Sweden, the Middle Way
The book that made the Swedish model an international reference point.
Summary
Marquis Childs was an American journalist who reported from Sweden in the early 1930s and produced this book, which introduced the American public to the idea that a country could operate between American capitalism and Soviet communism. It sold widely and shaped the international reputation Sweden held for decades.
Childs's subject is chiefly the cooperative movement. He describes Swedish consumer cooperatives, particularly Kooperativa Forbundet, and their strategy of entering monopolised markets in order to break the price. The best-known case is the electric lamp market, where the international Phoebus cartel had fixed prices and limited bulb life, and the Swedish cooperative built a factory that undercut it. Childs also covers cooperative housing, banking and insurance, the agricultural cooperatives, and the state's approach to monopoly, which he describes as competing with private firms rather than prohibiting them.
He also covers the social democratic government elected in 1932, the labour arrangements that led to the Saltsjobaden agreement of 1938 between employers and unions, and the housing and social policies then being developed. The book is enthusiastic and simplifies considerably. Its portrait of Sweden as a settled middle way understates the conflict of the period and the fact that the arrangements it described were then very new. It is a period document whose influence exceeded its accuracy, and it is worth reading as the origin of a durable international idea.
Key takeaways 7
- Swedish consumer cooperatives entered monopolised markets specifically to break prices rather than to serve members alone.
- The cooperative lamp factory undercut the international Phoebus cartel and forced prices down across the market.
- State and cooperative enterprises competing with private firms was presented as an alternative to prohibiting monopoly.
- Childs described a settlement between labour and capital that was then very recent and much less settled than he implied.
- Cooperative ownership extended across housing, banking, insurance and agriculture rather than being confined to retail.
- The book's influence on international perceptions of Sweden exceeded its analytical accuracy and lasted for decades.
- Childs argues that a mixed economy can discipline private monopoly through competition rather than through regulation.
Who should read it
Readers interested in the origin of Sweden's international reputation and in cooperative enterprise as a competitive instrument against cartels.
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