Chapter 4
industrial base in shipbuilding, the building trade, and the textile industry. The city’s vast Kockums shipyard, for instance, made 40% of its workforce redundant between 1975 and 1984 and completely halted its civilian shipbuilding in the Malmö docks by 1986.176 The result was a gradual decline in relatively well-paid and secure manufacturing jobs, breaking the productivity-wage increase deal that had been the economic basis of the Scandinavian model. Mass unemployment was staved off by a speculation-driven economic boom period beginning in the mid-1980s, national stimulus packages targeting the Malmö region, and large municipal investments in public sector jobs from the late 1970s responding to increasing public demand for high quality public services. Without a return of high-paying manufacturing jobs, and with a reform abolishing municipal corporate taxation, Malmö municipality’s tax revenues were slowly hollowed out, despite a steady stream of tax hikes.177 This financial difficulty was exacerbated by a general trend of urban depopulation and suburbanization for about a decade from the mid-1970s onwards.178
Interestingly, the built environment, which had been a crucial sphere of intervention for postwar social governing, became a key cultural vulnerability for the city’s social democrats at this moment. Slum clearance and large-scale modernist rental blocks were increasingly understood as crude tools that no longer could solve the type of issues the city faced.179 A series of municipally-driven redevelopment schemes in central Malmö, most prominently the Triangeln mall in the city center’s southern periphery, turned out to be key issues of contention.180 The governing party’s fiscal and cultural recklessness in handling these sources of popular contention fuelled both leftist new social movements and, more importantly, the new right’s parliamentarian advances.181 The dramatic political fallout of large-scale inner city commercial redevelopment in Malmö was perhaps uncommon, but the same kind of conflict was negotiated in the shift towards new forms of urban governance across Sweden, Europe, and beyond with speculation-driven inner city renewals often overseen by old political elites steeped in
176 Billing and Stigendal, Hegemonins decennier: lärdomar från Malmö om den svenska modellen;
Vall, Cities in Decline?: A Comparative History of Malmö and Newcastle after 1945, p. 44. See also Bo Stråth, The Politics of De-industrialisation: The Contraction of the West European Shipbuilding Industry, (London: Croom Helm, 1987) p. 107-112.
177 Holgersen, Staden och kapitalet: Malmö i krisernas tid, p. 83.
178 Billing and Stigendal, Hegemonins decennier: lärdomar från Malmö om den svenska modellen, p.
314-319, 371. See also Lars Nilsson, Efter industrialismen: urbanisering och tätortsutveckling i Sverige 1950-2005, (Stockholm: Stads- och kommunhistoriska institutet, 2011) p. 49-51.
179 Billing and Stigendal, Hegemonins decennier: lärdomar från Malmö om den svenska modellen, p.
307-309, 328-332, 334.
180 Billing and Stigendal, Hegemonins decennier: lärdomar från Malmö om den svenska modellen, p.
338-340.
181 Billing and Stigendal, Hegemonins decennier: lärdomar från Malmö om den svenska modellen, p.
334, 328-340.
modernist ideals of urban space as a key area of social engineering.182 The 1980s was also a time when a new generation of Swedish social democratic economic policy-makers, inspired by monetarist fears of inflation, pushed through a series of de-regulations of credit markets. These reforms fed into a real estate boom with intense speculative investment driving the same kind of commercial inner city redevelopments in Sweden that could be seen across much of Europe.183
Malmö’s increasingly fragile social democratic project was most forcefully challenged from the traditional right, led by the steadily growing liberal-conservative Moderaterna (‘the Moderates’, or officially Moderata samlingspartiet, ‘Moderate unity party’), and the new right populist regionalist Skånepartiet (‘the Scania Party’). Both parties selectively embraced new ideas entwined with Anglophone neoliberalism in the mid-1980s, but in rather different ways. The populists combined undercurrents of increasing xenophobia in its demands for regional autonomy with railings against a sense of ongoing cultural decline and the destruction of a small-scale market economy of family businesses at the hands of large corporations, powerful unions, and a de facto one-party state mediating between the two.184 A key symbol for the party’s well-known front figure Carl P. Herslow was the Swedish state monopoly on alcohol, challenged by him and his compatriots as perfectly encapsulating the ‘socialist’ Swedish nanny state’s culture of unfreedom.185
This culturally conservative but economically libertarian program of small-scale market economy, personal freedom, and xenophobically-underwritten regional separatism might have been a problem for the long-standing left-leaning populist project of Malmö’s social democrats. The real challenge, however, came from the Moderates’ steady growth, which made them a concrete alternative to continued social democratic reign.186 Under Joakim Ollén, the charismatic local party chairman between 1982 and 1994, the Moderates wholeheartedly embraced an intricately-crafted neoliberal program drawing on radical Chicago School ideas.
182 See for instance Håkan Thörn, Stad i rörelse: stadsomvandlingen och striderna om Haga och Christiania, (Atlas akademi, 2013).
183 Blyth, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century, p. 223-227. See also Andreas Bergh, Den kapitalistiska välfärdsstaten: om den svenska modellens historia och framtid, (Stockholm: Ratio 2008), p. 58-59, 63-68; Karin Hedin et al.,
‘Neoliberalization of housing in Sweden: Gentrification, filtering, and social polarization’, Annals of the Association of American Geographers, 102/2 (2012), p. 453; Kjell Östberg, ‘Vad har hänt med den fordistiska välfärdstatens ingenjörer eller Var har socialdemokratin gjort av sina intellektuella?’, in Håkan Blomqvist and Werner Schmidt (eds.), Efter guldåldern: arbetarrörelsen och fordismens slut (Stockholm: Carlssons, 2012) p. 152-153.
184 Billing and Stigendal, Hegemonins decennier: lärdomar från Malmö om den svenska modellen, p.
340. See also Tomas Peterson, Björn Fryklund, and Mikael Stigendal, Skånepartiet: om folkligt missnöje i Malmö, (Lund: Arkiv, 1988).
185 Fredrik Persson, Skåne, den farliga halvön. Historia, identitet och ideologi 1865-2000, (Lund:
Sekel, 2008) p. 165-166.
186 Billing and Stigendal, Hegemonins decennier: lärdomar från Malmö om den svenska modellen, p.
344-345.
Unlike the vague anti-socialism of the regional populists, the Moderates could in the run-up to the 1985 elections present a detailed blueprint for a ‘different way of running’ Malmö drawing on a whole host of neoliberal ideas.187
It was this heterogeneous coalition of old conservatives and regional populists turning to neoliberal doctrines, cautiously backed by social liberals Folkpartiet Liberalerna (officially ‘The Liberal People’s Party’, later renamed Liberalerna,
‘the Liberals’) and the centrist old farmer’s party Centerpartiet, that dethroned Malmö’s Social Democrats in the 1985 election. This early neoliberal experiment in municipal politics was perhaps in sync with the Reagan-Thatcher-Pinochet moment, but had by no means unrestrained power to reform the city’s bureaucratic machinery. While a neoliberally-inspired rightist faction was gaining ground within the Social Democrats at this point, most of the national state’s interventionist mechanisms remained in place throughout the 1980s with the Social Democrats leading all national governments between 1982 and 1991.188 Swedish experiments in neoliberalism during the 1980s were contained to the neoliberal right’s precarious sway over a handful of city and regional administrations, with Malmö being one of the earliest and most important examples.189
The coalition led by Ollén was in this manner obstructed by national policy, but also a strong social democratic opposition in Malmö. The attempts to reprogram the kind of social democratic bureaucracy that had been built in Malmö over more than half a century were perhaps pioneering experiments of governance, but actual results were far from the sweeping neoliberal revolution that its right-wing architects had hoped to unleash. Some of the neoliberal mechanisms and concepts introduced at this moment would powerfully reverberate for decades, but only fragments of Ollén’s wide-ranging plans could be pushed through the municipal bureaucracy in the three years before the Social Democrats returned to power in 1988.
The 1985 election, then, marks one of the first instances of an intellectually explicit neoliberal program going head-to-head against a disintegrating municipal welfarist bureaucratic machine in Sweden, but the historical conditions in which this battle was fought were far from ideal for Malmö’s neoliberal reformers. This meant that some of the crucial contradictions of the failing welfarist regime rather than being resolutely resolved or indefinitely deferred were forced into the open.
Malmö’s Social Democrats improvised ways of containing crisis tendencies had,
187 Joakim Ollén, Ny tid för Malmö: om ett annat sätt att sköta en stad, (Malmö: Moderata Samlingspartiet i Malmö, 1985).
188 For a background on the social democrats 1980s deregulation, see Östberg, ‘Vad har hänt med den fordistiska välfärdstatens ingenjörer eller Var har socialdemokratin gjort av sina intellektuella?’, p. 148-159.
189Torbjörn Nilsson, ‘Nyliberalismens spöke och Moderaternas politik ‘, in Anders Ivarsson Westerberg, Ylva Waldersson, and Kjell Östberg (eds.), Det långa 1990-talet: när Sverige förändrades (Umeå: Boréa, 2014) p. 54-56.
since the mid 1970s, rested on two distinct mechanisms. Municipal public sector employment had rapidly increased, absorbing some of the labor surpluses produced by the first waves of deindustrialization, and the municipality had been actively buying real estate from fiscally-strained local businesses in return for promises of remaining in Malmö.190 To finance these policies the municipality had gradually raised income taxes and accumulated a mountain of debt owed to private creditors.191
Both these mechanisms instantly came under attack in a controversial emergency budget rushed through by the new center-right majority in December 1985. With this budget all new municipal hiring was temporarily suspended, and the Real Estate Department directed to start selling off the, at this point, massive municipal real estate stock.192 This neoliberal ‘shock tactic’ did not, however, have the dramatic effects imagined by its supporters and critics alike. The growth of the municipal public sector slowed down and eventually shrank a little, decreasing by just over 500 employees (from 33,900 in 1985 to 33,398 in 1989).193 The effects of this rather gentle way of imposing fiscal austerity was however compensated by a speculative real estate boom sparked by national credit deregulation and heavy state investments in Malmö by the social democratic national government.194
If the short-term fallout for Malmö’s economy was rather undramatic, the center-right’s reforms did undermine the credibility of what had been Malmö’s social democrats’ key approaches to managing economic contradictions. Growing public sector employment and municipal real estate holdings leased cheaply to private firms had been confronted head-on as ways to regulate the city’s economy.
These two bureaucratic practices that had shaped Malmö’s economic development for ten years were abandoned, and it would turn out to be difficult for Malmö’s
190 Billing and Stigendal, Hegemonins decennier: lärdomar från Malmö om den svenska modellen, p.
321-323; Holgersen, Staden och kapitalet: Malmö i krisernas tid, p. 84.
191 Billing and Stigendal, Hegemonins decennier: lärdomar från Malmö om den svenska modellen, p.
222, 327.
192 Malmö stad, Minutes of Malmö kommunfullmäktige 29th November 1985 §354 1986 års budget för Malmö kommun.
193 Stadskontoret, Malmö stad, Planerings- Och Statistiskavdelningen, Malmö Statistisk årsbok 1986, (Malmö) p. 86; Stadskontoret, Malmö Stad, Planerings- Och Statistiskavdelningen, Malmö Stad, Malmö Statistisk årsbok 1987, (Malmö) p. 47; Stadskontoret, Malmö Stad, Planerings- Och Statistiskavdelningen, Malmö Stad, Malmö Statistisk årsbok 1988, (Malmö) p. 47, 49.
194 The most visible of these programs during the first Ollén administration saw through was the move of a SAAB auto plant to Malmö’s recently-abandoned docks in 1986, which received an astounding 374,000,000 SEK from the state over a three-year period. Yet Ollén managed to give this venture a decisively neoliberal twist. Instead of using the social democratic tactic of subsidizing SAAB further by leasing the municipally-owned land below market price, the municipality sold the entire area for a symbolic price to SAAB as part of a short-term project of streamlining costs associated with real estate management. As the state subsidies ran out, the spectacularly robotized new factory promptly closed in 1991, leaving 1400 autoworkers unemployed. See Jon Pierre,
‘Public-private partnerships in industrial structural change’, Statsvetenskaplig tidskrift, 92/3 (1989), p. 204 and Billing, Skilda världar?: Malmös 1990-tal i ett kort historiskt perspektiv, p. 6.
Social Democrats to return to these means once they had again seized the political majority. This meant that a bureaucratic vacuum was taking shape. New ways of combining remains of the old bureaucratic machinery, and other less-established technologies inspired by dynamic translocal neoliberal debates, not only seemed possible. A turn to new practices of rule seemed necessary to piece together a working municipal bureaucracy in the empty space left by this turn away from municipal stimulus politics concerned with real estate and public sector employment.
Asking neoliberal social questions
In the historical literature on Malmö, which tends to focus on the early 1990s as the city’s turning point, the 1985–1988 administration is often glossed over as enacting inefficient reforms that came before their time. It is tempting to approach the 1985 center-right coalition in terms of a failed neoliberal roll-back of the municipal state of little significance. The center-right coalition’s insistence on selling off municipal assets, most prominently real estate, and slimming the municipal public sector and subsidies to the remnants of heavy manufacturing, might all be filed under this heading. But these reforms were not, especially to Malmö’s most influential neoliberal figure Joakim Ollén, only a matter of reducing the size and scope of the state according to neoliberal principles. The abandonment of the improvised fixes which the Social Democrats had turned to in the 1970s were designed to make space for an almost utopian neoliberal program for Malmö steeped in the social logics of population politics. This neoliberal visions, rather than what few austerity reforms neoliberals managed to impose, was the lasting significance of Ollén’s administration for Malmö.
In the highly technical pamphlet that the Moderates’ election campaign revolved around, Joakim Ollén had already made sure that roll-back reforms were framed within this more proactive long-term plan.195 Privatization, austerity, and ending subsidized real estate deals with faltering firms were, in this formulation, not primarily a question about the size of the municipal bureaucracy, but rather its function. Ollén, in fact, understood decreasing public spending as a technical fix to a problem that was rooted in the region’s demographic trends. Austerity was taken as the crucial precondition for lowering taxes, which in turn was seen as necessary for reversing Malmö’s population decline and boosting the city’s income tax revenues.196
195 Ollén, Ny tid för Malmö: om ett annat sätt att sköta en stad, p. 100-106.
196 Ollén, Ny tid för Malmö: om ett annat sätt att sköta en stad, p. 36-38.
Social regulation was in this way reimagined along neoliberal lines rather than abandoned in its entirety. Malmö municipality’s social welfare mechanisms were likened to services sold as a commodity on a fiercely competitive regional market.
The only way to become ‘attractive’, to compete with suburban and rural communities for desirable high- and middle-income demographics, was by dumping what amounted to the price Malmö was asking for providing social services. Malmö was asking too high a price — that is, excessive taxes — for what was understood in terms of a commodity that could be bought much more cheaply in the city’s commuter belt.197
The neoliberal program at work attacked the social democratic state on its strongest point, seeking to introduce a completely new kind of logic to municipal bureaucracy steeped in a decisively welfarist kind of social politics since the 1920s. Seeking to remake social regulation along neoliberal lines was not an immediate success. It would lead to years of political conflict before a stable bureaucratic formation emerged. For just under a decade the regulation of Malmö’s demographic patterns was framed by this tension between different ways of conceiving social politics. Social democrats, and their allies in the municipal bureaucracy, sought to maintain their traditional understanding of social regulation in terms of almost universal social rights combined with interventions directed at groups demanding special care. On the other side were neoliberals that understood municipal social interventions as a commodity-like service for potential residents in a regional ‘market’. Competing with lower taxes, as the cheap ‘price’ for this service, was essential to make the city more demographically ‘attractive’.
The short-term articulation of this contradiction was a neoliberal administration trapped in the sphere of bureaucratic practice perhaps most intensely shaped by the decades of social democrat postwar influence. With few ready-made neoliberal bureaucratic practices concerned with social care to be deployed to replace this municipal machinery, the neoliberals focused on limiting anything that caused the price Malmö was asking on the regional market for social care to soar. The neoliberals’ social vision of a demographically competitive city were in this regard translated into economic interventions, where there were plenty of actually existing examples from Anglo-American neoliberal austerity measures to draw inspiration from. Lowering taxes to make the city’s social environment more competitive was the most fundamental principle of Ollén’s plan for Malmö.198 Low taxes would attract new residents to the shrinking city, and in particular give Malmö a competitive advantage when it came to affluent suburban demographics that in absolute terms would make the largest gains from tax cuts.199
Ollén and his administration in this way framed tax rates as an indicator of how
‘attractive’ Malmö was for desirable demographics. Taxes became a way to
197 Ollén, Ny tid för Malmö: om ett annat sätt att sköta en stad, p. 42.
198 Ollén, Ny tid för Malmö: om ett annat sätt att sköta en stad, p. 30, 37, 43.
199 Ollén, Ny tid för Malmö: om ett annat sätt att sköta en stad, p. 36-38, 103.
benchmark Malmö’s regional competitiveness, but at same time, it was also one of few means to change the city’s competitiveness. Since tax cuts were the explicit reason for freeing up municipal resources through austerity and privatization, tax rates then also became a way to measure the relative success of these mid-1980s neoliberal reforms. Looking at the fierce budgetary negotiations, and the strains that the Moderates’ relentless tax race to the bottom caused in the fragile center-right coalition, reforms were clearly not making the expected headway. Most of the reforms to free up public money were difficult to push through the municipal machinery, and what should have been straightforward decisions like raising bus fares were stalled for years by unwilling bureaucrats and seasoned social democratic politicians using every legal loophole available.200 Despite the Moderates’ best efforts, the center-right only managed to lower income tax from 30% to 29.25% between 1985 and 1988, rather than the promised 27%, and the Social Democrats quickly raised the level to 31% after winning the 1988 elections.201
The bureaucratic sphere in which this neoliberal program seems to have worked best in Malmö was the municipal Real Estate Department. This department was already steeped in economic practices and instantly began selling off its large property holdings at a remarkable pace, just as a national real estate speculation frenzy was gathering momentum. Even in the 1988 budget, after two years of selling off key real estate assets, the Real Estate Department banked on having a sizable 150m SEK revenue stream from sales.202
If the three years of center-right rule can be seen to have had a long-lasting impact on Malmö, it was not so much in terms of what effects austerity had on the everyday life of the city’s residents. Rather, the introduction of a neoliberal vision suggesting that the key responsibility for municipal bureaucrats was to make Malmö compete better regionally for desirable demographics would, as I will show, turn out to be the lasting influence of these early neoliberal experiments.
The economic means of measuring and intervening socially used by the first center-right administration had been crude, did not produce the desired results, and were abruptly abandoned by Social Democrats after their 1988 election victory. It was only when, more than a decade later, ways of re-articulating the proactive practices of postwar social planning to make the social ‘product’, rather than its
‘price’, more attractive that a stable formation of social neoliberalism would take shape.
200 Malmö stadsarkiv, Minutes of Malmö kommunfullmäktige 17th September 1987, §264 Godkännande av ML-taxor.
201 Planerings- Och Statistiskavdelningen, Malmö Statistisk årsbok 1988, p. 121. See also Malmö stadsarkiv, Minutes of Malmö kommunfullmäktige 26th November 1987 § 228; Malmö stadsarkiv Minutes of Malmö kommunfullmäktige 28th November 1988 § 447.
202 Malmö stadsarkiv, Minutes of Malmö kommunfullmäktige 26th November 1987 § 228, bihang 800, p. 42.