Library:Riding the Wave

Riding the Wave: Sweden's Integration into the Imperialist World System
Author	Torkil Lauesen
Publisher	Kersplebedeb Publishing
First published	2021
Type	Book
Source	https://annas-archive.li/md5/0e7e0ae20903230aa84c142a06344d2b
PDF	https://annas-archive.li/md5/827b991d49a65d4e2679d4eaf7400b17
Audiobook

Introduction

This book is about Sweden’s integration and role within global capitalism. It covers the period from 16th-century colonialism to the present day of transnational production chains. Sweden’s economic and political system cannot be understood without this long and global perspective. The development of global capitalism has significantly influenced the national contradictions that have come to define capitalism’s special “Swedish model.”

Globalization is not a new phenomenon. Capitalism has always been a world system. The breakthrough of industrial capitalism was closely linked to the Portuguese and Spanish looting of gold and silver from Latin America in the 16th century and Dutch, English, and French colonialism in the 17th and 18th centuries. The creation of the world system was at the same time a polarization of the world between a Northwest European core and the rest of the world, a colonial periphery. This process also shaped the birth and development of capitalism in Sweden. The inter-imperialist contradictions of the late 19th century and the first half of the 20th century, between England, France, the USA, and Germany, were of great importance to the economic and political development of Sweden. Up until the Second World War, Sweden was economically and politically tied to Germany. The German defeat in the Second World War, however, changed and broadened Sweden’s pattern of alliances in the direction of the USA and the rest of Europe. Simultaneous with the further development of the social democratic welfare state—the “people’s home” (folkhem)—Sweden expanded its global economic and political influence in the 1950s and 60s. In the mid-1970s, the neoliberal counteroffensive hit Sweden’s model welfare state hard, putting an end to 44 years of continuous social democratic rule. Outsourcing of industry, global finance, and migration flows have changed Swedish society. One cannot understand Sweden without an analysis of how national contradictions interact with capitalism’s principal global contradictions. This may sound familiar, obvious, and trivial. However, most studies of Sweden’s economy and politics start from a national perspective, with the global perspective merely presented as background information.

In this book, I will use examples from history, from early colonialism to the present day, to trace the development of “the Swedish model.” The “folkhem” is, according to the Swedish self-perception, a special progressive form of capitalism with social features. “Capitalism with a human face.” The Scandinavian capitalist welfare states are often regarded as semi-socialist societies, by both left-wing politicians in the United States—like Bernie Sanders—as well as politicians in many Third World countries. For the latter, the Scandinavian countries’ progressive image is bolstered by the fact that they were not significant colonial powers and, even moreso, because Sweden supported many Third World liberation struggles in the 1970s. Even on the more radical left, I have come across the view that the social democratic welfare state is a step towards socialism and that, “we can go with the Social Democrats halfway to our goal.” Such views are manifestations of a lack of a global perspective. The global perspective is not only important for analyzing the world; it is equally important for strategies to change the world. In order to develop effective anti-capitalist strategies, it is necessary to start from the global contradictions. First of all, because they have a decisive influence on the outcome of national contradictions, but even moreso because we, as socialists, must be internationalists, not only in words but also in deeds. We are not struggling for the specific benefit of the citizens of privileged nations like Sweden, but for the proletariat regardless of national or ethnic background. Finally, the global perspective is necessary because capitalism can only be defeated through a coordinated struggle. Internationalism is necessary if we want another, more equal and democratic, world order.

In what follows, I will describe how Sweden became part of the imperialist core—how it tried to be a significant European colonial power but was outmaneuvered by the great colonial powers. Instead, Sweden had to ride on the coattails of colonialism, especially that of Germany and Belgium. I describe the interaction between the breakthrough of industrial capitalism, the rise of social democracy, and the development of the Swedish welfare state, in the context of an increasingly globalized capitalism. Finally, I describe how neoliberalism has brought about economic change and altered the pattern of politics in Sweden, and provide an overview of the current economic and political situation.

Although the Scandinavian countries may seem more progressive than the leading imperialist powers, we will see that when you scratch the surface they are no different in their practice or ideology. For working-class people, they are certainly more comfortable than most countries, whether in the Global North or South—their exploits, however, are just as unscrupulous as those of the “hard-core” imperialist powers. While I focus on Sweden in the following pages, it is not because Norway or Denmark, my home country, are better or worse. It is because Sweden is the most important in economic terms; “the Swedish model” is the ideal type of capitalist welfare state and social democracy there is most advanced.

Louis Proyect’s 2015–2016 series about Sweden in his blog “The Unrepentant Marxist” served as an inspiration to write this book, as did many other sources. I attempt to take this material and show how it fits within an overarching process of imperialist polarization and shifting global contradictions. Of course, these conclusions are mine alone. I would like to thank everyone who has read drafts of this book and provided me with useful comments. In addition, I would like to thank Karl Kersplebedeb for assuming the task of editing the book, both in terms of language and content.

SWEDEN: NATIONAL AND HISTORICAL CONTEXT

Early colonialism and the slave trade

The rise of capitalism in Europe and colonialism are two inseparable phenomena. It was the conquest of the Americas and the looting of Africa and Asia that boosted the development of capitalism in Europe. The Spanish colonies in Latin America provided the silver and gold that Europe needed so desperately for its growing trade. The European kings, nobility, and Church were insatiable in their lust for luxury; following in their footsteps, the growing bourgeoisie and members of the state apparatus also became consumers of more and new kinds of goods. Gold and silver coins were the necessary medium for the growing trade. The limited amount of these two metals hampered the circulation of goods. That is why the thirst for gold and silver from the “New World” was so great. Precious metals were looted—or mined by slave labor—in Mexico and Peru and were then transported in huge quantities, mainly to Spain. From there, they spread throughout Europe and quenched the budding capitalism’s thirst for a means of exchange.^[1] Between 1500 and 1800, approximately 100 million kg of silver were transported from South America to Europe.^[2] The silver coins developed European manufacturing and paid for the import of goods from Asia—at the time, Europe had nothing of interest to Asia except gold and silver.

1. “The discovery of America was due to the thirst for gold which had previously driven the Portuguese to Africa, because the enormously extended European industry of the fourteenth and fifteenth centuries and the trade corresponding to it demanded more means of exchange than Germany, the great silver country from 1450 to 1550, could provide. The conquest of India by the Portuguese, Dutch and English between 1500 and 1800 had imports from India as its object—nobody dreamt of exporting anything there. And yet what a colossal reaction these discoveries and conquests, solely conditioned by the interests of trade, had upon industry: they first created the need for exports to these countries and developed large-scale industry.” Frederick Engels, “Letter to Schmidt, C. London, October 27, 1890.” In Marx and Engels Correspondence (Moscow: International Publishers, 1968).

2. Bill Warren, “Myths of Underdevelopment: Imperialism and Capitalist Industrialization,” New Left Review 81 (September–October, 1973): 41.

Slavery was expanded and systematized in the colonies in South America and the Caribbean. The Spaniards and Portuguese initially used Latin America’s Indigenous population as slaves in the mines and plantations. The Incan, Aztec, and Mayan peoples had developed societies that organized collective irrigation, production, and the distribution of food. The violent colonization broke down the structures of these Indigenous societies and famine ensued. In addition, Europeans brought epidemic diseases, such as smallpox, which killed millions of people. The colonization process brought the population to the brink of extinction in parts of South America, falling from an estimated 50 million in 1492 to 4 million in the late 1600s.^[3] Because of a lack of labor, the Spaniards and Portuguese began a slave hunt in Africa, transporting their prey to their colonies in America. This business was so lucrative that England, France, the Netherlands, and Denmark soon got involved. Approximately 15 million captive Africans were thus transported across the Atlantic between 1700 and 1850.

Sweden attempted to become a colonial power but was not very successful. Around 1650, Sweden established a number of forts in present-day Ghana on the West Coast of Africa, intending them to be a staging area for looting, slave-hunting, and trade. The Swedish merchants did not manage to undertake more than fifty slave transports, however, before the forts were conquered by Denmark in 1663. Sweden also established a trading colony on the southern tip of South Africa in 1649, but it was conquered by the Netherlands in 1663. In 1784, King Gustav III purchased the Caribbean island of Saint-Barthélemy from France, but he was cheated: the island was small, had no drinking water, poor quality soil, and few inhabitants—and so could not be used to produce the sought after products: sugar and tobacco. It did serve as a free port until the 1870s, however, generating a modest revenue. Subsequently, the island became less important and was sold back to France in 1878. Sweden also tried to establish colonies in India, but England and France prevented this.

As a curiosum, I will mention that Sweden attempted, under King Karl XII (1682–1718), to establish a colony on Madagascar in the Indian Ocean. The idea was that it should serve as a trade post and a pit stop for ships from the Swedish East Asian Company, on the important trade route between Europe and China. Madagascar was, at the time, an important base for pirates, mainly of Indian origin. In 1718, the pirates offered Karl XII the island of Sainte Marie near the coast and an area on the mainland in exchange for being protected by Sweden and “legalized” as Swedish citizens.

The pirates with their twenty-five ships and their fortune were to have the right to obtain land and settle in Sweden. Karl XII accepted the offer and a contract was drawn up; how- ever, the king died before he could sign it. His daughter and successor, Queen Ulrike Eleonora, equipped an expedition in 1721 to realize the plan, but a lack of funds left the ships stranded in Cadiz in Spain, and the project came apart.^[4]

In terms of acquiring colonies, Denmark was more successful than Sweden. It established 30 forts and trade posts along the West African coast. Between 1626 and 1825, Danish vessels carried approximately 100,000 captive Africans from West Africa to the Caribbean. Some of the slaves were sold in the Danish colonies in the Caribbean—St. Thomas (1672), St. John (1718), and St. Croix (1733)—where they mainly produced sugar and tobacco. The Danish East India Company also established trade posts in Tamil Nadu (Sri Lanka), in the Nicobar Islands, and in India in Tranquebar (1620) and Serampore (1755). In the North Atlantic, Greenland was recolonized by Denmark in 1721, joining Iceland and the Faroe Islands as part of the Danish kingdom. Denmark sold its pos- sessions in India to England in the mid-1800s, and the Danish West Indies—now called the Virgin Islands—to the United States for 25 million dollars in 1917. As Lenin commented:

'Who says that in our day there is no trade in human beings? There is quite a brisk trade. Denmark is selling to America for so many millions (not yet agreed upon) three islands, all populated, of course.'^[5]

Sweden did not manage to become a major slave trader, and yet the chains and bars on the Danish ships were made of Swedish iron. Sweden was the leading European iron exporter in the 17th century. Iron was involved in the colonial triangular trade between Africa, America, and Europe in several ways. It was used as a trading currency to buy slaves in Africa, for the production of chains and bars to keep the slaves locked up, and for tools for farming in the colonies. Denmark—and also England and Germany—bought large quantities of Swedish iron for these purposes.^[6] Besides iron, Sweden exported timber and salted herring to feed the slaves who labored on the Caribbean plantations, and imported sugar, tobacco, and cotton.^[7]

One possible reason for the lack of tenacity in Swedish attempts to acquire overseas colonies may be that there were prospects closer to home. In 1634, Peder Olofsson found a smooth and shiny black stone at Nasafjäll in the Arjeplog mountain region, in the north near the border with Norway. Upon closer examination, the stone was found to contain silver and lead. A “silver rush” broke out. Senator Karl Bonde expressed hopes that the discovery might solve Sweden’s economic troubles. “With God’s help, this will become the Swedish est Indies.” Swedish Chancellor Axel Oxenstierna added: “In Norrland we have an ‘India’ within our borders, if only we realize we should be taking advantage of it.”^[8] The northern part of today’s Sweden was at the time a very unpromising terrain, inhabited only by Sami and their herds of reindeer. National borders in the Scandinavian far north were not precisely established before 1700 and the Sami were to some extent an independent nation; therefore, the silver mining project was in fact a colonial venture.

The Sami were forcibly recruited to transport the silver ore to the south. However, it turned out that the ore was not as rich in silver as hoped, and production was abandoned after a few years. Still, the venture was the first industrial project in the region and as such signaled the beginning of the colonization of Sami territory, with the construction of roads and harbors to be used to service future iron and copper mines. At that point, the Sami were again used as cheap labor for the transport of ore to the harbors, from where it would be shipped further south in Sweden.

Sweden also colonized areas in the Baltic region in the 17th century. The country developed a strong militarized state machinery based on the landed aristocracy, which needed new territories to supplement its limited income from the lean farmlands in Sweden, which could barely sustain the peasantry.^[9] Finland was a Swedish province until 1808, when Russia conquered it during the Napoleonic Wars. Over the centuries, many Finns immigrated to Sweden, where they served as cheap labor, especially in the forestry and mining industries.

Imperialism without colonies

In the first part of the 19th century, before the breakthrough of industrial capitalism, mercantile capital was dominant. Throughout the 18th century, European and North American naval power had enabled their mercantile capital to acquire a dominant position in world trade. Trade in Europe and North America flourished because of cheap commodities based on the exploitation of slave labor in the colonies.

Meanwhile, in Denmark and Sweden, a mercantile bourgeoisie based in shipping was gaining power. In the latter part of the 18th century, big merchants dominated economic life in Copenhagen, Gothenburg, and Stockholm. At first, they participated in the various trading and colonial companies controlled by the absolute monarchy. Later, they established independent trading companies, which challenged the power of the monarchy. The Scandinavian mercantile bourgeoisie blossomed from around 1750, in part due to the many wars at the time between the competing nations of England, France, Germany, the Netherlands, and the United States. The Scandinavian countries managed to remain neutral in most of these conflicts, and their merchant fleet could therefore provide the warring countries and their colonies with transport.

Founded in 1731, the Swedish East India Company (Svenska Ostindiska Companiet) made 132 expeditions to Asia, mainly to Guangzhou (Canton) in China. Between 1739 and 1767, a total of 16,533 tons of Bohea tea were imported by the company.^[10] Cantonese tea was probably the fastest growing commodity in the 18th-century global economy. In England and Holland, drinking tea with lots of sugar became a part of everyday life, even for the lower classes, as early as the 1730s. The Swedish East India Company accounted for about 10–20 percent of European tea imports from 1730 to 1784. Together with the Danish Asiatic Company, the two enterprises accounted for a third of all Guangzhou’s trade in tea.^[11] Only 2–3 percent of the tea was consumed in Scandinavia, the rest being sold to independent dealers who smuggled it into Great Britain, the major tea-drinking nation in Europe, much to the chagrin of the mighty English East India Company.^[12]

Metals in the form of semi-finished or finished products constituted the bulk of the Swedish East India Company’s exports, predominantly bar iron at the beginning of the eighteenth century.^[13] However, it turns out that most, if not all, of the bar iron did not get all the way to China but only to Cádiz, in Spain, where it was sold to pay for chests of silver. Silver was practically the only thing the Swedes could sell in China: “the cargo of Spanish piasters was the sine qua non of the Company’s trade.”^[14] The lucrative tea imports came to an end in 1784 when the British parliament passed a law that reduced the sales duties on tea from 119 percent to 12.5 percent. As the British market for illegal teas more or less disappeared so did the profitability of the Swedish company.

The Scandinavian merchant fleets found other products and customers, however, and maintained a very strong position into the next century.^[15] As a result of the political union between Sweden and Norway in 1814, the administration of Norway’s merchant fleets ended up under the Ministry of Foreign Affairs in Stockholm. Between 1875 and 1905, the combined Swedish/Norwegian merchant fleets were the third or fourth most important in the world. The English merchant fleet was the largest, the American was number two, then came the Swedish/Norwegian fleet, which was the same size as the German but larger than the French, Dutch, and Italian fleets.^[16] Without a colonial territory of its own, Sweden had to set up a network of trade envoys in the service of this fleet. By the end of the 19th century, Sweden possessed more than one hundred consulates in different port cities around the globe.^[17] The Norwegian and Danish merchant fleets are still of great importance; for instance, the Danish A. P. Møller-Maersk Line is one of the largest container shipping companies in the world today.

Mercantile and industrial capital from all the imperialist powers of Europe and North America demanded access to the global market; however, it was not always necessary to exercise territorial control over colonies in order to make a profit. The main goal of capital was to integrate the resources and markets of the colonial territory into one’s own economic sphere. For a country like Sweden, whether this was possible depended on relations with the ruler of the colonial territory. Sweden could make special arrangements or, with luck, the colonial power might advocate free trade, as England did in the late 19th century.

In general, the Scandinavian countries did not have the necessary military power and administrative capacity to establish and operate their own colonies. They had to ride the wave of the great colonial powers in order to enjoy the benefits offered by imperialism.

There was no difference, however, between the Scandinavian countries and the great colonial powers regarding their attitude towards colonialism. European colonialism can be seen as a unified whole in which large and small countries played different roles. Some managed territories and opened up markets, others provided capital, built infrastructure, or transported goods to and from the colonies. The Scandinavian countries earned large sums by navigating in the wake of the major colonial powers. The Frederiksstaden district of Copenhagen is full of mansions built with the profits made from the trade in slaves and colonial goods.

From emigrants to settlers

There is another way in which Swedes played a significant role in colonialism: as settler-colonists. This began as early as 1638, when Sweden established “New Sweden,” financed by Swedish, Dutch, and German shareholders. New Sweden was located along the Delaware River, in present-day Pennsylvania, an area in which Swedish tobacco planters and fur traders had settled since 1610. New Sweden did not last long; it was conquered by the Netherlands in 1655 and became part of the New Holland colony. The Dutch governor Stuyvesant allowed the Swedish settlers to retain their land and continue as a “Swedish nation,” governed by their own legal system and with their own militia. All able-bodied adult male settlers were part of the militia, whose primary task was to keep the Indigenous people in check and to gain access to land and other natural resources. The semi-sovereign “Swedish nation” was maintained until 1681, when England conquered the area. Throughout the 18th century, Swedes continued to settle in New Jersey, Delaware, and Pennsylvania, though it was not until the 19th century that emigration from Sweden really took off. At which point, settlerism became more than just a strategy for a trading company to acquire goods—the new wave of emigration was partly a consequence of the poverty and distress that resulted from the rise of industrial capitalism in Europe, partly a result of the possibilities created by colonialism and the new means of transport, which enabled millions of Europeans to settle in the “New World.”

In the early 19th century, Europeans experienced few political restrictions on the movement of labor across national borders. Passports were rarely used and immigrants gained relatively easy access to new homelands. Approximately 70 million people emigrated from Europe throughout the 19th century. They were often “surplus” labor in the countryside who could not find work in the cities. Poverty, even famine as in Ireland, drove the emigrants across the globe: 36 million to the United States, 6.6 million to Canada, 5.7 million to Argentina, 5.6 million to Brazil, and others to Australia, New Zealand, Rhodesia, South Africa, and Algeria. A significant number of the emigrants settled—claimed land—often displacing and dispossessing the original population in bloody conflicts. Overall, the proportion of emigrants accounted for more than 17 percent of the 408 million people living in Europe in 1900. By acquiring land or work in the New World, emigrants helped to reduce “reserve army of labor” in their old homelands, thus securing the remaining workers a better starting point in the struggle for higher wages. Emigration was a safety valve alleviating social unrest in Europe. The businessman, politician, and later Prime Minister of the Cape Colony in South Africa, Cecil Rhodes, described the situation well:

I was in the East End of London (a working-class quarter) yesterday and attended a meeting of the unemployed. I listened to the wild speeches, which were just a cry for ‘bread! bread!’ and on my way home I wondered over the scene and I became more than ever convinced of the importance of imperialism. ... My cherished idea is a solution for the social problem, i.e., in order to save the 40,000,000 inhabitants of the United Kingdom from a bloody civil war, we colonial statesmen must acquire new lands to settle the surplus population, to provide new markets for the goods produced in the factories and mines. The Empire, as I have always said, is a bread and butter question. If you want to avoid civil war, you must become imperialists.^[18]

Throughout the 19th and early 20th centuries, 1.2 million people emigrated from Sweden—about 25 percent of the population at the time, a proportion which is surpassed only by Ireland. By comparison, only 300,000 emigrated from Denmark, corresponding to 10 percent of the population. Approximately one million Swedes settled in North America, the rest went to other destinations, including Denmark, referred to as “the poor person’s America” because the trip there was so much more affordable. Wages in Denmark were higher than in Sweden, in both agriculture and the growing industrial sector, and Swedish labor was sought after, considered diligent and cheap. Swedes found work in Danish quarries, railroad construction, shipyards, and especially in agriculture, which had prospered due to growing exports of grain, butter, and meat to the English market.^[19]

Sweden was a poor country in the early 19th century. The high standard of living and level of equality that would come later had no precedent in Swedish peasant society. Poverty in the Swedish countryside gave way to regular famines in the years 1867–69, when first cold weather and then drought made the crops fail.^[20] A simultaneous economic boom in the United States accelerated emigration. The message home from the settlers was that life in the United States was so much easier. By 1910, approximately 665,000 Swedes had settled in the United States; in addition, approximately 700,000 second-generation Swedes lived there.^[21] In 1900, just over 100,000 Swedes lived in Chicago, making it the second-largest “Swedish” city in the world.^[22]

In the United States, impoverished European workers and peasants turned into settlers, in a nation that was on the verge of replacing England as the leading global power. The success of the settler state was based on the dispossession of the Indigenous population and the exploitation of African slaves. Land speculation and slavery generated the capital for the fast-growing US economy. The wealth of the first president of the United States, George Washington, came from speculating in land from which the Indigenous population had been displaced; 317 slaves labored to maintain his household and plantation.^[23] This racist hierarchy, embedded in the foundations of the American state, positioned immigrants from Northwestern Europe as an upper part of the working class. Between 1830 and 1860, 4.5 million immigrants from Europe arrived in the United States. These new Irish, German, Scandinavian, Italian, and Polish workers supplemented the former generations of European immigrants, Blacks, Latin Americans, and Asians, in the rapidly expanding agricultural and industrial sectors. Indians and Chinese were imported on what were known as “coolie contracts.” Together with slaves and the remaining Indigenous population, the Asians were given the hardest work at the lowest wages. They built railroads and worked in mines and on plantations. The original settlers, the first generations of Anglo-Saxon origin, retained their privileged positions in skilled jobs or as foremen in charge of teams of workers. At the time, they received the highest wages of any worker in in the world, approximately double the wages in Britain. The Swedish immigrants were ranked just below the workers of Anglo-Saxon origin.

The result being that, by 1900, the American working class was divided by national origin into three main groups: At the top, the Euro-American labor aristocracy, a privileged layer of “born in the USA” workers who constituted approximately 25 percent of the industrial working class. They got the best-paid skilled jobs, protected by the American Federation of Labor (AFL). Below them was a layer of workers made up of the new immigrants from Europe, which comprised between 50 and 75 percent of the industrialized working class in the northern states. They were mostly unorganized and were systematically excluded from the AFL, and thus from the better-paid jobs. However, their wage levels were significantly above salaries in Northwestern Europe at the time. At the bottom was the “colonial proletariat” of African, Latin American, and Asian origin. They did the hardest work for the lowest wages, on the railways and in construction, in mining, as well as on the plantations of the southern states. Cotton production, mainly carried out by labor of African origin, remained important to the economy. Between 1870 and 1910, cotton production tripled, accounting for 25 percent of total US exports. Blacks also worked in Alabama’s coal mines and steel plants. Likewise, Mexicans, Asians, and the Indigenous population constituted an intensively exploited proletariat in the southwestern states, as field workers, on cattle and sheep ranches, in the mines, in railroad construction, and in the urban service industry. The salary of these proletarians was about $4 a week. The industrial proletariat in the northern states from Eastern and Southern Europe earned $6–$10 a week, while the skilled labor aristocracy received $15–$20 a week.^[24]

Gerald Horne describes how Europeans settlers could climb up “the class ladder with sugar stalks and Africans as the rungs,” by acquiring a share of the profits from land privatization and speculation and the benefits from slavery. A racist ideology of white supremacy was gradually shaped as a “pan-Europeanism: an invented solidarity between Europeans that transcended class, ethnic, and religious lines.”^[25] Through the journey across the Atlantic and the confrontation with the Indigenous population as well as slavery, an identification of belonging to the white race was strengthened. Racism against Indigenous people, Blacks, Latin Americans, Indian and Chinese immigrants, combined with an identity as Anglo-Saxon Protestants of Northwest European origin, lent a particular quality to American nationalism. The United States was God’s own land ruled by the white man. Racism and nationalism blocked the development of solidarity based on class consciousness. The trade unions and socialist and communist movements never succeeded in establishing as strong a foothold as they did in Europe. Not even social democracy developed in the United States. But racism and, as a consequence, the anti-racist struggle have been prominent recurring features of US history, and the ideology of white supremacy has characterized US domestic and foreign policy right up to the present day.

As mentioned above, emigration to the US helped alleviate pressures that might have led to social upheaval in Northwestern Europe. It significantly reduced the “reserve army of labor,” which led to more favorable conditions for the wage struggles of those workers who remained behind.^[26] An analysis of Swedish emigration shows that it led to increased membership in trade unions and the Social Democratic Workers’ Party. Furthermore, the tendency to strike and to vote for left-wing parties in parliamentary elections increased.^[27]

It was not only poor workers and peasants who immigrated to the colonies seeking lands of opportunity; British imperialism also provided an opening for Scandinavian entrepreneurs to participate in colonial exploitation. Take, for example, the case of Joseph Stephens, born in Stockholm in 1841 of two British parents. Like so many other sons from the middle classes, Stephens hoped to make his fortune through a career in the colonies. When he was just 19 years old, his father took out a loan to finance the journey from Sweden, and he arrived in India in December 1859. Stephens became an apprentice in civil engineering, and after completing his apprenticeship became a railway contractor with the Great India Peninsular Railway Company, which built railways and infrastructure in the Bombay region, the cotton belt of India. The American Civil War had disrupted the supply of cotton produced by slaves and this increased the demand for Indian cotton to feed the booming textile industry in England. Stephens’s firm organized the construction of railway stations and fencing for the railway company and storage houses and ginning factories for the cotton industrialists. By 1865, Stephens employed thousands of workers; his archive provides a detailed account of the contracts with carpenters, masons, stone workers, and headmen. If a worker failed to provide services in the agreed upon time and manner, they were liable to be fined and jailed.

By 1867, after only seven years, Stephens’s colonial activities had made him a fortune. Now 26 years old, he wrote to his father explaining that he had two options: to be a construction manager in England and live as a member of the bourgeoisie or to buy an estate with a manor house in Sweden and live like landed gentry. He chose the latter, purchasing a 600-acre forest and industrial estate in Huseby, in Småland in southern Sweden. He married a woman of “class” and sat in the Swedish parliament. In the following years, Joseph Stephens turned his estate into an ironworks and timber lot. His colonial experience informed his business regime in Sweden, as he pursued new connections in imperial England and attempted to sell his timber to the Indian railways. He also managed workers and artisans on his estate through contractual relationships, as he had done in India.

Stephens’s life story recently came to light when his personal archive was discovered at his old manor house, the Huseby Bruk.^[28] Discussing the discovery of the archive, Arun Kumar wrote:

“The Stephens’ archive weave together India (the colony), England (the coloniser), and Sweden (a Western nation state) in one thread which, otherwise, may appear totally disconnected in the mid-nineteenth century. Stephens’ life history forces us to rethink our understanding of India’s railway development, the wider distribution of colonial wealth in the Western world, and the transnational nature of British imperialism.”^[29]

German imperialism and the “Congo Conference” in Berlin

In the 1890s, Sweden underwent rapid industrialization, which led to a rise in wages in the mining, iron, and timber industries, forestry, and agriculture. The industrial breakthrough in Sweden was linked to the development of capitalism, specifically in Germany.

In the early 19th century, present-day Germany was regarded as a relatively backward part of Europe. In the second half of the century, however, Germany moved from a semi-peripheral position to the core of the capitalist world system. The development of the English colonial empire gave way to an expansion of the core which encompassed the northwestern part of continental Europe.^[30] Between 1840 and 1870, British foreign trade increased by 500 percent, part of which included imported agricultural products from Germany and Scandinavia.^[31]

The German industrial revolution occurred between 1850 and 1875, under the Prussian military regime of Otto von Bismarck. The German rural nobility, known as “Junkers,” had made their fortunes by supplying food to the expanding English market; they would become a cornerstone of the emerging industrial and financial bourgeoisie, together with the new industrial capitalists. Both the industrialists and the Junkers wanted the Prussian state to build a strong navy and to pursue an active military colonial policy in order to secure access to commodities such as copper, rubber, cotton, and vegetable and mineral oils. Raw materials were considered necessary if Germany was to compete with England, France, and the new ascendant power—the United States. As the general and future president Paul Von Hindenburg stated: “Without colonies, no security regarding the acquisition of raw materials, without raw materials, no industry, without industry, no adequate standard of living and wealth. Therefore Germans, do we need colonies.”^[32]

Like Cecil Rhodes in England, in the 1890s the German Junker and colonialist Ernst von Weber argued that a colonial empire would save Germany from recurring crises of overproduction and unemployment. According to Weber, Germany needed a “mass export of revolutionary tinder” in order to avoid a bloody social revolution.^[33] Germany, like the other European powers and the United States, regarded the rest of the world as a resource to be used and exploited at will. The problem was how to divide up the world, as imperialist rivalry was becoming a principal contradiction in the world system. For that reason, in 1884 a conference was held in Berlin to agree upon how to divide up Africa between twelve countries and thereby avoid “unnecessary” expenditures on warfare.

In this power game, smaller states such as Sweden sought to secure their interests. The problem was explained by Swedish diplomat Carl R. A. Georgsson Fleetwood, immediately before the conference:

“It is a well-established fact that European politics is hardly European any more, but Asian or African—it is in these remote parts of the world that the fate of Europe is being decided. Are we at the beginning of a new era in colonial politics? In which case, will we second- or third-rank state powers become even more insignificant than before—or might commercial interests possibly give us increased influence—or might we possibly act as colonizers on a smaller scale, so as to benefit in some way from the drain caused by the growing emigration?”^[34]

Sweden’s top representative at the Berlin conference was Gillis Bildt, who a few years later briefly served as the country’s prime minister (1888–1889). Sweden did not manage to acquire any colonies at the conference but did endorse the division of Africa adopted by the major colonial powers.^[35] Sweden’s strategy was to try to secure its trade interests by obtaining special agreements from the major colonial powers. For example, Sweden managed to be “particularly favored” by Belgian King Leopold’s International Congo Association. As a result, Swedish soldiers, sailors, businessmen, and missionaries would eagerly participate in the colonization of the Congo.^[36] King Leopold welcomed Sweden’s participation in the “civilizing” mission; in a letter to Swedish King Oskar II, he wrote that Sweden already had “authorised several outstanding officers from her splendid army to enter into the service of the International Congo Association. Important stations, central nodes for vast areas in the middle of Africa, are today managed by Swedes.”^[37] King Leopold’s International Congo Association is today known to have been one of the most brutal colonial regimes, as reflected in the drastic decline in the Congo’s population from 20–30 million in 1884 to only 8.5 million in 1911.^[38]

Sweden’s main strategy, however, was to strengthen its ties with Germany by supporting its positions at the conference. On December 7, 1884, as negotiations were coming to an end, King Oskar II wrote to Bildt: “I have followed the ongoing Congo conference with interest; however, one question above all others has been on my mind. Are Germany’s new and, in some cases, surprisingly active colonial policies, the main goal (if a goal it can still be said to be?) or is this really just a means of luring its western neighbor even further along the same road and thus, for a long time, weakening its power and diverting its attention from Alsace Lorraine? [emphasis in the original]”^[39]

Bildt answered the king, stating that, in terms of European power politics, the goal of Germany’s colonial ambitions was partly to neutralize France’s desire for revenge for its defeat in 1871 and partly to exacerbate tensions between France and England, but that the main purpose was to obtain resources and open markets as well as to bolster Germany’s national prestige.^[40]

In the 1890s, Germany built a sizeable merchant and navy fleet and established naval bases as far away as the South Coast of China. The German Navy was very active in the Mediterranean, north of the African coast and east of Turkey, in fierce competition with England and France. Within a few years, Germany built up a colonial empire. By 1906, East Africa (Tanzania), South West Africa (Namibia), Cameroon, New Guinea, Togo, the Caroline, Paula, and Marianne Islands, the Marshall Islands, Samoa, and Kiauchau were German colonies, with a combined land mass the size of India. Besides which, German economically dominated Bulgaria, Romania, and Turkey.^[41]

It was in this colonial context that the idea of the German Herrenvolk, or master race, developed. The basic elements of Nazi race theory were developed during this period and practiced in South West Africa, present-day Namibia. However, it would be a mistake to label German colonialism as especially brutal—English, French, Dutch, and Belgian colonialism were no less so. The racism, national chauvinism, and brutality of Nazism were later condemned by the other European powers, but as poet and politician Aimé Césaire wrote:

Yes, it would be worthwhile to study clinically, in detail, the steps taken by Hitler and Hitlerism and to reveal to the very distinguished, very humanistic, very Christian bourgeois of the twentieth century that without his being aware of it, he has a Hitler inside him, that Hitler inhabits him, that Hitler is his demon, that if he rails against him, he is being inconsistent and that, at bottom, what he cannot forgive Hitler for is not crime in itself, the crime against man, it is not the humiliation of man as such, it is the crime against the white man, the humiliation of the white man, and the fact that he applied to Europe colonialist procedures which until then had been reserved exclusively for the Arabs of Algeria, the coolies of India, and the niggers of Africa.^[42]

In parallel with the expansion of the colonial empires, there developed the idea of Europe as the historical cradle and center of civilization. The myth imagined a thousand-year continuity, from ancient Greece’s philosophy and culture to the liberal values of Western capitalism. In actual fact, however, it was not until the Renaissance and the dawn of capitalism that Europe began to cultivate the idea of Greek antiquity as its origin. The problem with this idea is that the Renaissance is separated from classical Greece by centuries, during which neither the European economy nor its philosophy or culture were by any means the center of world civilization. Christianity was also an element of this construction, supposedly a central element of specifically European values. Yet Christianity was not founded in Paris, Rome, or Berlin, but in the Middle East. The “Holy Family” and the Egyptian and Syrian Church Fathers had to be Europeanized and Jesus portrayed as a blond Northern European to fit the myth.

Along with colonialism, it was the breakthrough of industrial capitalism in England that made Europe rich and powerful. Science and culture fused with rationality and technical efficiency. Values of democracy and social justice developed within the framework of Europe and North America while the same states killed, enslaved, and exploited people throughout the world. European ideas of a racial and ethnic hierarchy were bestowed a scientific legitimacy. Colonial practice was translated into the social and biological sciences, as theories about the superiority of the Aryan race and its birthright and duty to rule over the “primitive races.” Eugenics was widely accepted, in Scandinavia as elsewhere. Racism was popularized with the concept of “the white man’s burden” and in literature. In zoos and fairs all over Europe, Africans, Asians, Indigenous peoples of North America, Bedouins, and Inuit were exhibited like animals.

European racism reflects the hierarchical division of humanity that colonialism created. Colonialism is a shared European responsibility. The racism and national chauvinism that characterize modern-day right-wing populism—including in Sweden—have their origins in the ideas of colonialism. The dehumanization of the peoples of the colonies was a prerequisite for the idea of Europe and the West as the center of civilization.

How industrial capitalism came to Denmark

Industrial capitalism had its breakthrough in England in the first decades of the 19th century, followed by France, Germany, the Netherlands, and Belgium in the middle of the century. In Scandinavia, the breakthrough occurred first in Denmark in the 1870s and then in Sweden in the late 1880s.

The development of capitalism in Denmark is the story of a special kind of bourgeoisie. This bourgeoisie was not a “classic” industrial bourgeoisie as in England—the conditions for that were simply not present. Denmark had no raw materials for the development of heavy industry, no large domestic market to provide the basis for large-scale industry, and when against these odds small industries did nonetheless take form, they encountered crushing competition from England and others. When industrial development finally took off in the last quarter of the 19th century, it was based on the processing of agricultural products for export and the production of agricultural machinery. It was all about agriculture in Denmark.

An important prerequisite for Denmark’s integration into the imperialist core was the export of agricultural goods to feed the rapidly growing working class in England. In September 1910, Lenin was participating in the 8th International Socialist Congress, which was being held in Copenhagen; while there, he went frequently to the King’s Library to research Danish agricultural development. As he would later note:

In addition, a specific feature of Danish imperialism is the superprofits it obtains from its monopolistically advantageous position in the meat and dairy produce market: using cheap maritime transport, she supplies the world’s biggest market, London. As a result, the Danish bourgeoisie and the rich Danish peasants (bourgeois of the purest type, in spite of the fables of the Russian Narodniks) have become “prosperous” satellites of the British imperialist bourgeoisie, sharing their particularly easy and particularly fat profits.^[43]

From 1820 to 1880, grain exports from Denmark to England doubled, as did their prices. Later, when a duty on live cattle and meat was abolished in England, the export pattern shifted towards animal products and Danish meat prices nearly tripled. In the 1870s, when wage levels in England began to rise, this led to an increased demand for meat and animal products including butter, eggs, and bacon from Denmark. In this period, 80–90 percent of Danish exports were agricultural goods, and by far the largest market was England.^[44] Thus, the Danish bourgeoisie acted as an intermediary between family-run farms and the growing English market, in the form of agricultural processing industries, the manufacture of agricultural and dairy machinery, not to mention transport and logistics in connection with exports across the North Sea. New roads, railways, and harbors, with steamship routes connecting the agricultural producers to European markets, all added to the infrastructure.

As early as 1846, the liberal bourgeoisie entered into an alliance with the farmers, in the form of the Society of the Friends of Peasants (Bondevennernes Selskab). In the following period, a peasant class, mainly consisting of mid-size farmers, established itself as a petty bourgeois faction closely linked to the emerging industrial bourgeoisie. The Danish bourgeoisie was thus a peculiar mix of rural and urban bourgeoisie, represented by the (liberal) Left Party and opposed to the (conservtaive) Right.

With the development of industrialization, the contradiction between the bourgeoisie and a growing working class was deepening. The first trade unions were founded in 1869. Louis Pio, a clerk in the postal service, founded the Danish Social Democratic Party in 1871 as part of Marx’s First International. Despite this fact, the Marxist influence was marginal. The Communist Manifesto was mentioned for the first time in 1883 in an obituary of Marx, which was not very laudatory and displayed ignorance as to his ideas. Early Danish social democracy was influenced by Ferdinand Lassalle’s ideas and focused on how the existing state could address the problems of unemployment and social needs in general. In Copenhagen, specifically, the miserable conditions in the new working-class districts proved fertile ground for socialist ideas. From the start, the party had strong ties to the trade unions. Besides support for the trade union struggle for higher wages and better working conditions, the strategy was always to acquire legislative power by getting representatives into parliament. There was no talk or plans of revolution, only political reform within the existing society. Still, the bourgeoisie and state power were terrified by even those moderate socialist ideas.

The reason why, despite its moderation, Danish social democracy in this early period had a revolutionary flavour was because of what became known as the Battle of the Common. The incident occurred in the context of a bricklayers’ strike in 1872. Acting on behalf of the Danish section of the International Working Men’s Association, Louis Pio convened a support meeting at a central park in Copenhagen. Even though the demands were not radical, on May 4, 1872, the night before the meeting, the leadership—Louis Pio, Harald Brix, and Paul Geleff—were arrested and imprisoned. This resulted in a confrontation between workers and police at the Common, a park in the working-class neighborhood of Nørrebro in Copenhagen. Pio was sentenced to six years in prison, Geleff to five, and Brix to four, for crimes against the state constitution.^[45]

As a consequence of these verdicts, the Minister of Justice issued a ban on the International Working Men’s Association. This was serious blow to the movement. When the leadership was released, they were marked by their years in isolation in prison. Pio and Geleff were paid by the police to emigrate to the United States and internal divisions in the party encouraged reformism.46 In 1889, the leaders of the party’s left-wing faction were purged.

(As a fitting postscript to this sorry state of affairs, once in the United States Pio became active in the Danish immigrant community, moving first to Chicago and then helping to found an ill-fated “socialist colony” in Kansas, while publishing various works including a Danish cookbook and a Scandinavian-English dictionary and guide for young people. At the World’s Fair in Chicago in 1893, Pio managed to get himself hired as a kind of PR agent for the state of Florida. He managed to secure funding to found a new city in Florida on the banks of the St. Locie River, to be known as “White City.” While the official story was that this name was in hommage to Chicago—known as the “White City” because of its white buildings—in a letter to a close friend, the “socialist” Pio explained that “The colony has started ... [If] the absent Madams and legitimate kids are counted in, the city will amount to c. 500 souls, all white as snow. Chinese, Negroes and other Coloreds are expressly excluded from Access.”)^[47]

At the turn of the century, the Danish bourgeoisie continued to profit from growing exports of refined agricultural goods to England, which made it possible to provide significant wage increases and better working conditions to the labor force. In the period from 1870 to 1913, real wages doubled.^[48] This also led to a reduction in the level of class conflict. In 1899, after four months of strikes and lock outs, the trade union movement and the employers’ union entered into what was known as the September settlement. The trade union movement recognized the right of employers to manage and allocate work and employers recognized the trade union movement. Furthermore, the settlement stated that all disputes should be decided by negotiation and mediation. If this failed, the case should be brought before a Labor Court to resolve the conflict. Class struggle was to be settled in a fixed institutional framework, to put an end to strikes and labor unrest. Reforms were introduced in 1901, establishing parliamentary rules and extending voting rights. Prior to then, only 15 percent of the population had had the right to vote; women, so-called “imbeciles,” and the poor were excluded. It was 1915 before women and domestic servants received the right to vote in general elections. The September settlement and the consolidation of the parliamentary system meant that trade unions and the Social Democrats were recognised as legitimate political movements. Social Democrats were elected to parliament and in 1916 they entered a coalition government with two ministers. Lenin wrote about this in his article “Ten ‘Socialist’ Ministers!”:

Huysmans, the Secretary of the International Social-Chauvinist Bureau, has sent a telegram of greetings to Danish Minister without portfolio Stauning, the leader of the Danish quasi-“Social-Democratic” Party. The telegram reads: “I learn from the newspapers that you have been appointed Minister. My heartiest congratulations. And so, we now have ten socialist Cabinet Ministers in the world. Things are moving. Best wishes.^[49]

Lenin was not impressed:

'The Danish “Social-Democratic” Party completely succumbed to this international situation, and staunchly supported and supports the Right wing, the opportunists in the German Social-Democratic Party. The Danish Social-Democrats voted credits for the bourgeois-monarchist government to “preserve neutrality”—that was the euphemistic formula. At the Congress of September 30, 1916, there was a nine tenths’ majority in favour of joining the Cabinet, in favour of a deal with the government! The correspondent of the Berne socialist paper reports that the opposition to ministerialism in Denmark was represented by Gerson Trier and the editor J. P. Sundbo. Trier defended revolutionary Marxist views in a splendid speech, and when the party decided to go into the government, he resigned from the Central Committee and from the party, declaring that he would not be a member of a bourgeois party. In the past few years the Danish “Social-Democratic” Party has in no way differed from the bourgeois radicals.'

Greetings to Comrade G. Trier! “Things are moving,” Huysmans is right—moving towards a precise, clear, politically honest, socialistically necessary division between the revolutionary Marxists, the representatives of the masses of the revolutionary proletariat, and the Plekhanov-Potresov Huysmans allies and agents of the imperialist bourgeoisie, who have the majority of the “leaders,” but who represent the interests, not of the oppressed masses, but of the minority of privileged workers, who are deserting to the side of the bourgeoisie.

The social history of 19th-century Denmark is relatively peaceful. There was no showdown with the nobility as in the French Revolution of 1789 or as in the violent bourgeois revolutions that swept across Europe in 1848; certainly nothing like the communist Paris Commune of 1871. This relatively peaceful quality to Danish history persisted into the 20th century.

The Social Democrats’ chief ideologue in Denmark, Gustav Bang, laid out the strategy in 1904:

'There are two ways to get to a new society. One is to knock over the game—overturn the pieces; the other is to move the pieces, one by one. Our opponents want nothing better than that we opt for the first, but we are going the other way—we move the red pieces of the Social Democrats further and further forward, until we finally put the enemy in checkmate.'^[50]

As the game unfolded, however, the Social Democrats were drawn into the system—finally in fact becoming the system.

How industrial capitalism came to Sweden

Due to natural preconditions, the structure of the economy, and the character of the bourgeoisie, the industrialization of Sweden occurred very differently from in Denmark.

As early as the first half of the 17th century, Sweden had been an important iron exporter, largely to the Netherlands, the hegemonic power in Europe at the time. Wars had deprived the Dutch of their sources of iron in Spain and Germany. At the same time, the demand for iron to produce armaments was on the rise, thanks to what was to become known as the Thirty Years' War. Dutch capital, entrepreneurs, and technicians were attracted by Sweden's plentiful iron ore, easily accessible charcoal, and waterpower. The Dutch entrepreneur Louis de Geer organized the immigration of Walloons as skilled workers and introduced the Walloon iron refining process in Sweden. A cannon factory was established using ore from the Dannemora mine, 100 miles north of Stockholm and less than 30 miles from the Baltic Sea. Later, the Dutch established factories at Ullfors, Wessland, Hillebola, and Strömsberg, causing Swedish iron production to increase from 6,650 tons in 1620 to more than 17,300 in 1650.^[51]

The first industrial factories in Sweden were established in the early 19th century. As in England, it was the textile industry that pioneered the use of spinning and weaving machines operated by wage-workers. The raw cotton was produced by slave labor in the plantations of the southern states of the United States and the technology was imported from England, but the emergence of the Swedish textile industry was primarily based on the domestic market: at first, finer fabrics for the upper class; later came cotton linen for the working class and peasantry.^[52] By the 1860s, Sweden's industrialization was based on the processing of raw materials such as iron ore, copper, and timber, and benefited from access to cheap energy in the form of hydropower.

One example of an early Swedish industrial enterprise is Bofors Bruk. Bofors had refined iron and manufactured weapons since 1646. In the 1870s, the craft manufacturing methods were replaced by industrial production, and Bofors become one of Europe's leading steelmakers. In 1883, it took up the production of cannons again. In 1894, Bofors was purchased by Alfred Nobel, who modernized arms production and expanded it to include various types of explosives, especially his invention dynamite—and yes, he also established the Nobel Prize in 1895.

While Denmark is characterized by small-scale industry, the exception being its shipyards, Swedish industry is dominated by larger companies. While Denmark was primarily tied to English imperialism, Sweden navigated in the wake of Germany, not least through the export of iron for manufacturing and timber for the construction of housing for the rapidly expanding urban German working class.

Symbolizing the importance of iron and steel exports for the Swedish economy, a fountain was erected in the port city of Gothenburg in 1927, on the Järntorget (the Iron Square).53 It was at this square that iron produced in Swedish ironworks was measured before being loaded and shipped to the rest of the world. The official name of the fountain is The Five Continents. In the five corners of the fountain are statues of naked women who, by their ethnicity, are meant to symbolize the five continents of the world. From the center of the fountain, water springs from a bowl towards the women, just as Swedish iron flows out to the whole world, which responds gratefully by sending gifts back from the five continents, symbolized by water spraying back towards the center of the fountain. A symbol of Sweden's integration into the imperialist world system.

A revolutionary beginning and a breakthrough for reformism

The 1890s were in many ways a turning point in Sweden's history. The breakthrough of industrial capitalism created many new jobs, massive emigration removed much of the reserve army of labor, and, consequently, wages doubled over the course of the decade. The Swedish Social Democratic Party was established and the foundations of the welfare state were laid.

All this had a revolutionary prelude, however. The history of Swedish socialism dates back to 1847, when Per Götrek, a Stockholm bookseller, published On the proletariat and its emancipation through true communism, inspired by the writings of the French utopian socialist Etienne Cabet.54 Götrek was religious—for him, communism was synonymous with the original ideals of Christianity. Marx's ideas about religion being the "opium of the people" had apparently not reached or convinced him. In addition, Götrek was what today would be called "straight edge and sober living": he did not use alcohol or other drugs and he was a vegetarian. Götrek was also engaged in the struggle for equal rights for women, something unusual amongst socialists at the time, and agitated for women's political education:

through this, she will learn to realize her position, realize that she is missing out on everything that a sensible human being has the right to demand from society, namely education, the right to work and to choose her work, the right to make decisions concerning her person and her actions, the right to participate in establishing the laws she must obey.^[55]

Götrek brought together a group of people, mainly artisans who had picked up new ideas while traveling and working in France, some typesetters, and Johan Ellmin, a doctor who worked among the poor in Stockholm. The group met regularly in an apartment in the center of Stockholm. In February 1848, The Communist Manifesto was published in German. Two weeks later, it was for sale in Götrek's bookstore, and he immediately began translating it into Swedish. Before he could finish, however, riots broke out in Paris and other European cities; on March 2, 1848, news of the unrest reached Stockholm. The uprising was a bourgeois revolution against absolutism and for civil liberties, universal suffrage, and parliamentarianism. Stockholm's revolutionary communists saw 1848 as a dress rehearsal for the socialist revolution.

Götrek's group participated in disseminating leaflets and posters to mobilize for a "banquet" on Saturday, March 18. The "banquet" took place in the afternoon at De la Croix's large hall at Brunkeberg Square in Stockholm. It was organized by the Society of Friends of Reform, an association of liberals and radicals. The men in the main hall were members of parliament, intellectuals, teachers, and shopkeepers. An elite, certainly, and yet many of them did not have the right to vote for the political assembly because they did not belong to any of the "venerable" traditional four estates: nobles, clergy, large landowners, and upper bourgeoisie. This left-leaning political elite now made fiery speeches calling for an uprising—a common tactic at the time for revolutionaries trying to spark rebellions in the streets. Outside at Brunkeberg Square, an excited crowd quickly gathered. They demanded the removal of the king and the introduction of a republic. The authorities intervened, cleared the street, and arrested the most active protesters, but the demonstration just moved to the area between the royal castle and the great cathedral. On the way, the demonstrators passed by the house of August von Hartmansdorff, the president of the high court, who was very unpopular because of his suppression of freedom of the press; all twelve windows of his third-floor apartment were smashed. King Oscar I, who was returning to the palace from the opera, met the demonstrators at the square in front of the cathedral. He promised the crowd that the arrested protesters would be released. Some hailed the king as he left the scene, believing that the danger was over, but the demonstration marched on to Gustav Adolf's square. Stones were thrown at the houses of Archbishop Wingård, Governor C. F. Horns, and Minister of War Peyron—and also at some houses belonging to Jewish businessmen. Doors and windows were smashed, and the king's guard intervened to put an end to the unrest. There was street fighting and the guard shot into the crowd.

The next day, Sunday March 19, the unrest continued. The regular army was deployed against the protesters in the center of the city, where barricades had gone up. The troops were met with a volley of stones. The king gave the order to fire on the protesters—twenty were killed and approximately two hundred were seriously injured in the fighting. In the following days there were army patrols in the streets around the clock. And so the March 1848 revolt in Stockholm came to an end.

These events had consequences, however. The police kept a close watch on Götrek's activities. It became difficult for him to find a print shop willing to print the Manifesto. Nevertheless, he finally managed to find a printer and, in December 1848, Götrek published The Voice of Communism, as his version of the Manifesto was called.56 In order to not further provoke the state, he modified Marx and Engels's text—where they wrote "a violent overthrow of the present social order," Götrek's translation read "a radical reorganization of the present social order." Marx and Engels would not be satisfied with Götrek's translation of the slogan "Proletarians of all countries, unite!"—which he turned into "The voice of the people is the voice of God."57 But Götrek's modifications did him no good: in early 1849 he and members of his group were brought to justice and the organization was dissolved by the court.

There was a broad and severe crackdown on the left in the years that followed. Sweden became one of the most reactionary and undemocratic political regimes in Europe.58 All women and 80 percent of men were denied the right to vote in late 19th-century Sweden. The state and the bourgeoisie feared the "dangerous classes." The French Revolution of 1789 was still fresh in their memories and the revolutionary uprisings in many European cities in 1848 had reached Stockholm. At this point in history, the bourgeoisie could not afford the "luxury" of introducing parliamentary democracy or the right to form trade unions, as this would have threatened the system's very existence. As Marx and Engels wrote: "A spectre is haunting Europe—the spectre of communism."^[59]

It remained a spectre, however. Gradually, the European state powers changed their tactics based on the motto: better reform than revolution. In 1871, the English parliament recognized the right of workers to organize themselves in trade unions. In France, Napoleon III introduced the Loi Ollivier in 1864, which gave workers the right to organize, issued a decree regulating the treatment of apprentices, and limited working hours. By including "the dangerous classes" in the political process and thereby turning them into citizens of the state, the ruling class hoped that social conflict would take a more controlled course. Suffrage was expanded to include working-class men and the first public social and health insurance policies were introduced in Northwestern Europe in the last quarter of the 19th century.

The struggle of the proletariat for better living conditions and political rights combined with European colonialism and became the driving force in a new dynamic of capitalist accumulation on a global scale. Colonialism was a centrifugal force that propelled capitalism across the globe, at the same time as it was a polarizing force that divided the world into a core and a periphery. A periphery drained of value, which maintained the profit levels and a growing consumer market in the core. This dynamic solved capitalism's inherent contradiction between the need to expand production and the lack of sufficient consumption power to realize a profit. In the second half of the 19th century, the proletariat's living conditions began to improve in England. For the first time in the history of capitalism, capitalists had to pay a wage above subsistence level. This development spread from England to Germany and the rest of Northwestern Europe, including Sweden.^[60]

Initially, the rising wages affected only a small fraction of the working class, being limited to the skilled and best-organized industrial workers. However, compared to living standards in the first half of the century—and compared to the workers and slaves in the colonies—there were definite improvements in wages and working conditions for the working class as a whole. By the turn of the century, widespread hunger—as we still see today in the Third World—had disappeared from Western Europe.

This trend changed the character of the class struggle. The economic improvements and political concessions that the capitalist class was neither able nor willing to provide to the working class in the core in the first half of the 19th century became possible towards its end. The concessions were not given voluntarily, nor were they a cunning bribe.

In Sweden, less than 25 percent of men and no women had the right to vote for parliament; this exclusion of the larger part of the population from political influence led to the emergence of a particularly broad coalition for democratic rights, which took the form of a Liberal–Social Democratic alliance. This laid the basis for the social reformism that came to characterize 20th-century Sweden.^[62]

In Europe and the United States, the working class fought for the improvements to their economic and political conditions. Rising wages, better working conditions, and expanded political rights, however, lent credence to the possibility of winning reforms within the system, which in turn made it less risky for the capitalists to grant the working class additional political rights. These compromises made the class struggle less hostile. The revolutionary part of the labor movement weakened as reformism grew stronger. The Paris Commune was defeated and the International disintegrated in 1871, while trade union and political struggles for reforms met with success. Reformist Social Democratic parties were gaining popularity everywhere in Northwestern Europe.

These reforms and compromises between capital and the working class gradually expressed themselves on the institutional level in the form of state administration. The state began to act on behalf of capitalist society as a whole. As the "dangerous classes" were transformed into citizens, the state began to pay attention to the welfare of its population, their health, personal safety, level of education, and so on. The wellbeing of citizens of the state was increasingly seen as a source of national prosperity and strength. This led to a host of new scientific methods and practical policies for the development of welfare, or what the philosopher Michel Foucault called "biopolitics" or "biopower"—the governance of the power of life.63 Ruling class concern for people's wellbeing was something new. The rulers of medieval and early modern Europe governed the population with brutality. Subjects were to make their bodies and lives available to the rulers at all times, to maximize the extraction of wealth. This was accomplished by physical punishment and the threat of death. In contrast to this, the new forms of biopolitics sought to control and promote the health and general wellbeing of the population, in order to strengthen the power of the state. A healthy population was considered the prerequisite for a well-functioning economy and a peaceful and orderly society.

However, this transformation had a negative consequence. Biopolitics created unity between the citizens and nation-states of Northwestern Europe and North America—against the populations of their colonial empires. The interests of the nation-state became the interests of the working class. As it was in the interest of the nation to acquire colonies, it was in the interest of the working class to support the colonial empire. Biopolitics meant that the welfare of the citizens of one nation spelled death and misery for those of another. This is what Mark G. E. Kelly calls biopolitical imperialism:

One might imagine that biopolitical imperialism would mean a flow of biopolitics itself outward into the periphery. I ... argue that, though some movement in this direction does exist, it is not the main way in which biopolitical imperialism operates. Imperialism is a form of power that by and large does not care about the lives of its victims. Imperialism, therefore, is primarily thanatopolitical, a politics of death, contrasting with the biopolitics of the population found in the imperial metropole. There is, I ... contend, a direct relation between the two things, in which death is figuratively exported and life imported back, in a systematic degradation of the possibilities for biopolitics in the periphery, arising out of the operation of biopolitics in the center.^[64]

Kelly cites the historian Mike Davis for a number of specific examples of biopolitical imperialism. In case studies of India, China, and Brazil, Davis shows how the imperialist powers, through direct government intervention and economic policies, destroyed the health and welfare of these countries' populations in order to accommodate their own citizens. One example was the massive export of food that took place from India to Britain, even while the people of India were starving:

'Between 1875–1900—a period that included the worst famines in Indian history—annual grain exports increased from 3 to 10 million tons, equivalent to the annual nutrition of 25 million people. Indeed, by the turn of the century, India was supplying nearly a fifth of Britain's wheat consumption at the cost of its own food security ... . During the famine of 1899–1900, when 143,000 Beraris died directly from starvation, the province exported not only thousands of bales of cotton but an incredible 747,000 bushels of grain. [Equivalent to 20,330 tons of corn —TL]^[65]

The "power of life" in Northwestern Europe was premised on the "power of death" in the colonies.

The birth of the welfare state

The idea of a capitalist state providing welfare for its working class did not originate in Sweden but in Germany, in the state capitalist regime of Otto von Bismarck. The Prussian Duke Bismarck represented the interests of the conservative landowners, the Junkers, against the liberal bourgeoisie and republicans. Bismarck, an ardent supporter of the monarchy and Reich Chancellor from 1871 to 1890, was an important architect of the German Empire, which was based on a strong central state with the emperor (or Kaiser) as unifying figure at the top. To secure his strong central state, Bismarck chose to forge an alliance with the working class against the liberal bourgeoisie’s desire for less state regulations and expenditures.

Thus, in 1881, Bismarck first attempted to introduce an accident insurance law to compensate workers for workplace injuries, to be paid for by employers. The purpose was twofold: to isolate the working class from the influence of more radical forces, and to gain its support in opposing the liberal bourgeoisie’s demand for a new constitution, which would have weakened the Kaiser’s power. In 1883, a broader Health Insurance Law was passed, with workers contributing one-third of the cost and employers the rest. In 1884, an accident insurance law was finally passed, completely financed by employers. In 1889, a pension plan and disability insurance for workers were adopted. Bismarck also introduced other forms of government intervention in the economy, including a state monopoly on tobacco imports and sales and the nationalization of the railway system.^[66]

Thus, the German state developed legislation against the immediate interests of capital. But make no mistake—Bismarck was no socialist. At the same time as these social reforms were being implemented, a number of repressive laws were adopted to restrict the ability of the more radical wing of the socialist movement to organize. This combination of policies split the German Social Democrats into a reformist and a revolutionary wing, laying the groundwork for social democracy’s capitulation to imperialism in the form of support for armaments and nationalism, which contributed to the outbreak of World War I.

The goal of Bismarck’s policy was to make Germany a world power on a par with Britain and France. The social reforms were intended to ensure internal unity and class peace while the state pursued an aggressive foreign policy with demands for colonies and increased access to foreign markets—a policy that was also expected to compensate capital for the costs of the social reforms.

As in England, the establishment of the German colonial empire contributed favorably to domestic economic development. From 1886 to 1911, wages in Germany grew significantly. Following this increased economic and political influence, the center of gravity of the socialist movement moved from England and France towards Germany. The German socialist movement grew rapidly, taking organizational form in trade unions and political parties, but at the same time a division arose between revolutionary communists and reformist socialists.

The German Social Democratic Party (SPD) came to play a prominent role in the development of reformism in Europe. The SPD found strong support among the upper strata of the German working class. Wilhelm Liebknecht, founder of the German Social Democrats, stated at the 1892 party congress: “You who sit here are also, most of you, aristocrats to a certain extent, among the workers—I mean in so far as income is concerned. The laboring population in the mining regions of Saxony and the weavers of Silesia would regard such earnings as yours as the income of a veritable Croesus.”^[67]

The leading ideologue of the German social democrats, Eduard Bernstein, believed that Marx had been proved wrong on several points. Writing in 1889, Bernstein explained that Marx’s thesis of capitalism’s polarization between poverty and wealth was wrong, pointing to how the standard of living of the German working class was actually rising.^[68] Furthermore, Bernstein criticized Marx’s statement in The Communist Manifesto that “The working men have no country.” Bernstein conceded that this may have been the case in 1848, when the Manifesto was written, but insisted that by the end of 19th century it was no longer true. According to Bernstein, the working class had gained political and social rights by virtue of social democratic political struggle, and in that process they had become citizens of the nation-state. Social democratic political struggle was therefore from that point on fundamentally national, their task being to reconcile the interests of the working class and the nation. Following this logic, social democrats supported German colonialism. In “On the Military Question, Foreign Policy and the Colonial Question,” Bernstein argued that Germany had every right to conquer new colonies in order to be able to produce industrial products from tropical raw materials.^[69] He concluded that it was possible for the working class to achieve improvements in wages and living standards and to win more and more political rights, all within the framework of capitalism. By means of parliamentary struggle, the working class—which, after all, constituted the majority of the population—could acquire state power and introduce socialism, nice and quietly, with no need for revolution. Bernstein’s revision of Marx became the DNA of social democrats, which, at future critical historical junctures, repeatedly caused them to take the side of capital and the nation-state against socialism and international solidarity. The split between social democrats and communists in Germany had severe consequences. A Social Democratic government under the leadership of Friedrich Ebert and Defense Minister Gustav Noske used the army and paramilitary forces to bloodily suppress the socialist/communist uprisings of 1919. Colonialist and racist attitudes spread fast within the SPD. In 1900, the party supported German participation in the Eight-Nation Alliance, a multinational military coalition set up in response to the Boxer Rebellion in Imperial China. The forces consisted of 45,000 troops from the German Empire, Japan, Russia, Britain, France, the United States, Italy, and Austria-Hungary. At the German Social Democratic Congress in Mainz later that year, Rosa Luxemburg was the only member to condemn this imperialist aggression. At the same time, the SPD opposed Chinese (so-called “coolie”) immigration to Germany. Chinese workers were viewed as competing with the European working class and had to be excluded from the labor market in Europe.^[70]

The Social Democrats’ position on colonialism was also reflected in meetings of the Second International. In the first years of the Second International, there was a consensus on a clear position against colonialism. However, at its 7th Congress, in Stuttgart in 1907, the anti-colonial line was challenged by the German Social Democrats. There, just three years after the German army and settlers had committed genocide against the people of South West Africa, SPD president Eduard Bernstein—agreeing with party founder Ferdinand Lasalle—stated that: “People who do not develop may be justifiably subjugated by people who have achieved civilisation ... . Socialists too should acknowledge the need for civilized peoples to act like the guardians of the uncivilized ... our economies are based in large measure on the extraction from the colonies of products that the native peoples have no idea how to use.”^[71]

Another leading Social Democrat, Eduard David, put it bluntly: “Europe needs colonies; it does not have enough of them. Without them, we would be economically like China.”^[72] (May I add: Exactly!)

The German Social Democrats’ nationalist strategy was successful in terms of attracting voters. With Karl Kautsky at the forefront, it became Europe’s strongest and most influential social democratic party. In the 1912 German elections, the party won the most seats in the Reichstag, with 34.8 percent of the votes. Like the other social democratic parties in Europe, the SPD voted for war credits in 1914, thereby aligning itself with capital in Germany’s conflicts with France and England over the imperialist division of the world.

The first Swedish socialist party program was written in 1882 by August Palm, a tailor. He had returned to Malmö in 1881 after working and traveling in Germany and Denmark. It is therefore no wonder that it was largely a translation of the Danish Social Democrats’ program from 1876, which in turn was more or less a copy of the German Social Democrats’ Gotha Program of 1875.^[73] Marx had these harsh words to say about the Gotha Program, regarding its split from internationalism:

'Lassalle, in opposition to the Communist Manifesto and to all earlier socialism, conceived the workers’ movement from the narrowest national standpoint ... Not a word, therefore, about the international functions of the German working class! And it is thus that it is to challenge its own bourgeoisie—which is already linked up in brotherhood against it with the bourgeois of all other countries—and Herr Bismarck’s international policy of conspiracy ... . Bismarck’s Norddeutsche was absolutely right when it announced, to the satisfaction of its master, that the German Workers’ party had sworn off internationalism in the new program.'^[74]

In April 1889, the Swedish Social Democratic Party (officially the Social Democratic Workers’ Party of Sweden, the Sveriges Socialdemokratiska Arbetareparti, or SAP) was formed with the support of the trade union movement. In 1896, Hjalmar Branting was elected to the Riksdag—the parliament—as Sweden’s first Social Democratic member of parliament. In 1897, the SAP released its first official party program—written by Axel Danielsson and based on the German Social Democrats’ Erfurt Program—in which nationalism and reformism were taken even further. It was not only the Social Democrats who were inspired by political ideologies from Germany. The Swedish conservative social scientist and politician Rudolf Kjellén (1864–1922) developed the idea of the Swedish folkhemmet—the “people’s home”—inspired by Bismarck’s German state. Folkhemmet would become a core concept in the ideology of the Swedish Social Democrats. Kjellén was a member of parliament from 1905 to 1917 and an acclaimed professor at Gothenburg University, known today as “the father of geopolitics.” In his book Introduction to the Geography of Sweden, published in 1900, he described the Swedish people as having Germanic origins and the state as a living organism in need of “lebensraum”—living space. Kjellén hoped to reconcile conservatism with an anti-Marxist form of socialism that eschewed class struggle in favor of nationalism: the state was to provide the basis for a national community, a unified national people, without any division of citizens into separate economic classes.^[75] He wrote in 1915:

One thing is certain: only on its own soil can Sweden build up the happy “folkhem” [people’s home], which it is meant to be. Nationalism provides the only salvation from the voices of our age who, in the name of a misunderstood internationalism, wish to lure wide sections of the people into relinquishing their providential living conditions—i.e. their own innermost personality.^[76]

As the two countries were meant to share a common destiny, Kjellén was a keen advocate of Swedish participation in the First World War, on Germany’s side. According to Kjellén, war had an educational and healing effect on the character of the nation. In 1910 he wrote that war “is like a bath for the renewal of nationalism. Nothing teaches us so tangibly as war that we are our own nation, that we belong to a common homeland.”^[77]

With Germany’s defeat in the First World War, Kjellén—himself a member of parliament—became opposed to parliamentary democracy. In one article he stated that “parliamentary democracy is not an idea suited for 1914.” In a lecture delivered in Uppsala in 1921, he envisaged the collapse of democracy in Germany, predicting that a leader would emerge from the broad strata of the people to create a new society.

There is much disagreement as to the extent to which Sweden’s Social Democrats were influenced by Kjellén in the development of their version of folkhemmet, but it is certainly clear that there are some similarities. The chairperson of the Social Democrats at the turn of the century, Hjalmar Branting, hoped to forge a socialism based on cross-class alliances: “The goal ... is through struggle to achieve a solidarity that ... extends across the nation and through this ... to include all people.”^[78]

In 1925, Swedish Prime Minister Per Albin Hansson (1865–1946) used the term in a speech, emphasizing that the social democratic “folkhem”—unlike Kjellén’s—should be built on a firm foundation of equality and democracy.^[79] The Social Democrats, however, were in fact moving away from class politics by adopting this concept. In one article in the social democratic journal Ny Tid (autumn 1929), Hansson evoked the folkhem in a polemic against the communists:

'That is where ... the class concept seems self-limiting and isolating, whereas the concept of the people instead opens the path to cooperation ... . There is hardly any doubt that the concept of the people is much more unifying than the class concept and thus also in terms of agitation the former gives better results than the latter.'^[80]

The folkhem was to be managed by a political party representing the people of the nation, not special class interests. The “home” should provide security for everyone. In Hansson’s folkhem one is a “fellow citizen.” Economic class disparities were to be leveled out, class power replaced by parliamentary democracy. In folkhemmet, the emphasis was on reducing differences in income rather than changing the relations of property ownership. Although Kjellén’s Bismarckian national conservatism differed from social democracy, the two shared a common ground of nation-based state capitalism.

Getting Rid of Lenin

Sweden was not unaffected by the split between social democrats and communists that developed in the years before the First World War. The crises of the Second International and the formation of factions such as the Zimmerwald Movement divided the social democrats and led to the emergence of a left-wing opposition. One of the points of disagreement concerned the possibility of revolution in Russia. The German Social Democratic leaders Bernstein and Kautsky were of the opinion that socialist revolution could only take place in the most developed parts of Europe, not in backwards Russia. Lenin, on the other hand, saw the possibility of a socialist revolution in the weakest link of European capitalism and hoped that such an event might trigger revolutions in the more developed European countries.

In the spring of 1917, this possibility began to materialize. The German government allowed Lenin to travel home in a sealed train from his exile in Switzerland, hoping that his presence in Russia would help to end the war. Lenin left Germany at the Sassnitz seaport on April 12, traveling by ferry to Trelleborg in Sweden. He planned to pass through Sweden to Finland and from there to Russia. It is not known whether the Swedish government was informed about this journey by the German authorities; however, the Social Democrats were well aware of the arrival of the Russian revolutionary. Erik Palmstierna (1877–1959), an aristocrat and naval officer—and a leading Social Democrat—sprang into action; as he would recall in his memoirs:

When Lenin passed through Stockholm at that time, I heard about it and called Branting [the leader of the Social Democratic Party and later Prime Minister] with the words: “You know Kerensky. Tell him that Lenin will arrive on the next train and must be shot down or imprisoned when he crosses the border. Send him a telegram.” Branting just laughed and said, “You’re really crazy; one does not do that,” but I interrupted him and replied on the phone: “You are an old-fashioned liberal and you think like it was the 1880s. What we need now are men who dare to act!”^[81]

Six months later, in October 1917, Palmstierna became Minister of Naval Affairs in the Liberal–Social Democratic government and later, in 1920, Minister of Foreign Affairs in the first Social Democratic government, led by Branting. He never made any secret of his wish to see Lenin dead. In his memoirs, he also recounted a meeting with the Russian Tsar’s minister-in-exile, in Stockholm in 1918:

Gulkevitj, the Russian minister, who attended one of my wife’s “Tuesdays for the diplomatic corps,” had many interesting things to say about the situation in Russia. I told Gulkevitj that when Lenin had passed through Stockholm, I found out about it and phoned Branting ... ^[82]

Gulkevitj was disappointed that Branting had not taken the suggestion to kill Lenin seriously. Palmstierna recalled his reaction:

Gulkevitj understood the situation and said with tears in his eyes: “Mon cher baron, vous aviez le sort de la Russie entre mains.” [My dear Baron, you held Russia’s fate in your hands.] Just think if Branting had listened to my advice.^[83]

Things did not turn out that way; instead, Lenin crossed the Torne River at Haparanda, out of Swedish territory and into the center of world history.

The civil war in Finland

The inter-imperialist rivalry of the First World War opened a window of opportunity for revolutionary change in Europe. Lenin’s Bolsheviks succeeded in Russia and that inspired a more or less spontaneous uprising in Germany from November 1918 to January 1919, which was crushed by right-wing militias supported by the Social Democratic government. On March 21, 1919, the Hungarian Soviet Republic was proclaimed—it was not long-lived, however: on August 1, 133 days later, the revolution was brought to a close by the entry of the White Romanian army into Budapest. The Russian Revolution also affected Finland, Sweden neighbor. Between January and May 1918, Finland experienced a bitter civil war. On one side stood the “reds,” socialists and communists, consisting primarily of urban and rural workers living in the south of the country. On the other side stood the “whites,” made up of the Swedish-speaking middle and upper classes and the farmers who dominated the north. The whites received military support from Germany, which was concerned by the spread of revolutionary socialism in the East. The attitude of the Swedish Social Democrats toward the revolutionary movement in Finland was not much different from that of the German Social Democrats.

The Swedish Social Democrats, who at the time were participating in a government coalition alongside the Liberal Party, were worried about the possibility of a “red” victory and its potential to generate radical left-wing political activity in Sweden. In his diary, Palmstierna disclosed how the leader of the white forces, General Mannerheim, had asked the Swedish government for permission to transport arms through Sweden and to send a contingent of Swedish soldiers and officers to assist the white army. The Swedish government could not do so openly, however. Palmstierna explained:

Overall, is impossible for us to act as a party, as the situation has developed along pure class lines. On one side the Socialist Party, workers and small farmers, on the other side state power, ruled by the Swedish upper class—who have our sympathies. It is not possible to openly take sides. Doing so would immediately trigger serious struggles here at home.^[84]

The government secretly favored the whites but was under domestic and foreign pressure. Officially, the Swedish king and the Liberal–Social Democratic government declared that Sweden was neutral in the civil war. Many Swedish socialists opposed supporting the whites, as did the allied powers of England and France, wary of their ties with the German Empire. This formal neutrality, however, did not prevent the Swedish government from extending covert support. General Mannerheim had eighty-four Swedish volunteer officers on his staff. What’s more, a Swedish brigade of approximately one thousand soldiers, under the command of Hjalmar Frisell, participated in the fighting against red forces in and around Tampere. The government secretly authorized the export of 2,000 rifles, 100,000 cartridges, 10 machine guns, and 50,000 hand grenades to the white army. In addition, Swedish volunteers were allowed to carry large quantities of arms. The total quantity of arms and supplies smuggled across the border remains unknown, but it was not uncommon for fully loaded train carriages to cross bringing weapons to the white side. In February 1918, the Swedish government also supplied naval escorts, aircraft patrols, and icebreakers to the German cargo ships that sailed from Germany, heavily laden with arms and one thousand white Finnish elite soldiers who had received special military training in Germany.

The Swedish government, and Minister of Naval Affairs Palmstierna himself, had their own agenda, in addition to opposing the reds: to take advantage of the civil war to acquire the Åland Islands from Finland. The islands were strategically located in the middle of the Gulf of Bothnia in the Baltic Sea. The Swedish government sent a military expedition to the islands in February 1918. Swedish propaganda justified this on humanitarian grounds, but the actual motive was to strengthen Sweden’s geopolitical standing in the Baltic Sea.^[85]

After the white victory in May 1918, suspected reds were hunted down and interned in concentration camps where thousands were executed or died due to malnutrition and illness. A total of 37,000 people perished in connection with the civil war in Finland.^[86]

Swedish capitalism in the interwar period

Sweden experienced a period of industrial expansion in the interwar years. Sweden’s wood, paper, metal, and machine industries bolstered its international position throughout the 1920s. The Electrolux Group was founded in 1910; its first product was a vacuum cleaner, but soon many other home appliances and electrical machines for use in professional kitchens and laundries were being produced. Electrolux is today the world’s second-largest manufacturer of household appliances. Founded in 1927, Volvo established itself as a manufacturer of safe, reliable, good-quality personal cars and trucks. Saab, which stands for Svenska Aeroplan Aktiebolaget, was founded in 1937, specializing in the production of weapons systems, airplanes, and electronics. In 1947, it expanded to producing cars. Husqvarna dates back to 1689; up until the 1870s, it mainly manufactured firearms. It later began producing motorcycles, mopeds, and bicycles, different kinds of tools, and sewing machines. Arms production continued with the popular Husqvarna submachine gun, among other weaponry.

Another important Swedish enterprise in the early 20th century was the Kreuger Group. In 1915, Ivar Kreuger consolidated ten match companies under the name United Swedish Match Factories, the flagship company within the group being a match company he had founded in 1910. The First World War complicated Swedish access to phosphorus and calcium carbonate, vital components in the production of matches. Nevertheless, Kreuger managed to secure better supplies than any other factory and acquired his main competitor, Jönköping-Vulcan Match, the two companies merging into Svenska Tändsticks AB. The Kreuger Group was formally established in 1917 and grew rapidly through the acquisition of leading match companies in Europe, the United States, and South America. Kreuger set up a holding company, International Match Corporation, which had its headquarters in New York.

Today, matches are considered an insignificant product, but at the time, they were a tremendously important commodity: everybody bought matches, every day. In the 1920s, Kreuger was one of the most prominent and powerful business executives in Europe. His company became a symbol of monopoly capital: the Kreuger Group accounted for two thirds of the world’s production of matches and controlled more than two hundred match factories in thirty-five countries. It had an official monopoly on the sale of matches in fifteen countries and dominated the market in another ten.

There are many colorful examples of the tricks and methods Kreuger used to maintain its monopoly position. In Peru, where Kreuger had an official monopoly on the sale of matches, the company hired “provocateurs” who would approach people, preferably foreigners, asking them for a light. If the victim used matches that did not come from a Kreuger company, or a lighter, it triggered a heavy fine, half of which went into the pocket of the provocateur.^[87]

In Belgium, Kreuger paid an agent, Sven Huldt, to persuade local match makers to be part of a joint company to resist Kreuger’s own company. As soon as the deal was in place, Huldt sold out to Kreuger. In countries such as Turkey, Yugoslavia, Guatemala, Ecuador, and Peru, Kreuger obtained his official monopoly by financing loans to the government. Kreuger also received France’s highest award after lending 75 million francs to the French state.^[88]

Throughout the 1920s, Kreuger established a broad network of financial and industrial enterprises, in parallel with the match companies. The Swedish companies he controlled were concentrated in the paper, machine, telecommunications, and mining industries. In 1930, the Kreuger Group accounted for 64 percent of activity on the Stockholm Stock Exchange.^[89]

Like today’s transnational corporations, Kreuger used a web of shell companies. In the 1920s, he had more than 400 companies registered in Liechtenstein and similar places where there were minimal regulations and no taxes. Not even the companies’ directors or accountants were fully informed of Kreuger’s many transactions, and even his personal assistant, Kristor Littorin, was kept in the dark. Kreuger was self-reliant and made all major decisions on his own. He was a great admirer of Napoleon Bonaparte; as Kreuger put it, he “did not hold war councils because one first-class brain is enough for an entire army.”^[90]

The world economic crisis that followed the New York stock market crash in 1929 caused huge problems for the Kreuger Group. Initially, however, Kreuger managed to keep everything going through a series of daring cons. President Herbert Hoover received him regularly at the White House to discuss the global economic situation and ask his advice. When Lee, Higginson & Co. of Boston, a huge investor in Kreuger’s business, suspected something fishy they sent a director, Donald Durant, to Stockholm to investigate the matter. Kreuger organized a large party, attended by prominent figures and diplomats, to impress Durant. It worked, and Durant went home confident that Kreuger’s financial situation was sound. It later turned out that many of the guests had been paid to attend the party. One of the directors of International Match, Percy Rockefeller, also suspected mismanagement, and asked for a personal meeting with Kreuger. During the interview, Kreuger appeared to receive telephone calls from English Prime Minister Stanley Baldwin, Stalin, and Henri Poincaré, one of the leading scientists of the time. Rockefeller was impressed and subsequently reassured his colleagues, “We are lucky to be associated with Ivar Kreuger.” Only later was it revealed that Kreuger had simply spoken into a silent phone. Kreuger became increasingly desperate, forging Italian bonds for $143 million and using them as collateral to take out a number of loans.^[91]

Eventually, it became impossible to hide that something was seriously wrong in the company. The price of Kreuger shares fell on the New York Stock Exchange from its highest listing of over $46 in March 1929 to $4.50 near the end of 1931. When the banks began to demand Kreuger repay its loans in the autumn of 1931, the company’s liquidity crisis became acute. Kreuger sought to raise capital by selling a large stake of shares in LM Ericsson, a major telephone company. The US company ITT was initially willing to pay $11 million for the shares but then withdrew. That was the end for Ivar Kreuger, who shot himself in his Paris apartment. An audit subsequently revealed that Kreuger was bankrupt; claims against the estate totaled over a billion dollars—an amount which at the time was more than Sweden’s total public debt.^[92] The so-called Kreuger Crash resulted in a wave of bankruptcies and suicides among Swedish CEOs and the resignation of the prime minister.^[93]

The Stockholm School of Economics

The capitalist world crisis of the 1930s got rid of smaller and less profitable companies, thereby leading to a greater concentration of capital. At the same time, banking and financial capital in Sweden strengthened its hold on the productive industrial sector. As the Kreuger Group fell apart, the financier Knut Wallenberg picked up the pieces, strengthening his position as the leading capitalist in Sweden.

On the political front, one consequence of the Kreuger Group’s collapse was that political parties associated with big capital were weakened. Several prominent Liberal politicians were personally involved in the Kreuger scandal. Liberal and business-friendly economic politics, which had been prevalent in the 1920s, had no solutions for the problems that had arisen in the wake of the world economic crisis. This paved the way for a social democratic economic policy that would attempt to regulate capitalism to avoid future crises.

The Swedish social democratic capitalist welfare state developed its own economic theory and practice based on ideas from the Stockholm School of Economics. Paradoxically, the aforementioned financier Knut Wallenberg was the main financial sponsor of the institution. Founded in 1909, its original purpose was to educate economists in order to be able to modernize Sweden’s economy and develop international trade. The connection between the capitalist Wallenberg and the development of social democratic economic policy can be traced to a common German inspiration.

The Swedish Social Democrats were, as previously mentioned, inspired by the German Social Democrats’ Gotha Program, which—besides being nationalistic and focused on reforms within the capitalist framework—also disputed Marx’s theory of labor being the source of value creation.

The American Marxist Louis Proyect has explained the connection between the German Social Democrats and the Stockholm School of Economics.94 At the time, the German Social Democrats supported Eugen Böhm von Bawerk’s theory of value; Bohm-Bawerk is considered the father of the Austrian School of Economics, which included economists such as Ludwig von Mises and Friedrich Hayek, the theoretical architects of neoliberalism. Someone else who was inspired by Böhm-Bawerk and shared his criticisms of Marx’s theory of value was Knut Wicksell (1851–1926), the first and founding professor of the Stockholm School of Economics. But if Wicksell was inspired by Bohm-Bawerk and if the Stockholm School of Economics later developed economic policies associated with John Maynard Keynes, how does one explain this strange mixture of neoliberal and social-liberal economic thinking? The answer lies in Wicksell’s economic theories.

Knut Wicksell was a very eclectic person. He was partly inspired by the classical ideas of David Ricardo and the Austrian School of Economics, both very liberal sources, but also by Keynes’s early writings, which recommended that the state should regulate capitalism. No wonder Wicksell has been called the “economist of economists.” Despite his liberal roots, he concluded that a capitalist economy left to its own devices would produce recurrent devastating crises and make the rich richer and the poor poorer. To counter this, state-regulated interest rates and monetary policy were necessary. Wicksell’s theoretical specialty was interest rates, prices, and monetary policy, and he was a strong advocate of using interest rates to maintain price stability. In addition, he advocated progressive taxation to promote a more equal distribution of wealth.

Wicksell was also influenced by the classical economist Thomas Malthus and his theories about overpopulation. He was deeply worried that technological development, productivity, and the volume of production would not be able to keep pace with population growth. He sought to determine the “optimal population size” and, as a result, was a strong advocate of birth control.

Wicksell was a controversial figure who was outspoken on many social issues. He was strongly opposed to alcohol and prostitution; he questioned social hierarchy, the institution of marriage, the Church, monarchy, and the military. His wife, Anna Bugge, was a prominent feminist. At a lecture in 1908, he poked fun at the idea of Jesus’s “virgin birth,” which led to his conviction for blasphemy and two months’ imprisonment. Wicksell saw himself as more than just an economist; he wanted to be a social reformer.^[95]

Notwithstanding all this, in 1916 Wicksell became a government advisor on finance and banking matters. He died in 1926, but his Stockholm School of Economics was to be further developed by esteemed economists such as Bertil Ohlin, Gunnar Myrdal, and Erik Lindahl. Dag Hammarskjöld, the later Social Democratic minister and Secretary-General of the United Nations, was also a pupil of Wicksell’s.96 (We will return to Hammarskjöld later.)

In 1937, Bertil Ohlin published an article entitled “Some Notes on the Stockholm Theory of Savings and Investment,” in the influential Economic Journal. The article was published in response to Keynes’s book The General Theory of Employment, Interest and Money, which had appeared the year prior. The purpose of the article was to draw international attention to the Stockholm School of Economics, which according to Ohlin had anticipated Keynes’s findings. Gunnar Myrdal, who was also a supporter of Keynes’s ideas, maintained that he and the School of Economics had first suggested adjusting national budgets to slow down or speed up a national economy.

Of greater importance to immediate political concerns, Wicksell and his pupils influenced Ernst Wigforss (1881–1977), who was the Social Democratic Finance Minister for most of the period from 1924 to 1949, as well as being a special advisor to the trade union movement. Wigforss was a knowledgeable economist in his own right and a Keynesian before Keynes, so to speak. Like Keynes, Wigforss believed that left unregulated, capitalism would run off track. There was an inherent imbalance in capitalism between the growing supply of goods and the limited purchasing power created by wages and profits from the same production. This contradiction would lead to crises of overproduction/underconsumption and then to unemployment. The state had to regulate capitalism, partly through interest rates and monetary and fiscal policies to stimulate employment, partly through state-initiated projects, such as new infrastructure and social housing, to promote employment and thereby increase purchasing power. During the economic slump of the 1930s, the Social Democratic government implemented Wicksell and Wigforss’s ideas about interest rates and monetary and price policy, to get the wheels of the economy spinning again.97 Wigforss is also regarded as the mastermind behind the high and progressive income tax in Sweden, used to finance social welfare measures and redistribute income in society.

In the post–World War II Cold War, with its two rival political blocs around the United States and the Soviet Union, the Stockholm School of Economics enjoyed international appeal for promising a “third way” between a liberal capitalist economy and a socialist planned economy. The supposed accomplishment of this third way was to have achieved a high level of social equality and welfare without undermining the “efficiency” of the capitalist market economy. In order to succeed, however, such an economic strategy requires that some political and class-related preconditions be met.

The division of power

Despite almost half a century of continuous Social Democratic governments, capitalism has never been challenged in Sweden. The economy is firmly based on the accumulation of capital, a market economy, and private ownership of the means of production. Sweden is a capitalist state based on the rule of law, freedom of expression, and the right to organize. However, it is a special form of capitalist state. The Swedish state has been characterized by a division of power between the working class and the bourgeoisie via parliamentary mechanisms. This division of power does not mean that class struggle has ended. It is an expression of it.

The Swedish capitalist welfare state does not solely represent the interests of capital or the working class. The state is an organization that class society establishes in order to maintain social peace and uphold the optimal conditions for its mode of production. The prime minister of the welfare state is not the representative of narrow capitalist interests or of working-class interests but is simply the representative of the current mode of production. Power accrues to the government best suited to serve, preserve, and develop the existing mode of production, based on the informal social contract between capital and labor. This is how a capitalist welfare state comes to exercise hegemony. As Gramsci explained: “Obviously, the fact of hegemony presupposes that the interests and tendencies of those groups over whom hegemony is exercised have been taken into account and a certain equilibrium is established.”^[98]

There is nothing new, special, or controversial about the division of state power between classes. In a series of articles from 1848–50, collected under the title The Class Struggles in France, Marx described how the constitution of the bourgeois state grants political rights to the classes it exploits:

The comprehensive contradiction of this constitution, however, consists in the following: The classes whose social slavery the constitution is to perpetuate—proletariat, peasantry, petty bourgeoisie—it puts in possession of political power through universal suffrage (sic). And from the class whose old social power it sanctions, the bourgeoisie, it withdraws the political guarantees of this power. It forces the political rule of the bourgeoisie into democratic conditions, which at every moment help the hostile classes to victory and jeopardize the very foundations of bourgeois society. From the first group it demands that they should not go forward from political to social emancipation; from the others that they should not go back from social to political restoration.^[99]

Sweden’s constitution and parliamentary system serve the same purpose. They guarantee the economic predominance of capital while at the same time providing political rights to all citizens. With this power-sharing arrangement, class struggle is limited to dividing up the benefits from the accumulation of capital. Throughout the last century, this state form became increasingly important for the management of capitalism in the core. What’s more, this state form became the owner of infrastructure, institutions, and even means of production, and the capitalist welfare state developed a significant public sector employing many people (a fact that would help to secure its existence).

It is important to remember, however, that the emergence of this power-sharing arrangement and the subsequent construction of the welfare state were tied closely to the development of imperialism—a fact that is denied or dismissed by social democrats and many on the left, who tend to view class struggle from a strictly national perspective. Seen from such a perspective, reformism waged a very successful struggle.

Imperialism and the split in socialism

It was this combination of nationalism and reformism that Lenin fought against so fiercely in the Second International, in the years around the First World War. He rhetorically asked the question:

Is there any connection between imperialism and the monstrous and disgusting victory opportunism (in the form of social-chauvinism) has gained over the labour movement in Europe? This is the fundamental question of modern socialism.^[100]

Lenin’s answer was affirmative. Imperialism promoted extraordinary profits and national chauvinism, which laid the basis for what Lenin called a “labor aristocracy” and for the success of its political representatives, the Social Democrats. Lenin described the phenomenon in his pamphlet Imperialism, the Highest Stage of Capitalism:

As this pamphlet shows, capitalism has now singled out a handful (less than one-tenth of the inhabitants of the globe; less than one-fifth at a most “generous” and liberal calculation) of exceptionally rich and powerful states which plunder the whole world simply by “clipping coupons.” Capital exports yield an income of eight to ten thousand million francs per annum, at pre-war prices and according to pre-war bourgeois statistics. Now, of course, they yield much more.

Obviously, out of such enormous superprofits (since they are obtained over and above the profits which capitalists squeeze out of the workers of their “own” country) it is possible to bribe the labour leaders and the upper stratum of the labour aristocracy. And that is just what the capitalists of the “advanced” countries are doing: they are bribing them in a thousand different ways, direct and indirect, overt and covert.

This stratum of workers-turned-bourgeois, or the labour aristocracy, who are quite philistine in their mode of life, in the size of their earnings and in their entire outlook, is the principal prop of the Second International, and in our days, the principal social (not military) prop of the bourgeoisie. For they are the real agents of the bourgeoisie in the working-class movement, the labour lieutenants of the capitalist class, real vehicles of reformism and chauvinism. In the civil war between the proletariat and the bourgeoisie they inevitably, and in no small numbers, take the side of the bourgeoisie, the “Versaillais” against the “Communards.”

Unless the economic roots of this phenomenon are understood and its political and social significance is appreciated, not a step can be taken toward the solution of the practical problems of the communist movement and of the impending social revolution.^[101]

The concept of “Social Imperialism,” meaning social democratic politics at home and imperialism abroad, was widely used by Lenin.