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Sverige i den globala ekonomin 1850-2010. Underlag Sjögren (2008),” Welfare capitalism: the Swedish economy". Pdf-fil på kurshemsidan. Waves of globalization. First global economy Disintegration 1914-50 New global
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Sverige i den globala ekonomin 1850-2010 Underlag Sjögren (2008),”Welfare capitalism: the Swedish economy". Pdf-fil på kurshemsidan
Waves of globalization First global economy Disintegration 1914-50 New global 1880-1914 Beginning of a economy new global economy 1950- 1980 2010 1914 1950 1880
Does capitalism and business matter? Between 1820 and 1990 the advanced capitalist countries increased their production by a factor of 75. These advanced countries, with less than 15% of the world's population, produced half the world's GDP in the 1990s.
Questions to reflect on Why and how have some entrepreneurs, companies and countries been more successful than others in creating economic growth? How has capitalism and entrepreneurial leadership evolved over time? When and why did this strong economic growth began? Is it reversible? Is it sustainable? Does it make everyone happy?
Todays message to you • The evolution of Swedish welfare economy and the “Swedish Model”. Reflections on a Nordic Model? • Country-specific characteristics and the role of business in the transformation of the economy.
Driving forces - periodisation problems • Waves of globalisation • Industrial revolutions: 1780s-, 1880s-, 1970s- (steam-power, electr./engines, micro-chip) • Historicallayers: pathdepedency in combination withchange of institutional and techno-economicregimes
Four periods • Four periods ofeconomic transformation: • 1850-1890 • 1890-1935 • 1935-1975 • 1975-2005 Formative phases (20-25 years)
Four periods in Swedish economic history • Liberalism and early industrialisation within agriculture society 1850-1890 – the foundation era • Industrial society and financial capitalism 1890-1935 • The Swedish model, mature industries and welfare economy 1935-1975 • Neo-liberalism and internationalisation within the service society 1975-2005
State Liberal, company act (joint stock banks), capital import, infrastructural projects, tension in the parliament between represents for agriculture and industry. Education & training Financial system Company Natural resource-based industry and mining, export of iron, timber and saw products, railway companies, strong mechanisation, factories, merchant houses. Institutional reforms, formalisation of the system, joint stock banks, Scandinavian Monetary Union 1873, central banking. Compulsary six years schooling from 1842, technical training, import of foreign skills. Labour market Custom-based, free setting of wage rates, urbanisation, working class, emigration (1.15 million people 1850-1930 with a peak in the 1880s). Period 1850-1890
State Promoting growth, technological procurement, coordination of large investments, launching of social reforms. Financial system Education & training Company Engineering culture, inventions, cartels, strong growth in energy, pulp and paper, then electronics, chemical-technical and building and construction, from the 1920s strong rationalisation and structural transformation Corporate finance (universal banks), growing stock market, deflation crisis 1920-21, mergers, Kreuger crash 1932, new banking law 1934 Special institutes for technical and commercial education, taylorism, professionalisation processes Labour market First unions and employers’ confederations (LO 1898 and SAF 1902), collective agreements, industrial cities Period 1890-1935
Shares of employment in various sectors and change in absolute numbers.
State Re-distributive, Swedish model, growth of public sector, regulatory regimes and support of various favoured sectors (mainly housing, infrastructure), higher taxes. Financial system Education & training Company Regulated credit-based system, stock market low importance, large bond market Mature multinationals, consumer-related innovations, industrial society with a growing service sector, golden age 1950s and 1960s, many successful multinational firms Senior high school, expansion in educational system, advanced technology, training programs Labour market Saltsjöbadsavtalen, solidaristic wage policy, Swedish Labour Market Authority and Swedish Labour Market Board, increasing women participation. Period 1935-1975
Shares of employment in various sectors 1931-35, 1951-55 and 1971-75. Per cent.
State Increasing state debt and budget deficits leading to substantial depreciations 1976-1982, neo-liberalistic policies, joining the European union in 1995, EU-reforms, privatisation programs. Financial system Education & training Company Structural crisis and creative destruction from the mid 1970s, growth in services, increase in outward and inward foreign direct investment and M&A from the 1980s and onwards, increasing R&D, ICT-sector, biotech, change of corporate governance 21st C. Market-orientation and reregulation, financial crisis 1991-1993, growing stock market, markets for venture capital. Vocational training, mass university and regional university colleges, science, innovation and technology policies. Labour market Structural crisis, activated labour authorities, labour market education system reorganised in 1986, high unemployment rate (early 1990s), then more fragmentation and differentiated wages, foreign labour, shorter labour contracts. Period 1975-2005
Shares of employment in various sectors 1971-75, 1991-1995. Per cent.
Annual growth in GDP/capita 1800-2000 in Sweden. Per cent and fixed prices.
Distribution of Business Sector Employment by Enterprise Size, 1991. Per Cent.
Is there still a Swedish Model? Definition 1 • Solidaristic Wage Policy, central negotiations (Saltsjöbaden Agreement 1938-, Rehn-Meidner Wage Bargaining Model, EFO-model) Break up in the 1970s 2007-2009 unsuccesful re-start of Saltsjöbaden Agreement Result: No Swedish Model today
Definition 2 • Welfare state, certain range and size of the public sector The People´s Home 1930s, housing and infrastructure programmes, unemployed and women access to the labour market 1940s-, re-distribution of income, transferring system, high taxes, the state plays an active role, state ownership in the business sector, public expenditure/GDP 31%-62% 1960-80.
Definition 3 • Mental modes, compromise thinking, egalitarian spirit, corporatism (negotiations between business, labour, and state interest groups to establish economic policy) • State is centralized but open • Bureaucracy professional but not authoritarian • Policies differentiated but have a central coordination • Low level of corruption • Close links between interest groups, trade unions, business leaders and the state (corporatism) • To reach consensus in the parliament
Swedish Model today – Yes or No? • Definition 1 – No Swedish Model today • Definition 2 – Partly • Definition 3 – Yes!
Is there a NordicModel? • Or are there two, or even four separate models? • Or, the other way round: is the Nordic model only a variation of models in other European countries? • Reminds of models in other parts of the world?
YES, there is a Nordic model of capitalism. But clear variations between the countries exist: • An ’eastern’ and ’western’ dimension: Sweden-Finland vs. Norway-Denmark • Or regional: southern Sweden and Denmark similar, as, Ostrobothnia in Finland and Northern part of Sweden. • But also a forerunner vs. latecomer: dimension Sweden-Denmark vs. Norway-Finland
A Nordic Model of Welfare Economy • The Nordic countries have had and still have a lot in common, culturally, politically and economically. • But the Nordic Model of welfare capitalism has been challenged by globalisation, EU-reforms - weakened the power of the national states.
