The Challenge of Economic Democracy: The Case of Sweden

During a period of economic expansion, under the rule of the Social Democratic Party, Sweden initiated a major series of legislative reforms affecting the workplace. Started in the 1960s and continued throughout the 1970s, these industrial democracy reforms led to greater job security, sought for codetermination, and a greater union and worker participation in work environment issues. In the mid-1970s the Swedish labor movement began to push as well for greater democratization of the'economy, linking shop floor participation to broader participation in the enterprise and the economy. This challenge of economic democracy, specifically in the form of wage-earner funds, has become increasingly important in the proposals which have been influenced both by the economic crisis affecting all Western industrial nations as well as the internal political situation in Sweden. This paper traces the development of economic democracy in the shifting political economic climate and suggests lessons from the Swedish case.