The Swedish Promise

The Swedes, all of whom seem to love their country dearly, often complain that it is dull—“just a suburb of New York,” a Swedish sociologist told me last spring. Yet it is here that a social experiment of truly historical significance is taking place: a test of the limits, or the capacity for further evolution, of Sweden’s famous “middle way”—to use the phrase applied to the Swedish system by the journalist Marquis Childs in the mid-1930s. Whether this experiment will be a success, as the Social Democrats hope, or a sham, as the Marxists believe, or a shambles, as the Conservatives predict, the prospects for Western capitalism will have been deeply, perhaps unalterably, affected by the effort itself.

Contrary to popular belief, the middle way was never a marriage of capitalist and socialist economies. Sweden has been and still is unmistakably capitalist in its economic structure. About 94 percent of industry is privately owned, and a considerable portion of the nationalized fraction is the consequence of a recent public takeover of the failing shipbuilding industry by a coalition government of centrist and conservative parties. Industry itself is highly concentrated, with fifteen to twenty corporations, many of them family-owned, dominating the industrial scene. The interests of the Wallenberg family, in particular, occupy a strategic place comparable to that of the Rockefellers, but without the competition of Texas newcomers. Within these very large enterprises, ownership also appears to be more concentrated than in Britain or the United States, and within the economy as a whole, the distribution of property does not seem to have changed much since the 1930s. Finally, employment is still the prerogative of the class that owns the means of production: the great labor dispute that brought the Swedish economy to a standstill in early May of this year was primarily caused by a lockout of workers by the Swedish Employers Federation.

Thus by all the conventional criteria of entrepreneurship and ownership, Sweden is a capitalist economy. I should add that it has also reaped the benefits that have accrued to capitalist economies since World War II. Swedish economic expansion has been impressive. Per capita incomes, corrected for inflation, have risen by 250 percent during the postwar period. By 1974, according to OECD figures, Swedish per capita GNP was already slightly higher than that of the United States, and the margin has almost certainly increased since then.

The essence of the “middle way,” however, was to graft an element of socialism onto this capitalist productive mechanism—not the socialist propensity for planning, but its concern for social equality and well-being. Thus the dynamism of the Swedish capitalist base has been steadily opposed by, or constrained within, a structure of welfare that is socialist in character.

One often-cited index of the degree of socialist tendencies in a capitalist system is the percentage of GNP spent for various purposes by government. In Sweden that percentage was 64 percent in 1978, compared with less than 35 percent in …

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If Workers Were the Boss February 5, 1981