Corporate Social Responsibility, International Responsibility, and Fair-Trade Activism

The advance of the Third World-bloc in the United Nations in the early years of the 1960s extended the ongoing fight for political decolonization into the realm of national economic independence. This agenda tended to pit state sovereignty against foreign private capital, and multinational corporations were commonly cast as the enemies of state-led development plans.^{Footnote 8} Much of the existing historical research studying corporate legitimation strategies during decolonization has subsequently focused on the relationship between multinational firms and host country governments and the local population.^{Footnote 9} Some historians, for instance those studying the process of dismantling the British Empire, have analyzed the relationship between the withdrawing colonial authorities and the remaining corporate interests.^{Footnote 10} This article has a somewhat different focus: how business representatives legitimized investments in Africa in response to political and moral demands voiced in their home country. An example of work dealing with a similar case during this era is Georg Schreyögg and Horst Steinmann’s article on Siemens’s involvement in the construction of the Cabora Bassa dam in Mozambique. They trace the firm’s evolving responses in Germany from 1970 to 1972 to the mounting political criticism against its involvement in the Portuguese colonial project. They show that Siemens in effect reoriented its philosophy of business as a consequence, publicly framing its operations in political rather than strictly economic terms.^{Footnote 11} In this article, I analyze the preceding evolution during the 1960s in Sweden, dealing more broadly with the arguments and activities of national business organizations and their critics.

The analysis takes as its point of departure the conceptualization of corporate social responsibility (CSR) introduced by Neveen Abdelrehim, Josephine Maltby, and Steven Toms in their study of the Anglo-Iranian Oil Company. Their model primarily concerns the role of CSR in contexts in which firms are threatened by nationalization. In such situations, they see CSR as a means for exercising corporate control, and propose that it takes on different forms and purposes in relation to three distinct groups of stakeholders. In the first, it is a form of political control when used in relation to politicians and diplomats. In the second, when deployed in communications with capital markets and domestic investors, it is a form of market control. In the third, it is a form of social control used in relation to local employees and local political organizations. Moreover, different engagement mechanisms are used in each of these three contexts: when diplomats, politicians, and the military are engaged, private correspondence is used. Investors are addressed through annual reports, while employees are engaged through actual company policies.^{Footnote 12} This model worked well in the 1930s and 1940s, the period covered in the study of the Anglo-Iranian Oil Company, but starting in the 1960s, the increased use of television and increasingly globally connected nongovernmental organizations (NGOs) meant that an additional dimension became required. This dimension is addressed by Charles E. Stevens, En Xie, and Mike W. Peng, who developed a conceptual framework in part precisely to take into account the fact that multinationals face “a large degree of conflicting demands from key stakeholders both at home and abroad.”^{Footnote 13} They argue that perceptions of a firm’s legitimacy (and consequently its responsibilities) are socially constructed within different groups of observers and stakeholders, including public agencies, international institutions, the media, and NGOs. Because both host country and home country governments seek legitimacy within their respective societies, the legal license to operate granted by governmental authorities is complemented by—and dynamically related to—the “social license” that civil society members in effect provide. Gaining legitimacy in the eyes of one social group (or institution) can therefore result in losing it in the eyes of others. Firms must decide according to which norms, beliefs, and expectations, at home and abroad, they are seeking to act responsibly.^{Footnote 14} It is the evolution of this border-crossing dimension that I add to Abdelrehim and colleagues’ CSR model. By the 1960s, television news coverage “affected public policy and influenced popular attitude—changing minds, confirming prejudices, sowing controversy.”^{Footnote 15} This had an impact on how business operations were portrayed, as it effectively allowed outsiders to challenge the official corporate narratives of overseas operations. This changing historical context prompts the theoretical question: What is CSR when it is employed in engagements with opinion influencers, journalists, and activists in the firm’s home country? They are, after all, not obvious stakeholders, decision makers, investors, or employees. CSR in this context became an issue not only of international relations but also of home-country politics.

Even prior to the Cold War era, multinational firms faced the challenge of simultaneously seeking legitimacy in several countries at once.^{Footnote 16} However, the emergence of the public issue of the international responsibility of firms was intimately related to what Ryan M. Irwin has called the global postcolonial moment between 1960 and 1963. In Irwin’s words, international affairs at this point were reshaped under the influence of the growing group of African and Asian representatives in the United Nations. They offered “a systematic rebuttal” of the dominant Cold War paradigm that under U.S. leadership had prioritized international order and security over the need for global redistribution and justice. They focused attention on the continuation of racism and economic exploitation, and regularly drew the issue of apartheid into international debate.^{Footnote 17} This worldview was in turn picked up, amplified, and localized around the world throughout the rest of the decade by social movements, activists, and political parties. In Sweden, as elsewhere in Europe and North America, thirdworldism became an essential element in the rhetoric of the New Left. In particular, Chairman Mao, the National Liberation Front in Vietnam, Castro’s Cuba, and the anticolonial struggles in Portuguese Africa and South Africa played prominent roles in mobilizing activists, setting ideological examples, and formulating visions of a revolutionary alternative world order. However, commitments to “anti-imperialism” and “international solidarity” were commonplace in the ideological programs of virtually all the parliamentary parties, and widely used in the rhetoric of more traditional extra-parliamentary groups too—local unions, churches, and cooperatives.^{Footnote 18} It is also among the latter groups, especially in the Netherlands, that Peter van Dam located the rise of organized postcolonial fair-trade activism and the “moralizing of consumer society.” The fair-trade activists emphasized strategies directed toward the economic completion of decolonization through global equality.^{Footnote 19} Such activism, van Dam points out, rested on a long-standing repertoire of consumer activism in the form of boycotts and buycotts, and expanded to include rallies, information campaigns, and political lobbying. All of these activities relied on the media, not least television, to reinforce and spread the message.^{Footnote 20} In this range of efforts to promote global solidarity, the “trade” in fair trade was not always directly related to individual acts of consumption. It could also, as in the Swedish examples in this article, pertain to “relations between states, between states and companies, or between producers and companies, without directly involving consumers.”^{Footnote 21}

The following analysis builds on the assumption that the global postcolonial moment in international affairs gave direct impetus to the moralization of consumer society, and that the impact of investigatory television journalism and the transnational mediation of CSR constituted important components in the latter process. I examine how this played out in the Swedish context by focusing on how industry representatives and fair-trade activists debated the scope and meaning of corporate international responsibility. Mirroring the sprawling contours of fair-trade activism that spurred it on, the topic of corporate international responsibility as I use it here covered an array of company operations. It could refer not only to the postcolonial dimensions of the political consequences of where manufacturing plants were located and which international trading partners a firm chose but also to the practical issues of employment policies, union relations, and social commitments. Thus, debates included CSR and extended beyond it. Swedish companies in Africa did practice variants of CSR; LAMCO, for instance, was particularly proud of its social policies.^{Footnote 22} What became a topic of contention was whether these multinational companies should be doing more than they were, to what extent they represented Sweden, and to which stakeholders they ultimately were accountable.

In the three sections that follow, I chronologically trace the repercussions of the postcolonial moment from the perspective of Swedish industry representatives. The analysis begins by sketching out the role of Swedish industry during and after World War II, showing how it ensured domestic legitimacy by adjusting to the requirements of Sweden’s official foreign policy of neutrality. This notion of big business acting on behalf of the nation remained dominant in early media representations of LAMCO’s investment in Liberia, and lay behind a surge of industry-led political activism to influence Swedish development policies in the late 1950s. The next section details how a rapid shift in public debate, inspired by the transition in emphasis from order to justice in global international affairs, transformed the ideal of corporate international responsibility. Having been free to define it themselves, firms now faced a barrage of demands imposed on them by journalists, intellectuals, and activists. The third section examines how the industrialists dealt with this situation, the internal discussions that followed, and the methods used to adapt to the new era of public scrutiny. In the concluding section, I briefly highlight the specific political dynamics of the Swedish case and then return to how it may contribute to the historical conceptualization of CSR.

I used two main types of historical sources. The first is archival, including the Swedish Export Association (SEA) located in the Swedish National Archives (SNA) in Arninge, which contain correspondence, memoranda, and policy documents of the most important industry advocates. In the case of the Private Sector Committee for Developing Countries, some of the minutes were in the Swedish Employers’ Confederation (SEC) located in the Centre for Business History (CBH) in Stockholm.

The second type of sources are media representations, both printed periodicals and broadcast programs. The periodicals Svensk Export, Industriförbundets meddelanden, and Industria, produced and distributed by the SEA, the Federation of Swedish Industries [FSI], and the SEC, respectively; the business journal Finanstidningen; and the main daily newspapers Dagens Nyheter, Svenska Dagbladet, Aftonbladet, and Expressen were all searched for relevant articles. I also consulted Malm, the magazine of the mining company Gränges, to examine its portrayal of the operations in Liberia. As for the audiovisual material, my sources include television documentaries from 1963, 1966, and 1968. The television programs were accessed from the audiovisual archives of the Royal Library in Stockholm.

1955–1963: “Allies of the Future”: Business Activists and Development in Africa

War has the capacity to “rapidly change perceptions of what types of transnational business behaviour are legitimate.”^{Footnote 23} Historians have pointed to how European multinational firms, for instance, developed flexible organizational solutions to cope with the consequences of surging nationalism, blacklisting, and the political blockades during the two world wars in the first half of the twentieth century.^{Footnote 24} In Sweden, during World War II, the strategy of the major industrial companies was to work closely with the government on continuously adapting Swedish neutrality to the shifting constraints caused by the war. From 1939 to 1945, this resulted in a pragmatic economic diplomacy, jointly outlined and conducted by government and business representatives, which sought to ensure that Sweden could maintain as normal trade relations as possible with the belligerent nations. For geographic reasons, this in effect led to significant commercial reliance on trade with Nazi Germany. As a result, the corporate beneficiaries found themselves facing Allied accusations of immoral war-profiteering.^{Footnote 25} In particular, ball-bearings manufacturer Svenska Kullagerfabriken (SKF), which continued trading with Germany until 1944, was subjected to sustained diplomatic pressure and criticism in the U.S. press. SKF was controlled by the leading Wallenberg dynasty, whose bank Stockholms Enskilda Bank (SEB) was threatened with blacklisting by U.S. authorities because of its wartime ties with the Bosch Group.^{Footnote 26} Although largely unopposed within Sweden at the time, the apparent official indifference to the economic consequences of neutrality thus proved to be a political and commercial liability abroad as the war drew to a close.^{Footnote 27}

Consequently, a key feature of official Swedish foreign policy in the late 1940s and early 1950s was the decoupling of the politics of neutrality from the economics of commerce. Swedish foreign policy was henceforth not to be perceived abroad as an influence on the direction and flows of private capital.^{Footnote 28} This dualistic interpretation of neutrality was paradoxically rooted in a close state–industry alliance that emerged from the war years. Smooth cooperation was facilitated by the fact that ownership was highly concentrated to a limited number of industrial and financial ownership groups. The most important of these, the Wallenberg Group, which also played a dominant role in the domestic military industry, and the Social Democratic government suppressed their ideological differences in order to concentrate on national concerns.^{Footnote 29} An expression of this was their shared keenness to strip both political neutrality and foreign trade of any moral connotations: the former was portrayed simply as a legitimate small-state policy of survival; the latter as the (unrelated) rational outcome of commercial forces and the international division of labor. This systematic depoliticization of trade allowed Sweden to integrate into the emerging international Western economic system under U.S. hegemony, while also signing a comprehensive credit agreement with the Soviet Union. Both moves were supported by leading Swedish industrialists. Thus, SKF and electro-technical giant ASEA could pursue lucrative business opportunities in the Eastern bloc, while fellow Wallenberg-controlled companies such as SAAB and L. M. Ericsson became increasingly dependent on Western technological components, many of them linked to Sweden’s military requirements.^{Footnote 30}

In the first decade after World War II, although there were sharp public debates about the relationship between private and public corporate responsibilities in the domestic arena, there was little corresponding dispute about their roles on foreign markets. Abroad, the perceived notion of CSR was simple: Swedish firms were to maximize their profits wherever possible, and thereby support the national economy. As one business periodical put it, because Sweden’s neutrality threatened to marginalize its firms in foreign markets, the response must be “to make ourselves, our products and our services indispensable throughout the world.”^{Footnote 31} This imperative was equally valid in democratic societies, in the Eastern bloc, and in regions still under European colonial rule.^{Footnote 32} As I show next, it extended to other markets too, such as the independent states in Africa.

During first fifteen years after World War II, Swedish trade with transoceanic markets increased significantly. Between 1938 and 1958, so-called developing countries doubled their share of Swedish exports, primarily as a consequence of Latin America’s growing demand for capital goods. This pull-factor coincided with a push: the need for Swedish heavy industry to find new export markets while the European economies were recovering from the war. In order to circumvent the obstacles of import substitution policies and currency clearing arrangements, many of these major firms began (or continued) to establish factories in several key markets, including India and Brazil.^{Footnote 33}

On the African continent, Swedish investments were dominated by South Africa, and to a much lesser extent by Liberia. Of the ten Swedish firms operating in Africa in 1970, those located in South Africa had 77 percent of Swedish assets on the continent. All of these companies—SKF, Electrolux, Alfa-Laval, Atlas Copco, AGA, Sandvik, Volvo, Fagersta, and ASEA—played important roles in the Swedish economy by together employing (directly or indirectly) hundreds of thousands of Swedes.^{Footnote 34} Most of the remainder of Swedish capital invested in Africa was tied to LAMCO. This particular investment, in the extractive rather than productive industries, differed in both type and scale from other Swedish ventures. While some of the investments in South Africa dated back to the early 1900s, the Liberian connection was new. Launched in 1955, after obtaining mining concessions from the Liberian government, the project had close links to the United States’ strategic bid to gain influence in Africa.^{Footnote 35} LAMCO was owned by an international consortium, which included a number of Swedish firms, and several were part of the Wallenberg Group. SEB was responsible for securing the financing of the venture, and the operative responsibility lay with the mining company Gränges. The venture included the extraction of high-quality iron ore from the inland mountainous region of Mount Nimba, the building and running of a 260-kilometer railway to the coast, and the construction and operation of a deep sea port in Buchanan. Over the years, hundreds of Swedes would live and work in the Liberian mining town of Yekepa, designed and built by the Swedish contractor SENTAB.^{Footnote 36}

Because it involved creating a Swedish ex-pat community of technicians, engineers, teachers, and their families in a remote part of Liberia largely unknown to the Swedish public, LAMCO received a great deal of media attention during its first years, up to and including the official inauguration of full-scale mining activities in 1963. It was an enterprise unparalleled from a Swedish perspective. In Gränges’ publications as well as the daily newspapers, reports about the investment offered a concrete means for narrating Sweden’s relationship with the “underdeveloped” world. This coverage uncritically reproduced colonial tropes, the large-scale investment described as coming “three hundred years after the colonial adventure New Sweden in Delaware.”^{Footnote 37} The emphasis on daring capitalistic risk-taking was reproduced in colonial frontier constructions of treasure hunts on the “dark continent,” as Swedish experts were said to be joining an international competition in “the race for Liberia’s natural resources.”^{Footnote 38} The blend of promise and risk, unveiling and prevailing, was framed as a source of enormous excitement. Again and again, the same key word was repeated: adventure. Capital was to be “invested in the adventure,” and it was “the grandest Swedish industrial adventure in modern times.”^{Footnote 39}

The adventure narrative was part of a broader discourse on constructing the emerging postcolonial world as a market opportunity. The hope among Swedish industrialists was that as trade barriers and preferences favoring the colonial powers were pushed back, a self-proclaimed unaggressive and nonaligned country like Sweden would make an attractive alternative as trading partner.^{Footnote 40} Encouraged by the example of LAMCO, national business organizations launched three separate but overlapping initiatives to influence the direction of Swedish official policy toward the developing countries. First, in 1959, the business think tank Studieförbundet Näringsliv and Samhälle (SNS) formed a committee of industrialists and bankers to produce an extensive report on “Sweden’s private sector and the underdeveloped countries.” Published in 1960, it included an overview of economic relations, a theoretical discussion about the ends and means of “development,” and recommendations for the government’s policies on foreign trade and aid.^{Footnote 41} SNS followed up the report with a major conference on the subject, attended by a significant selection of important representatives of the business community, Foreign Service, and political elite.^{Footnote 42} Second, in 1961, in a continuation of this initiative, the FSI formed a special working group. It was soon expanded, institutionalized, and known as the Private Sector Committee on Developing Countries (PSCDC). It would become the official joint-policy committee of three major national business organizations: the FSI, SEA, and SEC. Members of the PSCDC also included representatives of firms with experience working in the developing countries.^{Footnote 43} Third, another offshoot was a government-appointed committee dedicated to the issue of designing “commercial and trade-political aid.” The committee, composed of industrialists and prominent bankers, was the result of successful lobbying by FSI. It produced a report that recommended several official measures—in the form of investment guarantees, taxation policies, and export credits—to encourage Swedish commercial relations with developing countries for the mutual benefit of recipients and firms.^{Footnote 44} These recommendations formed the basis for the PSCDC’s advocacy work throughout the remainder of the decade.

There were several overlapping members of these different initiatives, the most important being the industrialist and Member of Parliament Jonas Nordenson. In business, he had cut his teeth as a market analyst and executive in the iron ore industry. He chaired the SNS committee, was a member of the PSCDC, and a board member of the government’s foreign official aid committees and authorities. Starting in 1963, Nordenson was the director of the SAE, and went on to become the director of the Swedish Bank Association. Two other key individuals were Åke Vrethem and Sven Dahlman. The former was president of ASEA, chair of the PSCDC, and a board member of both FSI and SAE. The latter left his ambassadorial career in the Foreign Service to become deputy CEO of FSI and spokesperson on foreign policy matters, making him a particularly influential member of the PSCDC. Although of different generations and professional backgrounds, Nordenson, Vrethem, and Dahlman were united by a pro-Western, anti-Socialist worldview. Their conception of foreign trade as something essentially amoral was informed not only by a drive to maximize corporate profits but also by the perceived imperatives of protecting the interests of a small state. Like most of their peers in the inner circle of Swedish industry, all three had in some capacity worked for state authorities during their careers. Dahlman, born in 1905, labelled himself a liberal. He was a senior diplomat before moving to SFI to begin a distinguished career as a corporate executive on the boards of a series of major companies. Vrethem, born in 1912, began his career at the state hydroelectric authority Kungliga Vattenfallsstyrelsen, from where he was recruited to ASEA. He briefly chaired the national committee of the European Movement. The youngest of the three, Nordenson, born 1920, represented the Conservative Right Party. By the end of the 1950s, he was the director of the state-private export organization for Swedish iron ore, Malmexport AB.^{Footnote 45}

There were close ties between the private sector’s advocacy bodies and the corporate investments in Africa. Until 1962 Nordenson had worked for the Gränges group, and was credited by its CEO for his important contribution to the initial stages of the LAMCO project.^{Footnote 46} ASEA, AGA, and Atlas Copco, operating in South Africa, as well as SEB and SENTAB of the LAMCO consortium, were all represented on PSCDC. The industry committees together provided much sought-after knowledge production about the so-called underdeveloped regions of the world, an area in which Swedish business leaders, politicians, and diplomats were becoming acutely aware that they had much catching up to do. The internationally experienced industrialists played an unchallenged role as go-to experts on many distant regions where Sweden still had no official diplomatic representation.

The narrative of LAMCO in Liberia was billed not only as the company’s adventure but also as the entire nation’s. In 1955 SEA foresaw that the investment would make Sweden a stakeholder in Liberia’s industrial development, one as “equally important [as] the USA.”^{Footnote 47} The press agreed: “This is Sweden’s greatest adventure in modern times” and “our country’s greatest project outside Sweden’s borders.”^{Footnote 48} Black Africans were now “for the first time being introduced to Swedish products” and “Swedish ways of doing business,” the director of the Swedish Export Credit Board declared.^{Footnote 49} The business journal Finanstidningen went so far as to admonish those who publicly criticized LAMCO as disloyal to Swedish interests, as that would play into the hands of international competitors.^{Footnote 50} The sense of it being a pan-Swedish undertaking was strengthened by the fact that official aid authorities were engaged in the project.^{Footnote 51} Following an agreement after the SNS conference in 1960, the government set up, funded, and ran a vocational school on company grounds to train the Liberian employees for more qualified positions.^{Footnote 52}

Overall, representations of the LAMCO venture affirmed the wartime ideology of a united public and private sector acting abroad to serve and promote national interests. However, the fact that Sweden’s counterpart was categorized as underdeveloped added a new dimension. The Liberian investment was framed as more than just a national adventure. LAMCO director Sture Linnér in 1957 informed his fellow industrialists that the company’s operations would have far-reaching socioeconomic consequences, and that LAMCO was taking on “a great responsibility,” and “we do not want to risk destroying thousands of years of cultural, social and economic ties with clumsy fingers.”^{Footnote 53} Sven Ersman, of Gränges, explained that Sweden, unlike Liberia, was part of a world of “increasing living standards,” “car theft,” and “Anita Ekberg.” It was now up to the Swedes, along with “their black friends,” to introduce Liberia to the aspects of our world that “we deem worthy of sharing: security, prosperity, health,” while sparing them the rest. Ersman declared that the Swedes and William Tubman, president of Liberia, had every right to feel “that we are in a very real sense the allies of the future.”^{Footnote 54} It was in this spirit that the company invested in improving the material and physical well-being of its Liberian employees. It built modern housing for them and their families, and provided free primary schooling and healthcare on its premises.^{Footnote 55} According to the CEO of Gränges, the project as a whole demanded “a general attitude to social and human problems that rises above ethnical [sic] prejudices and is based on understanding and goodwill.”^{Footnote 56}

The general agenda being pushed by the industry’s advocacy groups largely coincided with that of U.S.-based modernization theory, which overlapped in important respects with colonial theories of development.^{Footnote 57} The confident agenda-setting initiatives of Swedish industrialists had direct links to ongoing international efforts. The PSCDC was created shortly after the 1960 formation of the Organisation for Economic Co-operation and Development’s (OECD) Development Aid Committee (DAC) in Paris. In March 1962, OECD’s Business and Industry Advisory Committee (BIAC) was constituted. At the same time, the world congresses of the International Chamber of Commerce (ICC) were beginning to be dominated by development issues.^{Footnote 58} Like the PSCDC, all these three organizations—DAC, BIAC, and ICC—promoted the role of private capital and free enterprise in developing countries, an indicator of the widespread institutional effects of the postcolonial moment. Personal ties linked these international efforts with the simultaneous Swedish initiatives. The Swedish National Committee of the ICC was represented on the PSCDC.^{Footnote 59} The ties to BIAC were via the FSI, and its director, Axel Iveroth, was given the task of organizing the OECD’s first business advisory body. The chair of the FSI and president of SEB, Marcus Wallenberg, was appointed the first chairperson of BIAC. Wallenberg’s and Iveroth’s international positions were used as a basis for the work of the PSCDC.^{Footnote 60} These overlapping personal networks and knowledge-producing bodies mirrored the international contacts being established between students, political activists, and trade unionists. However, while those networks had begun to take shape across the colonial North–South divide, the business community remained largely Western-centric.

In February 1963 the Committee on Commercial Aid delivered its report, and in October the triumphant press coverage from the official inauguration of the LAMCO mines in Nimba only strengthened the PSCDC’s case. The narrative that united nationalistic fervor with successful capitalism was underlined by the fact that a Swedish royal, Prince Bertil, as honorary chair of SAE, represented Sweden at the inauguration ceremony. He took his place among the corporate dignitaries (among them Marcus Wallenberg) and heads of states (including Tubman; Senegal’s president, Léopold Senghor; and Ghana’s president, Kwame Nkrumah). Sveriges Radio aired two documentaries by Erik Forsgren after the inauguration, the first of which presented the project as a whole, with interviews with Liberian employees. The second concentrated on the Swedes, how they adapted to life in Nimba, and how they found working with the Liberians. The tone of these programs, although not deferential, was full of optimism and praise for the rapid and successful construction of the mines and community by the Swedish engineers.^{Footnote 61} The Swedish employees returning home in December to celebrate Christmas were greeted at Stockholm’s Bromma Airport by excited newspaper reporters.^{Footnote 62}

Up until this point, LAMCO was represented not only as an issue of national interest but also as a prime example of responsible capitalism with a human—primarily Swedish—face. Private capital was depicted as shouldering its part of the nation’s responsibility to help “develop” Africa. The media representations of the company’s CSR—its schools, healthcare, and progressive policy of race relations—conveyed the message that LAMCO was both in the business of exporting technical know-how and modern Swedish democratic values. Although the close cooperation between industrialists and Swedish authorities that had been established during World War II remained intact at the launch of this unprecedented venture, a certain shift could be discerned as to how it was legitimized vis-à-vis the Swedish public. The promise of Swedish profit and international reputation remained key, but the notion that it also served the interests of the overseas partner, in this case Liberia, was present from the outset.

1963–1966: From “Internationalists” to “Racial Thinkers”: Into the Postcolonial Vortex

While the Swedish engineering triumphs in Liberia were still being hailed in the Swedish press, a counter-narrative was developing in the case of South Africa. The second half of the 1950s had seen several coordinated Swedish initiatives to capture more of the South African market. These tours and campaigns were backed by the Swedish Foreign Service.^{Footnote 63} However, after the Sharpeville Massacre in 1960, critical public attention was directed toward the continuing commercial ties with the apartheid regime. Activist networks began taking shape through the combined efforts of political campaigners, students, Christian societies, and cooperatives.^{Footnote 64} The National Confederation of Unions and the Co-operative Union called a first boycott of South African goods in 1960 as part of a broader international initiative, setting them on course for a confrontation with the industrial heavyweights. The probusiness press warned of the dire financial consequences of irresponsible individuals pursuing “private foreign policy” in this way.^{Footnote 65} In 1961 three Swedish firms in South Africa—Atlas Copco, ASEA, and Transatlantic—considered undertaking a goodwill tour of the country to show the South African government that they had no political hesitations about continuing their operations in the country. Sending the same message, the SAE the following year participated in an industrial fair, Rand Easter Show, in Johannesburg.^{Footnote 66} This move was retroactively criticized in public by Minister for Trade Gunnar Lange. The minister’s intervention prompted the main industry organizations to request a private meeting with the Swedish government in June 1963. Lange’s comments, along with the dissemination abroad of news reports about Swedish boycott campaigns, were considered concrete threats to ongoing business activities. At the meeting, Nordenson, Lange, and Torsten Nilsson, the minister for Foreign Affairs, found that they agreed on the most important points: boycotts were futile, in the intended sense of harming the South African economy, but they did have the potential to damage the image of Swedish firms in South Africa. They also agreed that the South African market was important for Swedish industry, and that continued government support of Swedish commercial interests was necessary. Nilsson even explained how he had consciously sought to “lie low” and avoid debates on the topic in Parliament so as not to provoke further public rallying on the issue. He warned, however, that protests could flare up soon again, and that both the SAE and government should be prepared.^{Footnote 67}

The minister’s prediction proved correct, as the issue was picked up by SR, the abovementioned public service television broadcasting company. A few months after the meeting between the SAE and the government, and shortly before the official inauguration of the Nimba mines in Liberia, a documentary on the topic, För eller emot bojkott (For or Against Boycott), was aired on Swedish TV. In the program, journalists Roland Hjelte and Karl-Axel Sjöblom juxtaposed the opinions of Swedish activists and the plight of black South Africans with the ongoing business-as-usual Swedish–South African commercial relations. Nordenson was interviewed for the program, as was Vrethem. The latter was asked about the effect of apartheid on ASEA’s plant in Pretoria, and the separate wage policies for black and for white workers. Although he said he sympathized with the humanitarian intentions of the Swedish boycott activists, he was strongly opposed to their actions because he saw them as completely counterproductive. Vrethem then made a statement the producers obviously knew would enrage many viewers, as it was repeated twice in the program:

The furor sparked by this remark exposed the difference between how leaders of technology-intensive companies had come to view the process of managed “development” and decolonization and how fair-trade activists attuned to the changing dynamics of postcolonial moment had come to understand them. For Vrethem, civilization without material progress was an oxymoron; for his critics, officially sanctioned racial discrimination was tantamount to barbarity. Where one emphasized order, the others pressed for justice. At the same time, it should be noted that Vrethem’s dichotomy between civilization and noncivilization was generally echoed in the mainstream journalistic representations of LAMCO’s nearly contemporaneous inauguration. This laudatory coverage juxtaposed the alleged “cannibalism,” “black magic,” and “cases of ritual murder” of black Africans with the technological prowess, rationality, and progressiveness of the Swedish-led company and its non-African staff.^{Footnote 69} At this point, there was still a marked difference in the media portrayals of the “primitive” Africans living in the forests of inland Liberia and the primarily urban black population of industrialized “modern” South Africa. It would seem that, in the eyes of contemporaneous fair-trade activists, a semblance of recognizable “order” was necessary, if calls for justice were to be voiced.

Vrethem himself appears to have taken the anger directed at him lightly, commenting in private that the fury had subsided quickly.^{Footnote 70} However, this suggests that he did not quite appreciate the impact of television or its long-lasting consequences for corporate public relations. His equation of South Africa with the outpost of civilization would be recited and recirculated by critics of Swedish industry throughout the decade and deployed in other debates, thus permanently seeming to fix the position of Swedish capitalists on the issues of race and civilization. In a TV interview the following year, Nordenson was, for instance, requested to respond to that “famous quote” of Vrethem’s.^{Footnote 71}

Vrethem was portrayed as the embodiment of the racially insensitive technocratic capitalist. Meanwhile, a young academic and future leader of the influential Maoist faction of the New Left was writing about Western civilization’s inherently imperialistic tendencies. Published in 1964, Bo Gustafsson’s short book, Från kolonialism till socialism (From Colonialism to Socialism), on the plight of the developing world, would have a major impact on how Swedish business was publicly being linked to Western imperialism. This was despite the fact that Sweden was not even mentioned in the original edition.^{Footnote 72} Published by a small, left-wing publishing house, the book initially had little circulation beyond Gustafsson’s fellow radicals and intellectuals. However, Dagens Nyheter, in December 1964, published a review by the poet, author, and—significant in this context—anti-apartheid activist Sara Lidman. This gave rise to what became known as “the exploitation debate” in the mainstream press, which continued throughout 1965 and 1966.^{Footnote 73} Unlike the author of the book she was reviewing, Lidman directly implicated Swedish aid and trade in the systematic exploitation of the developing countries. Her moral declarations were adamant: any profit whatsoever at “their” expense was shameful. Gustafsson’s book, she hoped, would be the first of several similar studies that contributed to the debate about Sweden’s role.^{Footnote 74} Only a few months later, Från kolonialism till socialism was printed in a second edition, this time with a foreword by Lidman and a new chapter that addressed Sweden’s part in the global system of exploitation. LAMCO was inevitably given as a prominent example.^{Footnote 75} During the first months of 1965, other voices joined in to challenge the assumption that Swedish companies naturally contributed to the progress of developing countries.^{Footnote 76} Even the newspaper reports from Liberia began to take on a more skeptical tone in their portrayals of LAMCO, providing examples of how expatriates who were “committed Social Democrats and internationalists” became “racial thinkers” on the job in Nimba.^{Footnote 77}

This definitively drew Swedish business organizations into the postcolonial vortex. What had hitherto been separate issues—“underdeveloped” Liberia and “industrial” South Africa, imperialists and Swedes, official foreign policy and private trade flows—were now purposively being entangled. The PSCDC launched a series of coordinated PR efforts to try to influence the debate.^{Footnote 78} The committee’s Helge Berg and Gränges’s Sven Åsbrink began by publishing responses to Lidman in Dagens Nyheter. They aimed at returning the issue to economic logic and championed the socially beneficial externalities of profit-seeking firms. Åsbrink asked whether Lidman and other critics really thought that Swedish companies should actively seek lower returns in certain countries and higher ones in others. There was no way to theoretically determine a “reasonable price,” he argued. It was only when political threats were used, or incompetent negotiators made the deals on behalf of the developing countries, that unreasonable prices were set.^{Footnote 79} Similarly, Berg argued that although large corporations might be able to force through “unreasonable” prices, this was in no way the norm. With their “strong sense of national consciousness,” he found it impossible to believe that governments in the developing countries would allow that to happen. Rather, he claimed it was the foreign companies that were the vulnerable parties. With threats of confiscation and nationalization hanging over their heads, Swedish companies constantly had to behave in such a way that no accusations could be directed at them.^{Footnote 80} Berg and Åsbrink turned Lidman’s analysis of power on its head: Swedish companies were at the mercy of foreign governments, not the other way around. This effectively shifted the locus of responsibility from the voluntary actions of pressured corporations to the powerful legislature of host countries.

Along with publishing articles, the members of the PSCDC pursued their counter-campaign through several channels. They gave lectures; wrote to newspaper editors; publicly petitioned the prime minister; and arranged a conference on Sweden and the developing countries, to which they invited industry experts, economists, the Swedish head of the government authority for foreign aid, and government representatives. About 250 representatives from the private sector also attended. A comprehensive list of articles, statements, and reports about the developing countries that had been produced by representatives of the private sector during the 1960s was assembled and disseminated to selected public authorities and organizations, all members of Parliament, and news outlets.^{Footnote 81} The focus was partly on the social and economic side effects that resulted from the activities of individual Swedish companies abroad, but primarily on the general defense of public–private partnerships as a means of promoting development. Businessmen were portrayed as the true experts; their companies as efficient; and their technology, organization, and know-how as transferable. The best way to meet the rising expectations of the Third World was to offer swift, proven means of capitalist development: this was the main goal of global corporate responsibility. An evaluation conducted by the FSI of this PR campaign, presented at the PSCDC in August, concluded that it had achieved this goal.^{Footnote 82} Because of the medium of television, however, still greater challenges lay ahead.

From the time of Nordenson’s meeting with Lange and Nilsson in June 1963, the government’s rhetoric against the racist regime in South Africa gradually hardened. Inspired by this, Vin & Sprit AB, which held the Swedish monopoly as importer of alcohol, declared it would stop buying South African wines in December 1965. In response, KWV, the main exporter of South African wines, attempted to persuade its government to boycott Swedish imports across the board.^{Footnote 83} As this spat escalated, the debates following Lidman’s review inspired SR to produce documentaries that would investigate actual examples of Swedish investments in developing countries.^{Footnote 84} Roland Hjelte would once again produce them, this time with colleagues Ingrid Dahlberg and Lars Hjelm. The first subject they selected was LAMCO in Liberia. The documentary Svart vecka i Nimba (A Black Week in Nimba) would make a lasting impact on representations of Swedish capitalist ventures in the developing countries.^{Footnote 85} By chance, the journalists arrived in Nimba in June 1966 as Liberian workers were holding a strike. After a few days, the police were called in to remove the (alleged) instigators, who were duly fired and evicted from the property by the company. The idea that Swedish journalists would side with the Liberian workers rather than their compatriots seems not to have crossed the minds of LAMCO leadership, which allowed them unrestricted access to the company grounds. The documentary consequently began with the haunting scene of Henry Monger, an arrested Liberian trade unionist, shackled to a post for participating in the strike. This was a potent image that, as with Vrethem’s quote about the outpost of civilization, would be reproduced by leftist critics of Swedish industry for years to come. Using a similar technique from For or Against Boycott, Hjelte’s documentary from Nimba contrasted interviews with the low-paid Liberians on strike with the images of Swedes cavorting in swimming pools and attending parties at President Tubman’s palace. Footage of the expatriates and Liberian elite celebrating the president’s birthday further underscored the narrative of class conflict that the producers pressed home. The apparent collusion between the Liberian political elite, its brutish police force, and the Swedish capitalists provided a perfect example of Gustafsson’s theory. According to his Marxist thesis, economic development was inhibited in poor countries by the alliance between “imperialistic giant corporations” and “domestic, reactionary classes and groups.” LAMCO was portrayed as a typical neocolonialist multinational acting in full accordance with Leninist theory: it was exploiting Liberia’s national resources while in cahoots with a corrupt and socially conservative regime.

The contrast with the celebratory media coverage from Liberia at the inauguration in 1963 could not have been starker, and the debate about LAMCO extended into other media over the years. Expats in Nimba protested about how they had been portrayed: “We are no slavers, exploiters or neo-colonialists,” one newspaper headline declared.^{Footnote 86} Torsten Gårdlund, a professor of Economics, published his positive study, Lamco i Liberia (LAMCO in Liberia), in 1967. Conversely, the troubling image of the handcuffed Henry Monger was reproduced in leftist publications such as Holmsén and Mannerheim’s Lamco:s Liberia (LAMCO’s Liberia), and Berntson’s and Persson’s U-hjälp och imperialism (Development Aid and Imperialism). An impressionistic memoir, Tack vare Lamco: intryck (Thanks to LAMCO: Impressions), by Busk Rut Jonsson, a Swedish housewife who had lived in Yekepa, was less ideologically explicit but hardly flattering in its portrayal of the expat community.^{Footnote 87} As anti-capitalist critique gained traction in Swedish politics, the media’s framing of Swedish business operations in the postcolonial world dramatically altered from the warm reception in 1963. This, in turn, soured the relationship between the Swedish government and private industry. In his study of the LAMCO project’s shifting position in Swedish foreign policy, Karl Bruno observed how Prime Minister Tage Erlander in October 1964 expressed his satisfaction with how LAMCO was contributing to Sweden’s reputation abroad. By October 1966, however, Erlander was distancing himself from the venture and drawing parallels between the strike portrayed in A Black Week in Nimba and the East German uprising of 1953.^{Footnote 88} Overall, public demand for corporate international responsibility had escalated and diversified, and the industrialists seemingly lost control of how they were being portrayed. The presence of South Africans and Liberians on Swedish television clearly altered the conditions for conducting effective public relations.

1966–1969: “We Have Nothing to be Ashamed of”: Formulating Counter-Strategies

SNS held a previously arranged conference, titled Corporate Morals and Foreign Policy, in Lidingö, outside of Stockholm, only two days after A Black Week in Nimba was aired. Among the speakers were Nordenson and Dahlman. The event had been prompted not only by the intensifying campaigns of fair-trade activists but also by the government’s increasing tendency to voice opinions about the moral dimensions of foreign trade and investment. The raging debate over LAMCO made the conference highly topical, and several speakers spoke of the growing influence of the medium of television.^{Footnote 89}

Overall, the conference participants shared the view that their critics were ignorant of how commercial enterprises worked, and that the political initiatives they suggested would not have the intended effects. However, it was also apparent that the issue of corporate international responsibility would not be going away. The challenge of these new “policy problems,” as Nordenson called them, was that firms in overseas markets were not simply expected to do what was legal in the host country but also what was considered right. This moral aspect was not limited to following the norms of the host country, but companies were now also expected to adhere to Swedish values. A failure to do so, Nordenson observed, could spark a strong reaction:

These challenges were exacerbated by linking the home market and the host country through intensified transnational communication and media representations. This, Nordenson claimed, placed unprecedented demands on internal consistency within the company. After creating a “profile or ‘image’” that “implied adherence to certain morals or an ideology,” the new situation demanded that companies pursue the same policy abroad as it did at home. This meant that they found themselves compelled to operate in ways that differed from their competitors, or to try to effect political change in the host country. Nordenson identified what he saw as a completely novel challenge for multinational firms. In the future they would, on the one hand, have to maintain a coherent brand that was plausible both at home and abroad. On the other hand, such brands risked restraining growth, or even forcing companies to act in commercially “irrational” ways.^{Footnote 91}

Nordenson’s analysis was especially succinct, but he was not alone among his peers in realizing that the new situation demanded active and public responses from the Swedish industrial sector. In the various speeches at the Lidingö conference, and more generally in the industrial sector’s public activities over the next few years, a number of different methods can be discerned. One was firms’ increasing attention to how the media was handled. LAMCO had been taken aback by the hostile perspective of A Black Week in Nimba, and immediately launched a series of rather furious damage-control efforts. The site manager and head doctor of LAMCO were flown home from Liberia for a press conference, and Erland Waldenström, Gränges’s CEO, accused the documentary of being biased and inaccurate. He demanded that SR produce a second program in which LAMCO be given the opportunity to answer the accusations and correct the false claims. Gränges produced a twenty-page report and distributed a detailed list of twenty-nine inaccuracies in the program. The list has been described by one historian as “full of trivial details.”^{Footnote 92}

LAMCO’s failure to influence the debate after the strike meant that it had to handle the media continuously and subtly. At the conference in Lidingö, newspaper editor Lennart Hirschfeldt admitted that Swedish industrialists might be able to defend their indifference toward discrimination in South Africa by simply claiming that they were subject to the universal laws of commerce. However, just because those laws encompassed one and all—including “the Pope and the Devil”—there was nothing to say that businesses had to “act before the Devil as if he is the Pope.”^{Footnote 93} Göran C-O Claesson, director of the Swedish Sales and Advertising Association, made a similar point. He described the Swedish business community’s situation as the result of poorly handled public relations. Business representatives too, he said, had to show “an attitude of social awareness.” For instance, he said, simply pointing to the fact that black South Africans had a higher living standard than workers in other African countries was not enough; it was “crucial that we admit that conditions in South Africa are terrible.”^{Footnote 94} He recommended a dual strategy of defensive and offensive PR. As an example of the former, he spoke about how LAMCO had clearly lacked a prepared communication strategy for a scenario such as the one that transpired. As for the offensive strategy, he recommended that Swedish firms in the future “prepare” the Swedish public before they began investing in a developing country. If, from the start, the Swedes were made aware of the lack of democracy and unions, the risk of major criticism after the fact would be reduced. For this, he explained, the media could be used to the firm’s advantage. “The company does not have to say these things itself—our mass media are grateful for off-the-record tips, and the protection of anonymous sources is well established.”^{Footnote 95} If Claesson was correct, then it was LAMCO’s proud public declarations at the start of the decade about the social benefits of its CSR that were now being turned against the company.

Another example of a more considered approach to handling the media was when, in spring 1968, eighteen Swedish companies with business in South Africa were contacted by journalists at SR undertaking research for a new television documentary. At a meeting held at FSI, representatives from six of the firms met with Dahlman to coordinate the extent to which they would cooperate with the journalists. The companies at the meeting were Atlas Copco, Electrolux, Johnsons, SKF, L. M. Ericsson, and Volvo. Staff from FSI and SEA were also present.^{Footnote 96} The minutes from the meeting show that two different strategies emerged. Three of the firms argued that the response to the journalists should be outright refusal to participate, and that the companies should be completely uncooperative in supplying information about their operations in South Africa. They feared that the program would create a new “LAMCO case,” and argued that the firms should simply communicate that Swedish companies had no reason to consider the political situation in South Africa. Volvo’s representative claimed that most of the journalists in the documentary section of SR were leftists, and therefore there was reason to “fear the worst.” He even thought that if enough pressure were to be applied to SR, the documentary could be stopped before it was made. The other three companies offered little support for this idea. Instead, they advocated for a smoother diplomatic strategy that involved providing as much information as possible without hurting any business interests. The representative of SKF stated that the company had nothing to be ashamed of, as it employed one thousand people in South Africa. Dahlman, proposing a compromise between the two camps, suggested that they all rebuff the journalists’ requests for interviews but that the firms could helpfully point them toward information already available in the public domain.^{Footnote 97} This is what the companies agreed to do.

Based on this response, SR produced Inte en siffra rätt (Not a Single Accurate Number), which made a major point that Swedish firms were reluctant to disclose any information about their operations in South Africa, giving the impression that they were hiding something. Making the argument that the whole of southern Africa had to be treated as one integrated region, the remainder of the documentary then talked about ASEA’s planned involvement in the Portuguese dam project in Cabora Bassa in Mozambique.^{Footnote 98} Thus, despite the industrialists’ efforts to contain the narrative, legal trade and investment in industrial South Africa again got sucked into the postcolonial pan-regional issues of morality, justice, and colonial compliance. As would be the case in Germany with Siemens’s role in the same dam project a couple of years later, ASEA’s involvement in Cabora Bassa became one of the most heated topics of Swedish political debate in 1969. It was even attributed a prominent place in the Swedish general elections that year. In this context, Vrethem’s 1963 quote about “the outpost of civilization” once again resurfaced.^{Footnote 99} This prompted business organizations to increase their efforts to better handle the media among their members. The SAE, SFI, and SEC assembled a common pool of resources for industrialists preparing to participate in debates about development issues, and offered training in debating techniques. Among the resources was a quick guide on how to answer the most common questions about LAMCO.^{Footnote 100} For the first time, SNS arranged teach-ins in Umeå and Stockholm, allowing university students to debate with leading industrialists, including Jonas Nordenson. The Stockholm teach-ins were broadcast live by SR.^{Footnote 101}

A second method used to influence the debate was study tours. The idea was to offer people with influential opinions first-hand experience of the regions under discussion. LAMCO appears to have pioneered this method. In December 1966, following the airing of A Black Week in Nimba, the firm invited a large delegation of Swedish union representatives to tour Nimba and Yekepa in Liberia, and allowed them to study the working and living conditions of the local employees. The purpose was to gain allies in the politically influential trade union movement. In 1968 the method was used again in Liberia, this time when LAMCO hosted a delegation of Swedish members of Parliament.^{Footnote 102} A slightly different plan was considered, and ultimately rejected, for South Africa. Proposed to the SAE by a Swedish businessman based in Johannesburg, the idea was to arrange an exchange between Swedish and South African scientists, and thereby more generally promote improved relations between the two societies. However, it was recognized as a rather risky project because its success depended on the clearly problematic challenge of involving the right individuals:

Along with the handling of media and the use of study tours and exchanges, leading industrialists also attempted to formulate a shared ideology that could counter that of their critics. Admittedly, at the conference in Lidingö, a few speakers considered “so-called public opinion in Sweden” so ignorant and irresponsible that it did not have to be taken seriously.^{Footnote 104} One brusquely announced that firms could not be “too strict [in their] morals,” and that “many Swedish companies have subsidiaries abroad that may be members of cartels, sometimes pay bribes, etc., which from a moral point of view is despicable, but something that has to be done if you want to be allowed to join in the game in such places.^{Footnote 105} The other speakers, however, focused on how to respond to the political pressure with more finesse. On both principled and practical grounds, they dismissed the idea that Swedish companies should have to direct their investments and trade flows in accordance with selective and inconsistent moral imperatives. Several speakers compared the situation with the battle against Nazism and Communism in the 1930s and 1940s.^{Footnote 106} Dahlman himself explicitly returned to the nation-centered view of responsibility that had united government and business during World War II. He explained that he had taken leave from his position in the Ministry for Foreign Affairs during the war to lead the Committee for Finland, which agitated on behalf of more active Swedish support of its besieged neighbor. Even then, he said he had always been in agreement with the government that foreign policy and foreign trade policy should be kept apart. Just as the government had done in the wake of the Russian revolution, it was possible to criticize a regime and at the same time maintain economic ties with the country over which it presided.^{Footnote 107} Like many others, he was incensed by what he saw as the hypocrisy of contemporary leftists who demanded postcolonial justice in the Third World but were resigned to accept the imperial order of the Eastern bloc.^{Footnote 108}

Others kept more strictly to economics, and undertook the exercise of calculating the exact price of political decisions that infringed on trade. At the conference, economists Göran Albinson and Hans Eisler presented a paper that proposed a model for calculating the cost at firm level of allowing moral considerations to direct foreign trade policy. The model posited a baseline that stated that Swedish companies imported from countries that offered the most competitive prices, exported to foreign markets where they could extract the highest prices, and invested in regions where they enjoyed the highest returns. According to the model, any enforced deviations from this theoretical point of departure on the basis of the government’s “moral considerations” should consequently be counted as costs that individual firms could not be expected to cover. They went on to argue that Swedish companies investing in poor countries were already “burdened by Swedish moral regulations,” which meant that they generally shouldered higher running costs than their international competitors.^{Footnote 109} This economic argument aligned itself with the dominant view at the conference, which sought to define moral imperatives as extra-firm externalities.^{Footnote 110} This position was also taken by Nordenson and his colleagues at the SAE when they met with government ministers in July 1968 and again in October 1969. Swedish firms, they explained, should not be burdened with having to make foreign policy decisions, and they should certainly not have to foot the bill for the government’s foreign policy. If that policy was based on solidarity, then society as a whole—not individual companies—should share the costs of morally based commercial infringements.^{Footnote 111}

Finally, an additional strategy used by some prominent industrialists was to extend their activism through other channels via international institutions. Because the debates on corporate international responsibility emanated primarily beyond Sweden’s borders, business advocates had to respond in kind. In 1965 Marcus Wallenberg became the president of the International Chamber of Commerce (ICC), and the following year attended the Bilderberg Group’s conference on developing countries. Under his leadership, the ICC consolidated its partnership with the United Nations General Agreement on Tariffs and Trade (UN-GATT) Consultative Committee. In 1969 Wallenberg, now the honorary president of ICC, cochaired the committee’s first meeting with top representatives from the UN, the World Bank, the International Monetary Fund, and GATT. Among the issues raised by the ICC at the meeting was the “role, rights and responsibilities” of commercial enterprises.^{Footnote 112} The PSCDC hoped that the committee could affect the work of Swedish aid authorities.^{Footnote 113} It helped when an FSI member of the PSCDC, Göran Ohlin, embarked on a distinguished international career that went from the Development Centre of the OECD, via the UN-appointed Pearson and Brandt commissions, to deputy general secretary of the United Nations. When Ohlin visited the PSCDC in 1969, Dahlman asked whether there were plans to translate the Pearson report, as it could function as an “antidote to all the leftist powers.”^{Footnote 114} Thus, mirroring the internationalization of postcolonial activists, business representatives too sought to use international institutions as a basis for extending their platforms for policy influence, both abroad and at home.

Conclusions: CSR as International Public Relations

This article has sought to make three contributions to existing research. First, it directly adds a case study to the emerging body of scholarship examining twentieth-century and twenty-first-century Swedish enterprises in postcolonial settings.^{Footnote 115} Second, it shows generally how the dual impact of decolonization and the spread of television during the 1960s introduced myriad new challenges in the public relations work of multinational companies. Third, it contributes to related theoretical conceptualizations of CSR by historicizing the important cross-border dimension of political risk. In this section, I elaborate on these points.

Birgit Karlsson concluded that Swedish economic policy toward Nazi Germany during World War II was based on the simple democratic premise that “the government was [solely] accountable to the people that had elected it.” The government thus considered its task only to protect, as far as possible, the well-being of the Swedes—not the Danes, Norwegians, or Jews. Swedish business owners reasoned along the same lines: by exporting to Germany, they saw themselves doing exactly what their employees, customers, and even government expected of them.^{Footnote 116} This illustrates the definite limits of corporate social responsibility in Sweden during the first half of the twentieth century: it was instinctively defined in national terms. The dynamics in public debates that would subsequently propel corporate international responsibility to the top of the political agenda sprung from the evolving interactions between fair-trade activists, investigatory journalists, a government increasingly oriented toward the Third World bloc, and some of the country’s most important industries. First, the emerging fair-trade movement and the ascendant New Left with which it overlapped successfully harnessed the momentum of the global postcolonial moment. They raised critical questions about the overseas responsibilities of firms that hitherto had routinely been praised for their service to Sweden’s economy. The impulses to do so came from the activists’ growing transnational networks, which extended across the First World–Third World divide. Young and media savvy, they quickly realized that linking their cause to the operations of Swedish firms was an effective way of attracting attention to their agenda. Second, the journalists at SR actually traveled to Africa and Asia and relayed their reports back home. Many of them were part of the activist community, and discovered a new story to tell about Swedish firms and their overseas operations. Corporate commitments such as LAMCO’s pledge to “take responsibility” in Liberia could actually be scrutinized and the firm held accountable. The journalists found that company representatives had never thought to prepare concise and convincing answers to any of the obvious challenges to such claims, such as why workers in Africa were not treated the same as their Swedish colleagues at home. Third, as the decade proceeded, the Social Democratic government found it increasingly difficult to pursue its Third World-friendly agenda in the UN while also allowing the Swedish private sector to conduct business as usual. The decoupling of politics from trade, which had been such an important feature of Swedish neutrality in the aftermath of World War II, now became a liability. Antiapartheid activism emerged as a central component in Swedish foreign policy, and the government began to directly support the liberation movements in South Africa. It toed an increasingly unconvincing line of pledges to support Swedish export companies while repeatedly siding in public with their critics. By emphasizing the need for Swedish multinational companies to be more responsible (however defined), the conundrum of simultaneously relying on and criticizing capitalism could at least temporarily be resolved. These three factors undermined the tacit agreement that there was a fundamental economic–political divide in Swedish foreign policy, which in turn forced Swedish industrialists to respond. They saw the interpretation of international responsibility that they promoted at the beginning of the decade eclipsed by a far more radical and far-ranging version. Consequently, firms and business organizations had to become better at managing expectations and controlling representations of their foreign operations. The most common strategy became to position Swedish capitalists as de facto practical activists in contrast to the lofty, ideological, and ultimately ignorant idealism of their critics. They increasingly sought out what they saw as their position of strength: at least they were doing something. They advanced the notions that actual, existing CSR within the confines of host country law and normal profit margins were the only realistic forms of corporate international responsibility. “I believe that the ASEA plant in Pretoria,” Vrethem wrote, “has done more for the material and political future of the coloured [sic], than all the Swedish boycotts and demonstrations together.”^{Footnote 117} In this argument, somewhat paradoxically, private foreign investments became an extension of Sweden’s activist foreign policy.

Neither Liberia nor South Africa were decolonized during the 1950s or 1960s, and as countries they had few characteristics in common. Nevertheless, the force of the postcolonial moment brought them together in Swedish debates. In Irwin’s terms, the paradigmatic shift in international affairs from order to justice was mirrored in the portrayals of the Liberian and South African investments. By the end of the decade, legality no longer sufficed, but a just cause—a “higher loyalty”—was touted as necessary.^{Footnote 118} When anticapitalists and antiapartheid activists joined ranks, their antagonists were conflated in the debate: a single class of racists and capitalists operating in a single category of “developing countries.” However, there were in fact different points of departure in the cases of Liberia and South Africa, which were often obfuscated by the debate. On the one hand, in the 1950s, Swedish business in South Africa had generally not been seen as different from investments in any other industrialized country; they simply extended the accepted order of the West. On the other hand, as I have shown, LAMCO attributed its Liberian venture to nobler values from the start. The broader aim of promoting Liberia’s national development and the recognition of the firm’s “special responsibility” toward Liberian society can be described as appealing to a form of justice. This contrast dovetails with the distinction made by Nordenson at the abovementioned Corporate Morals and Foreign Policy conference in 1966. He pointed out that firms were being both criticized for their acceptance of local laws and norms (as in South Africa) and for not imposing Swedish standards in their overseas operations (as in Liberia). These different demands varied in part because the Swedish companies had made different claims from the outset. In South Africa, Swedish firms never claimed to be doing anything other than operate for profit. In Liberia, however, the issue of contention was if LAMCO was doing as much good as it had originally promised. In the first case, industry representatives did their best to separate business from politics; in the second, they were eager to unite them. The confusing demands that Nordenson lamented were due not only to the incoherence of the fair-trade activists but also to the inconsistent positions taken within the industrial community itself.

This last observation can be explained partly by the fact that the postcolonial moment entailed a steep learning curve for the members of the business community. The Wallenberg Group, on the one hand, which had worked closely with the Swedish government to sustain Swedish trade with Nazi Germany, now found itself being targeted for doing the same in its dealings with Tubman’s and Verwoerd’s regimes. The Social Democrats, on the other hand, who had once defended an extensive government-backed credit agreement with the Soviet Union, were now on moral high ground criticizing private investments in two Western-allied countries in Africa. In the terms employed by Stevens, Xie, and Peng, what had happened was that the pragmatic legitimacy firms had enjoyed courtesy of their contribution to the Swedish economy was now forcefully being challenged on the grounds of moral legitimacy.^{Footnote 119} Nordenson explicitly stated that he found the concept of “moral trade” difficult to comprehend. Both he and Dahlman pointed out that the idea of an ideological or moral dimension to foreign trade and investment was very recent, and that given the fickle and inconsistent nature of the public moral evaluations, it was a highly problematic notion.^{Footnote 120} The organizations they represented thus had to develop a new vocabulary to legitimize their overseas operations. In early 1964, Iveroth recommended that the PSCDC spell out a general “development philosophy” for the private sector.^{Footnote 121} At the conference in Lidingö, the suggestion came up again, with the proposition that a working group should begin to draw up a code of conduct or a definition of good practice to which Swedish firms could collectively adhere.^{Footnote 122} SNS launched a committee that formulated a shared ideological program for Swedish enterprise that included a study tour of CSR policies of U.S. companies.^{Footnote 123} A version of these ambitions was eventually realized in 1974, when Swedish industries in South Africa voluntarily signed on to Codus Ethicus, drawn up under the auspices of the SFI.^{Footnote 124} Ultimately then, the postcolonial moment trigged a long-term process of trying to define good corporate practice. By the end of the decade, as with their counterparts in the rest of Europe and North America, Swedish business representatives were increasingly involved in various international initiatives to develop acceptable norms for foreign-owned corporations operating in developing countries.^{Footnote 125}

In relation to Abdelrehim, Maltby, and Toms’s conceptualization, this case study indicates that additional dimension should be added to the model if it is to be used for more recent historical contexts. Applying the cross-border perspective on political risk emphasized by Stevens, Xie, and Peng, I argue that the mediations of CSR in the home country from the 1960s onward can be seen as a form of international public relations, the purpose of which was to control a firm’s reputation in the new media landscape. That reputation was, in turn, a form of political capital. It served as an increasingly necessary public means of influencing diplomats and politicians, as opposed to the more private channels suggested in the model by Abdelrehim and colleagues. The diplomats and politicians that had to be influenced were situated not only in the host country but also in the home country. In an era of embedded liberalism, when foreign investments were strictly regulated by state authorities, good relations with the home country government were vital. Benefitting from various forms of tax-funded support (e.g., diplomatic assistance, collective promotion, government-sponsored investment guarantees), firms could not easily discount taxpayers in their home country as legitimate stakeholders.^{Footnote 126} Certainly in a democratic-corporatist political system like Sweden’s, in which both big industry and trade union organizations held strong positions of influence over government policy, the use of overseas CSR policies in domestic public relations became a necessary tool when Swedish firms attempted to control their political environment.

In this increasingly important public arena, the boundaries between political control, market control, and social control became more blurred. This underscores an important point made by Stevens and colleagues; namely, that there is no reason to assume a priori that home country governments are predisposed to be supportive of “their” firms operating overseas.^{Footnote 127} Andrew Smith has shown how jingoism and security concerns lay behind schisms between state actors and private capital in the United Kingdom during World War I.^{Footnote 128} In contrast, during the very different conditions of the 1960s, other factors contributed to such rifts. Again a shift from order to justice can be discerned; rather than the foreign nationality of overseas customers and employees causing controversy, it was now their harsh social and economic living conditions. The trajectory described in this article is one of rescinding government support—at least at the rhetorical level—over the course of a decade. The explanation for this lies in how the international legitimacy of both the Liberian and South African regimes suffered as a consequence of the postcolonial moment, with the latter selected as the main antagonist of the ascendant Afro-Asian bloc in the United Nations. As the Swedish government shored up its own political legitimacy at home and abroad by seeking new political allies among the more radical regimes in the Third World, the Swedish firms that had already invested in Liberia and South Africa found themselves politically exposed. Through media representations, the handling of a strike in a remote part of Liberia could suddenly weaken a Swedish mining company’s position in domestic politics. Reports of boycott activists in Sweden had the ability to harm Swedish firms’ relationships with South African partners. It is in this context that the emotional and cognitive impact of television must be taken into account, which is why I emphasize the necessity of introducing the factor of changing media environments into historical studies of CSR. From the formation of newspaper-based public opinion during World War I that Smith analyses, to today’s “increasingly complex and interconnected global economy” saturated by social media, CSR practices have continuously been shaped by changing media landscapes.^{Footnote 129} The dawn of independent investigatory television journalism in the 1960s introduced a forceful way of juxtaposing government and industry claims to social legitimacy in Sweden with their respective claims to political legitimacy abroad. Whether firms liked it or not, the influence of television introduced new stakeholders: home country policymakers and transnational fair-trade activists. In response, mediating CSR as public relations was an attempt to control the international dimension of corporate reputation.