The decisive victory by Swedish socialists in national elections yesterday brings Olof Palme, the country's best-known politician, back to power as prime minister, ensuring Sweden a stronger voice on global issues and a policy of economic expansion at home.
Palme, 55, served as prime minister from 1969 to 1976 and earned a measure of notoriety in the United States as a sharp critic of U.S. policy in Vietnam. Since then, while Sweden was run by a succession of center-right governments, Palme served on prestigious international panels. He was a member of the Brandt Commission studying relations between the industrialized and developing countries and chaired a major study of disarmament problems in which former secretary of state Cyrus Vance also took part.
Because of his background and energy Palme is likely to emerge as a vigorous proponent of curbing the superpower arms race and attacking disparities between the world's rich and poor. Palme, said those who watched him at victory celebrations in Stockholm last night, appeared to relish fielding reporters' questions in a host of foreign languages, and was plainly buoyed at the prospect of once again raising Sweden's profile on the world scene.
But it was on domestic issues that Palme's campaign for reelection was waged and his performance in office will be judged on how well he deals with serious economic challenges, according to a cross section of Swedes interviewed in Stockholm last week.
Amid the sunny glories of Sweden's early autumn days, the first impression of a visitor on the eve of the election was: What is there to argue about?
With one of the world's highest standards of living, one of the lowest unemployment rates in Europe (3.7 percent), cradle-to-grave welfare programs, flourishing industries and stable politics, Sweden still seems a Valhalla compared to other democracies -- the sort of place that, in many respects, would please both Thomas Jefferson and Karl Marx.
And yet the triennial national campaign was dominated by talk of economic crisis -- rising budget deficits that now represent 11 percent of the gross national product, five times as much as in 1976; a $10 billion debt to foreign banks, 300 times what it was a decade ago; inflation; declining export markets; and, by Swedish standards at least, a disturbing trend toward unemployment, especially among the young.
That the problems are very much the same in other countries where they are, on the whole more severe, does not appear to mollify the Swedes.
"The welfare state is in a major crisis of legitimacy," said Hans Vetterberg, Sweden's leading pollster and public opinion analyst. "We can no longer afford to keep expanding it the way we were."
The Center, Liberal and Conservative parties -- known as the "nonsocialists" -- ousted Palme's Social Democrats in 1976, after 33 years in office, largely because of growing resentment over high taxation and a sense that a dehumanizing bureaucracy played an increasingly intrusive role in people's lives. But the nonsocialists made few substantive changes, finding their coalition hamstrung by rising costs for imported energy, public resistance to real cuts in social spending and an inability to agree among themselves on key issues.
As a result, they ran up deficits and debts to sustain welfare programs and lost support of the Conservatives when tax cuts to stimulate investment were postponed until 1983.
The spectrum of Swedish politics is relatively narrow compared to countries such as France, West Germany and Great Britain. Consensus on basic Social Democratic principles has been the rule for decades. Nonetheless, this election showed some polarization of views on how to solve the growing economic difficulties, with Social Democrats gaining the majority in parliament, but the Conservatives scoring a gain of 12 seats, making them the country's second largest party.
Palme advocates a conventionally expansionist approach to the economy by increasing consumer taxes (already 21 percent) and business levies. He hopes to create revenue for further new jobs and, as one of his critics put it, "buy his way out of trouble." At the same time, Palme is committed to bringing down the deficit and scaling back borrowing, a combination his opponents believe is impossible.
The Conservatives, whose share of the voting has about doubled in recent years, favor trimming taxes and making such limited modifications in spending as reducing sick pay from 90 to 87 percent