Broad Alliance for the Welfare State

Asbjørn Wahl

Introduction
In September 1999 in Norway, a broad alliance of trade unions was established in order to strengthen the struggle against privatisation, deregulation and market liberalism - for a strong public sector. It was named «For the Welfare State»[1], and the six unions[2] involved represented all together near half a million members (there are 4,5 million inhabitants in Norway). A year later, another 20 national organisations have joined the alliance, almost doubling the number of members.

The alliance is no longer limited to the trade union movement. Among the new affiliates we find user organisations, student organisations, retired people’s association, farmers’ and small-holders union etc. In other words, a broad popular movement is about to be born. While the initiating unions all represented the public sector, a number of private sector trade unions have joined force during the first year of the campaign.

In Norway there are three national trade union confederations. The Norwegian Confederation of Trade Unions (LO) is biggest and has traditionally worked closely with the Labour party. The Confederation of Vocational Unions (YS) is its main competitor and has proclaimed itself independent of political parties, so-called neutral, but in reality to the right of LO, even if it has been politicised over the last years and has moved closer to the LO. The third one is The Confederation of Academic and Professional Unions in Norway (AF), which has an agreement of co-operation with the LO on areas other than wage policy[3].

The three confederations, in particular the LO and the YS, have at times been in harsh competition with each other, even if they have become less hostile over the last 20 years. The alliance For the Welfare State involves unions from all the three confederations, something which makes it historic in the Norwegian context.

The alliance has developed a joint political platform which is the basic fundament that all organisations which want to join the alliance, have to endorse. The steering committee consists of the presidents of the six founding unions, which also finance a co-ordinating office that has been set up with a Secretary responsible for day to day running of the organisation (actually the author of this article). An advisory Council has been created in which all affiliates can have a seat. Due to the higher than expected number of affiliates, the structure of the organisation and the composition of the steering committee are already being reassessed.

Background
The welfare state is, like the labour movement, in historical terms , a relatively young phenomenon. They both evolved with the capitalist mode of production – when wage labour became the dominant form of productive activity. The capitalist mode of production separated the workers from their means of production, so the only thing they had to sell in order to make a living, was their labour force. This means that the income was lost for those who, for different reasons and in different periods of life, were unable to take part in wage labour.

In response to that, workers started to organise among other things in order to set up collective funds from which they were given support when involuntarily out of work. These funds were the first germs of a welfare system. Welfare arrangements were, in other words, a response to the social insecurity which followed the development of wage labour in a labour market. Thus, welfare arrangements developed in the entire western industrialised world, although in different forms. Gradually the states involved themselves, and public welfare schemes were introduced, jointly financed through taxation. These were mostly in the form of means tested, minimum benefits and grew side by side with private charity – both very much influenced by paternalistic ideas.

This started before the labour movement was strong enough to influence state politics. The first reforms most often were initiated by social liberal politicians towards the end of the 19th century – for two reasons. Firstly, because the exploitation of labour was so harsh, that the introduction of health and safety regulations and social benefits were necessary purely for the reproduction of sufficient labour to the rapidly growing industry. Secondly, the incipient organisation of workers in trade unions and political organisations caused fear of opposition and revolt, which the ruling classes wanted to dampen through welfare initiatives.

The real growth of the welfare state, however, started at the time when the labour movement gained political influence and social democratic parties came to political power in a number of countries – in Norway in 1935, but mainly after World War 2. Then solidarity and human right-based ideas gradually took over for paternalism and charity – in particular in the most advanced welfare societies. At the very most, public share of Gross National Product (GNP) in many Western European countries was well above 50 percent[4].

The level to which public services and welfare systems have developed, as well as welfare models, differ considerably between countries. Roughly, we can differentiate between three welfare models:

1. The market or the Anglo-Saxon model (USA).
2. The work-related or the Continental European model (Germany).
3. The universal or the Nordic model (Scandinavia).

In many ways we can say that the level of the welfare state is a product of the strength which the labour movement is able to achieve in a capitalist society. The Nordic model is seen by many as the most advanced form of such a welfare state.

Class compromise
In Norway, as in many other countries, the labour movement struck an accord with capital forces – a sort of peaceful cohabitation between labour and capital. The compromise rested on a strong labour movement on the one hand and a capitalism in stable and strong economic growth on the other hand. As the British historian Eric Habsbawm[5] has pointed out, the existence of a competing economic system in Eastern Europe, also was instrumental in making the capitalists accept a compromise. It was on the basis of this compromise that the most important welfare reforms and institutions were developed during three decades after WW2.

The participation of the trade union movement in the compromise was in reality to accept the capitalist organisation of  production, the private ownership of the means of production and the employers’ right to lead the labour process[6]. At the same time, the trade union confederation guaranteed industrial peace and restraint in wage negotiations. Simplistically, the welfare state and the gradually improved living conditions were what the rather peaceful trade union movement achieved in exchange for giving up its socialist project. Today we can conclude that it was a short-term achievement in a very specific historical context.

One important part of the class compromise was a stronger division of work within the labour movement. The conditions for buying and selling of labour would  be regulated by the trade union movement through negotiations, while social security when out of work would be dealt with by the party in parliament. This laid the foundation for a more narrowly economistic development in the trade union movement, something which weakens trade unions today, as social democratic parties more or less have deviated from even their former reformist politics.

The class compromise, however, was a fragile construction. As part of its fundament was a stable capitalist economy with high growth, the compromise became gradually undermined as soon as deep economic crises again started to ride western capitalism as from the early 1970s. The crises resulted in increased market competition, neoliberalism gained ground at the political level and capitalist forces went on the offensive, among other things in order to reduce costs – by attacking trade union rights, keeping wages down and reducing public expenditure, i.e. the economy of the welfare state.

With the breakdown of the command economies of the eastern Europe around 1990, the only alternative to western capitalism disappeared. Capitalism had triumphed on all fronts, and the compromise with labour was no longer necessary. Capitalist forces could pursue their narrow economic and political interests in a more uninhibited way than they had been able to for decades . That is why the class compromise (or the consensus model) already has broken or is on the verge of breaking down all over Western Europe. The historic and economic preconditions for such a compromise are no longer there, and the most important product of this compromise, the welfare state, is being put under increasing pressure, although Norway’s relatively high oil revenue has contributed to dampening or delaying the pressure on the welfare state as well as on the trade unions and the workers directly – compared to the situation in many neighbouring countries.

Shaky foundations
Under the pressure of the current globalising economy, in particular the multinational companies, the financial institutions and the free movement of capital, public sector and welfare services are being attacked all over the world. Even though Norway today is richer than ever before in history, and is lucky enough to have an unemployment rate lower than most countries, social and economic inequalities are increasing in society. Public as well as private poverty is growing side by side with an ever more visible private abundance of wealth among the élite.

Recent research has found that 70,000 children are living under the poverty line in Norway - and the number is increasing. At the same time 20 new millionaires are produced every day. While average wages increase by 15 percent from 1995 to 1998, the corporate fat cats increased their income by about 35 percent. While public consumption increased by 2 percent per year in the period from 1993 to 1999, private consumption increased by an annual 3.6 percent. The public share of GNP was reduced from 52 to 43 percent between 1992 and 1999. 

This considerable redistribution of wealth causes, of course, financial problems in the public sector. All such problems, however, are referred to the public sector itself by the neo liberalists; to its lack of productivity and efficiency, including trade union opposition - and with privatisation as the one and only solution.

This impoverishment of the public sector creates dissatisfaction among people and consequently weakens the basis for and possibilities to maintain universal public services. In a society with increasing inequalities the rich gradually will establish private services to avoid public queues and deficiencies. In the long run this will threaten the legitimacy and the existence of the universal welfare state. That is one of the reasons why the Norwegian unions, and other popular organisations, have joined forces in order to defend the principles of the welfare state and improve its services.

In short, we can summarise that the development of the welfare state has rested on three main pillars: the social state thinking of the social liberal politicians, the struggle of the labour movement (at the particular time expressed through its strength in the class compromise) and the existence of a competing system in eastern Europe. The latter has broken down. The relatively stable class compromise is breaking down. This means that if the working class is going to maintain what it has achieved, and not fall back to minimum, paternalistic and means tested benefits of the social liberal type, it will increasingly depend on the strength it still represents and is able to mobilise in today’s society - in confrontation with offensive capitalist forces.

The platform
In this context,  six of the biggest trade unions in the public sector joined forces towards the end of 1999. A political platform was developed, in which the struggle for the welfare state is seen in a wide and global perspective. It states that, over the last years, «we have experienced that neoliberal politics have gained ground nationally as well as internationally. Through deregulation, privatisation and competitive tendering, public services, democratic governance and control are being weakened. Internationally, financial speculation has made national economies tremble. Market forces have gained ground at the expense of public governance. This has caused the development of increased inequalities in society, attacks on welfare and public services and ruthless exploitation of resources and the environment.»

The alliance underlines that it is not defending every aspect of the current welfare state, particularly as it does not serve its inhabitants in the way it should. There are many deficiencies, «difficult accessible public services, imperfect care and welfare services which do not reach everybody. It is therefore necessary to strengthen and further develop the welfare state.»[7] This is the reason why the alliance emphasises the need to ally with the users of public services. This also represents the answer to right wing political forces which are continuously trying to divide and rule between producers and users of public services, describing every trade union struggle in defence of public services as «a fight for their own narrow interests at the expense of the users».

The platform further states that «we (…) face a decisive struggle for public services and the democratic governance of our society. The struggle is all about protecting a strong public sector and creating a society which take the environmental challenges seriously. We experience a redistribution of wealth from public to private, and public budgets are being put under increased pressure. The fight is about what kind of society we are going to build in the future. The struggle against privatisation and competitive tendering is a defense for the welfare state, for a just and equal distribution.»

The platform summarises its political position in the following eight points:

·        «We are supporting the restructuring of the public sector, based on security for and motivation of the employees, while making use of their experience, their creativity and their knowledge of the needs of the users.

·        We are standing up for the principles of the welfare state, while rejecting a return to means testing and the undermining of acquired rights. We will therefore fight against the development of inequality and rising poverty in society.

·        We are supporting the democratically elected management of public resources, while fighting decisions transferring important public assignments to the market forces.

·        We are rejecting the current globalisation of the economy which is based on liberalisation, deregulation and free flow of capital. We are demanding action against financial speculation and limitation of the enormous power of multinational corporations.

·        We are supporting the struggle for a just distribution of the resources of the world.

·        We are opposing the trend of turning public sector monopolies into private sector monopolies with the assistance of multinational corporations.

·        We are rejecting tendering of public services, which is also used as a means to undermine wages and working conditions of the employees.

·        We are fighting for adequate funding for public services. It is unacceptable that private riches and public poverty develop side by side in a society which is richer than ever before.»

Based on this platform, the campaign aims at building an alliance sufficiently strong to be able to carry forward an alternative policy. It realises that only a broad popular alliance will be able to confront the current offensive of market forces. The perspective has to be internationalist, but the main task of the Norwegian unions is to organise the struggle at the national level.

Future plans
The first year of the welfare campaign has mainly been used to build and consolidate the alliance. The response has been overwhelming, far above even the most optimistic expectations of the founders. The alliance has, however, also been met with opposition and criticism within the Norwegian Confederation of Trade Unions (LO), both for building alliances with non-LO trade unions and for «not having sufficient understanding of the important role of the private sector» as some private sector trade union bosses have put it. This criticism, however, has calmed down as a number of private sector trade unions have joined the alliance[8]. They have realised that the fight for the welfare state is not a case for public sector workers only, but in the interest of all workers.

The alliance was initiated and has first and foremost been established at the top national level. This is at the same time the strength and the weakness of the alliance. The strength because it reflects a strong and wide-reaching dissatisfaction with the current economic and political development in Norway (and internationally) and legitimates local and co-ordinated resistance. The weakness because it has not arisen from real movement at the grassroots, and a great part of the members are still not mobilised. It can, in other words, be in danger of developing into a top-down bureaucratic creature.

In order to make it a real nation-wide movement, the setting up of regional and local branches of the campaign therefore has been a priority. In more than half of the counties and in a number of municipalities such branches have already been established – in a flexible way, where people are urged to focus more on activities than on formal meetings and minutes. Apart from supporting the political platform of the campaign, there are no formal requirements. Local branches are, for example,  free to organise the way they like.

An electronic newsletter is being distributed to everybody who likes to receive it, and a web site is being planned. A document called «We demand a redistribution of wealth in favour of the welfare state» has been developed and distributed to the members of government as well as to the political parties in the parliament. If the campaign does not see a change of policy, a change in the way the distribution of wealth has developed over the last years, in the state budget of 2001, which will be made public at the beginning of October 2000, the campaign has already publicised that it is going to mobilise against this policy. 19th October has been fixed as a national day of action when the alliance, among other things, is going to take to the streets.

The alliance was established under a minority center coalition government. Some months later, however, a minority social democratic government came to power. This could create problems as quite a few of the leaders of the trade unions as well as of other organisations involved in the alliance are members - even high-ranking representatives - of the Labour party. They are now being put under pressure from both sides. The Labour party, however, is in the process of being polarised between a new generation of so-called «modernisers», who have few principles against privatisation, and people with a more critical view of the privatised, free-market economy. As the trade union movement has not yet been defeated in Norway as was the case of the British unions under Thatcher, the Norwegian modernisers will have a lot more problems in moving the party to the right than Tony Blair had in Britain. The new alliance For the Welfare State could actually make a difference.

Exciting times that is in Norway these days. There are problems ahead, but there is also a lot of enthusiasm, people calling to offer their services, local branches being set up, signatures being collected in support of the campaign in academia, organised protests against the coming state budget being considered by municipalities across political lines, initiatives of Youth For the Welfare State and Students For the Welfare State being prepared and so on. If successful, it could develop to a real and influential popular front. Time is ripe for resistance!

(Article in Kolya Abramsky (ed.): Diverse Voices of Resistance, London 2001.)

(This article is also available in Spanish and German.)