Norwegian exceptionalism?

In 2005, a coalition government led by the Norwegian Labour Party took office. Four years later, it retained power in the 2009 elections. Welfare spending continues to be high, an expansive public sector has been maintained and trade unions continue to enjoy a strong role in economic and social policy-making. In many respects, Norway has successfully resisted the general direction of neo-liberal restructuring, public sector cuts and undermining of the welfare state. In this blog post, I will discuss how we can explain this apparent Norwegian exceptionalism.

Photo by xitus

It is often argued that oil wealth would explain Norwegian exceptionalism. And indeed, in contrast to other developed countries, Norway has not had to incur a budget deficit in order to stimulate the economy during the current global financial crisis. It could rely on its oil wealth fund. However, as a leading trade unionist remarked to me in an interview, the crucial institutions of the Norwegian political economy, the gains made by trade unions, were all achieved before the oil wealth appeared on the agenda in the 1970s. Hence, the key explanation needs to be looked for elsewhere.

Two main reasons can be identified for Norwegian exceptionalism. First, in contrast to other small European countries, the Norwegian production structure is comparatively little transnationalised. Capital in Norway is characterized by the predominance of small and medium-sized companies and, as a result, is comparatively weak (see Bieler 2012: 234-5). In contrast to countries such as Sweden, dominated by large transnational corporations, capital cannot dictate labour how to organize the domestic political economy (see also Globalisation and the erosion of the Nordic model).

Second, the agency of trade unions has been decisive. Prior to the 2005 elections, trade unions adopted a more independent position from the Labour Party. LO, the main Norwegian trade union confederation, carried out the project ‘You decide – LO on your side’. Members were asked to send in proposals, from which 54 demands were selected and submitted to all political parties for their comments. In turn, LO then recommended its members to vote for those three parties, the Labour Party, the Socialist Left Party and the Centre Party, which had endorsed most of the demands. LO itself mobilised during the electoral campaign for a majority coalition of these three parties. Importantly, LO did not decide to abandon the Labour Party as a result of its dissatisfaction with the party’s neo-liberal policies in 2000 and 2001. Nevertheless, it made clear that it was no longer willing to support the Labour Party unquestioningly. Support for the other parties of the electoral alliance and the request to endorse the demands, developed through a consultation with trade union members, indicated clearly to the party that it had to take seriously the unions’ opposition to restructuring (see also The Power of Norwegian trade unions).  

Moreover, the Norwegian Union of Municipal and General Employees (Fagforbundet) realised that the balance of power between capital and labour, on which the class compromise around the welfare state had been built, had changed in Norway. In response, it established the broad-based Norwegian Campaign for the Welfare State, which consisted of trade unions in the public and private sector as well as a whole range of other social movements and NGOs, including the Welfare Alliance, the Norwegian Farmers’ and Smallholders’ Union, several feminist groups and a students’ organisation. The Campaign for the Welfare State fulfilled two crucial functions. First, through educational initiatives it mobilised support for the welfare state and against neo-liberal restructuring, and here especially the idea that the introduction of competition would deliver efficiency gains in the public sector. Second, it broadened the social basis of resistance against public sector restructuring and, thus, established a balance of power with capital.

Overall, both the politically more independent position of the trade unions vis-à-vis the Labour Party and the broad-based Campaign for the Welfare State put strong pressure on the Labour Party. As a result of these campaigns, the Labour Party, as an exception in Europe, moved to the left prior to the 2005 elections and has actually delivered policies in the interests of workers and wider society. Nevertheless, employers and centre-right parties continue to put pressure on the Norwegian government towards budget cuts and public sector restructuring. The Labour Party itself may be tempted to move again towards this policy course. Successes as achieved in 2005 constantly need to be re-affirmed and trade union agency for the welfare state will remain crucial.

This blog post is based on the article

Bieler, Andreas (2012) ‘Small Nordic Countries and Globalisation: Analysing Norwegian exceptionalism’, Competition and Change, Vol.16/3: 224-42.

Prof. Andreas Bieler

Professor of Political Economy

University of Nottingham/UK

Andreas.Bieler@nottingham.ac.uk

Personal website: http://www.nottingham.ac.uk/~ldzab

9 July 2012