Download Sweden - James Madison University

Sweden
Corporatist welfare state
Country profile
Data
 http://www.odci.gov/cia/publications/fact
book/geos/sw.html
Wasa ship
 Picture
 http://www.vasamuseet.se/indexeng.ht
ml
Medieval guilds
 A brief
synopsis
 http://www.millersv.edu/~english/homep
age/duncan/medfem/guild.html
Role of the state
 1880
and welfare origins (Poor Laws,
1847), health 1874, publicly financed
pensions in 1913, 8 hour workday 1919.
 Little state ownership
 Income inequality of 1930s
 Industrial revolution
 LO and SAF
The middle way
 Allocation
by market forces
 Distribution by the state
 Active government involvement with
labor markets
 Wage solidarism (Rehn-Meidner) and
corporatism and centralized collective
bargaining: wage equalization across
skills and firms and seniority levels
Corporatism
 Authoritarian
or voluntary (liberal)
 Liberal variety duopoly in a labor market
as a self-organized (SAF vs. LO)
 Authoritarian variety as sponsored and
mandated by the state
 Keeping balance between
unemployment and inflation
 Conflict or consensus corporatism
Economic philosophy
 Experience
with poverty, emigration and
laissez faire
 Employment and Keynesianism
 Egaliterianism
Welfare
 Distribution
and redistribution role of the
state
 26% of aggregate demand is accounted
for by the government (20% in the US
and 9% in Japan)
 Government expenditure is 41% of GDP
(22% in the US)
Beneficiaries of Swedish
government spending

Housing
 Municipal services
 Social security
 Low defence
 Low health (1.1%)
 High on education

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Taxes:
Income, profit, capital
gains (17.8%)
compared to 51.5% in
the US
Indirect taxes (29%)
compared to 3.5% in
the US
Social security: similar
Performance
 1960-s
economic growth
 1970-s oil shocks and inflationary
pressure
 1980-s wage solidarity and the Philips
curve, globalization of trade
Growth or eurosclerosis
 Extensive
safety nets
 Great role of the state
 Protectionism through subsidies
 Strong vested interests
Traits

Small country as a big player in the world
markets
 Social democracy: complementary rather
than competitive relationships (high social
capital)
 Sharing market information for the overall
economy’s gain
 Active and mobile labor market
 Employee ownership and participation
Eight reasons for the decline of
the model

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Collapse of support for Social democrats
Expansion of full employment concept
Stagnant economic growth
Excessive wage solidarism
Breakdown of EFO wage setting (public
sector)
 Misguided subsidies of the 1970s
 Inflation stabilization
 Internationalization