Political and economic development in the interwar period
The great expectations that early social democracy linked to the democratic breakthrough could not be met at once. The bleak economic development and the general stagnation of the world market in the 1920s coincided with misunderstandings about what the party’s parliamentary position was to be used for. For the Swedish labor movement, the 20s turned into a desert walk because of disorientation in the party, which was bound by uncertainty about the preconditions and prospects for socialism. The parliamentary situation was characterized by changing minority governments. These governments failed to put into effect the groundbreaking reform policy envisaged by the movement during the struggle for democracy. Economically, the decade was characterized by frequent crises and high unemployment.
The early signs of cooperation between industrial capital and industrial working class, which had emerged during the state crisis, could not be preserved. Social Democrats and liberals could not reach a common platform for further development of reform policy after the eight-hour day in 1918 had been implemented. On the left, political discontent grew. The polarization increased between social democrats and communists due to the international situation and national economic trends.
According to itypejob, the deep economic depression of the late 20s brought an end to the madness and powerlessness of social democracy. In the early thirties marked by the industrial crisis and rising unemployment, social democracy managed to gather around a “Keynesian” inspired crisis policy. Government interventions in the economy, budget deficits and an active economic policy should stimulate capitalist business and reduce unemployment. The starting point for the new policy was the conviction that it was possible to harmoniously combine the efforts of the large industry to increase effective demand, stabilize the labor market, stimulate capital concentration by meeting the working class demands for social reform: the right to form trade unions, full employment.
With the so-called “cow trade” – the crisis settlement with the Confederation of Peasants in 1933 – this policy was established at parliamentary level. The policy was anchored on a broad class level through the “Saltsjöbad Agreement” – the main agreement between the social partners – in 1936. The 1930s crisis policy became the basis for the state expansion, which for more than four decades was the main idea of political life in Sweden. The relative success of the formula was manifested by the fact that the social democracy had the governing power throughout this period.
Communist politics in the interwar period
It was not until the 1920s that the relationship between communists and social democrats was established. The Social Democrats came out of the state crisis in 1918. Immediately after, the Left Socialists failed to get more than 11 seats, while the Social Democrats got 86 seats in Parliament’s second chamber.
The relationship between Social Democrats and Communists was largely unchanged through the 20s. The Swedish Communist Party was severely hampered in its development of the ongoing organizational shifts within the Comintern, which in turn led to conflict and division of the party. The conflict was particularly widespread in 1928-29, when the party lost two-thirds of its members. In the following decade, this referred to the party as a pure sect.
The civil policy of the interwar period
Following the defeat of the 1918 state-form conflict, a restructuring of the Swedish bourgeois party organization eventually took place. The Liberal Party was split, and peasants with small and medium-sized farms broke with the Conservatives to create an independent political organization – the Peasant League. This organization should better serve the particular interests of these groups. Despite the changes in political organization, there is no doubt that the 20s saw a rise for the bourgeoisie following the severe setbacks immediately after the war.
Sweden experienced a great industrial expansion in the interwar period. The pulp and metal industry significantly strengthened its international competitiveness in the 20s. But agriculture was affected by the stronger international competition and came into the crisis situation which has since been permanent.
The depression in the 30s temporarily broke the trend of industrial progress. During the capitalist world crisis, the bourgeois factional division of the bourgeoisie clearly emerged. The capitalist crisis brutally purged smaller and not profitable companies, and the conditions of ordinary petty bourgeois production were bleak. Banking and industry interests strengthened their impact on business. With the collapse of the Kreuger Group – the flagship of Swedish capitalism – the Wallenberg financial house managed to further strengthen its position in the industry.
At the same time, the collapse of Kreuger caused a severe political defeat for the bourgeois. The liberal business policy that had been both prevalent and prosperous in the 20s lacked solutions to the problems that had arisen. This was highlighted by the fact that several prominent liberal politicians were caught up in the scandal when the Kreuger empire collapsed.