Fairness

There is one other point that is often ignored. A state, like a company, has both a profit and loss statement and a balance sheet. Commitments on public spending have important implications for the state as sponsor of collective insurance against the risks everyone confronts.

If the insurance component of public expenditure rises, this is part of the contract between the government and the people and is the most economically and socially efficient means of discharging the insurance obligation. But it is a balance sheet item and not a charge to the P&L like a nurse's salary is...or the purchase of a corporate Hallberg Rassy should be.

One of the key roles of the state is as risk sharer and risk-underwriter. The dynamics of contract capitalism, in thrusting unfair amounts of risk on to the disadvantaged, can only be addressed by redistribution of both the risk and the reward.

Most people would agree that rights should be balanced by obligations. But what we have been seeing from New Labour in its first two years in office is a dangerous tendency for obligations...to search for work, to save for pensions...to be imposed upon the poor, while rights...to enjoy low marginal rates of tax, to opt out into privileged private education...are voluntarily exercised by the rich.

This unfairness undermines the bonds that hold society together. Partial implementation of a rights and obligations framework hitting the poor harder than the advantaged is a mistake that Sweden has so far avoided.

The grey eminences behind the Swedish Model understood that moral principles are universal or they are not moral. And they persuaded both the Social Democratic Party's electorate and the advantaged themselves of the strength of their case...a case made again in recent years by the Harvard philosopher John Rawls.