Sweden's Experiment with Economic Democracy

Economic Democracy: Meaningful, Desirable, Feasible? Author(s): Robin Blackburn Source: Daedalus, Vol. 136, No. 3, On Capitalism & Democracy (Summer, 2007), pp. 36-45 Published by: The MIT Press on behalf of American Academy of Arts & Sciences Stable URL: http://www.jstor.org/stable/20028127 Accessed: 04-04-2018 10:52 UTC

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Robin Blackburn

Economie democracy: meaningful, desirable, feasible ?

JLo some, economic democracy is self-evidently a good thing if it means spreading economic opportunities more

widely, giving workers a greater say in the workplace, and allowing communi ties to participate in the investment de cisions that shape their future. Indeed, a classic argument has it that political democracy - universal suffrage, civic freedoms, and all that is needed to make

them practical and effective - will work better if accompanied by 'social' or 'eco nomic' democracy. Absent the latter, real civic participation will be low and big money will corrupt the political pro cess, especially in complex societies where commercial networks can shape political agendas and the cost of cam paigning is high. While few deny the need to reform the way elections are run and financed - a source of recurrent scandal in nearly

every rich country - another line of thought would challenge the conclu sion that it makes sense to aim for eco

nomic democracy. The very phrase is thought to be a contradiction in terms, or a category mistake. Economic pro cesses are too complex to be governed by votes and electioneering. Govern ments can and must lay down some ba sic ground rules, but, as Friedrich Hay ek showed, they lack the locally specific information required to run complex enterprises effectively, still less to plan the entire economy. On the one hand, consumer needs are too intricate and

changeable ; on the other, the myriad of specific investment opportunities at the local level can never be known at the

planning center. While Hayek's critique of central

planning was in many ways compelling, it failed to acknowledge the extent to

which markets rely on the wider social context in which they are embedded. It also did not demolish the argument that public initiative and collective resources are necessary to meet large-scale and manifest threats.1

Robin Blackburn is Distinguished Visiting Pro

fessor of Historical Studies at the New School for

Social Research. He is the author of "Banking

on Death or Investing in Life : The History and

Future of Pensions" (2002) and "Age Shock: How Finance is Failing Us" (2006).

> 2007 by the American Academy of Arts & Sciences

i I sought to address Hayek's argument in "Fin De Si?cle," in Robin Blackburn, ed., After the Fall : The Failure of Communism and the Future of Socialism (New York: Verso, 1991).

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Votes can be effective if directed at a

few, simple large-scale choices - alterna tive policy packages - on a national or even global scale. Ideally, this political democracy would extend to such ba sic concerns as how best to address cli

mate change or improve public health. In principle, voters would also decide the scope of taxation and of social pro grams. But there is a widespread sense that prevailing power structures and interest groups narrowly constrain ac tual outcomes. Economic democracy

might be a way to allow greater, more effective citizen input.

Jtolitical democracy is based on the principle of one person, one vote. In national politics this principle is easy enough to apply, and one might imagine it playing some role in a more democrat ic global order. But how would the idea of one person, one vote translate to the everyday economic world? When I took the equivalent of Eco

nomics 101 we still used Paul Samuel

son's classic textbook. It opened with the observation that we could think of

markets as a sort of electoral process in which dollars work like votes. When a

consumer makes a purchase, or a busi nessman an investment, their dollars function like votes in favor of what they choose. Aggregated across the economy, these 'votes' steer output in one direc tion or another.

But dollars, unlike votes, are not equal ly distributed among the citizenry. In the postwar period, the heyday of that text book, such an objection seemed weaker because both wealth and earnings had undergone a 'great compression.' CEOs did not like to be seen taking too much out for themselves and, instead, show ered their employees with benefits. We all know that things stand very dif

ferently today. Most of the gains since

1980 have been garnered by the rich and the superrich - not the top 1 percent of households, but the top 0.1 percent and 0.01 percent. If we take residential prop erty out of the equation, the concentra tion of wealth is even greater: the top 1 percent own half of all corporate securi ties and money-market bonds, while half of U.S. households own no productive property at all.2

Such plutocracy is especially difficult to justify when it derives, as it now so often does, from chief executives being extravagantly rewarded for indifferent or even negative results, or from back dated options, or from monopolistic forms of financial intermediation. Eliot

Spitzer, the New York attorney general, revealed systematic abuse of the latter sort in investment banking, fund man agement, and insurance in the years 2002 - 2006. These investigations led a Republican Senator, Peter Fitzgerald of Illinois, to describe the U.S. financial

services industry as "the world's largest skimming organization."3 Basically, the corporate-securities and

money-market instruments not owned by the very rich are held by institutions, supposedly in the interests of millions of middle-class holders of 40i(k)s or mem bers of employer-sponsored pension and health plans. This institutional wealth, however, constitutes 'grey capital,' since the property rights and privileges it con fers are very unclear. It gives leverage not to the beneficiaries, but to financial and

Economie democracy : meaningful, desirable, feasible ?

2 Thomas Picketty and Emmanuel Saez, "In come Inequality in the United States, 1913 - 1998," The Quarterly Journal of Economics 118 (1) (2003) ; G?rard Dum?nil and Dominique Levy, "Class and Income in the U.S.," New Left Review 30 (November - December 2004) : 105 -133,112.

3 John Plender, "Broken Trust," Financial Times, November 21, 2003.

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Robin Blackburn on

capitalism & democ racy

corporate executives whom the benefi ciaries have no way of controlling.4 Moreover, the classic function of cap

ital markets and financial institutions

was to direct capital to where it could most profitably be invested. In the era of financialization they have discovered another vocation : to sustain the mo

mentum of sales by reorganizing and extending credit networks. Large com panies like General Electric and Ford now have profitable finance arms, which lend money or devise leasehold arrange

ments in order to facilitate product sales. For their part, the swanky investment

banks display great interest in mortgages and consumer debt - especially those of the risky subprime variety because they attract the best rates. They purchase huge amounts of this debt, repackage it in credit derivatives, slice it up into ten tranches according to their degree of risk, hedge each tranche according to a different formula, and sell on the

resulting collateralized debt obligation (CDO) to pension and mutual funds. This practice has been very profitable,

but in a changed business climate the magic could evaporate.5 Instead of help ing to sustain demand, it could squeeze it remorselessly, as interest rates rise and bad debts inflict losses on the holders

of the CDOs. Regrettably, elected gov ernments have only deregulated finan cial institutions to allow the party to continue.6

JLhe financial inflation of demand is

essentially a way of putting purchasing power into the hands of consumers without redistributing wealth toward them. In addition to challenging the in flation of demand (and the way it masks the growing inequality in wealth), we

must also ask ourselves how much we control what we demand and how that demand is met.

To a certain extent the consumer is

sovereign, since rivalrous corporations must attempt to ingratiate themselves more successfully with consumers. But to represent this consumer-oriented commercial complex as economic de

mocracy would be very much a step too far. Naomi Klein's No Logo and Joel Bakan's The Corporation furnished vivid accounts of corporate marketing to con dition our desires. As Klein and others

revealed, an insidious barrage of adver tising shapes consumers' views of what they want and need - beginning at a young age. Children's peer-group rival ries direct taste, and their 'pester power' mobilizes adult spending. Even those with miniscule incomes on the global periphery of capitalist exchanges are entangled in this consumer logic.

This is not to say that the consumer's needs are entirely unreal. The need for food, clothing, and shelter are certainly real. But they can be met in a myriad of different ways, each of which will reflect cultural taboos or socially instilled ideals of what is satisfying and appropriate.

Consumers also have very little say over how demand is met. We can trace

this phenomenon back to the origins of capitalism in the sixteenth and seven teenth centuries. Commercialized agri culture had put money in the hands of farmers, landlords, merchants, profes

4 Robin Blackburn, Banking on Death or Invest ing in Life : The History and Future of Pensions (London : Verso, 2002).

5 Michael Gibson, "Understanding the Risks of Synthetic CDOs," Federal Reserve Bank, Work ing Paper No. 36, 2004.

6 Andrew Glyn, Capitalism Unleashed : Finance, Globalization and Welfare (Oxford: Oxford Uni versity Press, 2006) ; Robin Blackburn, "Fi

nance and the Fourth Dimension," New Left Review 39 (May-June 2006) : 39 - 72.

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sionals, and even day laborers, enabling them to buy exotic luxuries like sugar, tobacco, spices, dyestuffs, cotton, and coffee. But it was enterprising merchants (grocers) who decided to meet that de

mand by organizing plantations staffed with indentured servants and slaves.

As Thomas Holt observed, the English housewife buying a packet of sugar by means of her penny-votes was helping to set in motion a gigantic new social order based on the antithesis of individ

ual choice and freedom.7 If you like, a certain type of economic democracy was breeding another type of economic bondage and tyranny. We continue to live in a world where

the apparently innocent acts of the Western consumer are linked to sweat

shops and the depletion of scarce vital resources. The difficulty with dollar power is not only that it is very unequal ly distributed but also that it only con fers a second-order say, leaving the cor porations and capital markets to make most of the crucial decisions about how demand will be met. Governments can

regulate, but they are often too remote, too ignorant, and too clumsy to make any difference. Social movements can agitate, but their boycotts tend to have only a momentary impact. Corpora tions are flexible and have staying pow er; public concern is fickle. It can tire of activist stridency and succumb to the determined wooing of any apparently contrite corporation.

Jrlow can we construct a responsible economic democracy? How can more

participate in the making of economic decisions? How can we distribute eco

nomic resources more fairly and thrifti ly? While we will never be able to con struct institutions that guarantee ethical ways of producing and consuming, some arrangements may facilitate responsible behavior and social justice, just as too many of today's institutions do the op posite. In the following sections, I will present some negative and a few posi tive examples. The nonstatist socialist Left of the

twentieth century - especially of the lat ter half- was drawn to the idea of work

ers' self-management. When Tito's Yu goslavia broke with Stalin, it turned to this concept as an alternative to a com

mand economy. For a while it worked rather well, and by the late 1960s the country was beginning to bring a mea sure of prosperity to most regions. But Yugoslavia remained a one-party regime, and even though it exercised a compara tively mild dictatorship, this political sit uation hobbled democracy in the enter prises as much as anywhere else.

A further problem was that even where managements were genuinely responsive to the workforce, what of those workers who were not employed at all, or who were employed by other enterprises ? This problem became acute in the 1970s and 1980s when sig nificant unemployment surfaced. Enter prise managements were quite solicitous of the interests of core workers, but not

of those who were casually employed or unemployed.

And if two enterprises had different ideas about regional priorities, would the company with the most employees have to prevail? Obviously, the absence of real democracy in the wider society meant there was no legitimate arbitra tor. But even moves toward a little more

democracy did not help ; indeed, it was

Economie democracy : meaningful, desirable, feasible ?

7 Thomas Holt, "Marking Race, Race Making and the Writing of History," American Historical Review 100 (1) (February 1995) : 1 - 21, 7. See also Robin Blackburn, The Making of New World Slav ery : From the Baroque to the Modern, 1492 -1800 (New York: Verso, 1997).

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Robin Blackburn on

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accompanied by aggravated nationalism in the Federation's constituent repub lics.

Because these self-management struc tures had such limited power, it would be absurd to hold them responsible for the tragedy that unfolded in the 1990s. But what transpired demonstrated that fairly positive microgovernance arrange

ments do not necessarily add up to a good solution to macroeconomic prob lems, which included, in this case, infla

tion, regional inequality, and unemploy ment.8

The German system of mitbestimmung, or comanagement, whereby workers are represented on the second of a two-tier

management board, presents similar difficulties. With this system Germany overtook the United States, in 2005, to

become the world's largest exporter. But Germany's other indicators of mac roeconomic well-being, especially a stubbornly high unemployment rate of around 10 percent for the last two de cades, tell a less inspiring story.

Another version of enterprise-level economic democracy is employee share ownership plans (ESOPS). One can make a case for employees holding some stock in their employer. Such ownership

might give them some channels of infor mation and the prospect of a share of the profits. But there are also big risks.

When Enron collapsed in 2001, its em ployees held, on average, about half of their 40i(k) savings in the form of En ron shares. Therefore, they lost not only their jobs but also half of their savings. Although the unhealthy nature of such

concentrated risk has led to greater cau tion, many U.S. employees still hold too

much of their 40i(k) savings - over a

quarter on average - in their employer's stock. Employee stock ownership has been high at a number of troubled cor porations - such as United Airlines - where employees were offered stock in exchange for wage or benefit cutbacks. This example points to another com mon problem : employers often find it easier to issue stock than to stump up cash when contributing to employee savings plans. Neither does possession of such cor

porate securities give employees added leverage. In fact, it sometimes seems to increase their exposure to employers' blackmail: 'Abandon your benefits or see your job and savings destroyed.' Fur thermore, the modern corporation is so vulnerable to the capital markets that small-scale individual shareholding al ready confers only what are known on

Wall Street as 'subordinated' rights of ownership. Otherwise put, individual shareholders have little clout: they are at the end of the line of those with a claim

over a company's assets.

JLhe most successful example of em ployee self-ownership and self-manage ment is the Mondragon Cooperative Corporation, based in the Basque coun try of Spain. Mondragon grew from eight cooperatives in i960, employing 395 worker-members, to ninety-two cooperatives in 1980, employing over 18,000 worker-members. By 2004, the group was Spain's seventh-largest cor porate entity, with combined assets of 18.6 billion euros and 70,000 worker

members. The group produces electri cal goods, automobile components, ma chine tools, and furniture. It has a con struction division and a retail chain, and

maintains important research and train ing programs. Crucial to the post-1980 growth and

diversification of the group has been a

8 Robin Blackburn, "The Break-up of Yugo slavia," New Left Review 199 (May-June 1993): 100-119.

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bank, the Caja Laboral Popular, which supplies overall financial coordination and planning, and an Enterprise Board, which guides each new start-up. By 1995, Caja had 1,380 employees and was a ma jor force in the Basque region.

In the early days, the small size of the group, and the shared Basque and Cath olic background of most members, eased the tasks of governance. Once the group grew larger and more diversified, howev er, finance made a crucial contribution

to its expansion and coherence, exerting a certain discipline on each of its con stituent enterprises. In the late 1980s, overall leadership of the entire group was vested in a Cooperative Congress, representing every constituent coopera tive, and in an elected Standing Congress Committee.9 Mondragon is still only an island of

community collectivism within a capi talist context, but it is a more plausible stepping-stone toward economic de

mocracy than other variants of self-own ership or self-management. Mondragon employee-members have some concen tration of risk, but the now quite diver sified nature of the group's assets and activities has served to reduce this. The

ability of Mondragon to sustain growth, to defend an egalitarian pay structure, and to make provision for the education al and cultural needs of its members,

notwithstanding the pressures of global ization, is certainly an achievement and belies the determinism of 'flat world'

prophets like Thomas Friedman. But Mondragon, framed by the wider

Spanish and global context, is at best an incomplete recipe for a whole society.

Any strategy for a more democratic eco nomic order would still have to reckon

with the corporate organization of the modern capitalist economy, and the greatly unequal distribution of produc tive wealth.

other path toward greater collective participation in economic decision mak ing stresses the potential role of regional or municipal government. Dynamic lo cal economies often display the benefits of cooperation among local govern ments, universities, and businesses. On the one hand, enterprises can count on social inputs that would have been too costly for any given concern to have paid for by itself, while, on the other, such enterprises know they must ensure that the whole community shares in their success. China's Township and Village Enterprises draw on such logic and have made a large contribution to the coun try's overall advance. But, often, much depends on a local notable and his con nections, with little scope for genuinely democratic feedback.10

The Brazilian city of Porto Alegre, and its attempt to develop 'popular budgets,' offers a different model of local mobi lization. In the 1990s the Brazilian Work ers Party (pt) won the city's election and decided on a model of extended civ

ic participation that would begin rather than end with their assumption of office.

While the PT had its own ideas about

how the municipal budget should be raised and spent, it handed detailed de liberation and implementation over to

A?

Economie democracy : meaningful, desirable, feasible ?

9 See Robert Oakeshott, Jobs and Fairness : The Logic and Experience of Employee Ownership (Nor wich : Michael Russell, 2000), 448 - 493 ; and the website of the Mondragon Cooperative Corporation.

?o Jean Chun Oi, Rural China Takes Off: Institu tional Foundations of Economic Reform (Berkeley :

University of California Press, 1999) ; Angus Maddison, China's Economic Performance in the Long Run (Paris: OECD, 1998); Chun Lin, The Transformation of Chinese Socialism (Durham N.C. : Duke University Press, 2006), 106 -107.

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Robin Blackburn on

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assemblies in every district where citi zens could voice their own priorities and concerns. The system was so popular that it even survived the 2005 elections

in which the PT lost its majority on the municipal council.

Today about fifty thousand people in a city of 1.5 million play an active role in the budget process. Although this num ber represents less than a tenth of the adult population, it still reflects greater civic participation than what one would find in most states, where only a third or a half of the population even vote, let alone play a direct role in shaping collec tive decisions.

It is worth noting that participation is higher in the city's small, manageable neighborhoods than in its large, anony mous central district. The system's real limitation, however, stems from the con straints on the municipal government's ability to raise revenues. Even though local authorities often aim to stimulate

local production, they are revenue-con suming rather than revenue-producing entities. If it is to have real substance,

economic democracy should be about organizing wealth production as well as the disposal of the wider economic sur plus.11

V_yne of the most innovative attempts to construct an economic democracy in and against a developed capitalist con text was - and to some extent still is - the Swedish welfare state, or the 'Swed ish Home.' The architects of this system, Gosta Rehn and Rudolf Meidner, were economists for the LO, Sweden's main trade-union federation. Influenced by John Maynard Keynes and James Meade, the two men understood that they would

need to think through welfare and cor porate finance together if Sweden was to maintain high employment levels and avoid inflation. Remarkably, their model succeeded in delivering on both fronts for a long time. The same cannot be said about other European welfare states, where monetary stability was achieved at the expense of a long and debilitating toleration of high unemployment levels,

which affected younger workers, older workers, and ethnic minorities the most.

The Swedish welfare state also guaran teed its citizens secondary pensions and health care. This policy is a significant departure from the more prevalent for mula, which offers private corporations tax incentives to take on the task of sup

plying social insurance to their employ ees. Corporate welfare has proved to be a trap for employees, depriving them of their promised benefits and threaten ing their jobs, as once-famous compa nies plunge into bankruptcy and entire industries - steel, airlines, automobile, and t?l?coms - stagger under the bur den of pension and health entitlements. The corporate pensions crunch has de stroyed many good jobs. In their place are now Mcjobs - low-wage, insecure service employment.12 The cornerstone of the Swedish mod

el was the annual national wage-bar gaining round. This device allowed for a debate on social priorities while safe guarding high levels of employment. High employment rates are, of course, positive, but they can result in inflation when the bargaining power of key work ers is strong and their wage demands high. The wage round ensured a degree of restraint in wage demands from the best-placed workers in return for new

il Marion Gret and Yves Sintomer, Porto Ale gre : L'espoir d'une autre d?mocratie (Paris : n.p., 2002).

12 I document this process in Robin Blackburn, Age Shock : How Finance Is Failing Us (New York : Verso, 2006), chap. 3.

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social guarantees. But this still left the problem of well-placed corporations garnering superprofits because their employees had moderated their claims.

Meidner's response to this issue set the scene for an ambitious attempt to bring about a new dimension of economic de

mocracy, one which did not seek to sup press the market but rather to democra tize the investment process. Meidner's proposed resolution was

to establish strategic social funds - 'wage-earner funds.' These funds would

be financed by a 'share levy' on the large corporations that were going to bene fit from the wage-bargaining round. In other words, to prevent the excess profits from going solely to sharehold ers, the corporations would have to do nate shares equivalent to a fifth of their annual profits to a regional network of wage-earner funds. A portion of these funds would go to an enterprise-level body run by the employees, who would thereby acquire a growing stake in their employer. But the bulk of the funds would be channeled to the regional net work, representing local communities and trade unions. The shares acquired by the funds would not be sold but held to generate future revenue. The funds

would also be able to influence the large corporations by voting their stock at AGMs. In exchange, the corporations would gain from publicly provided coor dination and services, and a healthy and well-educated workforce.

The Meidner plan was a response to a specific challenge, but it is not difficult to see that it might have given a novel twist to the classic left-wing dream of an equal and self-governing society, in which workers by hand and by brain would assume the leadership of socie ty. Unfortunately, Sweden did not fully adopt the plan, even though the LO en dorsed it in 1976. Indeed, the federation's

normally stolid ranks greeted its passage at that year's conference with cheers and rounds of the "Internationale." The

membership of the Social Democratic Party was also enthusiastic.

The party leadership, however, did not share Meidner's vision, and did a poor job of commending it to the Swed ish people. Meidner's plan was very rad ical ; they were not. In hindsight, aspects of the plan were also ill-advised. The management committee of the funds should, perhaps, have been solely re sponsible to all the citizens of a locali ty, with no special position for trade unions. The proposed structure aroused fears, even among trade unionists, of excessive concentration of power in the hands of trade-union leaders. The pri vately owned media ran quite a success ful campaign focusing on this issue. But the modifications made by the Social Democratic leaders went in the wrong direction and handed control of the

funds to financial technocrats. Oppo nents of the plan also played up the fact that private-sector workers would get ahead of public-sector employees. When the social funds were eventual

ly set up in 1982, the corporate contribu tions were quite modest, and no longer furnished a means whereby citizens could channel future revenues to social

objectives or regional growth.13 More over, Sweden faced a severe financial

crisis in the early 1990s, and the Rehn/

Economie democracy : meaningful, desirable, feasible ?

13 The best overall account of Meidner's strat egy is found in Jonas Pontusson, The Limits of Social Democracy (Ithaca, N.Y. : Cornell Univer sity Press, 1992). The original plan for wage earner funds is set out in Rudolf Meidner, Em ployee Investment Funds (London: Allen & Un win, 1978). For an account of the struggles over its implementation see Jonas Pontusson, "Swe den : After the Golden Age," in Perry Anderson and Patrick Camiller, eds., Mapping the West Eu ropean Left (London : Verso, 1994), 23 - 54.

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Robin Blackburn on

capitalism & democ racy

Meidner model did not emerge un scathed. Rehn and Meidner had stepped down long before, and their advice had not been heeded anyway. The social funds, by this time, controlled 7 percent of the shares quoted on the Swedish stock exchange. They were wound up, and the proceeds used to establish a string of scientific research institutes.

But even in its diluted form, the Meid

ner plan helped propel Sweden to the forefront of the knowledge-based econo

my. Since Meidner, however, the corpo rate contribution he sought to raise has been in decline, whether in the shape of taxes or employer-sponsored health and pension plans. Increasingly, we live in societies resembling the French ancien regime before 1789, when the wealth of the feudal aristocracy was largely ex empt from tax - now it is the holdings of the corporate millionaires and billion aires. Other signs reminiscent of the age of Louis XVI include the spirit of apr?s nous le deluge, the reliance on lotteries, and the emergence of modern variants of 'tax farming' - laws that oblige citi zens to pay their taxes (pension contri butions) to commercial fund managers rather than to an accountable public body.

But the taboo on effective taxation of

corporate wealth is the most crucial sign of a reign of privilege. Meidner's share levy, unlike so many modern taxes, was extraordinarily difficult to evade. Those who stowed their shares in a tax haven

would not escape the measure. On the other hand, it was not at all punitive. Unlike traditional corporate taxation, it did not subtract from the cash flow or

resources that the enterprise needed for investment. It modestly diluted share holder wealth without weakening the corporation as a productive concern.

The wage-earner fund proposal re flected the thinking of an earlier gener

ation. Meidner was not born in Sweden

but arrived there as a refugee from Nazi Germany in 1934. The notion that work ers and citizens should together tame the corporations by acquiring a steadily growing and across-the-board collective ownership was an echo of ideas - nota bly that of sachwertfassung ('realization of value') - that Meidner imbibed in his youth as ajuso (Young Socialist) from the debates of German and Austrian So cial Democratic economists, like Rudolf Hilferding and Karl Polanyi. With his strong sense of the practi

cal workings of the market economy, Meidner devised an economic democ racy defined by the redistribution of capital rather than, as with most Social Democrats, simply the redistribution of income. On the other hand, his ap proach did not concentrate power or ownership in the central state but dif fused it across a regional network of social funds, responsible to their local communities. From its very origins the scheme was designed to maintain em ployment levels and assure macroeco nomic balances. According to a recent assessment, even the truncated version of the scheme had this effect.14 Thus

Meidner avoided the reproach directed at most locally focused projects (e.g.,

Mondragon, Yugoslav self-manage ment) : that they have been good for par ticular working collectives or communi ties, but not for the general interest.

Even after three or four decades,

Swedish welfare remains comparative ly generous, and Swedish unemploy

ment is only a little over a half of the core EU rate. Swedish parents have ac

14 For a very positive assessment of the prac tical effect of Meidner's ideas, see Philip Why

man, "Post Keynesianism, Socialisation of In vestment and Swedish Wage Earner Funds," Cambridge Journal of Economics 30 (1) (January 2006): 49-68.

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cess to better child care, and Swedish

women have better-paying and more flexible jobs, than are to be found in oth er advanced countries. But Sweden no

longer has a reserve to meet the rising costs of an aging society. Following the stand-off of the early 1980s, the leaders of Swedish Social Democracy began to see Meidner as an embarrassment, a rel ic of a bygone age. He was consigned to the shadows, and no part of his thinking was more disdained than the wage-earn er funds.

It is now a long time since govern ments of the Left have dared to tackle

the corporations and ask whether their owners might be obliged to contribute more to the wider society, without which their own profits would be im possible. Yet without such an attempt how can we check escalating inequali ty or finance pressing public expendi tures? Meidner's attempt to safeguard the 'Swedish home' has been the most

far-sighted attempt to think through the 'financial democracy' needed to un derpin 'economic democracy,' under stood as encompassing a more egalitar ian distribution of property, contribut ing to more generous social outlays, and restoring a degree of social control to an accumulation process now gripped by a heedless and destructive consum erism.15

Economie democracy : meaningful, desirable, feasible ?

15 I outline the case for a Meidner-style pen sion regime at the EU level in "Capital and So cial Europe," New Left Review 34 (July - August 2005): 87-114.

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