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congress in 1970, the SSU was chided for being a debating society and out of touch with the workers. Trade unionist Arne Geijer warned the congress that his powerful labor organization, a major component of the LO, would establish a competing socialist youth group from among its 400,000 young workers, but this threat appeared to be stemmed following the SSU Congress in June 1972.
As Erlander's confidant and protege for 15 years, Palme acted as the stalking hose for the party's left wing. A sharp critic of US policies in Southeast Asia, Palme contributed to the increasing strain in Swedish-US relations by marching alongside a North Vietnamese diplomat in a demonstration against the United States in February 1968. This gesture endeared him to left-wing elements but caused disquiet among much of the party's leadership and rank and file. The sweeping victory of the Social Democrats in September 1968 and the certainty of his succession to the leadership led Palme to try to improve his standing with the more conservative trade union and middle class members. In the months before the congress in 1969, Palme stressed the theme of unity among conflicting elements in Swedish society and tried to soften the more radical image that had characterized his political style since 1963.
Strengthened by the Social Democrats' majority in parliament and their unanimous endorsement of his policies, Prime Minister Palme gained a sense of confidence. The initial disenchantment began a few weeks after he assumed office, when Foreign Minister Torsten Nilsson riled Swedish businessmen by presenting long-range plans to aid North Vietnam as concrete measures to be taken in the near future. Palme was forced to quiet the clamor and conciliate local commercial interest by downplaying Nilsson's remarks. Although Palme succeeded in mollifying more conservative opinion, his image as a champion of left-wing causes was tarnished. The 2-month long wildcat strike in December 1969 by miners in the state-owned mines in Norrbotten threatened to spread to other industries. The strikers' grievances, not all economic, included charges of indifference on the part of the government as well as the unions to the welfare of the miners. Palme condemned the strike, thus further alienating labor militants, but acknowledged that the workers' complaints had some validity. Leftist supporters became even more dissatisfied when Palme reacted to the announcement of US military operations in Cambodia by delivering only a mild rebuke. His seeming abandonment of leftist causes probably contributed to Communist gains in the 1970 election.
Growing unemployment and business failures continued to plague Palme through 1971, and in the fall he was forced to release government funds for investment. This move appeased business interests and was designed to get the economy through the winter with the expectation that production and employment would improve with the normal cyclical upturn in the spring. The Social Democrats are pledged to maintain Sweden's high standard living, and unless Palme can improve the domestic economy, the authority of the leaders may be sharply challenged by more radical elements within the party.
c. Program and policies
The Social Democrats in Sweden, like those in other Scandinavian countries, abandoned their purely Marxist doctrines of class warfare and socialization of the means of production at an early date and developed into a moderate, reformist party. This change was affected under moderate leaders, who found it necessary to compromise and cooperate with other parties in order to establish universal suffrage, parliamentarianism, and an advanced system of social security and welfare. It became apparent that that party had to broaden its membership base to include traditionally middle-class groups if it were to continue in power. The party adopted government-administered social and economic programs which have sought to maintain a mixed economy, in which private enterprise would remain dominant, but publicly owned companies would operate most public utilities and certain basic industries.
The question of the extent of state intervention in the economy is still an issue in Sweden, but only the Communists and a handful of radical Socialists support nationalization of all privately owned industries and business enterprises. Approximately 93% of Sweden's total industrial production remained in private hands in 1970. Only about 200,000 workers, 6% of the total gainfully employed labor force, were employed in government-owned or government-controlled firms. The formation of the Ministry of Industrial Affairs in 1969, however, presaged some measure of increased official initiative in managing the economy. The first major project of the new ministry was the formation and operation of additional state-owned industries. But plans to buy up failing small businesses proved so costly that they had to be drastically modified.
Because the SAP has been dominant for many years, a number of party policies have become government policy. At home the party has supported social welfare and insurance programs as a means of raising the
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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090019-6
