The Nordic model and British public policy c.1997-2015: social democratic mythology or free-market supermodel? Thesis submitted to the degree of Doctor of Philosophy at University College London by Thomas Hoctor Supervisors: Examiners: Mary Hilson Titus Hjelm Richard Mole J. Magnus Ryner 1 Declaration I, Thomas Hoctor confirm that the work presented in this thesis is my own. Where information has been derived from other sources, I confirm that this has been indicated in the thesis. 2 Contents Acknowledgements ........................................................................................................... 8 Abstract ............................................................................................................................ 9 Introduction .................................................................................................................... 10 0.1 Britain votes leave .............................................................................................................. 10 0.2 Models, identity, branding .................................................................................................. 12 0.3 This study and its aims ........................................................................................................ 17 Chapter One – The Nordic Model: What is it and why does it matter? ............................. 22 1.1 Introduction ....................................................................................................................... 22 1.2. What is the Nordic Model: Middle Way, Rehn’s liberalism or Meidner’s socialism? ........... 27 1.2.1 The pre-war context: ‘the Middle Way’ .............................................................................. 27 1.2.2 The Rehn-Meidner model and the wage-earner funds ...................................................... 29 1.2.3 Nordic dystopia: conservative visions of Norden ............................................................... 41 1.2.4 Conclusions ......................................................................................................................... 44 1.3. Norden in the international sphere: The Cold War ............................................................. 46 1.3.1 The end of the Cold War: neither winner nor loser ............................................................ 46 1.3.2 Conclusions ......................................................................................................................... 52 1.4 Conclusions ........................................................................................................................ 53 Chapter Two – New Labour, New Moderates, New Norden ............................................. 54 2.1 Introduction ....................................................................................................................... 54 2.2. Writing a new Swedish Success Story ................................................................................. 56 2.2.1 The Swedish financial crisis 1991/2 and its aftermath ....................................................... 56 2.2.2 A New Start for Norden? .................................................................................................... 60 2.2.3 The Nordic Way .................................................................................................................. 64 3 2.2.4 Globalisation and Europeanisation in Norden .................................................................... 68 2.2.5 Conclusions ......................................................................................................................... 71 2.3. The Swedish Social Democrats, Labour’s Third Way, the Swedish Moderates, and Cameron’s Big Society ................................................................................................................................ 73 2.3.1 Changing Social Democracy in Sweden and the UK ............................................................ 73 2.3.2 ‘Far above ideology, but not beyond ideals’: Labour’s Third Way ..................................... 77 2.3.3 Triangulating towards an empty centre: Cameron’s Big Society ........................................ 87 2.3.4 Conclusions ......................................................................................................................... 99 2.4. Conclusions and further questions ................................................................................... 102 Chapter Three – Governance and Discourse: Approaching the Nordic model as a question of public policy .............................................................................................................. 104 3.1 Introduction ..................................................................................................................... 104 3.2 Governance: Theorising relations between actors ............................................................ 108 3.2.1 Think-tanks, government and the media: Is that really it? ............................................... 108 3.2.2 The development of governance as a concept ................................................................. 112 3.3 Discourse Theoretical Approaches .................................................................................... 120 3.3.1 Introduction ...................................................................................................................... 120 3.3.2 Signification and empty signifiers ..................................................................................... 121 3.3.3 Criticism of Laclau and Mouffe ......................................................................................... 125 3.3.4 Discourse: Material or ideological? .................................................................................. 128 3.3.5 Governance and Discourse as methodology .................................................................... 131 3.4 Sources and Terminology .................................................................................................. 136 3.4.1 The primary actors ............................................................................................................ 136 3.4.2 Sources ............................................................................................................................. 139 3.4.3 Terminology ...................................................................................................................... 142 3.5 Conclusions and questions ................................................................................................ 145 4 Chapter Four – Nordic models of political economy: fleXibility or security? ................... 147 4.1 Introduction ..................................................................................................................... 147 4.2 Why Nordic flexicurity? .................................................................................................... 150 4.2.1 Flexicurity: Where did it come from? ............................................................................... 150 4.2.2 The architecture of flexicurity .......................................................................................... 153 4.3 A tale of two networks ..................................................................................................... 162 4.3.1 The ‘social democratic’ network ....................................................................................... 162 4.3.2 The ‘free-market’ network ............................................................................................... 164 4.4 Flexicurity: A new labour market settlement? .................................................................. 167 4.4.1 Sweden as political paradox ............................................................................................. 167 4.4.2 Flexicurity in a time of austerity ....................................................................................... 178 4.4.3 The IPPR and flexicurity from the employers’ perspective ............................................... 185 4.4.4 Conclusions ....................................................................................................................... 189 4.5 Utopia 2.0: Free-Market Sweden ...................................................................................... 193 4.5.1 The New Moderates and ‘the Big Society’ ........................................................................ 193 4.5.2 Conservative victory and the Institute of Economic Affairs ............................................. 199 4.5.3 Conclusions ....................................................................................................................... 209 4.6 Schumpeterians and neo-Schumpeterians ........................................................................ 211 4.6.1 The liberal Schumpeter ..................................................................................................... 211 4.6.2 The corporatist Schumpeter ............................................................................................. 213 4.6.3 Conclusions ....................................................................................................................... 219 4.8 Conclusions ...................................................................................................................... 222 Chapter Five – TaXation or insurance? A Nordic model