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Folkhemmet: the old town of Sweden’s capital, Stockholm. Photo/Getty Images

What New Zealand can learn from Sweden's successes and struggles

Sweden’s enviable socio-economic model is almost the opposite of ours, with a highly educated, well-paid and strongly unionised workforce, but its struggles with racial and gender equality are achingly familiar.

At a rally in Florida in February 2017, Donald Trump claimed that, as a result of taking in large numbers of refugees, Sweden was “having problems like they never thought possible”. The US President implied that, the previous night, the Scandinavian beacon of liberalism had suffered a terrorist attack, which, on closer study, turned out to be a figment of the leader of the free world’s imagination. Even for a man prone to unpredictable statements, it was a bizarre intervention.

As former prime minister Carl Bildt tweeted at the time, “Sweden? Terror attack? What has he been smoking?” The world raised a collective eyebrow, shook its head, and moved on, reassured that Sweden was doing just fine.

In the space of a couple of years, from 2014-2016, this northern European land of about 10 million people had admitted a quarter of a million refugees and asylum seekers. That is an extraordinary figure. In proportional terms, it would be the equivalent of New Zealand absorbing a population nearly the size of Dunedin.

“The numbers are remarkable,” says David Crouch, a British journalist who lives in Gothenburg and has written an entertainingly informative book about Sweden entitled Almost Perfekt: How Sweden Works and What We Can Learn From It.

Read more: Why Swedes didn’t need to be told about environmentalism by Greta Thunberg

Outside a cafe in the old town. Photo/Brent Lewis

As Crouch points out, it was a conservative politician, Fredrik Reinfeldt, who called on his fellow Swedes to “open your hearts” to the mass of people fleeing wars, particularly in the Middle East. “You can’t imagine a conservative leader in any other country saying that,” says Crouch.

Sweden has an honourable record of taking in refugees, dating back to World War II when nearly all of Denmark’s Jewish population was able to flee across the Kattegat Strait to neutral Sweden. It also welcomed more than its share of refugees from the Balkans during the wars of the 1990s.

But what happened in 2014 and 2015 was on another scale altogether. It has tested Sweden’s celebrated social cohesion to a degree that suggests Trump may, for once, have been only half wrong. Last month, it was announced that, so far this year, Sweden has suffered 100 explosions. And they weren’t gas explosions, either.

They were deliberate attacks, the product of home-made bombs and grenades – the preferred weapons in the turf battles waged by Sweden’s growing drugs gangs. As Amir Rostami, a criminologist based at Stockholm University, told the BBC, grenades are synonymous with war zones. The only other country theoretically at peace in which grenades are common is Mexico – home of militarised drug cartels.

For a country that invariably tops the lists of good governance, transparency, lack of corruption and just about every other indicator of sound socio-economic health, it has been embarrassing for Sweden to find itself ranked alongside Mexico as a place for settling narcotics disputes with explosives.

Although Sweden doesn’t produce crime statistics with racial breakdowns, it’s widely understood that the majority of perpetrators of the grenade attacks are from ethnic minorities.

For many years, Sweden’s government and media tried not to bring attention to troubles relating to migrants. It wasn’t quite censorship but it did lean towards promoting positive images. Crouch says attitudes changed dramatically in November 2015, following the Bataclan terror attack in Paris.

“Suddenly, people began to ask, ‘Have we let a lot of Islamist terrorists into the country?’ Overnight, the brakes were slammed hard on the refugee policy,” he says. “There was nothing short of panic. Sweden being silent on the idea of integration, that died in late 2015. And, since then, they haven’t really talked about very much else.”

Sweden’s King Carl Gustaf has cut back the number of family members in the royal household. Photo/Getty Images

Wealth without equality

However, Crouch maintains that it would be misleading to portray Sweden as a country in the grip of deep social conflict. In many respects, it is a victim of its success.

For the latter half of the 20th century the “Swedish model” was renowned for its social democracy, state ownership, high taxes, excellent welfare system and effective redistribution of wealth. Governed for 80 of the past 100 years by the centre-left, the state, writes Crouch, “strived to be the folkhemmet or ‘people’s home’”, a cradle-to-the-grave vision of paternalistic support.

It was, by any standards, a society with a conspicuously narrow disparity in wealth between the shop floor and executives. But, in the 1980s, that model began to fracture. As with many other countries around the world, including New Zealand, Sweden instituted market-led reforms, and then, in the 1990s, a housing boom and bullish stock market saw rapidly increasing capital income and an entrepreneurial class begin to reap a much greater slice of the rewards.

In this century, writes Crouch, “Stockholm has developed more billion-dollar tech companies, or ‘unicorns’, than any other city in Europe.” They include Spotify, Skype and King (the makers of video game Candy Crush). Today, Sweden has about 200 krona billionaires (roughly NZ$160 million). They come from manufacturing, technology, clothing and other areas.

Another reason that industry is in good shape in Sweden is that there is a cultural antipathy towards short-termism. Crouch retells an anecdote of a senior US executive, Keith McLoughlin, who was appointed chief executive of Electrolux, the Swedish washing machine and refrigerator giant. He decided to speak to the company’s directors individually to get feedback on his 100-day plan.

His approach perplexed his new colleagues, one of whom told him: “I want to give you a tip. For a Swedish director to hear about a 100-day plan makes us very nervous. We want to hear about your 100-year plan.” Swedish investors tend to take the same approach. There is a keener social sense of being custodians rather than just making quick profits.

David Crouch. Photo/Supplied

So, business is flourishing in Sweden, but equality is not. As Crouch notes, the gap between rich and poor in his hometown of Gothenburg has quadrupled in four decades; growth in inequality since the 1980s is the largest among all OECD countries.

 Swedish politicians are increasingly concerned about the situation, not just for social reasons, but also economic ones – many institutions, including the International Monetary Fund, now believe that inequality inhibits growth.

In his book, Crouch sets about examining exactly how the Swedes reinvented their economic model, and what challenges it now faces. A resident for six years in Sweden’s second city, Crouch says that although he is married to a Swede, it took him time to understand Swedish society.

He arrived thinking of the Swedes as socially liberal, but over time he began to see that they are “conservatives with a small c”. For example, there is a state monopoly on selling alcohol, meaning that Swedes have to go to one of the large state-run off-licences if they want to buy a bottle of wine to drink at home. It’s a restriction that is supported by a healthy majority of Swedes.

“There are more golf clubs in Sweden than off-licences,” says Crouch. “In some parts of the country you have to order your alcohol days or even weeks in advance.”

Although Sweden is seen as a secular state, the church is hugely popular, even among atheists. Similarly, although it values democratic participation in all walks of life, Sweden is a constitutional monarchy.

At first, having lived in London and Moscow, Crouch felt that he had moved “to the end of the world”. That’s a phrase with which Kiwis are all too familiar. It usually says more about the dislocation of the person using it than the position of the country they’re describing. Crouch was not happy in his first year in Sweden, but having adjusted to his new home, he can’t imagine anywhere he’d rather live. The more he gets to know the country, the more he comes to love it.

Image/Getty Images

Workers before jobs

As a former Financial Times journalist, Crouch wanted to know what had happened to the old Swedish economic model. And, specifically, whether market reforms had killed off the harmonious relations between business and unions. He learnt that, after a period in which the two sides were antagonists, they came together, almost behind the scenes, to forge a new deal in the mid-1990s.

“The rest of the world was heading in a very different direction,” says Crouch. “The Berlin Wall had fallen, communism had fallen. But, in Sweden, the two sides put Humpty Dumpty back together again. They realised that mutual co-operation was an effective way of running the economy.”

This new economic model contained several counterintuitive elements. The Swedes themselves compare it to a bumble bee. It shouldn’t be able to fly, but it does.

The first thing to say is that it is a high-income economy and, against global trends, most Swedes are members of trade unions. Industrial relations are relatively peaceful and strikes extremely rare. But what makes the set-up particularly notable is the unusual role played by unions.

In most economies, failing sectors cut wages and successful industries increase them. By and large, that’s not true in Sweden. Instead, unions negotiate centralised pay settlements.

Representatives from unions sit on the boards of businesses, but they are surprisingly modern in their outlook. They actively welcome globalisation, digitalisation and international trade deals and even the disruption that often accompanies them.

“The unions have this soundbite that they roll out,” Crouch says. “‘We’re not scared of new technology. We’re scared of old technology.’”

He quotes Eva Nordmark, former head of the Confederation of Professional Employees: “Our view has never been to protect jobs, but to protect our members. Our focus is on your next job.”

Yes, the head of Sweden’s biggest white-collar union – until becoming the country’s Minister for Employment in September this year – with 75% membership in the sector, was fairly relaxed about the prospect of the workers she represented being made redundant. That’s not something you’ll hear many union leaders say elsewhere around the globe.

Multinational ready-to-assemble furniture company Ikea was founded in 1943. Photo/Getty Images

In Sweden, industry and unions have come to a dynamic agreement in which businesses either improve productivity or fail – because the option of lowering pay has been removed from the table.

And when they fail, there is a well-established process of retraining and re-employment, overseen by a body called the Trygghetsrådet, or Security Agency. It may sound a little sinister, like some kind of spy outfit, but in fact it swiftly transitions workers between jobs. If there is a period of unemployment, the benefit system is, by most Western standards, very generous.

In other words, Swedish workers tend not to feel part of the so-called precariat, that new class of employees struggling to maintain a living in the harsh winds of the gig economy.

Crouch has often witnessed the positive attitudes displayed by Swedish workers in jobs that, in many other societies, are seen as low-status – airline customer care, for example. The reason, he says, is that workers are more highly trained, better paid, and therefore derive greater job satisfaction. Even the job of a waiter is one that requires extensive training. In Sweden, there’s no such group as the unskilled.

I ask him if he thinks Sweden’s ability to adapt quickly to a global market, while retaining protection for its workers, is a function of its relatively small population.

“From the point of view of selling copies of my book, I’d like to say that it’s not important. But the truth is, probably, yes. For the movers and shakers in the country, it’s quite a limited pool of people and they all know each other. And if they don’t know each other, they know somebody who knows. It’s very easy to make personal relationships that can make a difference. The small size of the population makes collaboration easier.”

If Sweden has recently seen a rise in economic inequality, it continues to battle to close the gap between the sexes. In many societies the pay differential between men and women is attributed to the fact that women bear the burden of looking after children. But the Swedes have been determined to shift the balance of parental responsibility. In 1974, Sweden became the first nation in the world to allow paid paternity leave.

As then Prime Minister Olof Palme said: “In order that women shall be emancipated from their antiquated role, the men must also be emancipated.” However, despite decades of state encouragements, fathers still account for only a quarter of parental leave. That’s far more than the rest of the developed world, but still a long way from the Swedish dream of gender equality.

Sweden also leads the world in state provision of heavily subsidised child care and kindergartens. Crouch interviews Swedish women who’ve lived abroad with small children where they have found that child care is too expensive to enable them to work. In Sweden, the female workforce is largely liberated from such concerns.

Kiruna Church, one of Sweden’s largest wooden buildings. Photo/Getty Images

Nordic melancholy

One intangible effect of these developments is the sense that, as the Norwegian writer Karl Ove Knausgård once put it to me, Swedish society has become “feminised”. When I interviewed Knausgård a few years ago in his then home in Ystad, in the south of Sweden, he spoke of his ambivalence about the direction in which Swedish society was heading. On the one hand, he could see the social benefits, but on the other he was uncomfortable about the enforcement of politically correct attitudes.

Crouch is a fan of Knausgård’s work, but, he says, “There’s still a streak of old-fashioned sexism in Sweden. There is no evidence at all that men have been bullied by women – and I’ve tried looking for it.”

But perhaps Knausgård was speaking of a more subtle process, in which certain ideas are promoted and those that do not follow approved thinking are removed from the debate. The novelist believes this kind of progressive conformity is most obvious in the world of literature.

In response to a feminist critique of one of his books, Knausgård wrote a stinging attack on “the land of the cyclops”, as he referred to Sweden and its cultural guardians.

“The cyclops do not want to be aware of the parts of reality that don’t accord with how they believe it should be,” he declared.

Literature certainly plays an influential role in Sweden. Stockholm, of course, plays host to the Nobel Prize for literature, the most esteemed garland in letters. Last year, the award was postponed after the husband of one of the judges was accused of sexual abuse, leading to a conviction for rape.

If there are two things Sweden prides itself on, it is being the arbiter of literary greatness and world leader on women’s rights. To have a male predator associated, even just by marriage, with the Swedish Academy was a cause of national shame.

By convention, the Swedish Academy favours an idealistic kind of literature. Until 1912, it explicitly judged the quality of a work by its contribution to humanity’s struggle “towards the ideal” – in struggling towards that ideal, it managed to ignore Tolstoy, Ibsen and Zola.

Something of that worthiness has continued to hang around not just the prize but also Swedish literature in general. By far the most popular literary genre Sweden has exported in recent decades is Scandinavian noir – the crime novel with a social conscience.

Emporia mall in Malmö. Photo/Getty Images

In the worlds of Henning Mankell, creator of Wallander, and Stieg Larsson, author of the Millennium series including The Girl with the Dragon Tattoo, a quasi-fascist corporate racism stalks the land, immigrants are routinely harassed and exploited and women ritually abused.

It’s ironic that Sweden should have produced such dark self-portraits because, in so many respects, it is one of the most enlightened places on Earth for women and immigrants to live. But perhaps there is a Nordic melancholy that feeds these novels, a sense of wintry existential anguish born of long cold nights. There is also a contemporary paranoia that can be traced to an event that traumatised Sweden, and continues to haunt its collective psyche.

In 1986, Palme, in his second stint as prime minister, was gunned down on the snowbound streets of Stockholm after visiting a downtown cinema with his wife. Despite multiple investigations, countless theories, and the conviction of a minor criminal that was later quashed, the murder remains a mystery and no culprit has been found.

Palme’s slaying is seen in Sweden as the end of its innocence. If nothing else, it coincided with the institution of free-market reforms. Many intellectuals, such as Mankell, believed that Sweden became a much harsher place after Palme was killed, particularly for migrants from Africa and Asia.

Which brings us back to the issue we began with. According to OECD statistics, of the 28 nations it surveyed, Sweden has the highest negative gap in its employment rate between native and foreign-born populations. Non-European immigrants with low education had an unemployment rate of almost 37%  in 2016. The overall unemployment rate is about 7%.

Many migrants struggle to penetrate the job market in Sweden, loaded as it is towards high-education, high-training, high-productivity work. It’s not overt racism that holds them back so much as the daunting bar to entry for those lacking the requisite skills and relevant education. In other large European cities, such as London and Paris, there is a much bigger pool of low-skilled or unregulated jobs in which new arrivals can find work. In Sweden, it can take a long time – several years – for migrants to access the job market.

Inclusive advertising for a top fashion label in central Stockholm.

Brave new world

Some experts in Crouch’s book suggest that if Sweden is going to accommodate its migrant population in a way that doesn’t leave them alienated and marginalised – and prey to the grenade-throwing drug gangs – then the Swedish model will have to be reformed once more.

“The debate bubbles up and then it disappears and bubbles up again,” says Crouch. “I think we need to be a bit more granular about it. Immigrants from some countries, such as the Syrians, are generally extremely well educated. They’ve got international business experience, they speak English, and Sweden is really bad at identifying those people who can be fast-tracked to make use of them for the economy. After all, there’s a skilled-labour shortage in Sweden.”

American political thinker Robert Putnam popularised the theory of social capital, in which he argued that homogenous societies are able to create more productive bonds of trust and understanding than those with diverse communities. In a crude sense, the status quo has worked well for the native Swedish population while failing to encompass a significant minority of newcomers.

But Crouch remains optimistic. As he says, in the latter part of the last century and at the beginning of this one, “Sweden coped pretty well with integrating people from the Balkans who were fleeing the wars there, and those fleeing the Iraq war.”

Probably the most popular Swede of the present era is footballer Zlatan  Ibrahimović, who is a kind of national icon.  Ibrahimović was born in Sweden, but his parents came from the Balkans in 1977. He is the poster boy for a new multicultural Sweden, towards which most Swedes – with the exception of followers of the nationalist Sweden Democrats party – want to move.

How to achieve a more inclusive social cohesion, while maintaining the economic model that has brought so much success, is the question to which no one yet has a convincing answer. Whatever happens, though, the tired, poor, huddled masses are still likely to receive a much warmer welcome in Sweden than in Donald Trump’s America.

Almost Perfekt: How Sweden Works and What We Can Learn From It, by David Crouch (Allen & Unwin, $32.99).

This article was first published in the December 7, 2019 issue of the New Zealand Listener.