The Swedish Model in America

Why It Can’t Work, and What the Alternative Is

What is the Swedish Model?

To answer that question, we can turn to the man who played a large part in its conception: Rudolf Meidner. Meidner was a Jewish economist who escaped from Germany during the rise of the Nazis and ended up settling in Sweden. He got a job working for the Swedish Trade Union Confederation, more commonly known as LO. Working for the most powerful labor group in Sweden, Meidner’s ideas held immense sway. Together with Gösta Rehn, another LO economist, he developed the Rehn-Meidner model, which became known as the Swedish Model over time.

Wage solidarity under the Rehn-Meidner Model

Why Can’t it Work Here?

There are a variety of reasons why the Swedish Model will most likely remain a largely Swedish phenomenon. The clearest is the immense power that unions held in Swedish politics when this model was created. Union density has always been high in Sweden, holding around 70% in the middle of the century. Arguably more importantly, the LO served as a centralized body for these unions, providing a united political force for implementing policies like wage solidarity. In the United States, not only is our union density much lower (currently around 10%), it is much more decentralized. While some organizations, most notably the AFL-CIO, provide some unified will, nothing comes close to the raw political power that LO possessed in Sweden while the Swedish Model was being created and implemented.

The Saltsjöbaden Agreement being signed

What Can Be Done?

While the model overall is unlikely to work in America, there are certain parts that could reasonably be implemented. It is perfectly possible for the Federal Reserve to seek a policy of full employment and low inflation by adjusting interest rates accordingly. Models for job retraining and skills education are a part of almost every Democratic platform now. Worker’s compensation and unemployment insurance already exist, though they could be streamlined and better funded. In terms of a welfare state, we already have Medicare, Medicaid, Social Security, and the Earned Income Tax Credit, and proposals like Medicare for All and free college tuition could expand many existing public programs to be universal.

The Preston Model, higher resolution in link below

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