Sweden's Social Democrats have won yet another general election, confirming their position as the most successful political party in the world. They have governed for 61 of the past 70 years, a record without equal among democratic societies. They have done so, moreover, without benefit of triangulations, Third Ways and other Blairite or Clintonite tricks. During this month's campaign, the party leader and prime minister, Goran Persson, went out of his way to stress a firm commitment to high taxes and generous public expenditure. He aroused wide applause in his street meetings for his sturdy defence of Sweden's welfare state. Leaders of the unions, which represent 90 per cent of Swedish workers, played a prominent role in the election campaign. "We don't have to drop our principles in order to get elected," Persson told his followers at the election night celebrations, after once more routing the neo-liberal challenge.
This is not to deny that the Social Democrats have always displayed a shrewd pragmatism and compromised - when necessary - with the demands of an open market economy. Persson's government has turned Sweden into the most advanced user of information technology outside the US. As unrepentant free-traders, the Social Democrats say they want to humanise and not oppose the forces of globalisation. They also pride themselves on their financial rectitude. Over the past four years, they have more than halved the unemployment rate, kept down inflation, achieved high economic growth and run a budget surplus. Average living standards rose faster than they have for a long time.
Persson argues that no conflict exists between the forces of modernisation and the old values of democratic socialism. Rather, he sees the two as linked: most people adjust best to change not when they are threatened or frightened but when they feel secure, especially through the public provision of generous child- and healthcare and protection in old age.
The Liberals, one of the centre-right opposition parties, sought to play the anti-immigrant card, albeit in a mild way, but there was no evidence that any voters on the left were attracted by their appeal. Sweden remains immune from the virus of racism, at least for the moment.
Persson faces a test of his authority next year, when he will hold a referendum on whether Sweden should join the European single currency. He does not intend to wait any longer for Tony Blair and Gordon Brown to make up their minds. It looks as if a decisive majority of Swedes will back euro entry, leaving Britain more isolated. Increasingly, Persson looks to the German Social Democrats, not new Labour, for support and sympathy.
But is Sweden really the exception? A growing debate has just begun inside the progressive left across Europe on how social democrats should respond to the new economic and social realities. Blair and his small band of intellectual admirers like to claim that there is no alternative to the Third Way - with its commitment to privatisation, deregulation, low business taxes and tough law and order policies - if the democratic left is to stage a comeback.
But the evidence from Sweden and perhaps other continental European countries suggests such a strategy would guarantee electoral suicide if it meant dismantling welfare states based on redistributive taxation, abandoning corporatist relationships with labour and industry, and rejecting solidarity in favour of the pursuit of individual self-interest.
The Blair project has a long way to go before it can teach anything to the Swedish Social Democrats.
Robert Taylor is a research associate at the London School of Economics Centre for Economic Performance. He is writing a one-volume biography of Ernest Bevin