which the current election turns. Put crudely, 'economic democracy' means taxing firms in order to buy them with the proceeds on behalf of the union movement, which would rather in- vest its own considerable funds in property. The funds are to be created by the imposi- tion of a payroll tax and a profits levy which will, taken together, raise between £300 million and £500 million a year. The Social Democrats are anxious to suggest the lower figure, while their opponents, work- ing from the same documents, arrive at the higher. Either way, it's an awful lot of so- meone else's money. Some of it is to be us- ed to buy shares in the companies from which it has been raised; some will be used to found new companies; and the profits which the funds will be under an obligation to produce will be fed into the supplemen- tary pension scheme which needs them bad-
ly, and will continue to do so for as long as pensioners can vote and children are con- sidered a luxury.
The Stock Exchange commentator of Dagens Nyheter has worked out thatthe in- terlocking ownership of most large Swedish companies and banks would allow an ag- gressive fund management to buy control of the 50 largest within two years of the scheme's inception It's most unlikely that the takeover will happen that quickly, but even more unlikely that it will never hap- pen. An income of £300 million a year (give or take £100 million) has to be spent on something, after all; and over a period of ten or fifteen years, there will be very few large companies that the funds will be able to avoid buying if they are to make a profit. And once the process starts, it has a dynamic of its own. The funds, we are told, are necessary because mixed capitalism can no longer ensure full employment. But a company which is struggling against a takeover will have to reduce its profits, and the number of employees, because it is on these that the funds' taxes are calculated. So capitalism will work even worse, and the funds will come to seem even more necessary. It's worth noting here that no one supposes that a future anti-fund government could ever destroy them once they existed.
The scheme very nearly went through at the last election, which the Social Democrats lost by the narrowest possible margin in 1979. Though the plait has been around in one form or another since 1975, it has not been the subject of any serious public debate until this year. So much of what is written and said in public here is boring nonsense that it takes a very long time for genuine issues to become clear even to the politically interested. Most politi- cians, and even ministers, are quite unknown to the general public, and 1 once discovered that the chairman of the local Young Socialists couldn't remember who the current prime minister was, nor which parties were in office. The advantages of the funds are obvious to people like him: their side, and hence they themselves, will
gain in power and influence.
This seems also to be the motive of Anna Hedborg, one of the LO economists responsible for the original scheme, who caused a splendid row this summer when she called part time work 'tax evasion'. But the fact that such people find the funds at- tractive is enough to discredit the idea with almost everybody else in Sweden, and this Is their own fault. The Social Democrats have spent the last six years abusing the `bourgeois' for being parties of the rich that take pleasure in impoverishing the deserv- ing voters. This makes it easy for the `bourgeois' to represent the funds as nothing but a grab for power on the part of a clique of unprincipled opportunists in the union movement. This is in turn unjust. The Hedborgs of the movement are still a minority, even though a powerful one that cannot openly be defied. The rest of the leadership seems to support the plan largely because it has been so savagely attacked: their justified in- dignation when they are accused of wanting to introduce a trade-union dictatorship prevents them from considering carefully whether this may not be the unintended outcome of their plans. Another motive is despair. Nothing works any longer. The Finance Ministry believes that tax revenue has almost been swept back round the bend in the Laffer curve. The unions have been telling themselves for years that falling real wages are a result of 'bourgeois' policies: yet the Social Democrats and the leaders of the industrial unions are determined to keep wage rises down even if they win the elec- tion. In this perspective, the funds are a necessary bribe to keep the union activists quiet. 'We know there's a risk involved in our plans,' says Kjell-Olof Feldt, the Social Democratic shadow finance minister, 'but the alternative, if we do nothing, is to end up like England.' Feldt says that the objec- tions to the plan are based on what will hap- pen 'in the year 2000 ... but what matters are the next two or three years ... after that, if the plan doesn't work, we can always change it.' Few people share his op- timism that even a Social Democratic government could withdraw from the unions privileges once granted. A `bourgeois' government would be most unlikely even to try.
So for the `bourgeois' parties, principle and self-interest now coincide, for opposi- tion to the funds provides their only hope of clinging to office. The 'bourgeois' have found governing a great strain: they have split and reformed in four separate coali- tions since 1976, and during that time the budget deficit has been multiplied 20 times. Of course,, they were confronted with an impossible choice — either to bribe the elec- torate with borrowed money, or to resign themselves to losing power again after three years in government and 44 years in opposi- tion. 'To be liberal is to be in two minds' as a leader of the People's Party once said. So they did both: they bribed until the money ran out, and then they despaired of winning this election.
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