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Are we facing a left-wing socialist comeback in Europe? Will the answer to the challenges and threats that contemporary society seems to want to offer consist in the state taking on greater responsibility for our Western societies?
It might not be so strange if that were the case after 30 years of neoliberalism and privatization. And in that case, it could be a political change that many would see as “conservative”: the state is national and thus “nationalistic”. The state is stable and reliable; it is the institution of institutions. Only the state can guarantee continuity and long-term sustainability. The state needs to be stronger; the state needs to be bigger. We need more of the state (socialism) and less of the market and private ownership.
In a recent article in the Financial Times, “Sweden: a socialist paradise overflowing with billionaires”, Ruchir Sharma, head of Rockefeller Capital Management’s international operations and a columnist in the Financial Times, speculates about a possible future moral and economic revolt against the sharp income disparities that exist in Sweden and against the large number of billions that the country has produced.
Sharma recalls that Sweden in the post-war period was seen as a semi-socialist country with a strong public sector and high taxes on both income and capital. When this economic strategy reached its end in the early 1990s, the country’s politicians quickly turned on their heels and allowed themselves to deregulate the economy and to cut taxes significantly, especially on capital.
“Sweden began to encourage wealth creation after the failure of its post-second world war experiment in unrestrained welfare statism. Heavy taxes were driving celebrities and industrialists out of the country, costing Sweden far more in lost wealth than it raised in revenue. The ensuing financial crises of the early 1990s forced Sweden to rethink its commitment to socialism.”
And it is true that wealth has been created in the 35 years since 1990. It is true that broad groups in Swedish society have become richer (even though households in Sweden are highly indebted). But it is also true that wealth gaps have increased. And you don’t have to be a billionaire to have made money from the fact that taxes on property, inheritance and wealth have been low. Many have become rich by buying homes when they were young and then paying low interest on their loans while the value of the homes has multiplied. Others have become rich by inheriting money from enterprising parents who were able to build successful businesses or enrich themselves through smart real estate deals. And then there are those who never bought a home and who never inherited any money and who now must try to get by month by month.
In times when tariff wars, inflation and unemployment make life more expensive for low- and middle-income earners, reactions against economic inequality are starting to come. And this coincides with international trends where the state and public sector must invest in defense and infrastructure. And if there are then substantial assets to be obtained from an economic elite that has not had to pay such high taxes for its wealth (which has been the case in Sweden), it would be strange if we did not see older ideas about the state, socialism, and income distribution come back on a broad front.
A good example of a current anti-capitalist trend is that Britain is in the process of renationalizing its railways. In Britain, private companies have been able to own and operate railways since the mid-1990s, but now that is to end. When Labor won the 2024 parliamentary elections, they promised, among other things, to nationalize the railways, so it is a pure election promise that they must now fulfill. The idea is to make it easier and more efficient to operate and maintain the railways. It also turned out that private companies had difficulty dealing with the Covid pandemic, which showed that the state has a resilience to unexpected problems that private companies do not.
The fact that there is now a reaction against 35 years of privatizations and liberalizations is also noticeable in Sweden – if we go back there – in the way that the large Social Democratic Party seems to want to make a left turn in economic policy.
When it comes to the view of the nation, defense, immigration and crime, it is obvious that Swedish social democracy has made a right turn. Now at the turn of May-June, the Swedish Social Democrats have had a party congress in Gothenburg and there they have adopted a new party program that expresses a completely new view of migration and nationalism. Now the nation must be defended against external and internal threats. Immigration must be kept tight for a long time. All politics must be structured around the survival of the nation and around the Swedish people’s obvious need for security and safety.
But this obvious nationalism also has a clear left-wing character. For the Social Democrats, the nation seems to be the same as the state. Society is the public sphere. And now that Sweden, after 35 years of deregulation, neoliberalism and open borders, is once again going to focus on its own, it is the state that must guarantee the strength and cohesion of the nation. And of course, it is the state that must equip the defense and organize the expulsion of illegal migrants. It is also the state that must maintain the monopoly on violence and crush the new organized crime. But it is also the state that must guarantee that schools, healthcare and social services work. In the UK, the state must ensure that the railways now work and that the trains run on time. In the Sweden that the Swedish Social Democrats are now talking about, the state must go through sector by sector in society and deal with all the failures that market forces have brought about. And it is about schools, about healthcare and elderly care, but also about infrastructure and a variety of different social services.
Next year is the election in Sweden. Then the question is whether the socialist nationalism of the Social Democrats will be successful. The right-wing parties must of course point out the traditional sins of socialism. Many of those who vote today were not there in the 1980s. They do not remember the collapse of the Soviet Union and they do not remember the economic problems that followed in Europe from high taxes and over-regulated public services. The question now is whether this can become a trend we see around the world, or at least in the EU and the UK. Will the left respond to the challenges of our time by reinventing a kind of socialist nationalism? The multicultural project has in many ways reached the end of the road. Many countries still have extensive immigration, but the arguments about the blessing of multiculturalism are no longer gaining any wider support among the peoples of Europe. Then the left can hijack nationalism to once again start propagating the idea of the state as the savior in times of need and the giver of all good gifts.
That the public sector and the state will get a certain amount of revenge after 35 years of neoliberalism and after the pandemic and the war in Ukraine, we can all accept. The state is supposed to equip our military and take ultimate responsibility for crime prevention and education. But if the state is also going to step in and run businesses, we could have problems. And we could have problems if a socialist mindset that is mostly based on envy has a strong impact.
The idea in the article about the anti-capitalist revolt in Sweden that we started by referring to is that many Swedes will get tired of seeing others own billions while they themselves have difficulty making ends meet. But the problem is that these billionaires have also created wealth and that we will have no wealth to distribute among the population if enterprising people are not allowed to make money from their businesses.
We need more nationalism in Europe and national states will continue to have an important role to play. But we Europeans are not served by any nationalism of a socialist nature.