Capitalists against Markets: The Making of Labor Markets and Welfare States in the United States and Sweden

By Peter A. Swenson | Go to book overview

4
EMPLOYERSUNITE
Swedish Solidarism in theMaking

By the 1930s, a consensus amongmost large employers in America had formed around asegmentalist system of decentralized wage setting. Promotingefficiency and combatting unionism, they chose to provideabove-standard wages and a widening variety of social benefits. The Great Depression's sagging prices and wages disturbedthe stability of their system, and big employers tried tocoordinate efforts to hold wages up. In Sweden, meanwhile, things could hardly have been more different. There, leading employers had long since chosen a centralized system of wage settingin which labor unions exercised valued influence. Nonnegotiatedcompany benefits were common, as in America. But employerscollectively sought to eliminate them. And during theDepression, high wages, not sagging ones, occasionedalarm.

Militant coordination was necessary to bringwages down. In April 1932, ten leading Swedish industrialistsand employer leaders assembled in a conference room at theStockholm Opera Restaurant to discuss the crisis. Called by thechairman of the Swedish Employers' Confederation (SvenskaArbetsgivaref—ingen, or SAF), the meeting had as itsmain issue a massive lockout. Of utmost importance at themoment was to persuade all employers to close ranks behind thismulti-industry attack to force down wages in one sector, the paper pulp industry. A weak link in the solidaristic chain wasindependent, high-pay, high-standard welfare capitalists whorefused to join in. The disreputable employers, in otherwords, were the generous paternalists—not “Poorpay, Shiftless, and Chisel”, the troublemakers among Americanemployers according to the NAM's Wagner Bill Clinic in1935. 1

Case in point was Carl Kempe of MoDo (Mo & Domsj—alarge producer and exporter of lumber and paper pulp. Kempe, from a family of a very successful rural-industrial factorymasters (brukspatroner), was invited to the meetingthough he had steadfastly refused to join the employers'confederation from its inception in 1902. At the meeting, thepatriarch proved deaf to efforts to change his mind, insisting on the value of treating workers “along softerlines. Together with good pay, his welfare capitalism—workerhome

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