As the tide of Eurocommunism has subsided, the evolution of labour movements hegemonized by social democracy has come to assume a more pivotal role for the debate on strategies of transition in the advanced capitalist countries.footnote^＊ With good reason, the Swedish case is frequently cited in this context. This essay will explore its significance by way of a critical examination of recent theories about the relationship between labour reformism and the prospects of socialism.

As everyone knows, the Swedish Social Democratic Party (sap) has experienced a continuous tenure in government longer than that of any other workingclass party in the West (from 1932 to 1976). It has also, to a remarkable extent, retained its internal unity, its close ties to the unions, and its electoral base within the working class. The role of the powerful confederation of blue-collar unions (lo) appears to be the key to this achievement. Whereas the level of unionization has tended to stagnate in many other advanced capitalist countries during the post-war period, it has steadily increased to some 85 per cent in Sweden as a result of the unionization of women and whitecollar employees. The major confederation of white-collar unions (tco) is politically neutral, and less centralized than the lo, but has supported many of the social-democratic reform initiatives.

The organizational unity and strength of the Swedish labour movement made its integration both necessary and possible. An elaborate system of joint regulation of industrial relations by employers and unions was institutionalized in the 1950s and 1960s, when Sweden came to be known as the land of labour peace. Economy-wide collective bargaining provided the lo with the means to pursue an egalitarian (‘solidaristic’) wage policy, and to accommodate—indeed, to promote—economic restructuring that conformed to market forces. The unions’ wage-bargaining strategy was designed to relieve the government of responsibility for organizing wage restraint, which has been the primary source of tension between labour governments and labour unions elsewhere. The political integration of labour has had an important impact on state policy. Full employment served as the lynchpin of social-democratic hegemony, and public efforts to promote employment (‘active manpower policy’) have been closely articulated with the unions’ wage-bargaining strategy. Also, social-democratic rule has been accompanied by extensive public provision of welfare benefits and services. More than in most other advanced capitalist countries, the welfare state in Sweden has been characterized by the ideology and practice of universalism.

Sweden’s highly successful combination of peaceful industrial relations, market-driven economic growth and public welfare provision was hailed as a new model by the ‘revisionist’ current of European social democracy, most notably by Anthony Crosland in his influential treatise of 1957, The Future of Socialism. For Crosland and others, the ‘Swedish model’ represented the transcendence of the class conflicts and crisis tendencies of capitalism; the emergence of a more egalitarian and rational society. In Sweden, this line of thinking came to be associated with the notion of ‘functional socialism’, which rested on the premise that private ownership of the means of production did not pose any fundamental obstacle to the socialization of economic control. Gradually, the Swedish capitalists—like the monarchs before them—were being deprived of their real functions and power.footnote¹

The course of developments since the late 1960s belies the trajectory implied by the revisionist interpretation of the Swedish model. Party politics has become increasingly polarized, and the traditional hegemony of social democracy appears to have been eroded. The sap lost control of the government in 1976, and was once again defeated by the bourgeois parties in the 1979 elections. The relations between employers and unions have also undergone major changes. A series of wildcat strikes erupted in 1969–70, and the level of industrial conflict in the 1970s was considerably higher than in previous decades. The tendency for industrial relations and collective bargaining to become increasingly conflictual and politicized culminated in the general strike/ lock-out of May 1980.

Not only have the employers become less willing to concede wage increases as a result of the economic crisis; they have also begun to challenge centralized collective bargaining and continued public-sector expansion. At the same time, a marked radicalization of the labour movement occurred in the 1970s. Legislative measures promoted by the lo and tco in 1972–75 greatly extended employee and union rights at the level of the firm. More recently, the lo has begun to challenge private control of the investment process by vigorously promoting the issue of wage-earner funds. For the lo, profit-sharing on a collective basis represents a means to legitimize wage restraint, and to ensure that higher profits lead to increased investment and employment. It should be noted that, in adopting lo’s wage-earner funds proposal, the sap introduced a number of modifications that curtail its farreaching implications. However, even the latest sap–lo proposal would involve an important element of collective ownership of capital, marking a clear departure from the traditional, welfarist strategy of Swedish social democracy.footnote²

Once a model for the right wing of European social democracy, the Swedish labour movement has become a model for its left wing. The changes that Swedish politics and industrial relations underwent in the 1970s have stimulated new theorizing on the significance of social-democratic rule for capitalist development, the evolution of class conflict and the prospects of socialism. The discussion here will focus on three books, by Walter Korpi, John Stephens and Ulf Himmelstrand, which seem to represent the dominant tendency in this new theorizing.footnote³