SWEDEN TODAY

Evening Post, Volume CXXIII, Issue 69, 23 March 1937, Page 19

SWEDEN TODAY

SOCIALISED STATE

NATIONALISATION ENDED

LIMITS TO CONTROL

Sweden today is the most prosperous country in Europe. I found there an air of tremendous" well-being and a mental calmness. arising from a quiet pleasure at a position economically so much superior to that of its neighbours and also from a sense, of isolation from the turmoils of Europe and the threats of war, writes Gordon Murray in the "Manchester Guardian."

Under Hr. Harisson's Coalition. Government of Social Democrats and the Farmers' Party Sweden has made a more rapid recovery f-rom the world depression than any other industrial State. Yet at the end of September, 1932, when Hr. Albin Hansson first took over the Government, 25 per cent, of the trade unionists were, registered as unemployed. The permanent Unemployment Commission had failed hopelessly in coping with so severe a problem through the normal system of oublic relief works. Both on economic and on social grounds, therefore, Hr. Wigforss, the Minister of Finance,: introduced into his Budget of January, 1933. a policy of much more elaborate State expenditure to combat the crisis. The immediate additional expenditure of 160,000,000 kronor (over £8,000,000) meant seriously "underbalancing" the Budget for 1933-34. Yet this process of spending its way out of a depression was continued by the Government in the" next Budget. SPENDING AWAY DEPRESSION. , Hr. Wigforss was at the time condemned by the Opposition for his extravagance. But, as he pointed out to me, the. previous Government ,of the People's Party (the Liberals) had considerably overspent" during the two years before he took office in order to relieve unemployment, though their expenditure had come out of. the accumulated funds of State enterprises, in particular of.' the • liquor monopoly. "Therefore," he continued, "there was no radical breach of.policy when the Social Democratic Government decided to spend out of borrowed funds. Though the principles on which _ the spending was advocated differed,' the policy of keeping up -the purchasing power of the- agricultural community and of expenditure on public works had already begun." By the beginning of 1935 the fruits of returning prosperity enabled Hr. Wigforss to "overbalance" his Budget, which process he has since extended as surpluses have become more abundant. In so doing he is fulfilling the second part of his original programme of using the surpluses of good times to replenish the funds expended on combating the crisis. • In his latest Budget of January 12, 1937, the Finance Minister has preferred debt repayment to relieving the taxpayers, "in order to make the State better equipped financially to meet a new crisis."-. In prosperity Hr. Wigforss's policy is-as orthodox as it was; judged unorthodox- during depression. INCREASED." CONFIDENCE. Unfortunately'!'', it'is. not possible to determine, finally, to .what extent the budgetary, policy ..induced prosperity. Government expenditure^ took-the form of; encouraging.'house-building, erecting public works, and subsidising private enterprises. ■ But the full impact of this policy was-delayed by- a great building strike which started in April, 1933, and lasted for-the.rest : of the year. Already by the- middle of 1933 the recovery in-the: export trade had begun. By June the Riksbank succeeded in pegging the krona'to "sterling, and a rapid expansion of exports followed. In September, 1936, industrial product tion reached a level 35 per cent, above that prevailing before the depression, and unemployment dropped to 9.1 per cent. amongst trade, unionists. The Social Democratic Party deserved much and .received all of the credit^at -last September's General Election, when. Hr. Hansson obtained a great vote of confidence. His party secured nearly 49 per cent, of the seats in the Lower House apart from those held by its allies of. the Farmers' Party. Last month, after several weeks spent in studying Swedish conditions, I had the privilege of being granted an interview by the Prime Minister. He is known ' affectionately throughout Sweden/as\ "Per !Albin," and occupies today a- position;, of national rather than>party. leadership. As I entered he was".looking through .the window over an inspiring. view of that modern symbol .'/•of V. Swedish architectural achievement, the great tower of the Town, Hall of Stockholm. "I am convinced,"-he told me, "that if the Government had not undertaken f a;; campaign against unemployment the country-would still have been in a condition.of crisis. Its aim was to distribute incomes more widely, and so to increase purchasing power. Since the beginning of the crisis the State has spent nearly ( 1,000,000,000 kronor (over v £ 50,000,000) ■ on" assisting . public schemes -and; private ..'concerns. Now there is little unemployment, about ;25,000,' chiefly, in:the timber industry, as a result mainly, of great rationalisa--,tion. Though there are still unsatis-factory-areas.'the Government will con-, •tinue. its. efforts until even these fsles of .unemployment disappear."".-, -On'the subject 6i nationalisation the Prime, Minister first enumerated ' the '"number' of State enterprises.. to,..illusi trate the extent of its- scope, before hetook office. He-,then, carefully, .emphasised that in all its enterprises the State's chief-object was-fiscal; "There also exist many concerns in which the State and' private,enterprise work together, in, co-operation. For example, .the State owns half the' shares in some' iron* mines ih!'the extreme north, and has the right to take the whole of them if it wishes." •■ •'» - '• A' COMPROMISE. •■• When-I asked him \vhat he thought of such intermediate positions arid whether they represented an ideal middle way .between" capitalism and Socialism,, the Prime Minister replied: "They are compromises and are not, therefore, final solutions. For the future the State will have to consider an increase in the organised control of its connections with private owners, and will have to expand its share. But these changes will occur in the natural course of events. My Government will not force private enterprises to become State institutions. There will have to exist economic reasons before any change is made. Nationalisation will not come on any theoretical ground of principle. My programme, is one of social reform for- the present rather than socialisation. Our aim is above all to obtain a better life for the people in safety and security by whatever means these things may be obtained.

"Liberals and Conservatives also agree that the State must take a greater part in industrial organisation, though they perhaps wish this to be done by slower stages. An English •work,' 'The Next Five "Years," seems to me to represent a happy compromise for that period of time in Sweden. In economic life there: must always be change and development. ■

"I find that I can work as Prime Minister with Conservatives and Socia-

lists who have the common interests of the whole nation at heart, In this sense I believe that all Governments of democratic countries should try to be National Governments." ORIGINS OF GOVERNMENT ENTERPRISES. The State enterprises of Sweden can be seen in their true perspective only against the vast background of private industry. There are State power plants, State railways, State monopolies of tobacco and alcohol, a State timber board, a national central bank, and the ordinary system of posts and telegraphs; but in no quarter is there any expectation of Government encroachment into any new sphere of the private ownership of production. Both the presidents of the Board-of Swedish Industries and the Federation of Swedish Trade Unions expressed j the frank opinion that any nationalisation of industry does not come within the sphere of practical politics. How, ■then, did the present State enterprises come into- existence if they do not represent the beginning of a slow but steady process of nationalisation? ■

The answer is'to be found in an examination' of the geography of Sweden. It is a vast country, nearly the size of Germany, but inhabited by only 6,000,000 people, whose forefathers lived on the coastal areas for the most part and began to occupy the interior only in recent times. Until late in the last century Sweden was still undergoing a process of "internal colonisation. The great iron ore deposits in the province of Vasterbptten were discovered only at a much later period, within the las.t twenty years.

TOWER DISTRIBUTION SHARED.

The opening up of so much of the interior of Sweden in recent times has coincided with the generally developed conception of the duties of the State and with. a more fixed sense of property 'rights. It is significant that nearly all the State forests are in the north, where colonisation has been most recent. Although' 38 per cent, of the timber area is in public hands this accounts for only 15 per cent, of its value. Again, in the case of the State power plants, their establishment has arisen from ■ developing a natural legacy. The Royal Board of Waterfalls has its origin in the age-long rights of the Crown.'to fishing interests in the waters, which in turn gave it control over much of the water-power now used to generate electricity. Even so, the State, is responsible for only, onethird of the total .pow.er production of the country. Today there exists -that curious feature of the distribution.of electricity known as the Swedish system, in which the-State, communal authorities, . and private concerns are combined for certain requirements. ■

\ Naturally from the possession of r much electric power and certain land '. rights it hasbeen the task of the Gov- ; ernment to develop the railways, which have opened: up the country, s But the only important instances of . definite efforts to acquire State con- , trol at the expense of private interests ; have been in the establishment of . State monopolies of liquor and to--1 bacco. In the first case the motive ! was social'and moral, in1 the second it i was fiscal. The. tobacco, monopoly : arose from the desire of the Conservative Government during the war- to - find the money with which to start a - scheme of old age pensions. However '■ much nationalisation still survives on 1 the programme of the Social Demo- ' cratic Party, in practice it has tried !; to increase State ownership in only • two directions. • At the General Election of 1932 the Social Democrats asked for a mandate' to acquire petrol , and coffee monopolies. They made it clear that their object was strictly fiscal: to obtain money to increase the ■ old age pensions and to/staf.t a State \ unemployment insurance. scheme. . They did not .get a. complete majority , then, and now appear to rely on I heavier taxes for increasing revenues. HARMONIOUS LABOUR • !•' RELATIONS. ; It is significant that any increase in ; State control would appear to extend Ito the realm of distribution rather : .than to. that of production. The high \ state of efficiency of Swedish industry, ! its adaptability, and its capacity to pay ! high wages, owing to great rationalisa- , tion, appear to have justified its pre- | sent ownership in' the eyes of most . Swedes. An, increasing harmony is | noticeable in the relations between ; capital and labour. Hr. Lindberg, the '. president of 'the Federation of Trade , Unions, mentioned as a proof of this . that wage agreements were renewed last autumn without the usual advance ■ notice of termination. The strength of j the labour unions helped to keep up wages during the crisis, and during ; the last four years there has been a ; rise of. 6 per cent, in the already high | standard of real wages, though this ■ applies much more to the ■ home-con- ■ sumption industries than to those in • the export, trade. AVOIDING A SLUMP. At present Swedish industrialists are endeavouring to check the development of boom conditions. They have ■ avoided expanding their factories on ■ advances from the banks, and those ■ who were almost in -the hands of the bankers during the crisis have paid off their overdrafts and liquidated their debts* before declaring dividends. The S.K.F. (the Swedish Ball Bearing Company) has even arranged to pay off some of its Swedish shareholders this year out of its record profits. Swedes point out that their conservative policy ; of building up reserves rather than declaring high dividends has not led to the great appreciation in their 1 shares which has taken place in those .of .similar British firms. Even in 1929 only 77 per cent, of the profits of industry were distributed in dividends, whereas in 1932 the proportion was 90 per cent. Moreover, speculation' has : been largely checked by the Bank Act of June, 1933, which severely curtails ' the right of the private banks to lend '■ against shares. For instance, no ad- . vance may be made against the shares •of a which deals in shares. LITTLE PLANNING. Apart from the attempts to keep their positions as liquid as possible and from the check on speculation, there is -■ little ■ formal planning in ■Swedish industry.. No attempt has been made" to' regulate an industry after the-fashion-of the Spindles Board in the cotton trade of this country, nor is the location of industry in certain areas on social grounds apparently contemplated. But the results of some form of reorganisation and reintegration of industry are desired. For example, in a report the Unemployment Commission stressed the need for co-ordination between -various authorities, and criticised, for instance, the mistake of isolating tariff policy from that of the Riksbank. There has thus grown up a desire to establish a State institute .for business and industrial research; 1937 will see this desire fulfilled. The institute will render available to all the significance of various trends, such as the fact that Sweden's timber exports must fall by a third within the next five years. Whether the dissemination of authoritative information will lead to the conscious planning of Swedish industry is difficult to predict.