Gunnar Myrdal and Sweden's Welfare Policies

Gunnar Myrdal and Sweden's Welfare Policies
Exploring Myrdal's contributions to the welfare state
Alfredo Ascanio (askain)
Published 2009-07-17 16:55 (KST)

Gunnar Myrdal founded and directed the Institute for International Economic Studies in Stockholm. He is one of the world's leading social scientists, and is above all an economist.

This Swedish economist has given great importance to social reforms.

In Sweden, for instance, huge social reforms were instituted at a steady and, in fact, accelerating pace. It's hard to develop when there isn’t enough work, with a major program of health and social insurance.

Myrdal was fascinated to discover that over the ages, the great world religions and the grand philosophies attached to these religions have all been egalitarian in principle and thus endorsed the fundamental value of modern social policy.

Why and how did it happen, that this shining idealistic vision of the dignity of the individual human being, of his basic right to equality of opportunity and also his right to assistance when in need, developed so early and in every corner of the world? And how did it survive so many centuries of blatant inequality and oppression?

These two questions were always present in articles, essays and books.

Although it is not easy to find answers to these questions, Gunnar Myrdal said that the conditions for an egalitarian social policy were gradually created when people were granted universal suffrage and labor organizations were strengthened.

And that is precisely what seems to be happening in US with the new President Obama.

Even more than that, political parties are now increasingly active in proposing improvements including a new pension system. Mr. Obama has done a better job of selling his package, and had worked harder at making sure that Republicans were included in the process and thus making it more difficult for them to oppose his plans.

Sweden, of course, is an extreme case. But Myrdal sees much the same socio-political mechanism at work in the US when the Republican Party, under Eisenhower, did not attempt to reverse the reforms carried out by preceding Democratic regimes, although in various respects, these programs had been fought by the majority of Republicans in Congress, together with the non-liberal Democrats from the South. Instead, the Republican Administration continued the same policies in a cautious way.

The Nixon Administration certainly did not indulge in President Johnson’s exuberant rhetoric about the "unconditional war on poverty" and the creation of the "Great Society". Satisfying the peculiar American quest for stilted eloquence, President Nixon competed by promising a "Second American Revolution".

But at first, Nixon actually liquidated little of what had left from the Johnson regime. Nevertheless, the American nation will again find its way to imperatively necessary social reforms.

To summarize, as far as the development countries are concerned, Gurnard saw that the welfare state as more than an achieved situation.

Dynamically, It has become an almost immutable trend. Its further development can be slowed down for a time and occasionally even reversed.

But alter such a stop it can be expected to continue its.course.By doing so, whatever struggles there are about specific items of reform, one of the results of the development is a broad national valuation consensus, though in specific cases such a consensus is first arrived at when a reform is already instituted.

Of course economists traditionally came to assume a conflict between economic growth and egalitarian reforms. They took it for granted that a price had to be paid for reforms in terms of lower productivity of the national economy.

The problem is as follows: how the savings ratio, labor input, and labor efficiency react to different degrees of equality in the distribution of income and wealth.

The reforms were regularly argued simply in terms of achieving greater social justice.

Only in more developed welfare states, such as Sweden, Denmark and Finland, the idea emerged that welfare reforms, instead of being costly for a society, were actually laying the basis for a more steady and rapid economic growth.

A very important element in the development of social reforms, particularly in Sweden from the 1930's onward, was that the reforms became increasingly directed toward the welfare of the family and children.

Such reforms could be advocated in terms of being "preventive" or "prophylactic". Thus, saving the individual and society from future costs and increasing future productivity. Such arguments are most easily applied to reforms in the fields of housing, nutrition, and more broadly, health and education. This is because income redistribution reforms protecting the living standards of families with children and, in particular, underprivileged families, can also have great societal benefits.

Indeed, even old-age pensions and other policies to provide for the aged can be defended from the point of view of family welfare, because in modern urbanized societies, individual families are no longer able to care for them without great costs.

However, it is necessary to bear in mind the political culture of the various countries, because the political leaders' way of thinking and policy analysis can have an important influence on policy-making.

Darrell West, vice president and director of Governance Studies at the Brookings Institution, said, "Liberal became a code word synonymous with bad things, so Democrats devised a new way of describing themselves." He added, "It's all about the politics of language."

In the meantime, Darrell West suggested that Obama and like-minded legislators ought to claim the mantle of moderation for themselves before it’s too late.

"When you hear one of the conservative Democrats say, ‘I don't think we should be pushing forward on things like health care or energy right now, because we’re in a big hole already fiscally -- that's not a position that needs to be branded as a moderate position," West said.