The Atlantic Report on the World Today

THERE is a great deal of excitement in these normally placid parts. In her own small way Sweden is involved in exactly the same three burning issues as America: foreign affairs, the threat of inflation, and the coming elections. Indeed, there is another point of similarity as far as the elections are concerned. The Social Democrats have now held office since 1932 (except for three months in the summer of 1936), and in Per Albin Hansson, who died late in 1946, they had a leader whose towering personality dominated the whole country.

Just as in America, therefore, the elections are offering the opposition the first real chance of throwing out of office a party that has had the monopoly of government for sixteen years and can no longer rely on the magnetic power of “the old master” to gain votes. Both foreign affairs and the financial crisis are being used to the utmost in the campaign, by government and opposition alike.

To understand the violent character of the polemics which have arisen around Swedish foreign policy, it is necessary to place the whole matter in a certain historical perspective. Sweden has not taken part in any war since the days of Napoleon, and though all thinking Swedes know that they owe this record of unbroken peace largely to circumstances beyond their own control, they are nevertheless inhibited by the idea of “neutrality.” The word is a misnomer, because in neither the First nor the Second World War did Sweden pursue a genuine policy of neutrality.

The main difference between her position during 1914-1918 and that of 1939-1945 is that in the first war Sweden’s pro-German sympathies were tempered by her respect for and fear of Great Britain; whereas in the second, her sympathies for Britain and the democracies were tempered by her fear of and respect for Germany. In both conflicts the Swedes pursued a policy of opportunism.

Hatred and fear of Russia — the traditional enemy — are constant in Swedish politics. RussoGerman collaboration in 1939-1941 and Britain’s alliance with Russia after 1941 presented the Swedes with a bewildering situation. Not less bewildering have been the vagaries of America’s foreign policy, and especially of American intervention where Swedish-Russian relations are concerned. It is an open secret that during the war American official representatives in Stockholm exercised the strongest pressure to secure a more favorable Swedish attitude towards the Soviet Union as a fighting ally of the democracies. But when, in 1946, the Swedes concluded a trade agreement with the Russians, granting them a billion-krona credit, they received a stiff American reprimand.

This trade agreement, incidentally, has not brought about the evil results predicted by the prophets of gloom. The Russians have been very slow in placing their orders, which only total about 300 million kronor, and have not made any trouble about the small volume of deliveries, which amount to barely 30 million. On the other hand, the Communist coup in Czechoslovakia and the treaty of friendship and mutual assistance imposed by the U.S.S.R. on Finland have convinced some Swedes that Sweden and even Norway may be invaded by the Russians any moment.

So when Ernest Bevin in his speech of January 22 suggested the creation of closer ties between “the kindred souls of the West,” he started a nation-wide debate in Sweden. The quarrel is not only between those who want Sweden to join Western Union at once and those who cling to the traditional notion of “neutrality” (no commitments at any price), but also between both those groups on the one hand and the government on the other.

Will Sweden choose sides?

The government’s contribution to the debate has been to substitute a revived form of inter-Scandinavian coöperation for both these policies. Speaking in the Riksdag on February 5, the Swedish Minister of Foreign Affairs, Dr. Östen Undén, made it clear that Sweden was not going to be driven to “choose sides.” “The government is convinced,” he said, “that an overwhelming majority of the Swedish people do not want to join any great power bloc either by an open alliance or by silent understanding on joint military action in the event of a conflict.”

Dr. Undén and his colleagues then turned to the perennial business of inter-Scandinavian coöperation. This theoretically attractive idea never worked in practice. The Second World War showed how diverse the positions of the Scandinavian countries could become virtually overnight. Norway was invaded and became a fighting ally; Denmark was likewise invaded and was an ally in all but name; on the other hand, Finland fought on Germany’s side; Iceland was occupied by British and American troops; Sweden alone had the good fortune to escape being drawn into the conflict.

This disparity in experience, in effort, and in the feelings created cannot be brushed aside easily. Nevertheless, since the end of hostilities many attempts have been made to re-establish the vaunted inter-Scandinavian coöperation. In such practical fields as civil aviation it has been possible for the Swedish, Norwegian, and Danish airlines to merge into the jointly owned Scandinavian Airlines System. But in the wider field of politics and economics it is impossible to get beyond pious hopes and meaningless platitudes.

Scandinavian bloc or Western Union?

After Czechoslovakia, the Prime Ministers of Denmark, Norway, and Sweden met in Stockholm and agreed in condemning the Communist peril. But when it came to the vexatious question of a joint foreign policy, all the old obstacles re-emerged with new vigor. True, the Swedish Foreign Minister, at the Annual Congress of the Social Democratic Party, went so far as to suggest defensive arrangements between the Scandinavian countries. But he made it conditional on the Scandinavian group’s remaining outside any other groupings of powers.

Since the Danish and Norwegian Prime Ministers were present at this congress, it was assumed that agreement had been reached at long last. This assumption turned out to be wrong, and Halvard M. Lange, the Norwegian Foreign Minister, has since made a speech defining his country’s policy.

“There cannot be the least doubt,” he said, “that Norway is a part of West Europe, geographically, economically, and culturally, and that Norway is and will continue to be a West European democracy. . . . Very weighty reasons would be necessary before we chose a line that might separate us from Denmark and Sweden or from one of them. On the other hand, we must realize that the military-political problems of the three northern countries are not identical, and that this fact can cause certain difficulties in the work of achieving a common solution.” In other words, Norway has little use for Dr. Undén’s plan of armed neutrality, and has of her own free will thrown in her lot with Britain, or indeed the whole of Western Union.

Even Denmark, the weakest of the three Scandinavian countries, has no illusions about the practical aid she could receive from Sweden if invaded, or about the chances of neutrality. Moreover, the Danish Foreign Minister, Gustav Rasmussen, like his Norwegian colleague, feels drawn to the Western powers rather than Scandinavian isolationism.

Inflation and taxes taunt the Swedes

Next in violence are the polemics around the financial crisis, which set in nearly two years ago, became particularly acute during 1947, and is showing no signs of subsiding. The gold reserves of the Riksbank, which in June, 1945, approximated two billion kronor, amounted to only 600 million by June, 1947, and have dropped fo about 350 million now. The U.S. dollar reserve in the same period has dropped from 456 million to a mere 18 million.

Hardly a day passes without news of fresh restrictions, growing difficulties, and the further widening both of the balance of payments gap and the inflationary gap. It is the old, old story of too much money chasing too few goods, yet government legislation continuously tends to increase spendable incomes through the huge expansion of social welfare benefits, suspension of the sales tax, and a farreaching redistribution of the general tax burden in favor of lower income groups.

Thus purchasing power is constantly growing in the hands of those who consume practically all their income, while increased taxes on the comparatively small number of people in the higher income brackets tend to reduce not their consumption but their savings. Production is not increasing to any considerable extent, and the situation is further adversely affected by rising wages.

People grouse about excessive taxation, rationing, the export and import licensing system, and the frequent manifestations of faulty planning by the government. But the truth of the matter is that, with the solitary exception of Switzerland, there isn’t another nation in Europe that is enjoying as much freedom and relative prosperity as Sweden. The elections in September will show whether the Swedes want to preserve their liberty and national wealth by continuing along the “Middle Way,” or whether they want to gamble them away by deviations to the left or to the right.