How Worker Power Built the Nordic Way of Life

Pelle Dragsted

Commentators often point to the Nordic standard of living as an example to follow, but few explore what lies behind this model – a strong workers' movement and a more democratic economy.

A pier in Copenhagen, Denmark's capital. (Credit: Getty)

Interview by
Joe Bilsborough

Pelle Dragsted is a Danish writer, activist, and former MP for Enhedslisten, Denmark’s democratic socialist party. During his time in the Danish parliament and since, Dragsted has developed a reputation as an incisive and critical thinker in both understanding the contemporary political economic moment and formulating left strategies to navigate it.

He has recently published Nordisk Socialisme (Nordic Socialism)—released, fittingly, on 1 May—to both critical acclaim and popular success in Denmark. The book utilises Denmark’s experiences to develop a critical analysis and reinterpretation of left strategy, arguing that a dogmatic insistence that contemporary societies are entirely colonised by capitalism both forecloses political possibilities for the Left and obscures the impact that institutions such as worker-owned co-operatives and the non-marketised public sector continue to have. This theoretical and strategic analysis is built upon through a suggested series of reforms that could pave the way to a far more democratised economy.

In this first part of this two-part interview series, Pelle Dragsted spoke to Tribune columnist Joe Bilsborough about the book in detail: his motivation to write it; the contours of ‘Nordic socialism’ and the realities of Nordic neoliberalism; the road to a democratic economy sketched out in the book – and the importance of developing and increasing worker power and ownership.


JB

Your book Nordisk Socialisme speaks about the history, both economic and social, of Denmark. It speaks to some of the philosophical debates that we on the left have been having for a long time—particularly since the financial crisis—about questions of freedom, democracy, and the limits of democracy under existing ownership structures. It talks about the nature of democratic workplaces within Denmark, and, to some extent, the uniqueness of some of Denmark’s institutions. And I think it also sets out policy frameworks and proposals to realise democratic socialist ambitions.

What was the motivation for writing this book, and what do you hope to achieve with it?

PD

What I wanted was to restart the debate about democratic socialism and democratisation of the economy – and not just as this utopian vision for a future society, but also on a more practical level. What institutional, legal, and political frameworks can we use or create to take the first steps in that direction?

I ask that because if we’re really serious about growing beyond capitalism, I think that it’s crucial that we move beyond the kind of broad and radical slogans that the Left has been good at formulating, and develop the more practical answers to the hard questions. For example, if the capitalist class shouldn’t own, who should own, and how should they own? Also, of course, there is the question of the centralised planned economy.

In some ways that was my idea with this book: trying to pose a difficult question to myself, and then trying, by reading and analysing, to give some genuine answers to these questions in order to make socialism a more attractive alternative. In a way, it was to clarify my own thoughts.

I’ve been an activist all my life, but in the last ten or twelve years, I’ve been working in parliament for the left-wing party, Enhedslisten, and also was selected for parliament. So I felt the need to think about what being a socialist actually means for me today.

JB

It’d be useful if you could define exactly what you mean by ‘Nordic socialism’, and answer the related question of how this is different to the other types of socialism that have existed or that people have written about.

PD

I use the term ‘Nordic socialism’ both descriptively and normatively. Descriptively, in a way inspired by Donald Trump and Fox News, but also by Bernie Sanders, and inspired by a wish to use it in a way to recognise that the Nordic countries—with a quite significant amount of decommodification of important parts of the economy, such as health, education, et cetera—are in fact more socialist than we on the left have been used to thinking about.

My claim is that to just call our societies and economies capitalist, as we used to do, in some way misses the fact that workers and small producers since early capitalism have succeeded in creating alternatives outside of, and, to some extent, in opposition to, capitalist ownership. And so that’s a descriptive way of using it.

And then I use the term in a more normative way to describe a kind of socialism that differs from the ‘real’ socialist experiences in the Soviet Union and these kinds of countries – not just because of the pledge to a genuine democracy, but also by being, for example, more critical of state ownership, and more in favour of direct collective ownership by workers and other communities. It’s also differentiated by leaving behind the idea of a uniform form of ownership, and instead seeking a pluralistic landscape of different forms of democratic ownership – and perhaps even, in a minor scale, nondemocratic ownership.

Finally, another difference is drawn by rejecting the idea that we have to choose between a totally planned economy or a totally market-oriented economy, and proposing instead a kind of mixture—with far less market power than today—but accepting that market mechanisms can play a role in a democratically-planned framework in certain parts of the economy.

So, in that way, this Nordic socialism—you could also just call it democratic socialism—differs from some of the experiences with the socialist states in Eastern Europe, not just because of the lack of democracy, but also on other more crucial issues.

JB

That prompts the question of the counter story that we’ve seen over the last thirty or forty years. There’s a kind of Nordic neoliberalism that has also come to exist, where there has been the implementation of new public management across the public sector. There have been constant reforms to both the generosity of welfare benefits and the length of time for which one is eligible to receive them.

Could you tell us a bit about how neoliberalism has developed in the Nordic states, and what the differences and the similarities are with the more extreme version that we’ve seen in the US and the UK?

PD

Well, the Nordic countries have been hit by neoliberal reforms as has the rest of the world. Some Nordic countries—Sweden, for example—have been hit harder, introducing the profit motive in broad parts of the former public sector, such as schooling and day-care. In Denmark, we haven’t had the same extent of commodification of our welfare system. But as you mentioned, in the public sector we have introduced market-oriented governance like new public management.

And all the Nordic countries have been hit by workfare reforms, which reduce benefits and force unemployed people to work for benefits. I think maybe the Nordic countries have been some of the worst in implementing these really harsh regimes of control and coercion towards—against—unemployed people. And this has changed the power relation among classes. It has really diminished the power of the working class.

On the other hand, the attacks on unions have in no way been comparable to the UK or the US – and we continue to have quite high levels of unionisation. The unions are also still engaged in corporatist schemes. For example, during the pandemic, there have been maybe ten agreements between the trade unions, the employer’s federations, and the state: securing, for example, full wages for workers during new layoffs in the pandemic.

I think this probably explains why, in the Nordic countries, we haven’t seen the same decoupling of wages from productivity as in other countries. If we look at the numbers, it looks like the working class has broadly kept their part of the pie, if you can describe it in that way.

But among the working class, the gap between high wages and low wages has grown a lot. So the most vulnerable parts of the working class haven’t had—since the financial crisis—any rise in salary. It’s the better-educated or better-organised part of the working class that have maintained their part of the productivity gains.

An interesting issue that I discuss in my book is the fact that Danish neoliberal governments haven’t succeeded in undertaking the same amount of privatisation of utilities and social housing as has been seen in the UK. In Denmark, the utilities and social housing were cooperatively owned, and not state-owned. That made it much more difficult for the government to privatise them.

So in some way—if paradoxically—the legal protection of private property saved cooperative common ownership: even if a neoliberal government really wanted to commodify and privatise it, they couldn’t, because they didn’t own it. It was cooperatively-owned, and as a result of this, the majority of our utilities—water, heating, and the electricity grid—today are owned by co-ops. Around 20 percent of our housing units are cooperatively owned also.

So I conclude in my book that this experience at least is an argument in favour of more direct forms of cooperative ownership, instead of state ownership, because when the state owns something, all it takes is a change of government, and they can sell it to the capitalists.

JB

We have a rich experience—if a rather depressing experience—of this in the UK.

PD

Exactly. So that’s one of the arguments in favour of this idea of a more direct form of social ownership, instead of the indirect form that I call state ownership.

JB

One of the interesting things about the form of public ownership that was implemented in the UK was that it was in many cases exceptionally top-down, often rather anti-democratic. In many sectors and in many cases, a lord or an aristocrat who owned something when it was a private company would then sit on the board once it was a nominally public company. And, so, for workers, their situation barely changed under public ownership in many cases.

PD

Exactly, and it’s more or less the same history in the Eastern European countries. As I write in the book, in the DDR, they called their companies Volkseigener Betrieb: ‘people’s owned corporations’. But the workers in these corporations didn’t feel that they were the owners or that it really was their enterprise. So that’s an important question for us as socialists: if you want a real kind of democratic ownership, and also autonomy for the workers, how do we create the institutions and the formal ownership structures that achieve this goal?

My opinion, at least, is that the idea of state ownership, the idea of abolishing private property—which means that, in the end, the state owns everything—makes it hard to create forms of ownership that really empower workers and communities, and makes them feel that they are the real owners of their enterprises.

But we’ve also had bad experiences with more cooperatively owned companies in Denmark. So of course cooperative ownership is not a guarantee either that you have this sense of ownership and empowerment. I think these are some of the hardest and most crucial questions for socialists to answer, in order to imagine and argue for a democratic economy.

JB

Having set the scene, it would be good to talk directly about the proposals that you set out towards the end of your book. There are five frameworks that you use to shape them, set out in the preceding chapter, where you say that the system, or the thought process behind your ideas, is one that is radically democratic, it is state-sceptic, it progresses plural ownership, it is built on a combination of market mechanisms and planning, and it is curious and driven by the experience and history of the workers’ movement.

Alongside this is something that has already come up in our conversation: this notion of a continuum, rather than two entirely discrete economic and political structures of capitalism and socialism. I was wondering if you could speak about this kind of system and state formation, and what led you to come to these frameworks.

PD

I think this idea of capitalism being all around us—that everything is capitalism, our societies: capitalist, our economies: capitalist, our state: capitalist, even the humans are capitalist—has really been a barrier for the Left in imagining and arguing for an alternative. Because if there can’t be anything outside capitalism, then you can’t have gradual change.

My inspiration for this kind of thinking came from an article I read about twenty years ago by two American feminists and Marxists, Gibson-Graham, and it was during the somewhat post-constructivist, postmodern years, so the article was very much about how we create capitalism by the way we talk about it, but actually, I think it was quite lucid.

Their main idea was what I just said: that by describing and creating capitalism as an omnipotent, all-encompassing organic system, a living system, with its own life, we’re creating a kind of monster. And of course, it’s impossible to change it if we give capitalism this kind of power, that it can encompass all of society, that it is organic, and that it has its own life.

It’s not that I’m saying that capitalism isn’t organic at all, or that capitalism does not, in some way, expand itself, but I think that with the way that we tend to talk about this, capitalism has been a barrier to our imagination. Therefore, after I read this article many years ago, I have really tried to think about capitalism and socialism in different ways. This makes sense particularly in the Nordic countries, because, as I said, it will be difficult just to describe, for example, our public sector as purely capitalist.

Of course, you can do that—the Marxists have said might call it a reproduction of capitalism—but what I’ve tried to do is to say that maybe capitalism isn’t as powerful as we have thought, because, as we’ve seen—and it’s not just in the Nordics, it’s also in Britain and other parts of the world— working people and small peasants have succeeded in creating enterprises outside capitalism and in opposition to capitalism.

We’ve also seen in Britain, in the post-WWII decades, successes in taking an essential part of the economy in some way out of capitalism and changing the power structures in these systems. In Britain, you still have the NHS, for example. Of course, there have been lots of attacks on it, but that also shows the robustness of these structures, how hard it is for the capitalists to recolonise these areas when we have succeeded in creating them and giving them another kind of institutionalised and judicial framework.

So, my idea is that instead of saying that society equals one set of modes of production, it would be wiser to see societies and economies as a mix of modes of production. Of course, in Denmark—and even more in Britain or in the US—a capitalist mode of production is dominant. I am not trying to say that we are living in socialist countries or socialist modes of production at all. But my argument is that we have elements of socialism and socialist modes of production living besides the capitalist mode of production, and that the relation between these two sectors is not static, and that it’s a political field to move the frontier between these different modes of production. I’m not saying that they are totally separate: of course, they are interacting with each other in a negative and positive way, from a socialist point of view.

That’s maybe the most controversial theoretical position in the book, and surely a lot of Marxists would differ from my view, but I think from a practical and functional perspective it makes it much easier to imagine how socialist change can happen, and how to take the first steps towards a more democratic and socialist economy.

I know that there will be a lot of resistance. Erik Olin Wright, the late American sociologist, made this picture of an ecosystem where a new organism can emerge in some niche, and then, later on, become dominant. And then other Marxists criticised this point of view by saying, ‘No, but societies in the ecosystem—because you have this capitalist class—they will do everything to fight this kind of niche.’

And that’s right. We know that from our experiences that this is not an easy thing, the changing of society. Changing societies is conflictual, and difficult, and there will be success and failure. So, I just propose a different way of imagining how this change could happen based on some of the experiences from the Nordic countries.

The same goes for this binary between market economy and planned economy. Normally, when you think about it as two different systems, we can choose among either a market economy or a planned economy. But my view is that we should think about the relation between market and planning in a more Polanyian way, and not as two separate systems but as, as you say, a continuum. Our task is to advance democratic planning at the expense of market forces.

What I also found really liberating about this way of seeing change is also that it frees us from this idea that socialism has to be total – that we have this total capitalism, and it should be replaced with this total socialist system. If we are able today to have a dominant capitalist system—but there have been parts, or elements, of socialism—then you could also imagine a society where socialist ownership, democratic ownership, is dominant and sets—like capitalism today—the direction and the dynamic that governs society. Maybe it wouldn’t be a problem to have niches of private property or non-democratic property, as long as they are not setting the scene – as long as the main power of the society rests in democratic structures and ownership.

In some way it does not only give us a new way of seeing how to change, it also gives us an opportunity, perhaps, to get rid of this idea of a very schematic socialist society, where all forms of ownership should be organised, more or less, according to the same rules and principles. For me, this was really a kind of relief to think in this way. But of course, it’s controversial, and a lot of Marxists would differ from my opinion.

JB

To me, strategically, it feels like a counter-Thatcherite agenda, insofar as Thatcher famously spoke about ‘rolling back the frontiers of the State’—with this as an exercise in rolling back the frontiers of market mechanisms—but doing so in a way that is based in democratic decision-making, rather than just the schematic of ‘the Left is in government, so the state does lots of things.’

PD

Exactly. In Joe Guinan and Christine Berry’s book, People Get Ready!, they talk about reverse engineering the Thatcherite experience, and that’s a great way of formulating it. It’s important, too, as they write in their book, that we learn from the Thatcherites’ very tactical and strategical way of doing this: attacking the weakest link first—and not attacking, for example, the miners in the first years—but waiting until later on. I think it’s really a good way to think about the changes that we will have to do.

JB

This strategic approach is something that your book is very thoughtful in setting out, not least under the ten proposals to unfold a democratic economy that you advance at the end. When I was reading them and preparing for this conversation, what came to mind was a sense that they fall under four headings or themes.

One is changing structures of governance within existing firms, to give workers within them more democratic oversight. I’m thinking here of the sort of two-chamber system reforms for companies, representing both labour and capital at the board level, that you propose.

Another is the reassertion of public ownership over particular sectors of the economy.

Then there are reforms that posit using tools of capitalist accumulation for socialist ends. The Meidner plan is an increasingly well-known example of this, but you reference fondssocialisme here—fund socialism–alongside the democratisation of finance and investment.

And then finally—and I think this links to a lot of thinking that has been developed around asserting public instead of private luxury—you write about the creation of new public goods. I was wondering if you could go into detail about the contours of these specific proposals, and how they could take shape and be realised in Denmark and beyond.

PD

I think that’s a brilliant way of describing it. I have described it fundamentally as two central issues: the issue of democratising ownership, and the issue of minimising the influence of market forces. If socialism means common ownership of the means of production, and the elimination of the coercion of capital accumulation, then of course the task for socialists should be to democratise ownership and to minimise the influence of negative competitive market forces. That’s more or less what I have tried to come up with: some reforms that could take some first, but important, steps in that direction.

To democratise ownership, I propose a series of different interventions in the economy that, step-by-step, could distribute and democratise ownership of the means of production – by, for example, giving support to new cooperatives as owners of private companies look for succession plans, and then also the idea of ‘fund socialism’. I also propose specific ownership reforms regarding land, for the financial sector, and for intellectual property and data. So that’s more or less the reforms about ownership—and of course, I could go into details about every one of them—and then the other thing is to minimise and rein in the market forces.

Here, I suggest two things. One thing—based on our experience with decommodifying the important parts of the economy—is making people less dependent on the market. The second is introducing a lot more democratic planning into the economy. I suggest this idea of a kind of ‘donut’ economic planning, inspired, of course, by Kate Raworth, the British economist who has created this idea of a kind of planned economy, by saying that we have to make rules and democratic decisions that guarantee that the economy is working inside this kind of donut that’s not damaging nature, the climate, and our resources, and that it’s securing a great existence and secure life for citizens.

So my idea of economic planning isn’t the Soviet experience of trying to plan the totality of the production process, but instead setting some really clear and dominant frameworks for goals that the economy should achieve. If we can use market mechanisms in some parts of the economy to achieve it, great. When they are going against the frameworks we have approved, push them aside. That’s more or less the idea.

Then, of course, there are some reforms that are not doing either of these two, but are doing what you call ‘changing structures of governance’, and that’s in some ways inspired by the Swedish social democratic scholar Gunnar Adler-Karlsson, and what he calls ‘functional socialism’: reforms that don’t change ownership, formally, but change and challenge the rights of the owner class.

One example of this is the proposal of a two-chamber governance structure for big corporations, which is inspired but by the Belgian scholar Isabelle Ferreras, in which the capital investors elect one chamber as they do today, but then that the ‘labour investors’, or the workers, elect the other chamber, and then all decisions should go through both chambers, with the leadership accountable both to workers and capital investors. I think it’s a reform that could be an important tool in a transitional period, in which many companies are owned by capitalists still, but also in a more permanent structure that could, for example, give workers a strong voice in cooperatives owned by consumers or by small producers.

This is a feature that we have been missing in the Nordic experience of the cooperative sector. We’ve had quite a lot of examples of cooperatively-owned businesses—owned by consumers, or by small producers, like farmers—that have exploited or mistreated their workers. This could therefore be a good way of combining these different needs, because I think consumer ownership can be quite a good idea – but the workers should still retain a voice in these kinds of companies.

This is the first part of a two-part interview with Pelle Dragsted. The second part can be read here.

About the Author

Pelle Dragsted is a Danish writer, activist, and former MP for Enhedslisten, Denmark’s democratic socialist party. He is the author of Nordic Socialism.

About the Interviewer

Joe Bilsborough is a Tribune columnist. He is also a research assistant in economic history at the University of Southern Denmark.