Continuity and Innovation in Sweden in the 1970s

Sweden, Denmark and Norway are unique in Western Europe in the degree of dominance enjoyed in their political systems by Social Democratic and Labour parties since the early 1930s. Among these three Scandinavian states that dominance was most marked in Sweden, where the Social Democrats held office almost without interruption from 1932 until 1976. A powerful factor in their initial success was the positive nature of their response to the crisis of the Great Depression. Instead of the fiscal orthodoxy and book-balancing exercises adopted, for example, by the Labour government of the time in Britain, the Social Democrats in Sweden put into practice the pre-Keynesian demand stimulation prescriptions of Wicksell and the Stockholm School of Economists. They thus offered hope at a time of depression. But the crucial factor in their success was that, as was the case elsewhere in Scandinavia during this period, they entered into partnership with the Agrarians in a Red-Green coalition on the basis of aid for the primary sector of the economy together with an expansion of welfare facilities. This horse-trading (Swedish, ‘cow-trading’) deal was a matter of the harmonisation of interests, scarcely of ideology, and both sides were experienced in hard bargaining through their comprehensive union, marketing and co-operative organisations.