When the center of gravity within the bourgeoisie moved into the 1930s, it must be seen as a trend and not interpreted as dramatic changes in the quantitative composition. But the internal political divide in the bourgeoisie, which had previously been rather broadly composed, became increasingly clear. The previously affluent petty bourgeoisie in the cities was hit hardest, and in agriculture the crisis intensified the sharp contradictions between the smaller farmers and the larger conservative landowners.
In view of these trends in the development of the class structure, we must examine and judge the crisis policy of social democracy. The cooperation policy was based on the idea of a “people’s home” (the People’s Home), and was to seek support from social strata outside the actual working class – first and foremost peasants and officials. In this way, the political basis for the party was to be expanded.
With other methods but with the same goal, the government stimulus policy should create the basis for cooperation with the strong banking and industrial interests, who were eager to rationalize the Swedish business community to improve its international competitiveness. In line with these ideas, technical renewal and cooperative organization of production in the agricultural sector were encouraged.
The overall effect of the economic and political development pattern in the interwar period gave the Social Democrats’ negotiating and cooperation policy a position that is unparalleled in both Scandinavia and the rest of Europe. This strong position was further reinforced by the national collections policy during the war years.
Due. fortunate circumstances and by a particularly careful foreign policy maneuver, Sweden managed to stay neutral during World War II. The wartime brought considerable financial constraints, but the Swedish production apparatus was intact after the war, unlike the other industrialized countries. When the war ended, Sweden was therefore in a very good competitive position on the world market. Although demand for raw materials in particular was increasing, the Swedish metal industry was able to expand and strengthen its international position.
During the war, the working class was forced to hold back and not make demands. When peace came, it therefore called for social reforms and a sharp increase in wages. In the post-war program of the labor movement, these demands took on a politically offensive form. The program was supported by both Social Democrats and Communists. But the progress of the labor movement was not translated into practical policy. The opposition of the bourgeois parties and the large capital and the influence of the increasingly tense international situation put a sting on the wheel of reconciliation within the labor movement.
During the Second World War, the position of the Communists was strengthened by the anti-fascist struggle. But in the first years after the war, they lost this strength again. The Cold War and the misjudgment of capitalism’s chances of developing, drove the party into political isolation. Instead of uniting the labor movement into a social and economic reform program, the politics of the 1950s were dominated by cautious maneuvers, with the social democracy consolidating its government position through a coalition with the Peasant League.
But even though political life was characterized by a lack of ideological perspectives, the international boom caused Swedish business to undergo rapid restructuring. The Swedish industry was concentrated, rationalized and specialized at a rapid pace to exploit the good international economic conditions. In this way, Sweden developed to become one of the leading nations in the world in the steel, wood pulp and shipbuilding industries. This trend was partly supported by and encouraged by LO. LO thought it was important to maintain full employment and a high, roughly equal wage level through the «solidarity wage policy». The organization focused on a market policy and large efficient companies.
Also in the countryside, rationalization progressed. It had broken through as early as the 1930s and led to more and more of the small farms being discontinued in favor of the larger farms. This policy led to noticeable regional changes. The inner part of Norrland was partially depopulated and demarcated industrially. The concentration of capital promoted the urbanization and expansion of metropolitan areas in southern Sweden.
Classical trends from the 30s were reinforced. The former petty bourgeoisie was gradually transformed into an ever-growing middle class in the private and public sectors. At the same time, the Social Democratic reform policy strengthened the development of education and health services.
According to itypeusa, urbanization, economic growth and ideological ceasefire characterized the political climate of the 1950s in such a way that ideologies were considered extinct. Modern welfare capitalism only needed marginal adjustments before Sweden would reach the ideal society. Despite the period of inaction, two political issues opened up political debate and mobilization. One was whether Sweden should develop its own nuclear weapons; the second issue of retirement.
The issue of nuclear weapons triggered an ideological dispute that did not follow party lines. The hottest supporters and bitterest opponents were to be found among the Social Democrats. In the end, the problem was resolved by a compromise, which was to leave it to the future. It should provide some kind of freedom for the time being, but in reality it was a victory for the opponents.
The issue of retirement led to a polarization along classic dividing lines between the labor movement and the bourgeoisie. The labor parties demanded a compulsory “social insurance” to be built up as a state fund system. Citizens wanted a pension that was to be individual and voluntary. Behind this disagreement lay other and larger disagreements that pointed beyond the pension scheme itself. The mandatory pension scheme would entail a large accumulation of capital under state control. In this way, the state would have an impact on both investment decisions and the allocation of credits. This perspective was a threat to free business and capital formation. The Labor parties saw this as a step forward towards social equality and economic justice. The pension issue was settled in Parliament in 1958. The labor movement’s line prevailed. This happened partly by chance, as the victory depended on the voice of one of the members of the People’s Party.