Swedosclerosis or Pseudosclerosis? Sweden in the 1980s

Abstract

This chapter considers the state of Swedish economics in the 1980s. Between 1976 and 1982, Sweden suffered a sequence of economic buffetings. Government expenditure rose to more than 60 percent of GDP, and public employment embraced one-third of the workforce. In response, business flung itself into massive protest, setting up think tanks which published massively, agitating in parliament, the press, and even in the streets. The discipline of economics mobilized too. Assar Lindbeck cranked up criticism of his old party, and finally resigned from it in 1982 over the wage-fund issue, a few weeks before the election. But in defiance of his forebodings, the eight years of Social Democratic government after 1982 were economically more successful than the previous six under centre-right (‘bourgeois’) governments: inflation fell most of the time, output increased, and unemployment stayed low.