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OWNERSHIP AND WELFARE ECONOMICS Socialism derives its specific character and problems from its attitudes toward ownership. The ideologies of the nineteenth century sometimes described ownership as the mainspring of progress, at other times as the root cause of the miseries of the class system. The former position was espoused by representatives of bourgeois liberalism, an ideology closely associated with the industrialization process. The latter was the view of socialist theorists, who generally believed that it would be necessary to interfere with the right of private ownership in order to create a happier society in the future. Karl Marx developed this view into a provocative theory of industrial development. He taught that mass poverty made it impossible for capital owners to find customers for all their products. As a result, violent crises would arise in the capitalist system. In the end the system would be hit by a major catastrophe, in which the economically exploited workers would seize power and transfer industrial companies to public ownership. Toward the end of the nineteenth century, practically all Social Democratic parties embraced this program. In Sweden, the early Social Democrats put all their energy into political reforms unrelated to the ownership of capital. Together with the Liberals, they struggled for universal suffrage and parliamentary government. [ABSTRACT FROM AUTHOR]

PLANNING FOR THE POSTWAR PERIOD The outbreak of World War II brought a pause in the debate on economic planning. The ideological dispute on the role of the state in the business sector gave way to a truce as wartime regulation was imposed on the economy. Under the leadership of Per Albin Hansson, a grand coalition government was formed. It included representatives of the Social Democrats, Conservatives, Liberals, and Agrarians. The detailed regulation of the country's economic life that now took effect was supported by all social classes. Employees refrained from demanding extra pay to compensate for high wartime prices. Consumers felt called upon to accept a rationing system, manufacturers went along with price freezes and government direction, and special-interest organizations relinquished their independence and participated in the wartime economy as administrative bodies. To express this consensus, different groups chose stylistic approaches that best suited their varying traditional world views. In the conservative camp, it seemed natural to appeal for national unity in the face of danger and to call on special interests to subordinate themselves to the best interests of the country. In the Social Democratic camp, leaders preferred to describe the necessary economic regulation in terms that might conjure up the image of an economy dedicated to meeting social needs, which had always been the ideal of socialism. [ABSTRACT FROM AUTHOR]

SAFETY NET OR “STRONG SOCIETY”? Cooperation between socialists and nonsocialists continued. The Social Democrats exhibited a probusiness attitude. “The governing party's nationalization plans have been stowed away for a while,” one nonsocialist newspaper wrote after the 1948 election. Now the thing to do was to get rid of lingering wartime economic regulation. This wish was also fulfilled: During the 1950s one set of regulations after the other was abolished. The Swedish economy underwent a liberalization. A new forum was found for the continuing dialogue with business that the Social Democrats had initiated during their efforts to create a consensus on economic policy: The Thursday Club shut down and was replaced by occasional conferences at the Harpsund estate, which an industrialist had bequeathed to Sweden's prime minister as an official country residence. In this peaceful setting, the government could clear up problems and misunderstandings about economic policy. “The spirit of Harpsund” became a symbol of smooth cooperation between the state, represented by the Social Democratic government, and the business community. “The recurring discussions at Harpsund between the government and representatives of the business sector and working life are one of several signs that a new spirit of cooperation is being created,” wrote Stockholms-Tidningen, now a Social Democratic newspaper. [ABSTRACT FROM AUTHOR]

DETERMINISM AND THE DOCTRINE OF HARMONY The triumph of parliamentary government in Sweden was followed by a period of parliamentary crisis. Just as Swedish public life before World War I had fallen short of the constitutional ideals of the Left, events after the introduction of universal suffrage and parliamentarism did not live up to leftist expectations either. Arvid Lindman's proportional representation formula preserved the multiparty system. In addition to the Conservatives, the Liberals (who had split in 1922 into a “Prohibitionist” and a “Liberal” party before merging again in 1934) and the Social Democrats, there were two comparatively new parties represented in Parliament – the Agrarians and the Communists; the latter had broken away from the Social Democrats. There was no parliamentary power base for a strong government. Short-lived minority governments came and went, including the Conservatives, the Prohibitionists (both with and without the Liberals as a coalition partner), the Social Democrats, and an occasional nonparliamentary government of senior civil servants. Under such circumstances, it was not possible to carry out a thoughtful and purposeful government policy. Politics became one continuous strategic game. In parliamentary committees, the parties were constantly looking over each other's shoulders with the aim of forming new coalitions to improve their positions, perhaps by unseating the government and helping form a new cabinet. [ABSTRACT FROM AUTHOR]

FREE TRADERS AND PROTECTIONISTS During the first half of the nineteenth century, free trade made its European breakthrough. For a limited period following the Napoleonic Wars, the mercantilist tarriff-and-rule system was fully restored. However, in the industrial society that was now emerging, with its vibrant activity, increased production, population growth, urbanization, and improved communications, there was no place for economic restrictions. A steadily growing quantity of goods was being permitted to flow more and more freely among peoples. For a long time, Sweden did not share the economic growth of the Continent. It was a poor, backward agrarian country with a number of restrictive regulations governing trade and business. But a few reforms during the mid-nineteenth century resulted in full economic freedom, even in rural areas. A crucial factor in this development was that the United States and certain European states began to carry out a policy of retaliation toward Sweden's extensive tariff system. Another crucial factor was the intensive economic boom of the 1850s. Prices climbed very rapidly. It became necessary to suspend tariffs on both grains and animal feed. The reform was originally intended as a temporary measure. But circumstances made it permanent. In theory, the doctrine of free trade was universal. [ABSTRACT FROM AUTHOR]