As we have seen, a central element in the idea of the knowledge economy as a progressive economy is the idea that because knowledge is capital within, located within workers, it also makes workers the owners of capital and that there is something inherent in a capitalist stage organized around knowledge that defies the Left’s conventional understandings of the conflict between labor and capital. To Gordon Brown, writing in the mid-1990s, the knowledge economy was the point of departure for a “new economic egalitarianism,” an “opportunity economics,” because it is people’s potential that is the driving force of the modern economy.1
This conception of the order of things has led to two dominant interpretations of contemporary social democracy. The first one, discussed in the previous chapter, is the idea that because of the fundamental intangibility of knowledge capital in a global era, politics must strengthen the strategic role of human capital. This is the postulate that informs the political economy of the Third Way and emphasizes the role of state and public intervention for the creation of prosperity. From this presumption of the strategic role of human capital follows a second conclusion, namely, that the knowledge economy is somehow detached from the logics of capital accumulation and that there is something inherent in a capitalist order that works for the development of human potential. To the optimists, the knowledge economy seems to be a nicer kind of capitalism, a more social economic order, one that draws on human potential instead of destroying it. To Charles Leadbeater in his 1998 account, the knowledge economy was the promise of a postcapitalist utopia, a world where toiling in mills and mines was replaced by the power of imagination and creativity.2 As the French economist Daniel Cohen has argued, the knowledge economy could be the era of human capital, a fundamentally more humane variety of capitalism in which exploitation is replaced by emancipation through processes of self-exploration and learning.3 To that extent, the Third Way contains a notion that might be described as the end of capital, the presumption that an economy driven by potential will also finally bring the realization of the old socialist notion of freeing potential.
The realization of potential, or the freeing of individual talents fettered by capitalism, is social democracy’s classical notion of emancipation. It reflects the social democratic idea that unregulated market capitalism leads to a deeply inefficient society where the potential and talents of some inevitably go to waste. The rhetoric of freeing potential has been central to both the British and the Swedish labor movements, from early Chartism and ethical socialism to postwar debates on the mixed economy. In Third Way ideology, however, the presumption of the new economic power of potential has led to a thorough rethinking of problems previously associated with capitalism. An opportunity economics would, arguably, be one that frees opportunity for people to grasp and gives them the means with which to realize their inherent potential. The Third Way’s notion of emancipation is this idea of everybody’s freedom to fully realize his or her potential, to “bridge the gap between what we are and what we have it in us to become.”4
However, emancipation does not seem to be the dominant feature of the knowledge economy. There is sufficient analysis of the post-Fordist production order to suggest that while it might hold the potential for emancipation for some, it also brings new forms of exploitation for others, a relationship that is obvious and yet poorly understood in both politics and social science. The tension between emancipation and exploitation in the knowledge economy might be thought of in terms of the dilemma posited by Daniel Cohen—if the era of human capital is, on the one hand, a promise of a more humane form of capitalism, it also brings with it, on the other, a highly economistic understanding of human potential and human beings as a form of capital. Conceivably, rather than representing the final end to the labor capital conflict, the knowledge economy could be the ultimate commodification through the exploitation of the worker’s inner self.5
To be sure, there are many aspects to the new economy that would suggest that the idea of knowledge exploitation is worth considering. Critical writers on the knowledge economy have argued, for instance, that information technology and flexible specialization do not empower workers but rather take the division of labor one step further, as they dissolve the links between employer and employee and extend responsibility over time and space. ICT is not necessarily the liberating technology that connects people but also a technology of alienation. Flexible specialization is a mode of production that displays contradictory tendencies because it concentrates responsibility for a multitude of tasks on the individual employee while also making him or her exchangeable in the chain of production.6 As Darin Barney suggests, reducing our brains to “wetware” is ultimately also an economic philosophy of “people as bits.”7 Such a philosophy has consequences and social effects. The American sociologist Richard Sennett, one of the key interpreters of the social and cultural effects of flexible production patterns, speaks of the corrosion of character—the breakdown of self-worth and self-esteem as talent, skill, and craftsmanship are destroyed by outsourcing, consultancy cultures, and short-termism.8 This is a dramatic perspective on the knowledge economy. Rather than fostering knowledge and skill, Sennett argues, the new economy extinguishes skill, as the education system turns out young, educated, but unemployable people whose dreams of self-fulfilment clash with the realities of the decreasing value of knowledge and potential in the information revolution. The returns of individual investment in education are unpredictable and volatile. Narrow definitions of flexibility and employability lead to the hollowing out of potential and talent, as these become standardized goods. The depreciation of talent and skill, Sennett suggests, creates a spectre of uselessness: large groups of people whose place in economy and society is primarily defined by their lack of talent and knowledge.9 The contrast to Brown’s assumption of an opportunity economics might be that the skills economy may need only an ever-smaller knowledge-owning elite, that opportunity is not abundant, but scarce, and that its distribution is less than optimal. From this perspective, lifelong learning policies take on a new meaning, as policies of disciplining, rationalization and even standardization, equipping knowledge workers for lives in knowledge factories and reducing potential to exchangeable skill.
These are dismal prospects for social democratic politics, and we should not judge the Third Way by them entirely. The Third Way’s articulations of skill and potential are the expression of a social democratic aspiration to give a progressive potential to the knowledge economy. In doing so, however, social democracy seems to silence important elements of its ideological past. This chapter examines how contemporary social democracy conceives of contemporary capitalism and of its own role in it. In the 1990s and 2000s, both parties rewrote their constitutions to adapt to knowledge and the World Wide Web. The different constitutions express very different understandings of what capitalism is today and how social democracy should respond to it. This is due to the different historical legacies of British and Swedish Labour around capitalism and to prevailing differences in understandings of the relationship between the market and society.
Let us go back to Gordon Brown’s suggestion that because knowledge is capital located “within,” that is, in the head of the knowledge worker, the knowledge economy makes the worker the owner of capital, and therefore the knowledge economy marks the end of the conflict between labor and capital. Gordon Brown’s argument on the opportunity of the new economy can be found in the pamphlet “The Politics of Potential” in the manifesto for a new politics of the Left, Reinventing the Left, which was a central text in the construction of the New Labour platform in the mid-1990s. In this article, and in his following Fabian pamphlet “Fair is Efficient,” Brown laid out the central tenets of New Labour’s revisionism. Indeed, Brown’s contribution was intended as a dialogue with the central modernizer of the Labour Party, Anthony Crosland, key interpreter of the class dynamics of the industrial society.10
Anthony Crosland’s famous 1956 argument on the future of socialism was that capitalism had gone through a fundamental transformation in the twentieth century to the extent that it was questionable whether one could really speak of capitalism at all. He saw this process as triggered by technological changes, the diffusion of ownership in the joint stock corporation and the rise of a managerial class, changes that had led to the virtual disappearance of the old capital-owning elite. To Crosland, this meant that it was time to rid social democracy of certain dogmas, particularly the principle of the nationalization of the ownership of the means of production. In modern capitalism, the central problem was no longer the question of ownership but democratic influence and social justice in a mixed economy.11
In Gordon Brown’s interpretation, the knowledge era takes Crosland’s revisionism one step further. Network production is the end of managerial capitalism because the employee emerges as the owner of capital.
Brown asserts that the objective of socialism is the “realisation of potential.” The politics of the Left must aim at stopping the waste of potential that takes place in an unregulated capitalist society and “enable people to bridge the gap between what they are now and what they have it in themselves to become.” 12 However, the realization of this age-old objective, in an era in which individual aspirations and skill are greater than ever, must be different.13 Liberating potential can no longer be about protecting people from change, but it has to be an “enabling vision”—a vision of how to give individuals control over their own lives. The challenge of potential, in a time in which potential seems to have a new bargaining position against forces of exploitation, requires a rethinking of market and state because in the modern age it is not only the structures of the economy that lock in potential but also the structures of the state. The old Left did not see that the institution and bureaucracy of the state could become a vested interest that locks individual potential in or that “power can concentrate at the expense of individuals within the state as well as within private capital.” Potential requires new forms of social organization, forms that promote its realization. This gives socialism a new role:
The unique contribution of socialism is that we know that the strength of society—the community working together—is essential not only to tackle the entrenched interests and accumulations of power that hold ordinary people back, but also positively to intervene to promote the realisation of potential. In other words, the power of all of us is essential to promote the potential of each of us.14
Thus, the idea of an opportunity economics created strong links between the notion of potential and the notion of community, and in doing so it also established that the market was a central means to free potential. “Controlling the means to life in the interest of enhancing individual freedom” is about controlling the whole environment of which the economy is only a part. In Brown’s interpretation, two fundamental postulates of the Left were thus wrong—the first that emancipation stems from controlling the means of production and the second that the public interest conflicts with the existence of markets:
The socialist answer to the exploitation of labour by capital was, a hundred years ago, to advance the public interest by abolishing, or at least controlling, private capital. Now most would accept that the real answer to capital exploiting labour in the interest of a few is to create the circumstances not in which capital is somehow abolished but in which labour can exploit capital in the public interest. Indeed where the success and failure of an economy depends on access to knowledge more than access to capital, individual liberation arises from the enhancement of the value of labour rather than the abolition of private capital.15
Fundamental assumptions of socialism are therefore false in the era of potential. In the modern economy, the “real answer to capital exploiting labour in the interest of the few” is not to abolish capital but to create the circumstances in which “labour can exploit capital in the public interest.” This was the ideological justification of the politics of partnership, as a new form of mixed economy for the knowledge era. Hence were “the values of freedom to be liberated from old leftist dogma.”16
The final revision of Clause 4, a process begun under Gaitskell, recognized the market as a central part of the community and a central actor for freeing individual potential. The old Clause 4, written by Sydney Webb and adopted in 1918, said
To secure for the workers by hand or brain the full fruits of their industry and most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange, and the best obtainable system of administration and control of each industry or service.
The new Clause IV, adopted in 1995 for an era in which, as Blair later put it,” we compete with brains, not brawn,”17 says
The Labour Party is a democratic socialist party. It believes that by the strength of our common endeavour we achieve more than we achieve alone, so as to create for each of us the means to realise our true potential and for all of us as a community in which power, wealth and opportunity are in the hands of the many, not the few. Where the rights we enjoy reflect the duties we owe. And where we live together, freely, in a spirit of solidarity, tolerance, and respect.18
The old socialist emphasis on the ownership of the means of production was replaced with the emphasis on community and the assurance that the old conflicts of capitalism were no longer of any relevance.19
In its revision of Clause 4, the Labour Party followed the revisionist road that European social democratic parties had long since taken, albeit in a rather extreme form. The notion of community contained an explicit appeal to national unity, drawing on the values of Britishness discussed in the previous chapter. This appeal to national unity was a central part of New Labour’s repositioning of laborism as a project beyond fractionary class politics, its appeal to the Middle England voter, and its occupation of the political center. A core element in the idea of renewal was the explicit break with ideology and with socialism as a worldview. The New Labour journal Renewal appeared with the word hyphenated into idea-ology, to denote a set of ideas defined not by the values of social democracy but by a pragmatic outlook on “what works.” The project of modern governance launched by New Labour and its creation of “new politics” built on this rejection of ideology in favor of a national common good. Community, with its claim to occupy a political space beyond the Left–Right divide, was a key metaphor of new politics. As the concept of the Third Way was launched by Blair in a Fabian pamphlet in 1998, and subsequently in the web-based Nexus debate, it was explicitly positioned as a political project that went beyond political polarization between Left and Right.20 The 1997 Manifesto claimed to have liberated values from outdated ideological dogma and doctrine and applied them to the modern world. It promised to appeal to the people “of all walks,” people who “work hard,” “play by the rules,” and “pay their dues”; in essence the Middle England that was old Labour’s problem. It was an appeal to a common good in the national interest, a “shared sense of purpose.” It was social, but it was not socialism.21
This rearticulation of Labour values as national good is a striking parallel to the historic Swedish notion of the People’s Home, which was also a vision of national renewal and which also sprang from pervasive notions of crisis.22 In the interwar period, continental social democratic parties chose a reformist path, which appealed to national unity and the values of the people. In Sweden, the metaphor of the People’s Home was the expression of the SAP’s successful reinvention of itself from a party of fractionary class politics to a national party. The notion of the People’s Home was a fiercely modernist notion, one that promised to break with the past and portrayed social democracy as the carrier of the future and “prosperity for all.” In its 1930s policies, the SAP set out an agenda for economic and social rationalization and modernization. In 1938, it signed a new deal with Swedish business and promised peace in industrial relations, just as New Labour in the 1990s promised a new deal for British business. The New Labour Manifesto promised to set out a covenant with the British people, just as the SAP, in the 1930s, promised to build a home for all Swedes.23
In the interwar period, Swedish social democracy abandoned nationalization and chose pragmatic reformism as the route to radical transformation.24 It reaffirmed its market-friendly approach in a series of historical compromises throughout the twentieth century. During the radical decade of the 1970s, it stopped speaking of workers and instead began speaking of “coworkers” or indeed “stakeholders.”25 Paradoxically, the revisions of the party program in the period from the 1990s have seemed to bring a new emphasis to anticapitalist themes in party ideology, perhaps as a concession to the critics of modernization. In striking contrast to Brown’s discussion of the emancipatory logic of potential, the SAP speaks of the knowledge economy as an essentially capitalist order: “In a capitalist production order, profit is elevated above all other interests, regardless of how it is achieved and of the costs it brings to society, environment, and human beings.”26
Just as the Industrial Revolution led to great social conflicts, the knowledge economy is a new production order, which in some ways strengthens the position of human capital and labor but which also leads to sharper clashes between labor and capital. The power of capital has increased because it is no longer dependent on physical production factors and national boundaries. Hence capital is set free of the control of the interests of labor and social democratic governments. This strengthened position makes the “inherent incapability of capitalism to rationalize and sustain resources as obvious as its inherent tendency to create economic and social injustice.” The social consequences of this, to the program, are devastating. In the countries of the Western world, the interests of capital have put a large part of the labor force outside production as unprofitable and unemployable. Further, the rationalization of production that follows the introduction of new technology has also injured health and capacities of those in employment. Politics and culture have become imbued with the “capitalist idea of worth,” and this “power over thought” serves to strengthen capital interests. Money becomes the benchmark for all that is good. The result is a cold, harsh society without trust and solidarity. The program asserts that the SAP is anticapitalist, in the sense that it rejects the right of capital to exert power over economy and society; in the sense that it rejects a process of change wherein capital interests and the market dominate the direction of progress and the commercialization or commodification of human, social, and cultural relations; and in the sense that social democracy, in the conflict between labor and capital, is on the side of labor.27
There is thus not the New Labour idea that the new economic stage leads to some magical transformation of the fundamental forces of capitalism; but, rather, the SAP sees a transformation of the capitalist tendencies for exploitation in the knowledge economy. The program contains a long discussion on class, which departs from social democracy’s traditional emphasis on the distinction between those who own capital and those who own labor. The new production order changes this relationship, but it doesn’t abolish it. It is, thus, a double-edged change that both sharpens the distinction between capital and labor and strengthens the importance of labor against capital in other ways. Importantly, the program argues that globalization has weakened the relationship between ownership and responsibility. Capital has become anonymous, detached from social responsibility. Short-term capitalism increases the pressures of production on employees while it reduces employer responsibility. Theoretically, the increased importance of knowledge could mean that the control of labor over production is strengthened, but this does not seem true for growing groups more or less permanently outside of new labor markets. These groups do not appear empowered but rather increasingly subordinated to the power of capital. Indeed, there is a concern with a growing group of nonproductive outsiders in Swedish society. In contrast to Brown’s assertion of the end of managerial class divisions, the Swedish program speaks of a new triad in class relations: a class that owns both financial and knowledge capital, a knowledge-owning class, and an underclass of outsiders—the people who do not own knowledge, a kind of knowledge proletariat.28
In Swedish interpretations, this leads to conclusions about the role of politics that are fundamentally different from the new politics of New Labour. Change does not simply produce opportunities for realizing individual potential; the transformation of capitalism also leads to new social conflicts, just as industrial capitalism led to the mobilization of organized labor. In the long run, the program states, the inequalities brought on by new technology will themselves be a force for change. This, in Swedish discourse, is “opportunity”:
The power in the opportunities that the new order of production creates is then and now too strong for the interest of the few to resist. Today’s displacement of power to the interests of capital is not the unavoidable and unchangeable consequence of globalization. It can be breached through politics.29
This interpretation of what constitutes opportunity seems almost diametrically opposed to the interpretation of New Labour. Opportunity is not something that is thrown up by the new economy; rather it resides in the risks and conflicts that the new economy creates. Change is not an economically determined process but one determined by the social reactions that it triggers. The program thus retains a notion of conflict; the interests and social reactions that once shaped social democracy and the welfare state will also determine the fate of capitalism in the future. Change is human-made.
It would be mistaken from this to think that the SAP holds on to a Marxist legacy that it has long left behind. In 2001, the party finally dropped the ownership clause from the party program.30 Hence the old clause stating the nationalization over the means of the production (bestämmanderätten över produktionen och dess fördelning ska läggas i hela folkets händer) was changed into the new formulation of a “democratic production order,” where the principle of ownership is replaced with the principle of democratic control. This seems like a mere formalization of the party’s traditional revisionism dating back to the interwar period; but, in the 2001 program, it was represented as a vision of socialism in tune with a modern conception of democracy, particularly, as Göran Persson said to the Conference, in the era of the World Wide Web:31
All power in society has to come from the people who together constitute society. Economic interests can never be allowed to rein democracy in; democracy sets the conditions for economy and market.... Social democracy wants to create a social order where people as citizens and individuals can influence development and social change. We seek an economic order where every person as citizen, wage earner, and consumer can change the organization of production and the distribution of its results and the conditions of working life. Social democracy wants to let these democratic ideals structure society as a whole and the relations between people in society. Our goal is a society without class differences, without gender segregation or ethnic divides, a society without prejudice and discrimination, a society where all are needed and all have a place, where all have the same right and the same worth, where all children can grow into free and autonomous adults, where all can control their lives and in equality, solidarity, and cooperation strive to create the social solutions that benefit the common good.32
A crucial element in the party’s rewriting of the nationalization clause was the distinction between the market and capitalism. In a democratic order of production, the market and its entrepreneurs are accepted as vital parts of a democratic society. The market, the 2001 party program argues, is acceptable because, in contrast to capitalism, which is a system of exploitation in the interest of capital (not acceptable), the market is simply a system for the efficient exchange of goods and thus an acceptable mechanism of redistribution.33 Moreover, the market provides the necessary material resources for the Swedish welfare state. Thus the market is neutral and not a cause for ideological concern. Part of the definition of a democratic production order, however, is the recognition that there are fundamental social interests in society that are not compatible with the market interest, for instance the idea of a common good. In Swedish discourse this common good is defined not by prosperity but by solidarity:
Freedom and equality are about individual rights and collective solutions for the common good, which is the basis of individual potential. Individuals are social beings who develop and grow in interaction with others, and much of what is important for the welfare of the single person can be created only with others. This common good presupposes solidarity. Solidarity comes from the realization that we are all mutually in need of each other and that the best society is built on mutual consideration and respect. All must have the same right and possibility to influence our collective solutions, and all have the same responsibility to them. Solidarity does not rule out individual advancement and success but the egoism that allows some to use others for their own benefit.34
While this paragraph has clear similarities with the community paragraph of New Labour, there is also a fundamental difference. Solidarity and the common good are, in Sweden, values that are in opposition to the market and that act as a control on the market. The program states that market worth and human worth are in conflict and that social democracy is against the commodification and commercialization of social, cultural, and human relationships:
Social democracy rejects a development where capital and market are allowed to dominate and commercialize social, cultural, and human relationships. Market norms must never be allowed to determine the value of human beings or the shaping of social and cultural life.35
Because the market is not capable of recognizing the existence of key social interests it cannot be an acceptable norm for the provision of what the program refers to as “social goods” (sociala nyttigheter). Social goods are key welfare services, goods that must not be guided by principles of profit or supply and demand mechanisms but by the principle of need. It would thus seem that while the party does not deny the role of the market as a provider, it does reject the market ethos, which it sees as distinct from the public ethos. However, social goods is a neologism that avoids the problematic term of public good (kollektiva nyttigheter), arguably because the party has embraced the market in key services that it formerly considered to be essential public goods to be kept away from the logic of the market, for instance child care, hospitals, education, and housing. This is an indication of the highly ambiguous stances of the SAP toward the market. While it says that a democratic production order poses limits on the market, the party remains vague as to what these limits are. Indeed, in the next paragraph, the program states that the provider of services should be chosen on the basis of “what works,” a wording that falls back on the principle not of public good but value for money.36
In the postwar period, social democracy’s answer to the dilemmas posed by affluence was to attempt to reconcile social mobility with equality through the welfare state and the mixed economy. A “revolution of rising expectations” and an increasing diversification of need and preferences in the affluent society seemed to challenge social democracy’s notions of equality, but it was met with the ideas, of revisionists Crosland or Wigforss, namely, that through equality, individual freedom could be reached. Affluence required more equality, not less, to balance the effects of growing private consumption. In this way, there would be no conflict between the principle of equality and diversity, nor, indeed, freedom of choice. In contrast, social democracy in the 1990s argued that equality is at odds with affluence. It saw the creation of prosperity as dependent on the just reward of merit and achievement, and it argued that rising individual expectations for choice and diversity in services challenge collective and universal solutions, not least in the crucial area of education.
This has led to a rethinking of the principles of egalitarianism and the balance between equality and diversity. Allegedly, the individualism of the knowledge era, along with the emergence of individual talent, potential, and skill as key drivers of prosperity, calls for a rethinking of egalitarianism to make room for individual differences. Therefore, Social Democrats have shunned the notion of equality in favor of a notion of equality as equality of opportunity, a notion that shifts the focus from the structures that determine potential to the opportunities available for individuals to realize their potential. The notion of equality of opportunity has often been seen as a natural evolution of ideological postulates in an age of knowledge, as an era where the exploration of one’s talents is more important for individual self-fulfilment than disparities in income and socioeconomic position, and where, allegedly, the economy produces opportunities in the form of flexibility, career advancement, and education. In a capitalist order organized around potential, people must be allowed to pursue their individual potential and different talents even if this creates differences in economic and social outcomes. This is what Anthony Crosland once called “the rent of ability.” Such a reward for the development of individual talent and achievement was legitimate, he argued, because anything else would be an intolerable infringement on the individual right to develop. In the affluent society, the objective of socialism could no longer be equality of outcome but rather giving everyone the chance to succeed because destitution and material want were no longer the most pressing concerns, and the industrial economy seemed to provide opportunities for advancement and mobility.37 Ernst Wigforss also believed that the reward of merit was a justified ideological principle, as long as it did not further entrench class differences.38
Meritocracy has a new relevance in social democracy’s contemporary ideas of the knowledge society where, on the one hand, it is argued that in a competitive knowledge economy there must be a premium not only on individual investments in education but also on individual talent, while on the other, the pressing need for the potential of all also revokes an egalitarian ideal.
The rearticulation of the concept of equality to equality of opportunity in the United Kingdom was informed by this postwar debate on the relationship between affluence and equality. The notion of equality of opportunity reflected New Labour’s ideas of a new governance, where the central role of the social democratic state was to foster opportunity and leave individuals to explore their life chances. Equality of opportunity, in New Labour’s interpretation, was a positive notion of freedom, one that allowed for active individuals capable of fulfilling their potential. It was a concept of equality that allowed for aspiration, advancement, and achievement, and that recognized the different talents that exist in society.39 It drew not only on Crosland but also on the arguments of philosophers such as John Rawls and Ronald Dworkin on social justice, specifically, that inequalities in outcome are acceptable if they create a situation where the poorest are better off, or if inequalities result from the pursuit of talent rather than the unjust inheritance of privileges and resources. As we will see in upcoming chapters, it was also strongly linked to the notion of responsibility and, above all, to the individual’s responsibility to seize opportunity.40
Equality of opportunity is potentially a very radical notion, one that puts life chances, aspiration, and self-realization at the heart of emancipatory politics and sees individuals as competent, autonomous individuals. It recognizes the unfair distribution of opportunity in society. Equality of opportunity, in contrast to the emphasis on material redistribution of the notion of equality, contains an emphasis on the role of politics to foster and redistribute opportunity, extend it over the life cycle, and distribute it among social groups, as, for example, in the emphasis on raising skill levels or on extending access to the social networks of privileged groups. Arguably, life-long learning, understood this way, could be a very radical agenda for equality.
To New Labour, equality of opportunity represented an attempt to put in place a more meritocratic notion of equality and break with “the leveling down” of old laborism. Equality, to New Labour, was a strangling notion, one that crippled individual initiative. Equality was “putting everyone in the same mold” and a stranglehold on creativity. As such, equality was on a par with the notion of common good as defined as prosperity for all because prosperity, to New Labour, is seen as emanating from the entrepreneurship and creativity that comes from differences in talent and ability. In a virtual turnaround of old social democratic postulates, in an economy of opportunity, it was the drive for equality that led to the waste of potential. To New Labour in the mid-1990s, equality of opportunity fit into a narrative around the competition, entrepreneurship, and market logic of the new economy. Its inclusive elements were downplayed in favor of a stress on individual survival and the individual capacity to seize opportunity and increase his or her competitiveness on the ladders of the knowledge society. This was directly related to its interpretation of the knowledge economy as a cornucopia of opportunity for individuals to grasp. The central element of equality of opportunity was competition, the competition that New Labour sees as the driving force for the fulfilment of human potential.41
New Labour’s dismissal of the notion of equality stemmed from its stereotypical representation of “old” social democracy. Equality has not, in the social democratic project, been primarily about the socialization of the means of production and absolute equalities in outcome. Rather, the importance of the notion of equality to social democracy historically has been that of a central motivation for what might be termed the good society. Equality is a utopian aspiration of the realization of the equal worth of all in society. Arguably, this is where New Labour’s notion of equality of opportunity differed from the notion of equality of opportunity of Crosland. While Crosland did argue that absolute equality of outcome was not a desirable principle in a society of welfare statism, he also believed that the principle of equality of opportunity was not enough and that it would lead to a fiercely competitive, wasteful society, where potential would not be freed but eroded:
Whereas in a hereditary system competition is limited, in meritocracy it becomes general. And as the area of competition and the scope for self-advancement are increased, so the rate of failure to opportunity must increase. A hereditary society, denying the opportunity to rise, avoids also the sense of failure at not having risen, but if all had the opportunity, and only 10% succeed, 90% are conscious of having failed and suffer a loss of self-esteem. And the more unequal the rewards, the greater will be the frustration from failure, the more ruthless the competition, the more bitter the intolerance shown to rivals . . . acquisition is intensified . . . Such is the society—restless, insecure, aggressive, and acquisitive, that results from the pursuit of equality of opportunity . . .42
Hence, equality of opportunity was not enough as the guiding principle of socialism. To Crosland, the importance of equality as aspiration could not be replaced, precisely because it was not a means to an end but a defining principle of social democracy. Crosland recognized that differences in achievement and the pursuit of talent constituted the foundation of a prosperous society. But he could see no reason why intelligence should be elevated above other forms of capability or merit in society. Indeed he warned, in The Future of Socialism, of a society strictly organized after the principle of intelligence.43
The SAP still holds on to a notion of equality that includes references to outcome. The Swedish notion of equality—jämlikhet—is different from the liberal tradition because it does not see equality as being on a par with efficiency and dynamism; rather it sees it as a prerequisite for these very forces. The notion of jämlikhet is strongly linked to notions of security, solidarity, and freedom. In its discourses on the knowledge society, the SAP has thus argued that equality is a prerequisite for individual creativity. The party program states that free and equal individuals are the goal of socialism.44 Freedom is the right to develop as an individual, control one’s life, and participate in the shaping of society. This freedom is dependent on equality and incompatible with big disparities in rewards because these break down the solidarity that is the basis of freedom. A democratic order of production thus presumes the fair distribution of the results of the production.45
However, just as New Labour’s new community paragraph also saw the redefinition of the concept of equality into the neologism of equality of opportunity, the SAP’s 2001 program included a rewriting of the concept of equality, which opened up for differences in individual talent and achievement and seemed to lead away from class analysis. Class, it was said, remained relevant, but it was insufficient for an analysis of inequality in new times of creativity and diversity. Equality, Persson said in the conference debate, had to celebrate difference, because “our difference is what is so fantastic.”46 This effectively shifted the focus from outcome to opportunity. According to the program, equality meant giving all individuals, despite their different individual starting points, the same opportunities (förutsättningar) to shape their own lives and participate in the shaping of society. The precondition for this is the right to choose and develop differently from one another, as long as these differences do not lead to new social hierarchies and gaps in power and influence.47
As this follows in the footsteps of Wigforss and others, the rewriting of the notion of equality as the objective of social democracy in the 2001 program is a less radical departure from egalitarianism than New Labour’s break with the principles of socialism. Nevertheless, in Swedish social democratic politics the notion of equality has also effectively become compatible with the notion of freedom of choice, which was introduced in social democratic ideology in the 1980s and has since been the ideological basis of a thorough restructuring of the Swedish welfare state. In the 1980s, the party’s rethinking of the principles of the People’s Home included a careful evaluation of the neoliberal concept of freedom, which was introduced, into party ideology, as valfrihet, freedom of choice. Valfrihet was an ambiguous notion because it played—just as New Labour plays on Crosland—on the revisionist notion of freedom of choice of Erlander in the 1950s. In a number of texts outlining the ideas of the Strong society and the principles of solidarity in the welfare state, Erlander argued that equality and freedom of choice went hand in hand because the expansion of public services and the universal welfare state was what, for the great majority of people, made choice possible.48 Freedom of choice thus required a public commitment to equality and to the solidarity institutionalized in the welfare state. In the 1980s, freedom of choice was no longer about public responsibility but about the individual consumer’s right to choose between a variety of providers and services in the Swedish welfare state. The formulations in the party program in 2001 can be seen as the culmination of a long process of rethinking the relationship between the universalism that underpinned the development of the Swedish welfare state and demands for diversity. There appears to be a fundamental conflict between the emphasis on equality in party rhetoric and the principle of freedom of choice that was the guiding star of welfare reform in the 1980s and 1990s. There is no better example of this conflict than the issue of voucher schools, to which we will return.
The Third Way’s 1990s revisionism can be seen, on the one hand, as the apex of previous processes of revisionism in the history of social democracy. The values of social democracy have never been stagnant; rather, as Moschonas puts it, the history of social democracy is the history of its modernizations.49 In history, periods of structural economic change have led to new attempts to assert and interpret social democracy. Nevertheless, the Third Way does mark a fundamental break with social democracy’s past because it argues that core values of social democracy—above all the value of equality—were means to other ends and that their standing as means should be seen as specific to each time. Equality was not a suitable principle for an era of diversity, information flows, and the constant dissemination of knowledge. An economy driven by human potential and creativity demanded that social democracy recognize differences of talent and achievement as legitimate organizing principles of society. Equality, to New Labour, was utopia gone astray, a “socialist nightmare.” 50 The rewriting of Clause 4 was a tormented process; and, since then, many Labour voices have called for a reinstated notion of equality.51
In Sweden, revisions of the SAP’s political program have been much more frequent in history, and the changes in the 1990s and 2000s were thus less radical, maybe even just a formalization of changes already naturalized in social democratic ideology. However, the rewriting of the party program was not less about the soul of social democracy and the links between its role in the present and its past heritages. The program’s most radical stances—“social democracy rejects a development where capital and market are allowed to dominate social, cultural, and human relationships”—stand in sharp contrast to the marketization that has taken place in core policy areas in the last decade. It is conceivable that the partial radicalization of language and ideology in the 1900s is exactly what made these policy changes possible, glossing over gaps between rhetoric and policy and asserting that the values of social democracy were but the same.