Sweden’s social democracy and Germany’s social market economy have many similarities in policymaking and differences in their value structures. Whereas Sweden allows for direct influence from the worker on its bureaucratic structure, Germany has more of an emphasis on self-regulation and decentralization of power. Their different histories are indispensable in understanding the core values of these democracies.
Sweden’s basic principles of social democracy can be encapsulated in a quote from Sweden’s former Prime Minister, Tage Erlander, “it is a mistake to believe that people’s freedom is diminished because they decide to carry out collectively what they are incapable of doing individually.” (Tilton, 1990) Sweden has long been a pioneer in the promoter of social justice through the use of a strong corporate market and socialized distributive policies. In fact, their emphasis on collective bargaining as a means to reinforce the general welfare of its workers is illustrated by the fact that around 70% of people in Sweden are in a union (Lecture notes 9/18). According to Tilton, The Swedish commitment to the working class’s full participation in society is indicative of their framework of viewing everything through its social utility. Maximum social utility, in the eyes of the Swede, is best created with an equalized background conditions; they see the public sector as expanding their freedom of choice instead of a limiting factor. (Tilton, 1990)
Germany is made up of different, more conservative values; it is classified as a social market economy. A core principle of its federal system is that decision-making processes should be made through the most local level possible. This concept called subsidiarity, is prevalent in many Christian democracies. Rather than direct social justice, Germany’s ethical society traditionally bases a lot of emphasis on their welfare state, social partnership with interest groups, and fair competition. (The German Polity) Germany relies on the private market a lot more than top-down public distribution system than Sweden. This is indicative of their goal to avoid any major concentration of power. They value compassionate conservatism; its welfare state is very strong and is seen as a 3rd way between socialism and laissez-faire economic liberalism. (Lecture notes 9/27)
The way both countries see equality and democracy can be shown through the welfare states, economic thought and electoral systems. Sweden defines equality as an equality of consideration. This egalitarian principle makes sure that they do not see economic efficiency as a zero-sum situation in regards to social policies. They have a framing with which they allow for “expenditures on their education and health should be seen not as burdens upon production, but as investments in human capital” (Tilton, 1990). This economic equality is heavily based on Keynesian thought towards equitable distribution of wealth and government distribution through progressive tax policies. They are both a political democracy as well as an industrial one. Democracy is carried out through committees, consultation, and underneath a magnifying glass held by the people themselves. (Heclo & Madsen) According to the Economist, “Sweden gives everyone access to official records” this fact shows the conditions of democracy. Absolute transparency of Sweden’s government makes the people’s home more democratic.
Germany has a different view of equality than Sweden but a similar approach toward democracy. They do not put as much emphasis on government intervention so much as showing a preference for subsidiarity and self-regulation. Welfare is one of the most important issues for the German citizen, they see the welfare state bringing them social peace and prosperity. Their equal prosperity is achieved with a bargaining approach (139 The German Polity) In fact, their multiparty system ensures that there are many views being represented through coalition governments although sometimes there is not a clear winner. There is an emphasis on democracy in the workplace as seen in the works councils. The German Polity describes Interest groups as a “a vital factor in the policy making process” (166) Parties also play a huge role in institutions due to the split ballot and multiparty system. They have a strong committee system, in which Business interests and other interest groups have a large say in decision-making since the government is required to consult them if they are relevant through the Remiss system just like Sweden. But Germany takes a step further in allowing interest groups sometimes implement policy. This is the notion of social partnership coming into play, but negotiation and compromise is no stranger to Germany.
Individualism being a zero-sum game in contest with the collective good does not necessary ring true for these countries. Their view of the proper role of government and the individual is unique to each of them however. Sweden’s famous reference to its government as the people’s home has continued to dominate the role of the government. Sweden has a strongly centralized state where they center on full employment with a comprehensive welfare state. The public sphere controls a lot of property but industry can be a mixture of both public and private, the gradual socialization is indicative of their social democracy. Sweden is a venture capitalist country with a large regulatory structure. Most of the jobs in Sweden are in the public sector. There has been a gradual socialization of property rights. Property rights are seen as a bundle, the gradual socialization of property parallels the idea that the expansion of the public sector extends their freedom of choice. (Tilton, 1990) They see taxes not as a public overreach but an opportunity to pay for public services. The logic of Sweden is seen like this, If private capital resists public welfare and equal democratic organization of economic life, then government intervention maximizes prosperity and democracy.
The German Federal system is specifically geared to prevent centralized power which is why Germany gives a lot of power to the Lander regions allowing them extensive autonomy including a veto power. This distributed sovereignty is in place so that their future would be different from their fascist/communist past. Multiparty coalitions mirror the German value of solidarity. The individual gets two votes to pick their representation, both a party and a person to represent them. The market economy of Germany is also regulated for social ends, but not to the extent of Sweden. Germany’s generous welfare state is supported by social partnership programs instead of the government. Companies are social institution’s stakeholders since that is where the worker spends most of their time. Although its Federal system checks the National government the Chancellor is the center of executive authority (Lecture notes 9/25). Like Sweden, they believe that market mechanisms should not distribute gains, but instead of the government they use social partnership.
There are policies that mirror the core values of each country; the electoral system and how they treat their workers seem to be the most deterministic. Consultation with special interests hold a special weight in both these systems. Sweden’s emphasis on collectivism has created the nickname of the people’s home for its unitary system in which egalitarianism and full employment are their central goals. Equity does not exclude efficiency is their motto. A solidaristic wage policy is available thanks to the strong union presence in the country. Their social policy is universal, meaning that everyone has equal consideration. Economic system is undoubtedly Keynesian with government pressure to drive and organize the economy for more equal distribution. This social democracy’s market is largely subsidized by public welfare, for example, Sweden has an extensive paternity and maternity privileges. Government intervention is meant to maximize prosperity and expand options for its people. In making policy, the Swedish Rigstag has something called the Remiss system, this system is also present in Germany. Their integrative democracies allow for the voices of experts, interest groups, workers, and the employers to all be heard equally. Their unusually concentrated industrial structure emerges as a result of these policies.
In fact, Germany’s interest groups sometimes implement policy (Lecture notes 9/25) But the government lays down the goals of the social partnership. According to the German Polity, “60 percent of bills are modified through the Bundestag’s committees” (222) Consultation with committees hold a lot of weight although that said they only have the ability to propose amendments not modify the documents themselves. The works council is an important policy that enforces equality and democracy in the workplace. Workers are able to sit down with their employers and have a say in how they are treated. Policies are generally pro-business but it is a “Compassionate Conservatism”
All in all, in comparing the two ideologies of social democracy in Sweden and Germany’s social market economy we can see similarities in policy-making procedure but not in execution. They both have extensive welfare states and hold economic equality in the same regard as political equality.
Bibliography
Conradt, D. P., & Langenbacher, E. (2013). The German Polity. Plymouth, UK: Rowman & Littlefield Publishers Inc.
Heclo, H., & Madsen, H. (n.d.). Policy and Politics in Sweden Principled Pragmatism. Chapter 1.
Tilton. (1990). The Political Theory of Swedish Social Democracy. 257-269; 276-280.
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