The Anti-Fascist Origins of Swedish Social Democracy

Rudolf Meidner’s life largely coincided with what the historian Eric Hobsbawm famously called “the short twentieth century.” He was born in the Silesian capita,l Breslau (now Wrocław), in 1914, five days before Franz Ferdinand’s assassination in Sarajevo. His father died six months later from leukemia. Meidner’s family was part of the assimilated, liberal-minded Jewish segment of the German Empire. Religion appears to have played a minor role in his intellectual formation. Meidner once recalled a memory from his childhood, when a Jewish classmate, recently migrated, showed pictures of persecuted Jews. Meidner’s reaction: “We didn’t like him. This is Germany! There are no pogroms! The question had no relevance for us whatsoever. In the circles we moved, Jews were completely assimilated.”

As a teenager in Weimar Germany, the young Meidner grew interested in Marxism, an interest he cultivated through socialist study circles. He read Capital, but it was the Communist Manifesto that left the deepest impression on the young man. Toward the end of his life, he recalled its impact on his intellectual formation: “I can probably say that for me the Manifesto is the beginning and end of most of my political views. It describes . . . the fundamental power relations in a capitalist society. What it says is fundamentally still true – we have not moved beyond it.”

Though the German Social Democratic Party (SPD) remained Marxist during the interwar years, Meidner did not find a political home there. It appeared too old and sclerotic. In May 1929, under the leadership of Karl Zörgiebel, appointed by the social democrats, the Berlin police opened fire on a communist protest. The episode imbued Meidner with a deep mistrust of the social democrats. Not only did it go against social democratic principles, it also handed the communists a narrative of martyrdom. “I have never been able to forget that bloody May 1,” he later recalled.

When Wall Street crashed a few months later, Meidner and his comrades saw Marx’s prophecy fulfilled. It strengthened his belief in the necessity of socialism. But the consequences of the crisis were far from a triumph of the working class — the Nazis won 107 seats in the Reichstag in 1930, shocking Meidner and his comrades. Not so long after, young men from the Sturmabteilung [SA, or “brownshirts”] began to try to sabotage their meetings.

Meidner became increasingly convinced that the social democrats were unable to counter the growing Nazi movement. He briefly considered migrating to the Soviet Union. He went to several open meetings of the German Communist Party (KPD) but did not join. It was one thing to read about Lenin, another thing to work for the “dictatorship of the proletariat” in practice. He was more positive toward the Socialist Workers Party, which was formed in 1931 after the left-wing social democrats Max Seydewitz and Kurt Rosenfeld were excluded from the SPD’s executive. But by then it was too late. At least so Meidner later judged.

In the autumn of 1932, Meidner moved to Berlin to study. There he would witness Hitler’s rise to power firsthand. In January 1933, the Nazis organized a demonstration in front of the Communist Party central Karl-Liebknecht-Haus. In response, the communists organized a counterprotest. In the freezing cold, Meidner joined the procession in what he later described as a symbolic farewell to democracy in Germany: “It was quite simply Berlin’s proletariat saying adieu to Weimar.” Starved masses underdressed for freezing temperatures and snow. No displays of enthusiasm, no whistles or drums. Democracy was buried in silence. “A worthy, almost passive demonstration, democracy’s death march,” as he later put it.

The writing on the wall was still not clear to the young socialist. When Hitler took power on January 30, Meidner joined the crowds in front of the Reichstag. He later commented that it was remarkable that his Jewish background did not enter his mind that day. “I didn’t think of it.”

When his semester ended in Berlin in March, Meidner returned to Breslau. Initially, he had no plans to leave Germany. However, the appointment of Edmund Heines, a participant in the 1923 Munich Beer Hall Putsch, as police chief in Breslau, changed his mind. When his mother stormed into his room on March 29 and declared that all Jews had to turn in their passports, he made ready to leave. He was on a train to Berlin the same afternoon. From there the train to Sassnitz on Germany’s northern shore, and then the ferry to Sweden.

Meidner arrived in Sweden at the dawn of social democratic hegemony. The Swedish Social Democratic Party (SAP) came to power in 1932 and remained there for the next four decades. As chief economist at the trade union confederation LO, Meidner would become a key figure in Sweden’s hegemonic labor movement.

In the fall of 1933, only a few months after his arrival, Meidner began following classes, primarily in economics and statistics, at Stockholm University, the intellectual home of the so-called Stockholm School in economics. Meidner was particularly influenced by Gunnar Myrdal, who taught at the school in the 1930s. Meidner’s studies gave him a reason to be in Sweden, but as a newly arrived immigrant he remained unsure about his future. For a time, he considered buying a farm on the Canadian East Coast. However, in February 1934 he met his future wife, a Swedish native who was not thrilled about the prospect of a life in Canada. By May they were engaged. In December 1945 Meidner was hired by LO as a chief economist at Myrdal’s recommendation. He would spend practically his entire career there.

Meidner is known for two policy proposals. First, the so-called Rehn–Meidner model, formulated together with Gösta Rehn during Meidner’s first years at LO. The model is also known as the solidaristic wage policy, because it sought to minimize wage differentials between different segments of the labor market. Officially adopted by LO in 1951, the policy helped strengthen the solidarity of wage earners and strengthen their bargaining position.

Meidner’s second principal policy contribution was the radical and controversial wage-earner fund scheme, which he developed for LO during the first half of the 1970s. In response to several motions from members of the metal workers union, the 1971 LO Congress decided to form an inquiry into the possibility of setting up industry funds. Meidner was tasked with heading a small working group, which also included the young economist Anna Hedborg and the student Gunnar Fond. Hedborg came from a bourgeois background but had been radicalized during the 1960s through participation in the movement against the war in Vietnam. Fond was recommended by the economics professor Erik Lundberg, apparently because of his last name (fond meaning “fund” in Swedish).

The trio began their work in earnest in the spring of 1974, when Meidner and Hedborg took a study trip to Germany and Austria. They were met with relative indifference or even opposition to wage-earner funds. Meidner later recalled looking out of the window at the Heidelberg train station, spotting an ad depicting a happy union member receiving a shareholder letter. Hedborg pointed to the picture, asking Meidner: “Is this what you want?” “No,” Meidner replied, “it won’t be that way.” At that point, they decided on a more radical proposal.

Though their proposal would end up at the center of one of the most controversial episodes in modern Swedish history, their work proceeded without drawing much attention. As one of LO’s leading economists, Meidner had an office in one of the towers of LO’s headquarters at Norra Bantorget in Stockholm with a view across the city. However, when Meidner worked on the wage-earner fund proposal, he requested a small room on the ground floor behind the kitchen with no phone connection.

The group presented their work on August 27, 1975. In short, the idea was to gradually socialize the ownership of Sweden’s major corporations by forcing them to turn a share of their profit into shares to be put into so-called wage-earner funds, controlled by the union movement.

The funds represented a radical departure from the class compromise that had existed in Sweden since the famous Saltsjöbaden Agreement of 1938. Unsurprisingly, the proposal caused one of the most heated political debates in modern Swedish history. The proposal was not only an affront to the interests of employers; it also contradicted the so-called functional socialism of SAP party elites, according to which the goals of socialism could be achieved without any transfer of ownership.

What moved Meidner to make such a radical proposal? An obvious answer might be the radical political currents that ran through Western countries during the 1960s and ’70s. Was Meidner simply following the times? The general political tendencies of the period can explain why Meidner’s proposal was subsequently adopted so enthusiastically by trade union activists, but they cannot account for Meidner’s own radicalism. Except for his collaboration with Hedborg, Meidner did not associate much with young radicals. Rather, his own radicalism was rooted in his experiences in the Weimar Republic. It was his youthful encounters with Marx that established ownership as a crucial fixture in his political thinking.

A central passage in the proposal paid homage to the Communist Manifesto:

The history of industrialism is the history of the rise of and conflicts between classes: a small group has in an early stage of industrialism acquired and then expanded its property rights to the means of production. The great popular majority has only been able to provide for itself by selling its labor to the owners of the means of production.

In a subsequent interview with an LO publication, Meidner openly acknowledged his debt to Marx. Under capitalism, power was exercised through ownership. There was no way around it: the prevailing property relations had to be changed.

Meidner’s proposal did not put an end to capitalist class relations. Rather, Swedish employers went on a political offensive. Decades later, Sweden has become markedly more unequal and the welfare state significantly commodified.

Still, Meidner left a greater mark on Swedish social democracy than most. Few would have expected the explosive wage-earner fund debate that followed when Meidner was tasked by LO to write up a proposal. The radical orientation owed significantly to Meidner’s biography. Having been a trade union economist for several decades, he was a well-respected and established figure in the movement. Due to his intellectual formation in the Weimar Republic, he was also a Marxist, keenly aware of the political consequences of private ownership. Combining the two, Meidner formulated a vision of radical reformism that still draws attention from socialists today.