THE Scottish Government published its first prospectus in June of its Building a New Scotland series of papers promoting the case for independence. Called Independence in the Modern World – Wealthier, Happier, Fairer: Why Not Scotland? it set out an ambitious aspiration: for Scotland to become a Nordic-type society.

Yet, this was not without its problems on defining what is social democratic, ignorance over how these Nordic forms of social democracy came about, and omission about why these Nordic societies have moved away from being social democratic.

Independence in the Modern World uses Danish sociologist Gøsta Esping-Andersen’s The Three Worlds of Welfare Capitalism (1990) to categorise welfare states, being liberal, conservative, and social democratic.

The paper defines the social democratic approach as "universal systems based on an equality of high standards and not an equality of minimal needs. Costs of caring for the young, ill and old are socialised resulting in high social costs which in turn incentivises full employment (ie the durability of the model rests on maintaining a high employment rate to sustain high social spending)2.

The definitional problem starts with using a text about welfare capitalisms which is based upon a partial characterisation of social democracy. While generous welfare states are essential components of what comprise social democracy, they are far from the only ones. Welfare measures only deal with the outcomes of the capitalist market by seeking to ameliorate them. They do not deal with altering the processes by which these outcomes are created in the first place.

It seems no accident that the SNP-dominated Scottish Government chose to use this far more limited definition of what passes for social democracy. If it did not, searching questions would have to be asked about why it is making no plans for vastly enhanced public ownership, especially of strategic sectors like energy and transport, and a range of controls on prices and profits as well as setting maximum wages and vastly enhanced rights for workers and their unions.

The solution to squaring this circle is to see the SNP not as social democratic but as social liberal, where enhancing the efficiency of capitalism in order to generate the tax revenue to pay for a welfare state is the principal aim.

This brings us to the issue of how social democratic societies in the Nordic countries were established. This was as a result of considerable conflict between contending social classes in the 1930s after the effects of the 1929 Wall Street Crash kickstarted the Great Depression. Spearheaded by workers and their allies, labour forced capital into what has been termed a ‘great compromise’ in Norway and Sweden, with similar agreements made in Denmark and Finland.

These compromises constituted a more even sharing out the spoils of capitalism, with the state playing the role of intermediary. In the economy, centralised coordination of wage bargaining was created as was national tripartism, involving all three players. Social peace was gained through compromise between the two great classes in capitalist society, with the state playing the role of honest broker.

As a result, union density and collective bargaining coverage were almost total, with solidaristic wage policies enacted to reduce wage inequalities. Private property and capitalism still existed but they were heavily regulated and public ownership became extensive.

The lesson here for analysing the SNP’s vision for independence is that we have a case of comparing apples and oranges in terms of the size and scale of what is needed for such shifts in society to be constructed. Ironically, it is precisely because of the retreat of social democracy in the Nordic countries that the SNP can consider them as potential models now.

Although Norway remains somewhat different because its vast oil funds have provided for the maintenance of much public ownership, nonetheless, it is the case that all the Nordic countries have deregulated their economies and societies under the influence of neo-liberalism from the 1990s onwards. This means capital is now less far less regulated than at any time since the ‘great compromises’ came into operation. Collective bargaining has been decentralised, weakening unions’ leverage, with wage inequality increasing again. Welfare benefits have been reduced. Consequently, income inequalities have widened. Privatisation and marketisation of public services have also taken place.

All this means Denmark, Finland, Iceland, Norway and Sweden are no longer the social democratic Nordic nirvanas they once were. The power of capital counter-offensive has forced even these countries to accommodate to the neo-liberalism tide.

For a post-independent Scotland under an SNP Scottish Government, we would see very limited positive progressive changes. That’s assuming austerity measures to stabilise the currency and reassure international capital markets of the merits of the Scottish economy for investment and profits did not wipe them out in the first place.

Professor Gregor Gall is an affiliate research associate at the University of Glasgow and editor of A New Scotland: Building an Equal, Fair and Sustainable Society (Pluto Press, 2022, priced £14.99).