The origins and trajectories of Swedish and British Third Way policies are strikingly different. The very meaning of modernization has different connotations in Sweden and the United Kingdom. From British perspectives, the central element of Third Way discourse has often been identified in the emphasis on radical newness and discontinuity.1 Modernization, in New Labour discourse, was synonymous with the term renewal, a term intrinsically related to ideas of pervasive economic and technological change. In the mid-1990s, renewal was, at times, a breathtakingly futuristic modernization narrative, a vision of a Britain that did not “shuffle” into the new millennium afraid of the future, but that “strides into [the future] with confidence.”2 To Swedish social democracy, from their first experiment with a Third Way in the early 1980s to the restructuring and retrenchment policies of the 1990s, the key metaphor was not “renewal,” but “safeguarding” (slå vakt om).3 These different outlooks on the process of change established the framework for the parties’ understanding of the knowledge economy—in the United Kingdom as a revolutionary transformation, a great tide that, “unless we start preparing for it will simply roll over us, leaving us stranded in its wake,” while in Sweden, as a relatively peaceful process of transformation in line with the evolution of the Swedish Model.4
Renewal and safeguarding contained two radically different political approaches to the knowledge future. These different future visions, in turn, were dependent on the different pasts of Swedish and British Labour and of the recent political history of Swedish and British society. The New Labour project was a reaction against both Thatcherism and the “old” Left, both neoliberalism and the 1960s rights revolution. Contemporary political history in Sweden is, with the exception of the polarized years of the 1980s and early 1990s, marked by the absence of radical opposition. There is in Sweden a relative hegemony around the welfare state and its values, a hegemony that is often overstated by foreign observers but that has nevertheless resulted in “the most successful Social Democratic Party in the world,” and the entrenchment of the values of the welfare state in national culture. This element of social democratic hegemony—the creation of a value consensus around its historical edifice of the People’s Home—is a mixed blessing. It protects the welfare state from ideological attacks but also ultimately strengthens a self-image of the SAP as managers of the past. The central political problem of Swedish social democracy, which has grown in importance throughout the postwar period, is how to be “stolt men inte nöjd”—“proud but not satisfied,” how to find strategies of reform that do not break with the past but protect it and yet allow the party to appear in touch with change.5 The constant reassertion of the values of the People’s Home is arguably one of the explanations behind the party’s lack of ideological debate in the 1990s and its noticeable silences on important aspects of policy change. Where articulation and, some would say, spin have been so important to the political project of New Labour, silence and the construction of continuity form a central strategy of the SAP. History is one of its most important ideological assets.
This aspect of hegemony as a kind of national consensus around social reformism has tainted the legacies of both Left and Right in Swedish political history. There is a long-standing critique of welfare statism in Swedish political history, a critique that goes back to the late nineteenth century and runs parallel to the development of the welfare state. Over time it has included orientations such as ethical socialism and the “Third Ways” of mutuality and cooperative movements, both cultural radicalism and cultural conservatism, neoliberalism and pro-Europeanism, but it has rarely questioned the foundations of the Swedish model. There is a marked reluctance in Swedish social democracy to take in new intellectual currents, sometimes along with an explicit mistrust in intellectuals.6 This is a legacy of its famous pragmatism. New Labour’s naissance in the critical currents of post-Marxism, post-Fordism, and postmodernism and the British Labour Party’s ongoing struggle with a legacy of the Left are strikingly different from the way the last decades seem to have been marked primarily by the absence of debate in Sweden.
This chapter traces the contradictory and complex origins of the Third Way in Sweden and Britain from the early 1970s onward. It is concerned with the conceptual and ideological heritages of the Third Way, what might be called a genealogy of its predominant narrative of the new economy. In particular, it looks at how social democracy has understood and conceptualized change and the drivers of change and what distinguishes new times from old ones.
In its appeal to individual preferences and choice, its decentralization of core welfare services, and its managerial approach to public spending, New Labour’s Third Way reenacted many of the themes that entered Swedish social democratic ideology in its Third Way experiment in the early 1980s.
The trigger of the Swedish Third Way was the SAP’s second electoral defeat in 1979, which was interpreted by important groups on the party’s right flank as social democracy’s failure to modernize its ideological postulates to adapt to what seemed like a radically altered economic reality. The party’s 1981 crisis program, entitled A Future for Sweden, laid out a Third Way between the then-existing alternatives in European politics, Thatcherism and Mitterand-style Keynesianism. The aim was to protect industrial jobs while cutting costs in the public sector.7 While this marked the end of the 1970s attempt to use expansionary politics out of recession, it also contained something more fundamental, namely the idea that the transformations of the economy in the wake of the 1970s recession required a principled reconsideration of the organization of the Swedish welfare state. The core of the 1981 program was the notion of safeguarding. Defending the historical achievement of the SAP—the welfare state or the People’s Home—in a time of economic turbulence required a fundamental reconsideration of social democracy’s means.8 The new means stood in stark contrast to postwar social democratic ideology and led to the split between the “modernizers” in the Ministry of Finance and “traditionalists,” mainly in the trade unions, a tension that in new constellations has remained at the heart of Swedish social democracy.9
The SAP was one of the first social democratic parties of Europe to embark on what was by the mid-1990s unanimously referred to as the Third Way. In Britain, Labour’s lost election in 1979 saw a move to the left and the consequent split of the Labour Party as modernists such as Roy Hattersley and David Marquand left to form the Social Democratic Party. The 1983 manifesto called for a renationalization of the utilities privatized under Thatcher. It was the 1983 election defeat that triggered the revisionism of Kinnock’s policy review, a process that introduced many of the themes that would become New Labour. However, the Labour Party had already, under the Callaghan governments in the mid-1970s, left Keynesian deficit spending and introduced the wage controls that brought about the Winter of Discontent and paved the way for Thatcher.10
The impetus of the SAP’s revisionism was economic crisis, and the Swedish Third Way was dominated by a pragmatic search for new economic ideas for welfare reform. Influences for these new economic ideas were found in Margaret Thatcher’s Britain as well as in Ronald Reagan’s United States, cases that social democracy studied with interest from the late 1970s in its attempt to also thwart an increasingly aggressive Swedish Right. When the SAP regained parliamentary power in 1982, it put in place a new framework for public spending and a program of decentralization under the banner of freedom of choice. In the mid-1980s, the party began to consider privatizations and decentralization, foreboding the large-scale privatizations in the Swedish public sector that were to come during the conservative years in the beginning of the 1990s.11 In the process, the SAP broke with many of the core tenets of its economic philosophy around the welfare state, developed by party theorists such as Ernst Wigforss and Gustav Möller, in particular the notion of the productive role of public spending. In the mid-1980s, it is fair to speak of a new Third Way ideology in the Swedish welfare state.12
This 1980s revisionism meant a final break with a very different Third Way in the 1970s, which consisted of a more radical equality agenda, economic democracy, and wage earner funds. It was influenced by the rise of a Swedish New Left critical of the SAP’s historical compromise with capital. As Jonas Pontusson has shown, the wage earner funds and the investment politics of the 1970s marked the limit of the SAP, as they also led to the end of corporatism and the “fall” of the Swedish model when Swedish business left corporate agreements.13 In the subsequent years, the party started to marginalize former influential left-wing intellectuals, including Rudolf Meidner. The party’s interpretation of economic crisis as a call for renewal meant that the ideas of the generation of the 1960s lost out to the very influential group of young economists who wrote the crisis program and came to set forth the modernization agenda. In the 1990s, the members of this “Chancellery Right” became senior members of government and of the Swedish administration.14
Swedish political debate in the 1960s and 1970s was more concerned with the crisis of the advanced industrial society than with ideas of an emerging new order. Conceptualizations of structural and long-term perspectives fell back to an economic managerialism that is strikingly different from the origins of British modernization discourse in the New Times debate, which channeled important aspects of the New Left’s ideas into a debate about the changing nature of capitalism. The New Times debate started outside the Labour Party, in a nebulous group of thinkers around the review of the British Communist Party, Marxism Today, in the late 1980s. Members of the group were the post-Marxist and postcolonial intellectual Stuart Hall, the editor of Marxism Today Martin Jacques, the sociologist David Held, the historian and Labour Party intellectual David Marquand, and the Swedish Marxist sociologist Göran Therborn. In addition, two younger members of the group, Geoff Mulgan and Charles Leadbeater, would later become closely involved in the New Labour project.
The New Times debate was concerned with a vague but tangible impression of crisis in a range of areas of economic, social, cultural, and political life, adding up to what it suggested was a critical conjecture in the life of capitalism. The metaphor “new times” sought to capture what the group did not quite know how to describe, as the “dawn of a new age,” or merely “the whisper of an old one.” Globalization, flexible specialization, and computerization seemed to challenge fundamental characteristics of industrial modernity. The direct impetus behind New Times was the rise of Thatcherism. To the New Times group, Thatcherism signified much more than a temporary rise in neoliberal populism; it saw Thatcherism as the successful hegemonic articulation of a new politics in a world in which complex phenomena loosely labeled post-Fordism, postmodernism, and individualism seemed to add up to a pervasive crisis of the Left. To the New Times group, the Labour Party was a deeply conservative cultural force, stuck in its historical logic and its blueprints for economic and social progress. The 1945 settlement that had created the basis for British Labourism in elements such as the male breadwinner, the imperial state, and the Cold War had eroded. Changes in Western economies since the 1970s, characterized by underinvestment and faltering growth, had caused growing social conflict. The sexual revolution, the pill, the punk assault on middle-class sensibilities, and the protest against racial discrimination had brought about a revolution of identities and undermined the social contract. Finally, as it put an end to the collective utopias of socialism, 1989 had redefined the world. Socialism no longer offered a viable alternative to capitalism; instead, the Right had emerged as the provider of the radical alternative.15
The New Times debate argued that post-Fordism meant the crisis of assembly-line production. “Benetton Britain” was characterized by production processes based on computerization and new employer–employee relationships. These new patterns of production were paralleled by new patterns of mass-consumerism, reflecting a search for individual identity. It was these forces that Thatcherism usurped. The New Times debate was influenced by the works of Alain Touraine and André Gorz on the coming end of the working class and by postmodern theories of articulation. Grand narratives were dead, and working class identity had no obvious role in the present.16
In retrospect, the New Times debate stands out as a tension-ridden intellectual and political project, and it imploded over Blair’s Third Way in the 1990s. The New Times debate was a critique of what it saw as key tendencies in modern capitalism—and an attempt to articulate a progressive response to them. It did not praise post-Fordism or globalization. It concluded that there was nothing in post-Fordism that led toward increased equality; rather, it saw wide-scale social exclusion and the drive toward a two-tier society as fundamental characteristics of New Times. In fact, the New Times manifesto contained an explicit warning to the ongoing policy review in the Labour Party, a warning to a revisionist Labour project to remodel itself as a moderate force within the new parameters set by Thatcher and produce, not a progressive analysis of New Times but a
brand of new times that adds up to a slightly cleaned up, humanised version of the radical Right. Such would be the inevitable consequence of two things: a pragmatic adjustment of the Left to the collapse of its previous visions and a failure to generate its own new historic project.17
It is the historical irony of the New Times debate that, in its attempt to provide a new platform for Leftist debate, it introduced the themes that in the mid-1990s became the platform of New Labour. The Marxist origins of the New Times debate meant an emphasis on production forces and technological change that, despite the theories on articulation and radical politics provided by Stuart Hall and others, leaned toward a highly determinist account. It came close to a description of change as a binary logic of old and new and an interpretation of change as driven by the revolutionary forces of technology. Most importantly, it dismissed social democracy as a project that had outlived its time and was fundamentally flawed in a world dominated by dynamic flows of information and identity. It came close to the hand of history language, which would later echo from New Labour as it established that history, culminating in the events of 1989, had overtaken socialism.
One of the more problematic paradoxes was that the New Times debate identified class as a question of political representation and rejected the idea of socioeconomically determined identities and interests. This, indeed, seemed to be the only way to understand the appeal of Thatcher’s anti-working class populism to precisely that working class.18 But in so doing it identified the individual subject as the core of a reborn Left. Collective projects were dead. Instead, the New Times group proclaimed a kind of social vision of individualism, a vision of decentralized mutuality that Geoff Mulgan later brought into the communitarianism of New Labour.
There was nothing inevitable about this development, and Eric Hobsbawm, Martin Jacques, and Stuart Hall became vociferous critics of the New Labour project as a simplistic continuation of Thatcherism.19 Mulgan and Leadbeater became policy advisors, producing visions of a future driven by ICT. In Mulgan’s 1997 book Connexity, the future was driven by three laws of network technology: Moore’s law of the silicon revolution, whereby computer power doubles every twenty-four months; Metcalfe’s law of the growth of the network, where the value of a network increases exponentially relative to the square of the number of people using it; and Kao’s law, which states that the creativity embedded in a network is dependent on the diversity and divergence of the people using it, hence the sum of networked intelligence.20 In such a world, there is no place for collective utopias because knowledge constantly changes everything:
I mean I think that the idea that you describe an endpoint towards which you get, which was the popular idea of utopias in the 17th century, 19th century and so on, is simply incompatible with any society where knowledge plays a big role, because the nature of knowledge is to be dynamic, continually changing and transformative, so there can’t possibly be a vision of an endpoint, there can only be a vision of some of the processes that are controlling how that evolution happens. One of those is democracy, one of those is widespread access to education, one of them maybe the market economy . . . all you can have a vision about are the means of knowledge to constantly change everything else.21
The preoccupation of Swedish politics with safeguarding and social democracy’s break with the legacies of the New Left in the 1980s meant that there was little of the sophisticated analysis of New Times in Sweden. There was little concern with changing production orders or the nature of contemporary capitalism, other than a growing worry, dating back to the late 1960s, with the difficulty of protecting the export-dependent Swedish economy in an increasingly volatile world economy. Rather than grand theories of post-Fordism, Swedish interpretations of changing times were concentrated to a very Swedish perspective on rising individualism as a threat to the collective solidarity of the welfare state and as a force associated with egoism, commercialism, and social fragmentation.
The theme of individualism was taken up by the SAP in the years following the crisis program in 1981, as the party put freedom of choice at the heart of the agenda for welfare state restructuring. In 1984, the then–Minister of the Future Ingvar Carlsson, subsequently Prime Minister, drew up a program that appealed to a new social democratic utopia, that of the individual.22 In a speech the same year, Olof Palme described the People’s Home as an outdated social vision and argued that the historic role of social democracy was freeing human potential—not locking it into the bureaucratic structures of the state.23 Individualism was also the main theme of the SAP’s program for the 1990s, 90-talsprogrammet. Written in the year of the Velvet Revolution and three years before economic crisis hit the material foundations of the Swedish welfare state, it saw the main threat to Swedish society in a widening gap between what the program termed “material welfare” and “spiritual poverty.” The social democratic welfare state had wrapped people in the warm blanket of material well-being, but in this house of material security there were growing feelings of alienation and growing groups of people who felt they did not belong. The program saw this as a problem of values. The historical strength of Swedish social democracy, the program argued, was that it had combined a pragmatic program for material reform with an ethical argument based on values of the good society, of vision and ideals that had given meaning to the collective project. In the late 1980s this project seemed to have exhausted its role as mobilizing future vision. In contrast to how the debate New Times saw things, the problem was not a breakdown of the social democratic project. There was no question of the continued relevance of social democracy in Swedish society. On the contrary, the problem was that progress had led to a point where the SAP’s historic articulations seemed exhausted. The program described a development in which Sweden in the course of a few generations had developed from an agrarian, poor, isolated country to a technologically advanced economy with close links to the surrounding world. Trends in culture and consumerism increasingly influenced Swedish society. This was not a good thing. There was a growing fear in Swedish society, the program argued, of the rapid pace of technological change. Genetic research and computer technology advances turned the old, familiar world upside down. This sent people longing for ideals, “for something lasting beyond the timed existence of each and every one of us.” Politics seemed to lack the answers to the big questions:24
The feeling of a common historical mission—building the People’s Home—was a powerful and cohesive force far beyond the ranks of the labor movement. But now that feeling is growing weaker, and the ideological consensus is thinning out.25
In the Swedish society of the 1980s and 1990s, there were no longer any self-evident mobilizing goals such as building the welfare state. Populism and possessive individualism had led to fragmentation and egoism, “a weakening of our common values.” The diffusion of knowledge meant that people lost belief in authority and claimed new channels of participation. Postmodernism was an expression of this fragmentation in the realm of culture and ideas—“a multicoloured and multifaceted surface, where the once so stable, common inner nucleus is cracking.” Fragmentation and diversity might turn out to be dynamic forces for the future, but they also meant insecurity, fear, the erosion of trust and solidarity, and worry over the long-term itinerary—“feelings of spiritual poverty in our material welfare.”26
In contrast to how social democratic revisionism in the 1980s moved toward neoliberal language, the 1990s program was more clearly anchored in a longer continuity of social democratic thought, going back to ethical socialism. The late-1960s themes of alienation and social exclusion were strongly present in the program. It warned of a social democracy more attuned to institutions than to people and implied that the SAP had become a conservative force as it rhetorically asked what had happened to the Labour movement’s old view that the emancipation of the working class must be its own creation and not the creation of some avant-gardist elite. “The mission is to free people’s creative potential—not lock it in . . . It’s about freeing commitment, not suffocating it.”27
The program put forward a vision of a social individualism that was not unlike the one of the New Times debate, although it appealed to a specific Swedish tradition of social individualism and mutuality. The program spoke of the existence in Swedish society of a particular ethos, based in the strong social movements and worker organizations that paved the way for the labor movement in Scandinavia at the end of the nineteenth century and that were organized around self-education and mutuality, the folkrörelse. This was an ethos based on mutuality, voluntary cooperation, fraternity and solidarity, and the recognition that “it is together that we grow.” The folkrörelse, in the program, was the opposite of the government, the myndighet, and the program suggested that maybe this ethos of solidarity and mutuality had been squeezed out during the decades of the expansion of the welfare state. It now ought to be revived, as “a social ethos for the advanced service economy,” for a society well equipped with things material but in need of ideals.28
The means of revival of this social individualism was a kind of cultural revolution, a push forward in the realm of cultural policy and education designed to bring back those instinctive feelings of reciprocity and self-improvement in Swedish culture. Culture was, the program said, a great liberating force, a route both to individual emancipation and to rebuilding trust and values in Swedish society. The program tied this discussion of a new cultural policy to the expanding role of knowledge in society. In a society where material welfare had been achieved, the growth and potential of people must be put at the heart of politics. Freeing people’s creative potential was the main task for social democracy in the 1990s.29
The New Times debate contained a critique of capitalism that went missing even though several of the themes of the New Times debate—the new economy and individualism—became core tenets of New Labour ideology. As Alan Finlayson has argued, the interpretation of post-Fordism that underpinned New Times was gradually stripped of its critique of the new production order in favor of a technologically determinist “technofuture,” where adaptation to information technology and globalization became the central element of modernization.30 New Labour’s platform, in the mid-1990s, was construed around themes that had been introduced in the Policy Review and that took over some of the themes of the New Times debate but within the parameters of Labourism. The Policy Review saw the genesis of a modernization narrative that centered in on the role of labor skills and education and the growing importance of ICT.31 In the New Labour manifesto in 1997, this had become an assertive imperative around the knowledge economy as a dramatic third industrial revolution, where national survival depended on adaptation to the logics of knowledge and information. The future success of Britain depended on its capacity to exploit the new opportunities offered by this and to claim a new historical position as prime mover in a new race for global markets—to “make Britain the electronic workshop of the world.”32 Globalization was a race, a worldview of a fiercely competitive world order, where some would win and some would fall behind,
and it is because nations will rise and fall at speed because no nation can ever take its future prosperity for granted, and the race will be won by the skilled, the flexible, the enterprising and the creative . . . 33
The workshop of the world is a Victorian notion, coined by Disraeli in a House of Commons debate in 1838, and a metaphorical expression of the Victorian pride in industrial growth, urbanization, and the temples of capitalism. 34 The historian Tristram Hunt writes:
Industrialisation and urbanisation went hand in hand to shatter practices centuries-old and crown Britain the workshop of the world decades before her commercial and military rivals in continental Europe or North America. Britain was the first. The horrors, the wonders; the isolation, the excitement; the inequality, the opportunity of the city all appeared in their modern guise for the first time in Britain.35
To New Labour in the mid-1990s, the knowledge economy represented the chance to restore this glorious past of industrial greatness. The electronic workshop, or the “knowledge factories” that Gordon Brown has spoken of, were metaphorical expressions of particular notions of improvement and advancement found in a Victorian world of entrepreneurship and innovation.
New Labour’s platform drew on a pervasive narrative of crisis and decline, where the United Kingdom’s former position as the leader of the industrial world had gradually crumbled. Thatcherism had waged war on British society and caused unemployment and poverty. Decades of underinvestment in business and services had caused industrial decline and a national failure to keep up with a world that had already left coal and steel behind. British engineering and manufacturing were losing out to Indian and Chinese ingenuity. The ERM debacle, the United Kingdom’s failure to keep to the European exchange rate mechanism, became a symbol of the eroded confidence in that foremost British institution, the pound sterling. The decision to give independence to the Bank of England immediately after the takeover in 1997 was deeply symbolic, not only for the prudence and credibility of a new, economically responsible, Labour Party but for reviving a national institution that occupied a central place in the historical consciousness as the heart of the Empire.36
“Renewal” was to break with this crisis-ridden past and to build a new British future in an era dominated by the forces of information technology and globalization. Renewal set out an agenda for building “a better Britain,” “a Britain confident of its place in the world.” This new Britain was a new and rejuvenated country, full of drive and purpose, “convinced that its best times can lie ahead.”37 From the onset, renewal was a vision that was firmly rooted in ideas of the new economy, and it established the knowledge economy and information technology as the basis of the modernization strategy. The young country was one that embraced technological and economic changes and accepted the challenges of globalization, just as Britain had done so successfully throughout history. The 1997 manifesto stated that Britain was “a great country, with a great history.” The British people were a “great people.”38 In his 1998 Mansion House speech, Gordon Brown spoke of
a modern Britain, founded on lasting British values, the values of the British people, built on a determination to make Britain a more prosperous country for all its citizens, driven forward by a new generation willing, like our predecessors, to reject failed dogmas and to modernise and reform—a Britain ready to fulfil its role in the new world and to realise the potential of its people.39
In this way, New Labour put forth a vision for renewal that fell back on notions of specific British values and that anchored the process of modernization in a specific past of greatness. This emphasis on Britishness has been an integral part of New Labour’s project of modernization and its approach to governance as the governance of culture and identity. The reform agenda in economic, social, and labor market policies was thus praised as one that “realises, for a new world, the great British qualities—the virtue of hard work, creativity, and openness.” 40 Globalization and the knowledge economy have been conceptualized as being particularly befitted to British values of creativity, flexibility, and entrepreneurship. In the speeches of Gordon Brown, the Britons were a nation of islanders, forged by “the tidal flows of history” and hardened by successive experiences of invasion. This oceanic existence has created an “openness” that in Brownian terms means a readiness to embrace globalization and its competitive pressures. The British are innovative and entrepreneurial, from the agricultural revolution to the new economy.41 In a 1997 speech Brown spoke of the “British genius,” a play on Orwell’s wartime notion of the English genius:
If you ask the British people what qualities they would identify as distinctly British, they will tell you the British are inventive, creative, and adaptable, they work hard and learn fast. The British have a strong instinct for fairness—for opportunity for all. And the British, at their best, are outward looking and international in outlooks and tolerant to new ideas and cultures. These are the traditional, historic, permanent British qualities. They are qualities that have been making the British character over centuries, making up what George Orwell once called the British genius. These qualities—inventiveness, adaptability, hard work, love of learning, fairness and openness laid the basis for success in the 19th century. And they are precisely the qualities that are required for a country to succeed in the 21st century. Global markets and the information age call for inventiveness and creativity, adaptability in face of ever more rapid change, a culture of learning and a belief in opportunity for all . . . We need to reaffirm these values, to rediscover the British genius.42
Orwell’s notion of the English genius was of a resilient Englishness that would not be defeated by war but also one that would not accept the injustices of inequality and privilege. In fact, it was a plea for socialism.43 Gordon Brown’s praise of the British genius was, rather, a plea for global capitalism. The endurance and national pride of the British, he argued, were lost in the period of decline but could “help us tackle the biggest challenges we face and place modern Britain at the forefront of an era.” The British way was not to fear change but to embrace it, confident in the knowledge that the British people had the innate capacity to “master change and turn it to our advantage.” The British genius was a kind of instinct for modernization, a willingness to embrace inevitable, constant, and “relentless” change. The British genius could make Britain one of the global success stories of the new world economy.44
In this appeal to national unity and the historic values of the British people, the Victorian era emerged as a past utopia of national unity, social harmony, and industrial success. To Brown, it was an era of social integration and of commitment to collective improvement. It was “entrepreneurial vigour coupled with responsibility and mutuality,” a shared sense of national purpose. What was missing from contemporary British culture could thus be found in history. In the third industrial revolution as in the first, the philosophers of the Scottish Enlightenment were advocates for the moral benefits of capitalism. In Brown’s reading, John Locke’s treatise on liberty became a defense of the moral standing of the New Labour rights-responsibilities agenda in welfare policy. Adam Smith’s ideas of the moral sentiment were, in Brownian terms, the hard work that would extend opportunity in an era of skill.45
In this manner, the knowledge economy was linked to a specific past of industrial progress. The values of Britishness—industriousness, flexibility, and creativity—became historical values, forged in the historical experience of the Empire. Thus, creativity, invention and adaptability were defined not as new demands required by the new economy but as natural, integral features of the British people, elements of a national character that made Britain and the British particularly suited to the task of “rising again.” In this way, the notion of modernization became utterly essentialized as a process not pushed on the British people by markets or forces of economic and technological change but as a process that stemmed from the true character of the British. This was a highly strategic discourse, which made modernization into the process of rediscovering what, in fact, the British already truly were and not into the threat of dramatic change. Modernization became a simple question of bringing these British attributes out from their hiding place somewhere in the depths of the British consciousness and banking on them, of indeed, as Brown put it, exploiting the British genius.46
Swedish politics are not less stuck in history, but the referent to the past is different. Whereas in the British case the way to the future went through the Victorian workshop, in Sweden it went through the People’s Home. Where in the United Kingdom the new economy was vested with references to British values of flexibility and entrepreneurship, in Swedish discourse, the knowledge economy was anchored in particular values of Swedishness: solidarity, equality, and security.
In Swedish social democratic discourse of the last decades, there were none of the British calls for a rupture with a traumatic past or adaptation to a third industrial revolution. Swedish notions of modernity and modernization draw on continuity and on an idea of modernization as a more or less continuous historical process of economic and social reform. This has partly to do with the context of the 1990s. New Labour’s narrative of renewal and its emphasis on a third industrial revolution that would change the face of Britain forever was informed by its general need to break with the past and portray itself as a new historic project with a fresh future. In Sweden, discourses of radical transformation came from the Right. To the Bildt government in the early 1990s, ICT and knowledge were part of a narrative of epochal change in which everything would come undone, not least the welfare state and the corporatism of the Swedish model.47 Thus the idea of the knowledge economy was part of a neoliberal project of systemic change, but to social democracy it needed to be anchored in the tradition of the Swedish model.
The Swedish interpretation of the knowledge economy falls back on the particular ideas and tropes that historically were the building blocks of Nordic modernity. As the Polish historian Kasimierz Musial has shown, the very notion of the Nordic, Scandinavian, or Swedish model has strong connotations to a “blueprint” Third Way in the form of a quintessentially progressive middle way between socialism and capitalism, a rationalist culture of social reform and democratic institutions rooted in the strong social movements of the past. The notion of a Scandinavian model or progressiveness is informed by an idea of a certain moral quality, a uniqueness of being, the idea that “in Scandinavia there exists a certain frame of mind, a mental capacity by virtue of which a change for the better comes to be regarded as inevitable.”48
This idea of virtually embodying modernity has been part of the mythology around the Nordic countries since Marquis Childs’s famous observation of Sweden as a middle way between capitalism and socialism in the 1930s, but it is also a pervasive self-image of Swedish social democracy—a self-image that is thus that of owning the instinct for rational reform.49 This self-image faltered in the mid-1990s as unemployment hit levels Sweden had not seen since the 1930s. Almost overnight, Sweden went from the role model of the world to the punching bag of gleeful observers in the pages of the Wall Street Journal and the Financial Times.50 Former Prime Minister Göran Persson has repeatedly described that deeply humiliating moment when, as the leader of the advanced industrial nation of Sweden, he had to travel to Washington to defend the postulates of the Swedish welfare state to a group of young International Monetary Fund (IMF) economists.51 The first years following social democracy’s return to power were blighted by tough decisions regarding budget cuts and clashes with the trade unions. But in the mid-1990s, as the budget deficit was dealt with and all curves were pointing in the right direction, memories of crisis seemed to fade rapidly, and the 1990s became a kind of glitch in a social democratic success story. Consider Göran Persson’s metaphorical description of the Swedish welfare state as a bumblebee to the party’s conference in Sundsvall in 1997:
Imagine a bumblebee. With its heavy body and its frail wings it shouldn’t fly. Yet it does. Every summer it returns and makes the impossible possible on its way among forget-me-nots and daisies. This is how the so-called analysts look at the Swedish economy. We revoke the law of gravity. We have high taxes and a big public sector—and yet Sweden flies. And we fly in a way that many look upon with envy.52
In social democratic debate, the late 1990s marked a decisive moment when crisis management finally seemed to be a thing of the past and the party could start looking forward. A series of conferences and seminars were devoted to the social democratic future and to the ideology that would carry the new millennium.53 In sharp contrast to New Labour’s futuristic narrative of renewal, this took the form of a return to the past in, at times, highly nostalgic accounts of past achievement and affirmations of the validity of a Swedish sonderweg. Social democratic texts of the 1990s tended to begin with the attestation “Sweden is a good society to live in”:
Step by step, Sweden has developed from an unfair and poor society to a country with a unique combination of great equality, excellent welfare and world-leading multinational companies. This is a development we can be proud of. This progress has been made while a strong sense of solidarity and cooperation has developed, a sense that meant that unions and employers created uniquely good relations, that the public sector and business have been able to cooperate, that no one has to fear illness or old age, and everyone has access to education and self-improvement. Democracy is deeply rooted in all parts of our society. Our faith in the possibility to deal with the challenges of the future together has guided us through this century. Now we stand before a new century with new and equally great challenges.... It is on the basis of democracy, cooperation, fairness, and solidarity that social democracy wants to build the future. Together we take the step into the next millennium.54
In this process, many of the things that the party had broken with in its 1980s Third Way came back into party discourse, and the notion of the People’s Home, a notion the party shunned in the 1980s, came back as a pervasive future metaphor for the knowledge era. It is illustrative that this return to the “classical” social democratic heritage did not take place through a dramatic break with the 1980s Third Way, nor through conflict and debate. Rather, it was a process of rearticulation that happened as a silent return to past ideologies, a process wherein postwar values were quietly brought in through the back door. More than anything, this change was rhetorical. While rhetoric started to echo the Erlander years, there was remarkably little debate on policy change and how a newfound People’s Home rhetoric related to the party’s Third Way policies and welfare state change. Nor was there much analysis of the state of Swedish society during or after crisis. At the 1997 Conference, a disenchanted participant voiced his confusion over this discrepancy between social democratic rhetoric and a Swedish society in change:
Our beautiful welfare society, which we have been so proud of, has become a bit worse for wear in recent years. How should I put it? In some strange way we seem to be heading toward a kind of poor law society. The poor have become poorer, and the rich have become richer.55
Social democracy had very little to say about such impressions of economic and social change in Swedish society and even less about its own role in the process. Instead, it resorted to discourses of continuity in which the experiences of the 1990s were silenced and marginalized. In this manner, the idea of the knowledge society became part of a social democratic narrative of a resurrected People’s Home. Where New Labour spoke of the knowledge economy as a return to the workshops and factories of Victorian times, Swedish Social Democrats, from former party leader Ingvar Carlsson to Persson, described the knowledge economy as firmly anchored in Swedish political history and the rise of the social democratic state. Thus, the knowledge society was portrayed as a logical continuation of the self-education movements that spread literacy in the late nineteenth century and were an important base for labour mobilization. The creation of regional colleges in the 1990s was compared to the historical forging of a literate and politically aware working class in the study circles of early labor. The study circle was praised as the model organization for the knowledge society—a model of education where all help to lift each other up by joining knowledge and sharing experiences. In Sweden, the equivalent of the description of the knowledge economy as the British Imperial workshop was the public library, folkbiblioteket, the people’s libraries that began as ambulating book carts and eventually became central institutions in each town.56
In this way, the knowledge future became conceptualized as something integral to a long-standing Swedish tradition of democracy, solidarity, and equality. The next millennium, it was understood, would be judged by the ability to preserve these particularly Swedish historical achievements for the future. This fell back on a notion of modernity as a continuous sense of reform and improvement and on ideas of knowledge as a tool for a specific reformist rationality. In contrast to the way in which the knowledge economy, to New Labour, stemmed from British instincts of industriousness and competitiveness, in Sweden it was literacy, the spread of democracy, and working-class solidarity that would lead to the liberation of everyone in the knowledge age. Knowledge was not a competitive good in a zero-sum race for global competitive advantage but a good for self-fulfillment and a happier, more democratic, and solidaristic society, one inhabited by individuals with an understanding of the principles of the universal welfare state. Knowledge was a means for human growth. Knowledgeable and educated young individuals would grow, be strengthened by their insights, not only with diplomas but with commitments to society, with interest in the world, and humility for the “values that we share in this country”:
Knowledge frees man and gives him new horizons. Knowledge gives man power and deepens democracy. The strength of reason leads away from superstition . . . , it leads to fact, truth and empirical knowledge. When we se reality as it really is, we also see how society can be improved and developed. In this way, the knowledge of man urges on creativity and strength. Love and solidarity is developed. Solidarity and cooperation gain in scope. Through the development of knowledge we understand how to explore the infinite potential of people.57
Knowledge was thus not conceptualized as a driving force for economic modernization but as a means for the safeguarding of the principles of the People’s Home.
This contained a historical construction of Swedishness that was no less pervasive than the construction of Britishness that informed New Labour’s idea of modernization, but where modernity was defined by literacy, democracy and solidarity. Swedes are, said Persson in the late 1990s, the world’s most knowledgeable people. “We could read more than others could.” Linked to democracy and literacy in this success story were the successes of Swedish multinational companies such as Ericsson, historically seeking world markets for knowledge-intensive, value-added products, “turning our natural resources into innovations and technological change.” In addition, Swedish trade unions have always been on the side of modernization, willing to embrace technological change and adapt to structural changes in the economy. Therefore, the ability to constantly change and modernize was a historical asset that paved the way for the future.58
Through these constructions, modernization became something that emerged from within, an instinct embedded in the Swedish psyche. While modernity, in British political culture, was defined by the markers of prosperity and competition, in Sweden modernization was a process of extending solidarity and cooperation; but the function of this modernization discourse in both countries was similar, namely, that of providing legitimacy to one way particular forward, rather than another.
The call to people, nation, and even national character in social democratic ideology in the period following the 1990s is a curious phenomenon. It is clearly influenced by the need to fend off populist articulations in the political field and by the rise of anti-immigrant sentiment and racism in social democracy’s core constituencies. New Labour’s notion of Britishness clearly reflects a legacy from Thatcher’s appeal to Middle England. In Sweden, the nostalgia of the Persson years contained a romantic construction of the values of the welfare state as the natural values of the Swedish people. The appeal to nation and people is not in itself new in social democratic ideology, but the function of the themes of Britishness and Swedishness in contemporary social democratic ideology is different from the way in which social democracy once translated working-class preferences to the national level. In the present, discourses of national identity are part of a reinvention of the political project around notions of ethics, morale, and national identity—values beyond the scope of political struggle. The appeal to national unity is a way of silencing conflicts around change. History becomes a source of legitimacy for a process of economic change that is potentially disruptive and damaging for many groups. New Labour’s fiercely modernistic futurism and the SAP’s People’s Home nostalgia were, despite the different approaches to change that they contained, indications of the same phenomenon. In addition, the knowledge age places a premium on trust, identity, and culture as forms of competitive advantage, which seems to strengthen these nationalist expressions. We will return to this problem in coming chapters.