Advocating a capitalist welfare state

Economist and researcher Andreas Bergh is closely involved in public debate. Few things make him really angry. One of them is stupidity. Like when the city of Malmö fails to create simple entry-level jobs because of unreasonable demands on people who want to start mobile food trucks.
“That is how the sluggish Swedish labour market works. If we dared to shake up the regulations we would gain a lot more from immigration,” he says.

The water glistens in the canal outside the apartment building in Malmö’s Western Harbour area. The sea is not visible from the open-plan kitchen and living-room but you can see the Turning Torso. This is where Andreas Bergh currently spends his time on parental leave with his one year-old daughter Amanda, while his partner Pernilla Johansson is at work in the Swedish Chamber of Commerce.

Andreas Bergh earned his PhD in Economics at Lund University in 2003. Since then, he has managed to be a visiting researcher at Harvard and completed several book projects and public enquiry engagements. For the past few years, he has been dividing his time between Lund University and the Research Institute of Industrial Economics in Stockholm.

As a welfare researcher, his work has included studying the effects of globalisation on poor countries and they are positive, he says. Millions of people have been raised out of poverty and their lives have improved.

Globalisation entails increased mobility of both people and capital. Many people also flee war zones. Now that the Sweden Democrats have pushed migration and refugee policy to the top of the agenda, Andreas Bergh wants to shift the focus. Increased immigration is not unproblematic and is currently a cost for the public sector, albeit a relatively small one, he says. But the cost could quickly be turned into a profit:

“The solution is more jobs. They will emerge if we loosen the regulations.”

Andreas Berg LITEN

Andreas Bergh.

Andreas Bergh is a liberal but not in favour of an unchecked market economy. He defends the welfare state – good public healthcare, schools and care for everyone – backed up by non-corrupt, transparent public authorities. He writes about this in “The Capitalist Welfare State” which was published in English earlier this year.

The book received a great deal of international attention, partly because it was published at the same time as French economist Thomas Piketty’s “Capital in the Twenty-first Century,” according to Andreas Bergh himself. Piketty highlights the conflict between labour and capital. Prosperity does not trickle down to the poor, says Piketty, who foresees a future in which the divide increases and riches are further concentrated in the hands of a small capitalist elite. To counteract this, the Frenchman proposes the introduction of a global tax on capital.

Andreas Bergh believes there is an alternative route. He points to Sweden which managed to bridge the conflict between labour and capital in the twentieth century by offering good conditions to companies while collecting high taxes.

“The capitalist welfare state presumes tax revenues, which in turn require successful companies to create job opportunities so that people can earn money and pay taxes.

“Sweden differs from the rest of the world on some other important points”, continues Andreas Bergh. We have a more generous refugee policy than most other countries, but we are worse at getting new arrivals into jobs. The income divide is increasing in the rich countries of the world including Sweden, but it is still relatively small here in an international comparison.

“These issues are connected, and we need to deal with them in a new way. If we dared to allow a larger part of the labour market to function without collective agreements and if we accepted greater salary differences, a whole lot of new jobs would be created in the service sector, for both Swedes and immigrants. Worse paid jobs, but jobs for people with no training and who don’t speak very good Swedish.”

Many people in Sweden are sceptical about a deregulated service society. There is a strong union tradition and resistance to major income differences. In addition, there are indications that the upward mobility of incomes has decreased in Sweden, a phenomenon to which Andreas Bergh has drawn attention in articles. People with the lowest incomes risk getting stuck in relative poverty. This is problematic, but can be addressed, he says:

“We don’t need to do what the US or Canada do – we can create a model which suits us. What is important is the availability of simple jobs and for people to be able to move forward. The best way of getting a better job is to have one to begin with. Benefits do not have that effect – there you can talk about being locked in.”

So unions and collective agreements act as brakes, in Andreas Bergh’s analysis. He is disappointed in those who refuse to recognise that the union is a lobby group which no longer safeguards the interests of the weakest and that the regulation of the labour market has become an obstacle for those on the outside.

This is reflected in a series of contradictions. Society states that it wants to invest in immigrants as entrepreneurs, while making it difficult for them. Andreas Bergh hit the roof when the city of Malmö made public the requirements for a permit to run a food truck.

“Food trucks are perfect entry-level jobs for people who are new in the country. But the city of Malmö demands a fee of SEK 50 000 and requires food to be prepared from organic and locally sourced ingredients. These are requirements that are hard to meet if you are a refugee recently arrived in the country. The very things that could have been their trump card – contact with their compatriots and the possibility of importing cheap raw materials – are forbidden.”

But increased immigration raises questions not only of an economic nature. There is concern about antagonism and racism, less trust and more crime.

“I think these misgivings should be taken seriously, but I am not certain they are based in reality. When it comes to racism, it is decreasing in Sweden and trust in society continues to be strong, according to research. How crime develops and what causes it, however, is harder to ascertain.”

He believes in a motley society, characterised by diversity and difference – it is in places with precisely such diversity that the economy and culture thrive.

Talking about integration and seeing society as a melting-pot is partially misleading, according to Bergh, and he believes it is preferable for the different cultural expressions to live alongside one another. As they do, for example, in the Chinatowns of major western cities or in Malmö’s Rosengård, where he often goes with his daughter – to shop, eat and visit various playgrounds.

“What we have to agree on is to respect human rights and to abide by the law. For this to succeed we need to take personal responsibility – on the major issues but also, and perhaps even more importantly, on the small ones … We need continuous open discussion of the boundaries of what we can accept. Are we to permit the wearing of veils, female genital mutilation, same-sex marriage …

“We can all influence society by standing up for our views. By daring to speak up when we come across racism or daring to question when we meet someone who is an active union member. We don’t have to fall into the niceness and consensus trap all the time, but can instead actually ask uncomfortable counter-questions. A simple ‘Why?’ is an excellent place to start.”

 Text: Britta Collberg

Photo: Gunnar Menander

ABOUT ANDREAS BERGH:

Researcher and lecturer in Economics at Lund University, welfare researcher at the Research Institute of Industrial Economics.

Registered but passive member of the Centre Party, the Liberal People’s Party and the Green Party. Also a feminist.

Editorial columnist in the non-party affiliated right-wing daily Svenska Dagbladet.

Blogger, tweeter, author. “It is natural for me to take part in public debate, sit on panels and accept interviews. Through my blog, I can complement and qualify what I have said if I feel I have been misquoted.”

Lives with partner Pernilla, and daughter Amanda, 1 year.

Born in Malmö in 1973, Bergh grew up in a terraced house in Oxie. His father was a music teacher, his mother a pre-school teacher.

Lives in Vasastan in Stockholm and Västra hamnen in Malmö.

ANDREAS BERGH ON…

… economics. The subject has with good reason been criticised for having no basis in reality, but has improved and is increasingly based on empirical studies.

… work. The whole discussion on working hours is strange. We work for only ten per cent of our lifetime. The problem is that the work is concentrated within relatively few years in midlife, while we are living longer and longer. But how we handle this is up to the individual. We can work less, with lower material standards, and many choose to do so. Personally, I think the proposed sabbatical year reform was not such a bad idea.

… Lund University. It is wonderful to be a part of such a large, functioning, free-thinking research movement. At the same time, it is awful to see the ever-increasing requirements for evaluations, documentation and measurability. Measuring results is important, but nowadays everything is measured, to an absurd extent. Many people are forced to regard the administration and their managers with distance and irony in order to safeguard their academic freedom.

… his role as opinion-maker and researcher. I don’t feel conflicted as I currently express myself mainly as a researcher. Of course my values affect the research I do, but I have also changed my view on political and ideological issues on the basis of my own and others’ research. For example, I didn’t always identify as a feminist.

Read also about other researchers involved in public debate: Roland Paulsen and Inger Enkvist