With a population of 10 million Sweden once looked like a beacon of what advanced capitalism might achieve. Then the Swedish ‘model’ seemed to crumble. But Sweden today is still a positive outlier of advanced capitalism. So, what sense can we make of it?
Dave Crouch’s 2019 book, Almost Perfekt, is a fascinating guide to the complexity of modern Sweden. Crouch, a UK journalist who now lives in Sweden, builds his book around his observations and interviews with some 70 people done in Sweden in 2016-17.
The Development of Sweden
Crouch thinks Sweden a capitalist society but one still with many admirable, if misunderstood, traits. These distinctive features are a product of developments in the last century.
Economic development levels in England and Sweden around 1500 look close. The rise of capitalism in England (and Britain more sluggishly) opened a gap. The gap became wider with industrialisation. By 1850 output per head in Sweden was only around 40% of the UK level. Then the Swedish economy began to develop – driven forward by the production of wood products and steel and some higher technology sectors. By 1914 the gap had closed to 60%.
Sweden was neutral in both WW1 and WW2 and coped better with the 1930s depression. Its output per head was equal to that of the UK in 1950. In the long boom of the 1950s and 60s Sweden then overtook the UK and closed the gap with the USA. Then, in the 1970s and 1980s it fell back in relative terms. The high point of admiration for a ‘Swedish welfare capitalism alternative’ from the 1930s to the 1970s is long past. Some critics even suggested that its regulated capitalism meant it was becoming an ‘East German Sweden’.
So, policy in Sweden moved to pioneering some key market reforms. Yet Crouch argues that much of its distinctiveness remains. Changes in practice were often less than they seemed to outsiders. And, from the 1990s. the gap opened again. Today output per head in Sweden is maybe 20% more than the UK and some +/-85% of the US’s level.
These figures are rough. But there is no doubt that Sweden has a highly productive economy based around high tech industries like cars (only 2% of Volvo cars (owned by Chinese capital) are said to be sold in Sweden), IT and pharmaceuticals as well as more traditional industries like timber and a dynamic service sector. The US has a higher average standard of living and productivity but people there work longer and have a lower life expectancy and quality of life. The gap with the UK is less but still to the UK’s disadvantage.
The Bumble Bee Economy
The resulting Swedish mixture seems to defy conventional analysis. Crouch quotes a former Swedish Prime Minster saying that Sweden is like a bumble bee, ‘with its overly heavy body and little wings, it should not be able to fly – but it does … This is how so-called analysts view the Swedish economy. We “defy gravity”. We have high taxes and a large public sector, and yet, Sweden reaches new heights.’
Almost Perfect has revealing interviews which explore the longer term approach of business in Sweden. He meets several foreign business people who were initially resistant but then came to appreciate its benefits. He did not interview the head of the Chinese company that took over Volvo but argues that the takeover allowed the company to develop because the heavy hand of Ford, its previous owner, was removed.
The New Swedish Model?
Sweden aims for a high skill, high wage, high equality economy. Its institutions are designed to support this. Of course, Sweden was never, and is not, all good. Elements of its past and present are very dark as anyone will know who has read Stieg Larson or the earlier Beck novels.
Crouch explores many aspects of this dark side. He shows that aspirations do not equal attainment. Yet his account is still more positive than negative. Swedish workers have a high trust in the national and workplace institutions. Workplace representation is real. Unlike in Germany where the centre of gravity of the co-determination that exists is the national trade unions, in Sweden workplace reps do seems to represent their workplace. Change is supported by positive retraining schemes.
The wider approach came under strain again in the 2010s as the Swedish government opened its doors to those fleeing violence and war. Sweden’s openness put many other places to shame. Sweden took nearly 200,000 Syrian refugees and 150,000 Iraqis – more than the US or the UK put together. 150,000 people signed up to help mentor refugees – the equivalent of maybe a million in the UK.
But this openness produced a right-wing reaction. Crouch in his book provides a detailed discussion of the problems that followed [including their misreporting outside Sweden]. Today Sweden is much less open. When I briefly visited Malmo in 2018 the barriers against those crossing the bridge from Denmark were highly visible. But everything is comparative – there is, of course, effectively no safe route into the UK.
From Covid to a New Right-Wing Government?
With the eruption of Covid in 2020 Sweden once more came into focus. Debate raged over its alleged libertarian ‘policy model’. In fact, approaches to covid everywhere were messy. Reality was often very different from hysterical accounts of who was doing better or worse and why. Nevertheless, as Johan Anderberg sets out in his book Sweden did seem to steer towards a more voluntaristic approach, trusting more in its public heath advisers to give advice and its citizens to follow it. Despite claims that this would be a disaster it seemed to do no worse and on many indicators it did better than those who went down a more authoritarian route.
Crouch’s book was published pre-covid but perhaps it gives clues as to why this approach might have been reflective of a higher trust society. People were asked to choose to do what they believed to be the right thing rather than commanded to do it by authorities they otherwise did not trust. I was struck by a comment in Crouch’s discussion of the Swedish education system – that they did not want to educate people to be ‘bricks in the wall, links in the chain’. But there is always of danger of finding what you are looking for.
For all that in October 2022 a new right-wing coalition came to power in Sweden. It was backed by the far-right Sweden-Democrats who had become the second largest party with 73 seats (out of 349) in the parliament. The promise is to push Sweden further to the right with an anti-immigrant, anti-crime agenda. What will happen in practice remains to be seen. As Crouch notes in a more recent piece, Sweden’s underlying institutions may again prove resilient if Swedes get organised to limit what the new government can do.