Sweden and the Revival of the Capitalist Welfare State

Sweden and the Revival of the Capitalist Welfare State

New Thinking in Political Economy series

Andreas Bergh

This book tackles a number of controversial questions regarding Sweden’s economic and political development: • How did Sweden become rich? • How did Sweden become egalitarian? • Why has Sweden since the early 1990s grown faster than the US and most EU-countries despite its high taxes and generous welfare state? The author uses new research on institutions and economic reforms to explain the rise, the fall and the recent revival of the Swedish welfare state. The central argument is that a generous welfare state like Sweden’s can work well, provided that it is built on well-functioning capitalist institutions and economic openess.

Chapter 5: The capitalist welfare state’s bloc-transcending history

Andreas Bergh

Subjects: economics and finance, austrian economics, economic psychology, political economy, politics and public policy, european politics and policy


It may seem surprising that a political bloc-transcending unanimity has surrounded so many important changes in such a short time, as was shown in the previous chapter. In fact, however, the rapid pace of transformation and political agreement is very much in line with Swedish political history. As noted already by Anton (1969), cross-bloc consensus where important changes are concerned and a pragmatic stance towards political ideologies are characteristic of Sweden. Judging by the political parties’ rhetoric, it often seems as if Swedish political history has been one long, vicious battle between the Right and the Left. It is also easy to get the impression that the Social Democrats have won more or less all important discussions. Certainly, there have been intense political battles, and Sweden is to a large extent defined by social democratic thinking. However, Swedish social democracy has had a very pragmatic relationship to capitalism, and the right-wing parties have not always tried to steer Sweden down a different path as regards welfare policy. A review of the twentieth century’s party political history will show that there have indeed been some classic conflicts between the Right and the Left, but they are relatively few. In practice, the capitalist welfare state has to be considered a bloc-transcending project.

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