Background

In 1974 Bo Gustafsson launched a devastating critic of the Social Democratic Government's response to the Great Depression in the 1930s. Coming from the 'Hard Left', Bo Gustafsson's underlying assumption would have followed the official Leninist party line where representative democracy is viewed as a capitalist device in which two parties alternate in power to give the semblance, but not the reality, of democracy. Björn von Sydow, an up and coming party apparatchik within the Social Democratic party at the time, was given the task of rebutting Bo Gustafsson's accusations.

J'Accuse

Bo Gustafsson made eleven accusations against the 1930s Social Democratic Government in his report to a meeting of the Nordic Historians in Uppsala in 1974. These were as follows:

1. There was no change in taxation policy when the Social Democrats came to power
2. Government practice was in sharp contrast to Social Democratic party policy
3. The cost of the depression was met by the working classes
4. The 1938 tax reform implemented policies designed in the 1920s
5. Government unemployment policy was to reduce wages by stealth through inflation
6. Government budget deficits occurred in the 1920s and not in the 1930s
7. In the 1930s the Social Democrats talked about the Stockholm School's policy of
balancing the budget over the business cycle but in government did not do so
8. The Social Democratic Government's policy goal was the health of the Public Finances
9. Economic conditions were the sole determinant of budget balances in the 1930s and not any
action by the Social Democratic Government
10. It was the Ekman Government that began debt financing in 1931
11. There was little difference between the impact of Government finance policy in 1931, 1932,
1933 and 1934.

Von Sydow's Rebuttal

Björn von Sydow chose two principal sources for his line of attack against the Gustafsson accusations: the views of the Minister of Finance, Ernst Wigforss and the budget allocations for labour market measures during the period 1929 to 1934. In both cases these sources were first brought into the debate by Bo Gustafsson and in each case von Sydow seeks to undermine Gustafsson's credibility by demonstrating that these sources have been wilfully misused by Gustafsson.

In retaliation Gustafsson argues that because Björn von Sydow lacks any factual arguments for an academic rebuttal, he has resorted to the tactics of smear and innuendo. Specifically Gustafsson accuses von Sydow of having read only 4 of the 49 pages and of attacking only two of his eleven charges, thereby implicitly accepting the truth of the other nine.

The two charges that von Sydow chooses to challenge are Charge Number Five that the Social Democratic Government sought to lower wages by what Gustafsson implies were the 'Machiavellian Keynsian' policy of price inflation and Charge Number Ten concerning the financial record of the Social Democratic Government.

As the labour market budget figures used in the debate are not in fact complicated they provide a good example of the von Sydow method of attacking Gustafsson's position.

Labour Market Budgetary Allocations

Those unfamiliar with reading government statistics would take one look at von Sydow's complex presentation and leave the matter there. I suspect this is a deliberate tactic by von Sydow and supports the Gustafsson view that von Sydow is arguing by smear and innuendo rather than on the basis of fact.

In fact von Sydow is using a sort of ideological 'double-bluff' strategy by purporting to be making a factual challenge on Gustafsson's abuse of his sources when in fact it is von Sydow himself who is deliberately massaging the figures for the specific purpose of disinforming his readers and confusing the debate. Here are the disputed figures in millions of Swedish kronor:
 

Budget Year	Open Market	Job Creation	Others	Total	Adjusted Total
1929/30	88	4	2	94	94
1930/31	103	8	1	112	112
1931/32	142	22	6	170	170
1932/33	143	38	30	211	211
1933/34	222	60	58	340*	270*
Total	697	132	97	927	857

 

* The SEK 70 million adjustment in is for the unspent budgetary allocation.

When expressed in this clear manner, the figures are easy to understand. In particular it is clear that Björn von Sydow's argument that Bo Gustafsson has deliberately misrepresented the situation by excluding the 1933/34 figures can be seen to be a total fabrication, the trend that Gustafsson uses to make his argument being in no way altered by the addition of the fifth year figures.

Hence in the question of the labour market budget allocations von Sydow's technique is disingenuous. He makes no attempt to clarify the lines of debate, although this is a relatively easy thing to do. Instead he chooses to present his arguments with the full and active support of 'the smoke and mirrors department'. Let us look at von Sydow's claim that Gustafsson misrepresents Wigforss:

Wigforss

Von Sydow's 'smoke and mirror' tactics appear again in the question of whether or not the Social Democratic Government's unemployment policy was to reduce wages by stealth through inflation. But here von Sydow applies Himmler's 'big lie' theory...if you are going to lie then lie big if you want to get away with it. Von Sydow's bluff is so audacious that Gustafsson has difficulty in responding.

What von Sydow does is to cite a long section from Wigforss' memoires and then demonstrate that Gustafsson has selected only a few lines. By this ploy von Sydow is able to imply that the Wigforss extract has been selectively used by Gustafsson and that a full reading of this section of the Wigforss memoires would show Gustafsson's interpretation to be incorrect. The problem is that a full reading of the Wigforss extract endorses Gustafsson's argument and shows his selection to be well-balanced and a fair reflection of Wigforss' view of events.

The only criticism that could be directed at Gustafsson is that he fails to do justice to Wigforss' argument for why it was sensible and politically necessary to act in the manner the Social Democratic Government did. Had von Sydow taken this position he would have been on firm ground. But instead he takes the same line as he did on the labour market budget statistics and seeks by bluff and bluster to overwhelm his opponent instead of arguing on the basis of the facts.

Conclusion

It is disappointing to see an ill-tempered and ill-mannered controversy of this nature gracing the pages of a serious academic journal. This is political knock-about of the type you can see twice a week in the televised reporting of Prime Minister Question Time in the British House of Commons. It is politics not economic history.

It is sad to see a great political party like the Swedish Social Democrats resorting to these arrogant bully boy tactics. They have every reason to be proud of their record in government and, as is clear from the extracts from Ernst Wigforss' memoires, they do not need to hide behind smears and innuendos to defend their policies against legitimate debate with the left.

Björn von Sydow has done his party a disservice and a motion of censure against Björn von Sydow would be in order both from Sweden's academic community and his own political party. It is a reflection of the sad state of the Social Democratic Party that von Sydow has instead been elevated to the position of one of King Carl XVI Gustaf's ministers of state.

Stockholm, Sweden
April 1999