Financialized accumulation, neoliberal hegemony, and the transformation of the Swedish Welfare Model, 1980–2020

Abstract

Drawing on a Gramscian Regulation Approach and Harvey’s accumulation by dispossession thesis, this article discusses the structural and hegemonic mechanisms of the neoliberal transformation of Sweden’s welfare sectors. Providing new longitudinal data on welfare retrenchment, corporate governance, wealth shares, and private economic power, the article further analyzes how the transformation of the Swedish post-war universal welfare model is related to class struggle and accumulation regime change in the Swedish economy. Following a decade-long countermobilization of Swedish capital and a severe economic crisis in the early 1990s, neoliberal economic common sense was cemented among social democratic policy elites that manifested itself in an institutionalized austerity polity, leading to a slow but steady dismantling of the Swedish welfare project. Roughly a fifth of employees in the three largest welfare sectors work in private welfare companies that generate tax-financed profits on politically created welfare markets. Welfare profits are in turn defended by a welfare–industrial complex and undergirded by a hegemonic bloc consisting of capital elites and sympathetic policymakers. In the virtual absence of vocal antihegemonic forces, many social democratic leaders have limited criticism against welfare profits throughout the last decades. On the contrary, austerity measures practiced by Swedish social democrats have thereto led to deteriorating social cohesion and spawned distrust among core social democratic voters.

Economic powers encompass the largest cultural buildings: market, culture and equality in Stockholm, Sweden (1918–2023)

“…In the 1960s, Swedish society aimed for full employment, housing and an extensive welfare system (Skyrman et al, 2022). The workers' party received the solid support of educated voters (Piketty, 2020, p. 863).…”

“…Despite major advances in the Swedish welfare state in the 1960s, the mid-1970s signaled a turning point toward liberalism in the Swedish economy. Workers became involved in company management after 1977 (Scott, 1988, p. 518), and yet they grew increasingly dissatisfied with capitalism, Western imperialism, Taylorist work organization and gender inequalities (Skyrman et al, 2022). The Swedish employers federation and powerful elites leveraged on workers' dissatisfaction to propose changes toward a neoliberal economy (Skyrman et al, 2022).…”

“…Workers became involved in company management after 1977 (Scott, 1988, p. 518), and yet they grew increasingly dissatisfied with capitalism, Western imperialism, Taylorist work organization and gender inequalities (Skyrman et al, 2022). The Swedish employers federation and powerful elites leveraged on workers' dissatisfaction to propose changes toward a neoliberal economy (Skyrman et al, 2022). Further aggravation came when Sweden underwent a major recession and thousands of workers lost their jobs in the mid-1970s.…”

“…To address the crisis, the new Conservative governments (1976)(1977)(1978)(1979)(1980)(1981)(1982) introduced economic austerity. After 1982, the Social Democrats returned to power implementing further austerity measures, supporting neoliberalism with currency devaluation, lowering labor income and shrinking the public sector through fiscal restraint (Skyrman et al, 2022).…”

Industrial restructuring, spatio-temporal fixes and the financialization of the North European forest industry

“…The boom ended in the early 1990s when a domestic financial crisis (Skyrman et al, 2022) took place during a global recession, resulting in a large drop in export demand. Akin to a price-rigging fix, managers in Europe and North America would in earlier times collectively adjust output according to the business cycle to maintain stable price levels, resulting in newspaper prices of 350-400 SEK per ton in fixed prices between 1973 and 1989.…”