A quintessential feature of Third Way discourse is its claim of reconciling seemingly irreconcilable alternatives and finding a Third Way path or compromise between them.1 This applies particularly to the notorious dilemma of efficiency and social justice, which the Third Way claims to solve through its pragmatic attitude to welfare state intervention. This is not new in the history of social democracy. As discussed in the first chapter of this book, it is a fundamental of social reformism that it tries to reconcile seemingly irreconcilable alternatives, particularly the dilemma between capitalist efficiency and equality. From the postwar period onward, social democracy saw the welfare state as the means not only of intervening into the market for the creation of social justice but also of creating economic efficiency, a tool not only against the market but for the market.2
In the 1990s and 2000s, both parties, much in line with the changing approaches to social citizenship and welfare state intervention in the European context, emphasized the positive relationship between economic efficiency and social justice as part of their modernization strategy. Beginning in the mid-1990s, New Labour argued that what is fair is efficient and that there was no trade-off between social justice and efficiency. Indeed, this claim was a central element of its repositioning of Labour in the center left field, between the “exhausted” alternatives of state socialism and neoliberalism. In 1997 it promised a “new deal”—a break with the postwar Beveridge model to create new synergies between economic and social policies and lay the foundation for a new “active” form of welfare state intervention.3 In a sense, this process has been reminiscent of the Swedish model, which drew on just such a close relationship between economic and social policy and an active supply-side orientation.4 The language of Swedish social reformism is historically construed around exactly the kind of reconciliatory elements that have made up the platform of New Labour, first and foremost the idea that economic efficiency and social justice go hand in hand. This reflects the way that the welfare state, in Sweden, has been seen not only as a means to correct negative consequences of the market but as a productive investment into the economy and a precondition for growth. These historic articulations are echoed in the SAP’s contemporary insistence on the welfare state as the prerequisite for successful economic transformation and what leading Social Democrats refer to as “security in change.”5
However, there are important differences between these seemingly similar modernization discourses—differences that can be brought back to different discursive legacies around the social contract and the welfare state in the social versus the liberal model. A central part of these differences are, I argue, different approaches to efficiency, to ontological and ideological perceptions of how society and economy should be organized, and to definitions of what constitutes an efficient society. At the core of these notions are the different understandings of social citizenship.
New Labour’s understanding of the social as a sphere for the production of a specific kind of capital, social capital, has led to the emergence of new means of governance designed to invest in that capital, namely, social investment strategies.6 The idea of social investment was a central part of its modernization strategy narrative and its call for investment in fundamental British capabilities. Physical investment into the machines and capital of British industry was to be coupled with social investment in the social capital of the British people.7
The rise of social investment strategies in European welfare states in the last decade are part of an emerging concept of state that is clearly linked to the rethinking of the principles of political economy discussed in Chapter 2. The core purpose of the role of welfare state intervention in the “social investment state” is to use public spending and state intervention to “invest in people”—not to protect them from the market but, on the contrary, to give them the skills and opportunities needed to succeed in the knowledge future. In particular, this applies to those in society who can most easily be molded for the future. The idea of social investment has thus brought with it a shift in the prioritized activities and groups of the welfare state—a shift that specifically targets children as the crucial future social capital of the nation. The substantial emphasis on children and family policies in the 1990s—possibly New Labour’s most important achievement—was motivated as a strategic investment “in the potential of every child.”8
New Labour’s social policy agenda has in many ways been radical, for instance in the pledge to end child poverty, the creation of the national day care strategy, or the Sure Start program, designed to prevent future social exclusion by intervening in the early years that statistically are highly significant for an individual’s future life course. These programs have signified a break with the liberal philosophy of welfare that has dominated British political culture because for the first time children have been made a public responsibility and a central area of reform.9 However, social investment strategies reflect a changing governmentality around social intervention, with direct reference to a new economy built on human and social capital.10 The idea of social investment was part of New Labour’s economic narrative of social justice, a narrative that effectively turned social policy into a new form of economic policy and established a framing around welfare as motivated by its economic returns. This economic language clearly had a highly strategic function. It was a pragmatic argument for an egalitarian agenda and not a moral or ideological one. As such, equality became compatible with the common good and possible within the parameters of the values of “Britishness.” However, it also led to a highly utilitarian discourse around social justice and equality, as if these were economic principles.
This economistic approach to social justice has led to a fundamental transformation in understandings of social citizenship. As Jane Jenson and Denis St. Martin have suggested, social investment strategies are indicative of a changing time dimension in social policy, where it is not the security or welfare of individual citizens in the immediate here and now that is most pressing but the supposed future rentability of welfare subjects.11 And as Ruth Lister has persuasively argued, the rise of the social investment state signifies a shift in our outlook on children, from “child-citizens” to “citizen-workers of the future.”12 The dominant focus of policy is not to invest in children to give them a better childhood and help them lead more meaningful lives, even if this is an integral aspect of the rhetoric of the social investment state, but to invest in the strategic future brainpower that they represent. Children become a de facto capital investment.
Seen from within the long history of European welfare capitalism, New Labour’s economic discourse around social policy is not new but, rather, a contemporary variant on the investment discourses that have followed the development of modern social policies. The idea of social policy as an economic means for the efficient allocation of social resources is an integral part of welfare state governmentality. Indeed, the identification of social policy as a kind of economic policy was at the heart of the European notion of welfare capitalism and its historic notions of sozial ökonomie, or social economy.13 In the industrial era, social policy was framed within Keynesian discourses of humanpower and manual labor, while today they are concerned with the efficient utilization of social and human capital.14
The idea of social investment drew on a notion of efficiency that was directly linked to market efficiency and that contained a critique of the “old” Beveridgean welfare state as fundamentally inefficient and costly. New Labour’s “new contract for welfare” contained a new approach to public spending in which public expenditure was redirected from areas considered “wasteful” to areas with strategic importance for the knowledge future. A key distinction was the careful separation between “good spending” and “bad spending”—between investments and costs. Good spending was spending designed to put people to work and extend education and learning; “. . . good, we like that.” Bad spending was “spending on unemployment and people on benefit when they should be at work, bad, we want to decrease that.”15 A system of elaborate audits and standards was designed to monitor this move from costs to investments, “weed out waste,” and make sure that investment paid off. In part, this applied to the management of public services and public sector reform, but weeding out waste also applied to the content of welfare and to the welfare subject.16
“Investment” and “cost” are not neutral economic concepts; they are powerful metaphors of progress and decay. The difference between what constitutes an investment and what constitutes a cost is at some level arbitrary; after all, both costs and investments demand resources from the present. Ultimately, the distinction between what constitutes spending as cost or spending as investment is the anticipation of rentability. A cost is a burden on resources because it leads to capital waste. An investment, on the other hand, represents resources used in the anticipation of future yield. Applied to welfare programs, these terms are not empirical descriptions of the anticipated economic role of a certain social program; rather, they contain deeply normative descriptions of who represents a cost and who represents an investment. The British idea of social investment, which originated in the report of the British Commission on Social Justice and was taken up by the philosopher Anthony Giddens in his treatise on the Third Way, was strongly linked to New Labour’s communitarian agenda on citizenship and its concern with breaking with a culture of dependency, thus cutting the costs for welfare bills. The social investment state was a new, active welfare state, a state that fostered achievement and aspiration. It did not “subvention failure.” It “invested in success.”17
This approach to welfare drew on distinctly liberal legacies around welfare and social policy as things that are latently on a par with market efficiency. New Labour is inspired by a very social democratic social interventionism. Meanwhile, it has broken with important legacies in the British progressive tradition around welfare, Richard Titmus’s idea of universal entitlements, and T. H. Marshall’s emphasis on the transformative role of social citizenship.18 While leading in some areas to a more radical social policy agenda, social investment strategies also contain an approach to social policy that revokes Victorian legacies.19 It is hard to avoid the conclusion that the flagship position given to the Sure Start program in New Labour policy is because children, in New Labour’s moralistic approach to social citizenship, are seen as untainted blank sheets and not affected by the dichotomy of deserving and undeserving poor. Sure Start as a reform area was possible within the context of the values of Britishness and the liberal social contract, and investment in children was matched by strategies to “crack down” on welfare claimants and increase the conditionality of entitlements.
To that extent, the idea of the social investment state draws on a notion of efficiency that ultimately falls back on an outlook on social policy as a cost for idleness and dependency and as something that has to be circumscribed, controlled, and redesigned in order to bring out people’s productive potential and not suffocate it.
This is a very different notion of efficiency from the one that historically informed Swedish welfare policies. A core notion in the discursive underpinning of the Swedish welfare state as it developed from the 1930s onward was the idea that the welfare state and its social policies were not costs for the mollification of markets but a productive investment in the efficient industrial economy. Historically, the Swedish notion of welfare, in contrast to its Anglo-Saxon connotations as assistance to people in need, signifies socioeconomic efficiency, an overall approach to the efficient functioning of economy and society, including aspects of social progress and individual well-being.20 Therefore, welfare is as much an economic as a social principle. It was this principle of welfare as efficiency that lay behind the productivism of the Swedish welfare state. To social democratic thinkers like Wigforss or the architect of universalism Gustav Möller, equality and social justice were not just moral but economic principles, to be placed at the core of a planned economy.21
Just like the social investment discourse of New Labour, this productivism was a multifaceted discourse, displaying the tensions between socializing and capitalizing that I discussed in earlier chapters. On the one hand, it put in place an economic defence around the emerging welfare state and principles of universalism, as principles not primarily of redistribution but of efficiency. As such, it called for the regulation of markets in the name of social citizenship. 22 On the other, the productivism of the Swedish model drew on legacies from an, at times, thoroughgoing social engineering rooted in economistic approaches to the social. Swedish universal social policies were born in the 1930s’ discourses of the human material, människomaterialet, explicitly concerned with its quantity and quality.23 It was the identification of children as a fundamental economic resource of the nation state that led to ideas of public responsibility for children’s welfare and the development of family policy as a legitimate sphere of state intervention. The rational socioeconomic solution to problems of both falling birth rates and the poverty of the working class was sharing the burden for children, thereby also increasing the chances for children of good quality, equipped to contribute to society. This emphasis on sharing the costs for children became a central element in the rise of the modern welfare state. Indeed, it was framed within the language of investment.24
Thus, there are parallels across time between Swedish productivist approaches to welfare and New Labour’s idea of social investment. Nevertheless, contemporary social investment strategies differ from these historical Swedish discourses in some substantial ways that cannot be explained simply in terms of the specific historic, economic, and social contexts in which they exist but that need to be discussed in terms of changing ideologies and changing definitions of the economic and the social in our present times. In the 1930s, the idea of social policy as a productive investment was framed within the logic of emerging Keynesianism and linked to ideas of the structural causes of social problems. It was part of a critique of the capitalist economy as notoriously unstable and prone to the destruction of social resources. Moreover, through its links to the emerging philosophy of universalism, this productivist social policy discourse in Sweden became linked to arguments for the structural transformation of society on the basis of social citizenship. As such, it was distinct from the conservative discourses on which it drew.25
This is not to reduce the deeply disciplining aspects of early Swedish social policies or the “dark side” of the People’s Home, which have been elucidated in the last decade by Swedish historians. Discourses of efficiency gave rise, in Sweden as elsewhere in Europe, to thoroughly interventionist means of social engineering based on notions of human beings as productive or reproductive capital. In a sense, the universalism of Swedish social policy as it developed from the 1930s onward was dependent on the systematic exclusion of “asocial elements,” through means such as the sterilization policies that, even though they were marginal in number, were a core feature of the Swedish welfare state.26 Nevertheless, the crucial difference between the Swedish development and fascist eugenics was that efficiency discourses in Sweden were embedded in a historical tradition of individual rights, which acted as a bulwark against utilitarian social engineering and marked the decisive difference between fascism and social democracy. In Sweden, productivist discourses of social engineering merged with the principle of universalism.27 Perhaps the virtual absence of the notion of social capital in Swedish discourse today is due to the association with a capitalization of human beings that it invokes in Swedish political memory.
New Labour’s social investment discourse, in contrast, is tied to its pervasive notions of a common good created through discipline and obligation. It is the responsibility side of social citizenship that is associated with prosperity and efficiency, while the rights side of citizenship is fundamentally associated with dependency, idleness, and “waste.” In addition, social investment discourses—through their link to social capital—occupy a central position on New Labour’s communitarian agenda and its understanding of crime, asocial behavior, and delinquency as problems of social capital and as areas that should also be subject to strategic investment. In these areas, social investment refers to government activities aimed at preventing social costs; and as such it shares with Swedish productive social polices a prophylactic approach to social problems. But it differs fundamentally in its outlook on what causes them. The Swedish investment metaphor was aimed at “building away” problems of unemployment and poverty through structural means of economic and social planning and the universal welfare state. This side of investment is absent in the mentality of the social investment state. The famous slogan—“be tough on crime and tough on the causes of crime”—has resulted in some of the highest incarceration rates in Europe. What it shares with the productivism of Swedish social policies is the mercantilist emphasis on the role of the welfare state to increase the value in the future brainpower of the nation and the sanctions of those elements that do not fit in this ideology of efficiency. For instance, a policy paper of the Strategy Unit argued that governing individual behavior is more cost efficient than traditional welfare policies and accordingly labelled this approach “punitive universalism”—a kind of universalism in which the relative extension of social rights for some groups in society must be matched by increased conditionality and sanctions for others.28
The economic argument around the welfare state as a productive investment was a central feature of SAP postwar ideology, and it provided the discursive underpinning of the welfare state, spanning the field from party rhetoric to the means of governance. The operative concept in economic and social planning throughout the postwar period was a notion of efficiency as social efficiency, samhällsekonomisk effektivitet, which took into account the effects of social programs not only on growth but on human welfare. The expansion of the public sector in the 1950s and 1960s was regarded in budgets as “productive spending” and not as consumption. In contrast, a central element of the SAP’s Third Way experiment in the 1980s was its break with exactly this outlook on the welfare state as a productive investment. The 1970s economic crisis and the party’s two lost elections led to a thoroughgoing debate in the party of the validity of the economic postulates around the welfare state, a process in which the modernizers on the party’s right flank gained legitimacy for their critique of public spending as too wasteful and inefficient. The concept of socioeconomic efficiency was replaced by the concept of cost efficiency, followed by experiments with cost-benefit analysis and new public management models. The party toyed with notions of individual incentives and responsibility (see Chapter 3). These ideological principles lay behind the privatizations that took place in the Swedish welfare state beginning in the early 1990s. In the crisis management policies that began in 1982, individual security was set aside for fiscal stability, and the party silenced its notions of the productive role of social policy and the economic benefits of the welfare state.29
However, in line with the way that the party under Persson’s leadership tried to reconnect with its classic heritage and break with its 1980s Third Way experiment, the party rediscovered these articulations and again put them at the heart of ideology.30 Growth discourses of the 1990s defended the postulates of the Swedish model and the idea of the welfare state as a productive investment, essential to building the knowledge economy: “We should continue building the welfare state. Security in change stimulates innovation and provides the power to grow. Secure people dare. Security makes the economy more dynamic.”31 The economy does not need less security to function smoothly; it needs more.
This was based on an analysis of the process of modernization that is fundamentally different from that of New Labour. New Labour saw the process of modernization as driven by risk and opportunity and by individual willingness to assume these factors and turn them into success. Its approach to welfare state modernization has focused on fostering risk-taking individuals. Its reinvented idea of state responsibility in the modern era has followed from this conception of the primary individual responsibility to seize opportunity. The social investment state was also the “springboard”—a vision of the state as the trampoline that projected people into the air, not the safety net into which people fell and remained.32 The springboard, like other New Labour metaphors such as the “ladder” or the “race,” is a thoroughly meritocratic notion. It was more concerned with giving those willing to jump a bounce on their way up than with those who were afraid of heights or failed their jump. Its means of welfare were designed to push people to jump, through an intricate balance of encouragement and coercion.33
In contrast, the Swedish outlook on the process of change placed the main emphasis on the risks of modernization. Whereas the watchword of the process of modernization to New Labour was opportunity, in Sweden it was security . While Gordon Brown has repeatedly stated that there can be no security without change, the Swedish party leadership has insisted that there can be no change without security.34 This is not a rejection of change itself or of the “inevitable” forces of globalization or technology; rather, the SAP argues that successful structural change depends on the capacity to uphold and defend the welfare state because the welfare state is the safety net that keeps people from falling into the abyss while doing pirouettes on a tightrope. This is a discourse that draws on the SAP’s productivist discourse around the welfare state and its idea that a large public sector is a crucial element in a modern economy, creating the preconditions for smooth structural change. In the 1950s and 1960s, social democracy defended the expansion of the public sector with the argument that rapid structural change required a firm public commitment to security because insecurity would create intolerable rigidities. The idea was that structural change calls for collective responsibility to deal with the risks that individuals face in times of structural transition and that the increased risk of change has to be matched by a stronger commitment by the public and the welfare state to compensate for individual losses of well-being. The highly productivist orientation of the Rehn-Meidner model, with its insistence on labor mobility and individual adaptation, was also based on the recognition of the need for solidarity and the collective efforts of the welfare state. Security is, therefore, a productive force, closely associated with elements of growth and freedom, while insecurity, such as the insecurities brought on by globalization and a rapidly changing world, is a deeply destructive force that destroys potential and thwarts ambition:35
If people fear the future, they will not realize or see its potentials. A woman who is afraid that unemployment might spoil her economy will not be ready to leave work in order to pursue higher education or start an enterprise to develop a skill or invention. A man who fears the economic consequences of getting fired will not speak up and criticize management decisions or risk finding new methods or markets. A couple that doesn’t feel secure on the labor market or does not trust the future will be reluctant to have children and create a family.36
Insecurity creates inefficiencies and hampers growth, whereas security creates courageous individuals who dare to spend, to be creative, to criticize and express ideas in the workplace, to study, and to raise a family. Security creates growth.
This puts into place a notion of change and of individual motivation that is fundamentally different from the opportunity-driven discourse of New Labour. To Swedish social democracy, individuals are capable and curious, but they do not react positively to risk and fear. Rather they are spurred on by the instinct of solidarity. Modernization, in this Swedish interpretation, is a process driven by individual security and the boldness that security creates. Indeed, creativity stems from security. Secure people dare to be creative, to be entrepreneurs, and to take risks: “Secure people are creative people—people who are driven by the will to seek knowledge, not because they are driven with a whip, but because it makes them grow as individuals.”37
This can be contrasted to how, in British discourse, creativity arises from competition, “the sharpest spur to improve productivity and the greatest guarantee of reward for talent and innovation.”38
This is a very romantic Swedish discourse, regarding both individuals and the welfare state, and it has often been dismissed by party modernizers as well as by the Swedish Right as a kind of “security addiction” or “kindness disease” that stands in the way of proper change, an argument that was at the core of the 2006 election campaign. It is also a discourse that seems to silence the debate on the effects on insecurity that have arisen in the last decade due, arguably, to the twin challenge of economic transformation and organizational changes in the welfare state. A central point of the party’s ideological change in the 1980s and the 1990s lies in the very notion of security. Security, today, is taken to include a higher individual acceptance of risk than was previously presumed, and the contemporary meaning of the notion contains a significant emphasis on incentives and increased individual responsibility.
The meaning of “security in change” is that change and a dynamic labor market need to be coupled with strong social institutions that guarantee individual security in periods of transition, particularly through high levels of compensation in the social insurance system.39 The social insurance system is the “bridge of change,” not the trampoline projecting people upward but the path on which people walk from one economy to the other. Unquestionably, this approach to flexibility is very different from the British one, first, in that it claims that security is not an obstacle change but a precondition for it and, second, in the way that it maintains that high levels of compensation for social risk are essentially a human capital investment.40 Nevertheless, “security in change” draws on those contemporary labor market discourses that have effectively shifted the responsibility for unemployment from the public sphere to the individual. This conceptual slippage is clear in the new affinity between British and Swedish labor market policies in recent years. On one side of the North Sea, Gordon Brown has emphasized the importance of secure individuals, particularly in the context of the European social model. On the other side, Swedish policy makers have increasingly debated incentives, carrots and sticks. After Gordon Brown’s speech to the Swedish Social Democrat’s Economic Seminar in Almedalen in 2005, the Swedish Ministry of Finance and the British Treasury produced a joint report entitled The Bridges of Change. While the report spoke of the importance of security for creative individuals, it drew heavily on British language of flexibility and employability. Its main message was protecting people, not jobs, in a world where it is the responsibility of government to invest in people and opportunities and the responsibility of people to seize them.41
New Labour’s New Deal for welfare was explicitly informed by the contractualism that has become fashionable in political philosophy and social science in recent decades. The New Deals were embedded in the language of “no rights without responsibilities,” ultimately defined by “making work pay.”42 This relies heavily on a notion of individual responsibility, above all the duty of productive participation. In the knowledge age, the duty to work has been complemented by the duty to learn. It has sometimes been suggested that this “active” approach to citizenship draws on Scandinavian influences and Swedish-style active labor market policies and that New Labour’s workfare strategies are not that different from the way that the strong social rights of the Swedish model were coupled with the emphasis on the duty to work.43
Despite occasional depictions by British and American observers to the contrary, the Swedish welfare state has never been a system of handouts for the idle and the weak. On the contrary, at its heart is a work ethic, which has, in history, led to the identification of various groups in social policy as crucial labor force reserves and to the creation of welfare means explicitly aimed at bringing out their productive potential. Historically, there has been a fine line between emancipatory discourses of the right to work and disciplining discourses of duty. The right to meaningful employment was a central claim of labor movements in the early twentieth century.44 In Sweden, in contrast to the developments in the United Kingdom following the Beveridge report, this led to the development of active labor market policies, the creation of a large state bureaucracy around the organization and allocation of work, and the construction of a social insurance system based on principles of income relation. 45 In this manner, social rights in Sweden were directly tied to the principle of work. Swedish social democratic ideology is informed by a pervasive work ethic; and, throughout its history, the SAP has been deeply troubled by the existence of various groups and individuals who either seem not to share this ethic or are unable to be productive citizens in the social democratic meaning of the word. This is not just a matter of putting the notion of solidarity to the test; the existence of groups outside the labor market is a problem for the principle of universality that underpins the redistributive architecture of the Swedish welfare state because the core idea of this universalism is a principle of reciprocity close to Marx’s principle of “from each according to his ability, to each according to his need,” and thus stresses the productive participation of all.46 Hence there is, if not the deserving–undeserving dichotomy of liberalism, the dichotomy of productive–unproductive and a concern with how to turn the latter into the former. This explains the underlying duality of the Swedish welfare state, between its strong—universal—entitlements in the social insurance system, based on labor market participation, and its much weaker, means-tested entitlements for groups outside the labor market.47 In recent decades, these tensions between universalism and conditionality have become clearer, while the meanings of concepts such as welfare, security, and activation have become increasingly blurred.48
It needs to be pointed out, however, that the Swedish approach to the relationship between welfare and work differs fundamentally from the workfare strategies of the liberal model. Workfare strategies see rights as conditional on productive participation, as something earned through duties fulfilled, and they rely heavily on such means as contracts that define and regulate correct individual behavior.49 In contrast, Swedish productivism drew on the idea that the extension of social entitlements and social security was the precondition for productive participation. The predominant emphasis was not on the duty to work but on the individual right to contribute productively to society. It is important to note that it saw this as dependent on the public responsibility for work to make it possible for everyone to participate according to capacity.50
This is distinct from workfare, and it reflects a social democratic tradition that New Labour has broken with. In its search for a new work ethic, it preferred American workfare contracts to expensive Scandinavian active labor market policies. Despite ambitions to put people to work, increasing conditionality has hardly been complemented by increased quality of services or higher spending on unemployment. U.K. spending on active labor market policy is still among the lowest in Europe; and, up to now, the predominant emphasis has been a quantitative focus on moving people off benefits and into work, substantially less so with the quality of that work (even if this is a shifting ground).51 Again, it sees governing individual behavior as more cost efficient than intervening in structures. Meanwhile, a fundamental change in the Swedish welfare state has to do with the role of active labor market policies and the changing demarcations between work and welfare. In this process, social democracy’s outlook on the unemployed as potentially productive citizens or idle has also been put to the test.52
Unemployment rose in Sweden from frictional unemployment around 4 percent to mass unemployment at 16 percent between 1991 and 1993. On its return to government in 1994, social democracy, faced with an exploding budget deficit, promised to reduce unemployment to 4 percent by the year 2000. It accomplished this task, even if numbers have since risen again. The social democratic government put a large group of unemployed in training and education through the knowledge lift so that they would be better prepared when the economy turned, and it restored unemployment insurance to 80 percent (which was still 10 percent lower than the original 90 percent) with the argument that high levels of unemployment benefit are a productive investment in human capital and prevent waste.53 However, there have been significant changes in the design and content of active labor market policies concerning individuals who do not qualify for these 80 percent either because of long-term unemployment or because they have not previously been employed. In the aftermath of the 1990s recession, this group of people, who are more or less permanently outside the labor market, has grown substantially. Unemployment, together with other social effects of economic crisis, such as a dramatic increase in ill health and incapacity in the Swedish population, has resulted in falling rates of participation. This is a worrisome development because, in contrast to the situation in the United Kingdom or in other parts of Europe, long-term unemployment was virtually nonexistent in Sweden before the fall of the krona in 1992. This, then, is a new group in Swedish society, created, it seems, by the dramatic onset of the 1990s’ crisis and further by the structural changes that occurred in the economy once the cycle changed and significant groups found themselves unemployable.54 In addition, the rise of this group seems to stand in relationship to central changes in the bureaucracy of the welfare state itself. Since the 1990s, labor market policy has played an active role in the redefinition of long-term unemployment as a form of incapacity, by shuffling individuals between different parts of the system, activating them with activities whose meaningfulness is not easily deciphered, and, in fact, treating unemployed people as if they were disabled or deviant.55 It is hard to avoid the conclusion that social democracy has played a role in this, partly in loss of control over the activities of the welfare bureaucracy and partly by accepting a relocation of responsibility from state to individual in its core ideological concepts. This Swedish development stands very much in contrast to the way in which the British emphasis on getting people off benefits has brought with it new framings of those not in employment as “able” and “capable.”56
The active labor market policies of the Swedish model were put to a tremendous test after 1992 as the measures designed to deal with a small group of unemployed were suddenly to take care of a huge number of people, and resources were spread very thin. In the next decade, the nature of labor market policies in Sweden evolved into something that is much closer to workfare. Labor market policies were decoupled from the actual labor market and became increasingly concerned with the activation of the unemployed.57 Indeed, activation was a new element in the employment strategy, dating from 1996, because inactivity was per se seen as a kind of human capital waste. Thus activation was defined as a human capital investment because it avoided the development of a dependency culture and the cost of passivity.58 In Swedish conceptions of efficiency, it is now activation that is understood as being productive.
In the 1990s, unemployment policy as well as social assistance was decentralized, leaving more room for maneuvering by individual officials in the local employment offices and by local governments, which were given the right to demand that unemployed individuals take whatever work they were assigned under the threat of sanctions. Through what was known as the Activation Guarantee from 1999, which stated the government’s responsibility to put individuals to work after 100 days of unemployment, entitlements were made conditional on individual activity.59 Methodologies of employment offices became increasingly dependent on personalized interviews and contracts that aim to make the individuals aware of their shortcomings to develop into more employable characters. Such therapy-like interviews and contracts are a central feature of workfare.60 In this process, the language of welfare and work changed toward ideas of a contract that regulates the relationship between the rights and responsibilities of government and citizen:
Good labor market policies imply a mutual contract of obligation between society and citizen. Society takes on responsibilities toward the individual only to the extent that the individual fulfils his or her responsibilities. Individual responsibility resides in accepting the challenge of developing competence and actively seeking work.61
To the emphasis on the duty to work in the job strategy was added the individual duty to learn and develop competence. Indeed, a government committee charged with incentives problems in social insurance spoke of establishing a culture of work, of breaking with a culture of dependency, and of employment policy as self-help to independent, motivated, responsible individuals.62
It is striking that this language made it into Swedish social democratic discourse in the 1990s without the kind of ideological debate on the philosophical and moral foundations of welfare that was a central part of New Labour’s attempt to create a new social contract. The treacherous nature of this silent process of discursive change is of course that modern activation discourse is deceivingly similar to productivist notions even when both its means and its underlying values differ substantially from the classical postulates of the Swedish Model. Leading Social Democrats say that this new rights versus responsibilities language does not differ significantly from the work ethic that has always informed party ideology and that the problem is not a new emphasis on responsibility. Rather, the party has lost touch with its old notions of duty and obligation; there has been too much talk of security, too much general niceness, and not enough activity. The crux, of course, is that the notion of “active” can cover anything from active labor market policies, “old-style”; to activation, from, as it were, an “old” Swedish notion of welfare; to notions of workfare. From this perspective, “security in change” is a congenial term with an opaque meaning, as is the party’s emphasis in the last decade on welfare policy as an investment intended to bring out everyone’s productive potential.63
While the relationship between the welfare state and processes of commodification and decommodification is complex over time, nevertheless the Third Way marks a significant shift from social democratic traditions around the welfare state and social citizenship. As Sheri Berman points out, historically, the welfare state was important to social democracy as the guardian of society against the effects of capitalism.64 The objects of intervention were the economic and social structures that allow or deprive individuals from exercising their rights, the object of protection of the individual and core societal values. But to contemporary social democracy, the object of welfare state intervention is no longer the economy but the individual.
The language of responsibility is crucial for this shift. Governing the individual duty to work and learn is something fundamentally different from governing the individual right to work and learn. The right to self-development and the duty to improve are not the same thing. “No rights without responsibilities” or “from each according to capacity, to each according to his need” are two very different strategies of reform. In fact, there is a social democratic world of difference between them.