Meidner Plan

Doug Henwood dhenwood at
Sat Jan 23 08:24:13 PST 1999

Michael Pollak wrote:

>Speaking of socialism creeping in by means of the stock market, does
>anyone remember Meidner Plan or what happened to it? Back in the early
>80's when Sweden's economy was still humming along and unionization was
>still over 80% of the workforce, the Swedish Social Democrats proposed to
>invest union pension funds in the stock market at such a rate that they
>would own more than half the assets of the country within 10 years. And
>there wasn't much opposition to it at the time. I think the plan even
>went through it's initial stage. But since I've never heard of it again,
>I assume it was all for nought, and I was wondering what happened to it.
>Especially since it seems to be the spectre haunting Allan Greenspan. If
>anyone has a cite, I'm all eyes.

I have a little bit about this in Wall Street:

<quote> The lesson of the Swedish wage-earner funds should be chastening to pension-fund reformers (Pontusson 1984; 1987; 1992). The funds were originally conceived by social democratic economists as a scheme for socializing ownership of corporations. In the original mid-1970s proposal, firms would have been required to issue new shares, in amounts equal to 20% of their annual profits, to funds representing wage-earners as a collective. In the space of a decade or two, these funds would acquire dominant, and eventually controlling, interests in corporate Sweden.

This idea scandalized business, which launched a great campaign to discredit it - a task that was greatly simplified by the fact that the funds never attracted broad popular support. The Social Democrats and the unions watered the plan down, and a weak version was adopted in the early 1980s. The funds quickly began behaving like ordinary pension funds; their managers, in a vain attempt at legitimation, began trading stocks in an effort to beat the market averages. Eventually, late in the decade, the wage-earner funds were euthanized.

Why did they fail? For at least two reasons. First, business correctly saw the initial version as a challenge to capitalist ownership, a reminder that finance is central to the constitution of a corporate ruling class. And second, they never attracted popular support - essential to any serious challenge to a corporate ruling class - because they were so abstract. As Pontusson (1992, p. 237) put it, "when collective shareholding funds are reduced to deciding whether to buy shares in Volvo or Saab," it's hard to muster popular enthusiasm. More direct interventions are required - active public industrial policy and greater worker control at the firm level - if ordinary people are to get interested. The stock market, on the other hand, is the home turf of financiers, and any games played on their turf usually end up being played by their rules. </quote>

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