Historic Compromise

Some chose to see in the Swedish Model a historic compromise between labour and capital. The core of this viewpoint was the Saltsjöbaden Agreement of 1938. But the political reality was not quite what Swedes like to believe.

Per Albin Hansson, the Swedish Prime Minister was concerned that industrial unrest...which invariably affects third parties (ie. the public) more than those directly concerned...would erode Sweden's belief in democracy and open up the floodgates to a fascist takeover in Sweden. It was not just the hegemony of the Social Democrats he saw threatened but the ideas of liberalisation, humanism and democracy.

So he read the riot act to the labour union bosses and the captains of industry. 'Keep the peace or else!' Now in Sweden throughout the golden age of the Swedish Model the real captains of industry were also the board members of the banks. Enskilda Banken was the Wallenberg family's private bank and the other big commercial bank, Scandinaviska Banken was a loosely knit group of three big city banks each run by and for the top businessmen in Stockholm, Gothenberg and Malmö respectively.

For their own different reasons neither the union bosses nor these bankers wanted government meddling in their 'internal affairs'. So they were able to agree on one thing. The government must be kept out at all costs. Once that had been agreed, negotiations went ahead on the details in the small print.

The crucial idea in among the small print was the dispute procedures. Both parties had experience to draw on from their bitter battles in the 1920s over compensation for overtime during the Kaiser war and the introduction of the '8-hour day'. The result was an approach to conflict resolution that possibly only Sweden could have produced. It was before its time.

But nonetheless the Saltsjöbaden Agreement of 1938 was an agreement between labour and capital to avoid any third party involvement in the affairs of the workplace. The principal purpose was to keep government out. The mythmakers have built it up into something else.