Constructing the People's Home: The Political and Economic Origins and Early Development of the "Swedish Model" (1879-1976)
When Marquis Childs published his book The Middle Way in 1936, he laid the foundation that inspired the quest for an efficient welfare state. The Folkhemmet, or "people's home," initiated by the Social Democrats symbolized the "Swedish Way" and resulted in a generous, redistributive welfare state system. By the early 1970s, experts marveled at Sweden's performance because the Swedish model managed to produce the second-wealthiest economy as measured by per capita GDP with virtually no cyclical unemployment.This dissertation demonstrates that capitalist and pre-industrial cultural forces dominated Swedish economic policy development throughout the years that the Social Democrats constructed Folkhemmet. The Swedish economy operated as a variety of capitalism that infused unique traditional cultural characteristics into a "feudal capitalism." The system was far more market-oriented, deregulated, and free from direct government ownership or control than most assumed then or now. A process of negotiation and reason, mixed with pragmatism and recognition of valuing opportunity over principles, drove Swedish modernization.Eventually, the entire society became commoditized through gender equalization efforts, resulting in greater individualism and an increased breakdown of informal communal or collective functions. Gradually, the nature of individual initiative and incentive within capitalism undermined Folkhemmet's goals and aspirations. Modernization dismembered traditional Swedish households and values as the economy experienced increasingly higher taxes and long-term industrial decline. Post-industrial jobs financed by government taxes eventually choked the supply of foreign direct investment, as well as domestic capital investment levels. When the private sector ceased to produce enough jobs to fund the highly taxed system, Folkhemmet experienced a crisis.The creation of public sector jobs intended mainly to push more women into the workforce resulted in numerous inefficiencies and financial problems. High taxation accelerated the decomposition of traditional civic relations. Moral hazards taxed honesty and eroded the common trust that had enabled the formation of this unique method of economic policymaking. What Childs initially communicated was a process of policy development dictated by gradualism and moderation, not a political system that could be transplanted across the globe. Thus, his "middle way of politics" should have been phrased the "moderate way of policy making."
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