By tradition at least, Swedes are not given to mass displays of emotion. The demonstrations were therefore momentous events in themselves. Regarded as the biggest in Swedish history, they brought out 100,000 people on October 4, 1983, all milling around the Riksdag, the Swedish parliament, shouting slogans with wild abandon.
About 115,000 took to the streets exactly a year later, this time at 15 different locations. But what was even more astonishing, on the face of it anyway, was the target of the protests and the makeup of the crowd. Swedish outrage is typically vented against the alleged immoralities of remote foreign powers (usually the United States), and the typical protester is either an idealistic student or a devout labor-union member. The October 4th demonstrations, however, were leveled at the Swedes' own Social Democrats, and the mob in the streets contained a high proportion of people who could only be described as business executives.
If Swedes rebelled against their own government, it was bound to be Swedes of the business community who would do it, and the Social Democratic Party that would bear the brunt of their rebellion. After almost half a century in power, the Social Democrats have built one of the most generous and comprehensive welfare states in the world. Social programs in Sweden, for example, take roughly 21% of the country's gross national product, as against 12% in the United States. Moreover, the welfare apparatus is founded on profound egalitarian sentiments. Swedish labor leaders, for example, think it is perfectly fair that top executives receive four times the pretax income that the lowest-paid workers do; American labor leaders and Democratic party leaders think that ratios of more than 11 to 1 are fair.
But Sweden is a welfare state, not a Communist or even a Socialist state. Well over 90% of the means of production is in private hands, and the concentration of ownership (in families like the Wallenbergs, for instance) is even greater than it is in the United States. Enterprise is also freely competitive in Sweden: Companies are left to prosper or to fail according to the dictates of the marketplace, and employment decisions remain in the hands of business managers, with the state making itself felt mostly in the form of extensive retraining and relocation programs for the unemployed. Swedes enjoy one of the highest standards of living in Europe, but welfare costs are paid for not out of the retained earnings of nationalized companies, as in truly Socialist countries, but out of the retained earnings of individuals -- that is, through taxation.
Americans should recognize the system: It is not unlike our own. The difference is in the proportions. About 70% of Sweden's GNP is taken up by the state, as against 33% (including defense) in the United States, the taxes are commensurate. To pay for these outlays, Swedes with incomes in the $20,000 range, modest enough by North American standards, are taxed at the 50% rate, and earnings above $20,000 rapidly approach the 80% bracket. In short, the Social Democratic way with capitalism in Sweden has been to domesticate its golden goose -- and make off with its eggs.
It was no surprise, therefore, that the October 4th demonstrations, although well seeded with students, professionals, and even a number of trade unionists, should have been led by businessmen. What was a surprise was the origin of the movement. Sweden is a thoroughly, some say suffocatingly, well-organized society, the business-managerial class no less so than the working class. Yet the October 4th protests were engineered by neither of the two businessmen's organizations; nor were they the work of the "Bourgeois Parties," as Swedes call the center-right parliamentary coalition that briefly held power from 1976 to 1982. Instead, the protests were orchestrated by an unknown, nonpolitical entrepreneur by the name of Gunnar Randholm.
A broad-shouldered man, smooth-shaven, with the disconcerting blue eyes of a Siamese cat, Gunnar Randholm comes from Nassjo, a city in Smaland, a southern province celebrated for its cottage industries. Like Connecticut Yankees, Smalanders are tinkerers, setting up machine-tool or electronic shops in their houses, often developing them into small family businesses. Randholm is of that breed, but with more imperial ambitions. Starting in 1945 with his father's company, which manufactured electrical junction boxes, he has put together a $100-million public conglomerate, Eldon AB, which makes a variety of export items, from electrical installation materials to high-quality leather furniture, from automobile ski racks to wagons for farming and forestry.
In a sense, Randholm owes his success at Eldon to precisely the sort of tax policies against which he has been mobilizing his countrymen. In the late 1970s, he put an ad in the paper offering to buy out companies that had products for export. (There was no OTC market in those days, the stock exchange in big business -- dominated "Sweden Inc." is a sleepy place.) "He received hundreds and hundreds of replies," says Peter Magnusson, a salesman for exports at Eldon. "It amazed him, and when he looked into the reason why so many people wanted out, he discovered that invariably it was the tax laws -- inheritance taxes that made it impossible to pass on a business to the next generation, or punishing restrictions on the mobility of capital." The Smaland spirit of enterprise, Randholm concluded, was being destroyed as surely as a birch forest could be destroyed by girdling its trees.
There was nothing new about the tax policies as such. They had been on the books for years. What was new in the mid-'70s was the deteriorating heft of the Swedish economy in the global marketplace. With more than 8 million people, Swedes must export to live -- live, at any rate, in the manner to which they had grown accustomed in the 1950s and '60s. But in the 15 years from 1961 to 1976, low-cost developing nations took significant bites out of Sweden's crucial steel, shipbuilding, and wood-products trade. Then the country discovered that its fuel bill, thanks to OPEC, had increased sevenfold from 1971 to 1980.
One response to this sort of setback is austerity. But austerity is a hard sell in a country like Sweden, where everyone's standard of living, not just a minority of poor people's, is affected by welfare expenditures. The Swedes did embark on at least a flirtation with austerity in 1976 when they elected the "Bourgeois Parties" to a plurality in the Riksdag. The affair lasted six years, until 1982, and was not a success. One strike, followed by an employers' lockout, shut down the entire country for three weeks.
"Seventy-five!" roars Gunnar Randholm, when asked what happened when the Social Democrats returned to power. "Seventy-five new taxes instituted in Sweden since 1982. Imagine what that does to incentive!" As a Smalander in a country largely fixated on bigness, Randholm was in a good position to realize that what Sweden desperately needed to prosper in the years ahead was a resurgence of the entrepreneurial spirit of his native province. Among his first acts as an agitator was to persuade some 300 small family businessmen around Smaland to subscribe to newspaper ads arguing that taxation was killing entrepreneurship.
Without the Wage-earners Funds, however, Randholm's rebellion might have remained a faint outcry in the wilderness. The Wage-earners Funds was a proposal that Rudolf Meidner, chief economist for the LO labor federation of blue-collar workers, had been working on since 1971. In its original form, the proposal called for all companies to set aside 20% of their annual real profit in the form of new stock for an employees' fund.
Two things would be accomplished by this. First, a new source of money would come on line to help modernize the Swedish economy. Second, in the course of time, ownership of all profitable companies would sooner or later pass out of the hands of capitalists and into the hands of employees, and Sweden would become a truly Socialist state at last. Almost nobody liked that. Some prominent Social Democrats, official sponsors of the plan, resigned from the party; some media commentators forecast the end of democracy; polls showed that a meager 7% of the voters approved of the idea; The Nobel Foundation entered the fray, with Stig Ramel, the director, castigating the plan's supporters as "ignorant or spineless."
The Social Democrats backed off. By the time Olof Palme sent the Meidner Plan to Parliament, in June 1983, it was a mere wraith of its former self. Privately, in fact, party leaders were saying that the only reason they persisted in sponsoring the plan was to give the economy a little capital shot in he arm, and to placate the left-wingers in the labor movement.
In the summer of 1983, however, Gunnar Randholm knew an exploitable political issue when he saw one. Even in the diluted form in which it arrived on the floor of the Riksdag, the Wage-earners Funds still scared people: Sifo, the country's leading public opinion poll, reported that for the first time in recent years the Social Democrats now had a minority of sympathizers.
Randholm's revolt moved into high gear in July. All over Sweden, "Fund Corners" were opened to accept donations and collect signatures. Buttons and bumper stickers (the latter a new thing in Sweden) sprouted everywhere, like wildflowers in summer. "Stop the Funds," they said, and "Free Enterprise is Good for Sweden." Business got into the swing of things, too. Dataronics AB, a Swedish computer company, announced that it was abandoning plans to make a new public offering, thanks to the threat of the Wage-earners Funds, and for good measure declared that it was moving its research and development arm to the United States.
Randholm held his first nationally covered press conference on the morning of August 15, 1983. Proclaiming, among other things, that the Funds were "completely insane," he announced the formation of what he called, for the first time, The October 4th Movement. As a name, October 4th was perfect: It was the opening day of the Riksdag; it was the date on which Randholm promised to lead a massive protest march on that building; and most important, as he knew well, it gave the movement a thrillingly subversive quality that could prove attractive in dour Sweden.
It did. Previous demonstrations in Stockholm, the May Day celebrations of the labor movement, for example, are considered triumphs with a turnout of 30,000. Nobody had seen anything like the 100,000 that poured into the city center, many of them from outlying provinces, for the first October 4th protest. Nobody had seen anything like the spirit of this crowd, either, or of the even bigger one that came out a year later. There were bands and jugglers; there were high school students waving painted banners that read, "We refuse to study under the hammer and sickle" and "Stand on your own two feet or the state will stand on you"; restaurateurs passed out free food; and the hundred or so counterdemonstrators could barely find the energy to throw spoiled herring at their adversaries.
The message of the protests, at its simplest, was stated by the president of Alfa-Laval AB, Harry Faulkner: "I have never before taken part in any demonstration, but the issue here is one of life and death.We must preserve the spirit of free enterprise in Sweden." But there was more to it than that. "October 4th," read a leaflet handed out by cadres of young people, "is a message from the creative part of Sweden, aimed at the Socialist politicians. Trust the people! The many people! Trust their creative power. Put aside the watchful mistrust, throw away your controls and your belief in the blessings of central planning. If Sweden is to regain its affluence, it will not happen through a more socialized enterprise system."
Randholm's rebellion might have begun as nothing more extraordinary (except in straitlaced Sweden) than a taxpayers' revolt. Today, however, it is part of what Steven Kelman, of Harvard University's John F. Kennedy School of Government, calls "a major cultural shift." It has reached a point, says Kelman, where it is almost possible to say of Sweden what President Reagan claims for America, that it has entered the "Age of the Entrepreneur." The evidence is slight and gives ground for not much more than a hope, yet it is also everywhere. The brain drain, which has been a major concern in Sweden for some years now, may soon be staunched. Twenty-year-olds who only five years ago dreamed of going to work for the government now speak openly of going into business, often for themselves. Olof Palme, asked in the mid-'70s what he would do to promote entrepreneurial business in Sweden, replied almost contemptuously, "Sweden can't expect its growth to come from newly established firms." The Prime Minister would never say that today. The shift has made itself felt in the language. There used to be Swedish word for "entrepreneur," but it long ago became indistinguishable from the Swedish for "businessman" or "industrialist." Nowadays, the French word has been reimported into everyday use -- entreprenor -- always approvingly. There has even been a practical institutional reform designed to foster entreprenoranda (that is, the entrepreneurial spirit): the opening, for the first time in Swedish history, of an OTC exchange.
Gunnar Randholm, however, is not at all mollified. He and his more militant supporters are focusing their energies on the battle against the Social Democrats in the September 15 elections. As of mid-summer, indications were that they had a 50-50 chance of defeating them. But if the Socialists win, the October 4th Movement will once again take to the streets. Randholm believes that much more needs to be done if the spirit of Smaland is to revive. "Sweden," he says, combatively as always, "can't take any more out of her people. Swedes have no desire to start new business ventures: They know it's suicide.Failure just results in bankruptcy. It's success that kills them. If the small businessman succeeds, he is first tortured by excessive taxes, and then murdered by unions who treat him, or any new businessman, as if they were already as rich as Volvo. With incentives like that, it's impossible to get a new enterprise started." This situation is not likely to change overnight. Swedes are too deeply imbued with the mentality of the welfare state -- the passion for equal treatment, the need for order and security, the terror of personal failure. But if it does change, if the Smaland spirit should spread, then Gunnar Randholm's revolt will get much of the credit.