Towards ‘universal financialisation’ in Sweden?

Abstract

The reform of Swedish pensions serves as a case study to explore resistant institutions and logics shaping processes of financialisation in Europe. EU membership cemented the path towards neoliberal restructuring, yet Sweden remained an unlikely case for financialisation by the mid-nineties. Social Democratic principles and practices of de-commodification and redistribution remained dominant with pensions at the core. Reform aimed at changing this by subjecting pensions to financial market performance. The outcome of the project to, in a characteristically Swedish way, ‘universalise’ financialisation is however uncertain. If successful, those challenging the legitimacy of financialisation elsewhere in Europe lose a ‘social democratic’ reference point in their struggle.

Keywords:

• financialisation
• neoliberal restructuring
• Swedish pension reform
• the welfare state
• ‘economic aesthetics’

Acknowledgements

The writing of this paper was enabled by funding from the UK Economic and Social Research Council and the Swedish STINT foundation. The paper has benefitted from comments from John Campbell, Dick Forslund, Urban Lundberg, Johnna Montgomerie, Magnus Ryner, Daniela Tepe, Matthew Watson and two anonymous referees, yet the responsibility for any errors is, of course, solely the author's.

Notes

Swedish ‘Fordism’ is a simplification. Ryner's ‘disarticulated Fordism’ is a more suitable conceptualisation (2002).

Governed by tripartite boards, the AP Funds were initially temporary buffer funds intended to secure the stability of the ATP system, but soon became normalised parts of SAP economic policy. The accumulation of large volumes of pension capital from employers' contributions served to reduce inflation pressures and enabled the provision of cheap credit to strategically selected industry and socio-economic projects, not the least for housing (see Pontusson 1984).

A relatively symbolic initiative had resulted from the wage-earner fund proposal. Investment funds had been set up, which by the early nineties stood for 7% of the Swedish stock market. This capital was, however, used by the neoliberal government (1991–1994) to finance the kick-start of the Swedish ‘knowledge-based’ economy (Blackburn 2006, p. 46).

The 15/30 principle implied that in order to receive pension benefits based on the 15 best years of earning, wages had to be earned for at least 30 years.

It should, however, be noted that the ATP system had an in-built ceiling for pension entitlements. Income over this ceiling did not generate pension rights. As this ceiling was not adjusted for inflation and wage increases, supplementary and private pension arrangements grew more popular among the affluent middle-classes, and the ATP system was gradually reduced in significance (see Lundberg 2003).

It is however significant to note that all pension savers were first-time choosers in 2000, while subsequently primarily those who had earned pension contributions in the 18–28 year old bracket chose for the first time.

Additional information

Notes on contributors

Claes Belfrage

Claes Belfrage is lecturer in International Relations at the University of Swansea, SA2 8PP, Wales. He has published on pension reform and welfare state restructuring in Europe. Email: [email protected]