PN

In Sweden, the Social Democrats have been in power for over eighty of the last one hundred years. They had a political project. The idea was to produce a population that was homogenous and equal. There was also an actual strategy to knock out less competitive capital and therefore transfer funds to more productive sectors. Sweden had perhaps the most successful Fordist strategy of all countries.

This produced something unique. We had a social-democratic party in power with a social-democratic state that produced people with a social-democratic mindset. By the late 1970s, this ran into contradictions. A few things stopped working: wages were kept lower in the private companies that had the highest productivity to transfer them to the public sector, but the corporations ended up with super-profits.

The wage-earner funds were a proposal to solve this conflict. Sweden had attained political democracy with the right to vote. We had public democracy with the welfare state. And now we were going to have economic democracy by actually buying corporations for the working class.

To make a long story short, the limits of the Fordist strategy became apparent in the late 1970s. The welfare state was always being bought with productivity gains. The division between labor and capital stayed basically the same, but the level of productivity growth was such that you could buy welfare gains even though capital had the same level of profits.

In the early ’70s, there was a wave of wildcat strikes. This was a protest against this model that had worked so well between say ’32 and ’79. After that, the Social Democrats become a traditional, Third Way social-democratic party. They set an inflation target, allow unemployment to rise, and Sweden becomes a traditional European country.

What happens next is that the right-wing parties, which could never unite until that point, do so. They become very successful and win two elections in a row, which was unheard of before. That polarizes the Swedish political system, and the Social Democrats now feel that they have to win back the middle-class swing voters who went to the right-wing coalition.