Monthly Archives: November 2013

A “democratic” pension system despised by 97 percent

In the previous postcard I mentioned an exotic part (PPM) of the Swedish pension system in which people are expected to choose between 800 different (or “different”) stock funds produced by the finance industry. Since this is an absurd and impossible task for normal human beings, the finance companies provide pension advisors to help out (and try to make even more money out of the system). But there is not too much to gain. Provisioning to this part of the pension system is only 2.5 percent of people’s salaries.

There also is the snag that people sometimes are quite clever. So when faced with an absurdity like this, Swedes just refuse to choose. Of all who entered the system last year only 3 percent made an active choice. The others land up in a large public stock fund called AP7. It so happens that this AP7 fund performs better than the average of the private funds in terms of capital appreciation, and has lower fees than most of the others, at that.

One may really wonder how this bizarre idiocy came about. Well, it all happened in 1994 when the whole pension system underwent a thorough reformation, which almost all the parliamentary parties endorsed. The basic principle was changed from a “pay-as-you-go”-system to a fund-based one, a major swap from social democratic thinking to more (neo)liberal standards. And as the liberals (=conservatives in the US) really had tailwind they succeeded to squeeze in this “premium fund” system, so as to force people to play capitalists. As a conspiratory idea this one is not too bad: By luring people to become shareholders they can be made more susceptible to employers’ points of view, and less focused on their interests as employees.

Today, center-right intellectuals probably marvel over the fact that the Social Democrats surrendered cherished principles so easily in the negotiations about the pension system. But it may be explained by the fact that the soc.dem. then recently had won the parliamentary elections and was about to enforce harsh neoliberal measures to try to counteract the effects of a deep, domestic economic crisis caused by a burst housing bubble. The party’s leadership more or less aligned to neoliberal ideas, and has stayed that way since. To his honor it has to be said that the party’s chairman recently proposed that the PPM system should be abolished, but he was silenced in that attempt by all the bourgeoisie parties.

97 percent of the people demonstrate what they think about the ridiculous blooper that the PPM-system has turned into by openly rejecting it’s core principle. 97 percent of politicians demonstrate what they think about democracy by defending the same system. What does that demonstrate?

Private schools is not a matter of choice, just profit

A commentator on Twitter reacted on yesterday’s postcard with a sarcasm: “A socialist just cant [sic] bear the idea that people suddenly can chose”. What’s correct there is that freedom of choice is the only justification for private schools that anyone in this country can present with a touch of decency (the old crap about higher efficiency, quality and all that has become so thoroughly crushed by reality that the apologists prefer to keep silent on such issues).

But is the possibility to choose really something that came with the privatizations? I can amuse myself by looking back at my own schooling some 60 years ago. We started first grade at the age of seven, and to get to our school we just had to cross the street. OK, we were not allowed to choose a different school, but that was a pointless limitation since there were no cars or other possibilities for transportation anyway. But more importantly it had been futile to choose something else since all elementary schools were identical; in fact countrywide (that was by the way one important reason why Swedish education ranked among the highest in the world in those days, the same today proved by Finland).

Already after fourth grade, at the age of 10, we could leave for a voluntary secondary school of which there were almost a dozen in my town. Now we could choose freely and were not limited to our own town for that matter. These schools were also quite similar, all of them (with rare exceptions) publicly owned and managed. Most of them included senior high schools (gymnasium) meaning that you could spend 7-8 years there. Curriculum were identical for each of a limited number of courses, and teachers with the same seniority had equal salaries. It probably would have been a nightmare for today’s neoliberals, but it gave us after all a world leading educational system.

As we can see today, the private option has resulted in deteriorating educational quality. That is not to say that schools 60 years ago couldn’t have been much better in pedagogy and leadership. Teachers then still saw it as an important part of their mission to chastise the young children and to mold them into the civilized creatures that society demanded in those days. On that front we have seen enormous progress since then.

Swedes can choose between 800 different stock funds to administer a small part of their pension contributions. This is a choice that no human being can do in an informed way, the whole thing instead becoming a caricature of neoliberal idiocy. Very few, except for bank managers, would vote for a system like that. Still it’s impossible to change. If we think that through we will also understand why our privatized schools and welfare institutions continually can produce scandals in an endless row, the one more severe than the other, without anything done to reform the system. It just tells us where the power lies.

Privatized scandals

The fact that I have been quiet and silent on this blog for a while doesn’t mean that Swedish neoliberal scandals are over. By no means! We have just had a demonstration of shamelessness in some private schools of a sort that even made some politicians react. As we have told here earlier, our school system has been “neoliberalized” in a way that stuns our Nordic neighbors and probably many more. Every fortune-hunter in town has been allowed to start a new school after not much more than a formal application. And many have done so.

Once the schools have been established, the authorities have handed over generous amounts of taxpayer’s money which make the businesses most profitable from day one. The school voucher is dimensioned so as to cover facilities that benefit the students and education itself, such as nursing, libraries and special teachers. Many private education businesses have bluntly ignored these requirements in order to maximize profits. When the schools have been operative for some time many fortune-hunters have found the ultimate way to become even richer, namely by selling their businesses to private equity corporations and thereby lowering the ethical standard even more.

A bunch of notorious investigative reporters on public service television disclosed the latest scandal, the one disclosure that really did the trick. They visited some private schools with a hidden camera, presenting themselves as parents trying to find a place for a son and a daughter. When one of the reporters presented his son as a boy with minor behavioral problems, the school was said to be filled, but when another reporter then tried to find a place in the same school for his well behaved daughter, there where no problems at all for her to enter. Some principals were caught on tape saying frankly that they didn’t want any problematic students. (One of them made such outrageous statements on tape that he resigned the day the program was aired, and sold his school.)

To select the best students is naturally a flagrant violation of the agreements, and in breach of fundamental principles for our egalitarian school system. This bad news adds to a range of others. One of recent disclosures is that some schools have paid high interest rates on loans given by their owners, and paid with tax payer’s money intended for education, all with the intention to increase profits.

It took these last scandals, revealed by our prestigious public service TV, for the Social Democrats to finally react on the highest level. To cope with the problem of wrongful selections of students, they now propose that schools shall be bereaved right to choose students altogether. Instead this process is proposed to be managed by an independent and official body. How this really ends up is a separate question, though.

Prior to these happenings we had some turbulence concerning one of the boarding schools we have in this country. They are in part publicly financed, motivated by the fact that they educate some children of parents working abroad. But the one in question – Lundsberg – is more of a remnant from an ancient feudal era, with its noblemen and their obsolete habits. Lundsberg has a long history of excesses connected to the social order in which the older students are parenting the younger ones (the “bowels”), often with harsh methods. Numerous scandals have been revealed through the years. In this actual incident, a couple of the “bowels” were burnt with smoothing irons, so much that they had to visit a health clinic. Thus it all came out, and the National School Inspection acted promptly, closing the whole school overnight.

The Lundsberg management appealed to a court which set aside the decision on the grounds that the Inspection had no jurisdiction regarding what happened after school hours. We have yet to see the end of the story, but the spotlight is on Lundsberg and the other boarding schools we have.

In fact, the spotlight is on the entire school question and the privatizations which are correlated with a sharp decline in study achievements as measured by PISA and other respected test methods. The correlation is probably not coincidental. In the TV program mentioned above some students in private schools being interviewed expressed their satisfaction, based on “the convenient and flabby style” they enjoyed in their school.

Did the politicians who are responsible for this collapse of a formally excellent school system really not foresee what their decisions would lead to; consequences that a bright student in elementary school would have expected? We are not allowed to assume such stupidity. The probable answer is: they don’t give a damn, as long as they can drive through their ideology.