The History of Industrial Democracy in Sweden: Industrial Revolution to 1980
Haug, Ralph, International Journal of Management
This paper is a brief discussion of the early history of industrial democracy in one Scandinavian country: Sweden. Specific attention is paid to the evolving labor laws and the impact they had in creating this truly unique nation-wide approach to cooperative management-labor relations. It is interesting to note that although the three Scandinavian countries developed along similar lines, each maintained individual characteristics and philosophies towards the democratization of the workplace. It is also clear that industrial democracy in Scandinavia meant much more than employee representation on the board of directors. It encompassed all employee participation in the decision making process from the individual worker on the shop floor, through various cooperation committees or works councils, to the board of directors, and even outside of one's organization.
Without question the early Scandinavian experimentation with employee participation and workplace democracy has long been held as the shining prototype that other nations (or at least by their academics) could only emulate. While recent history has indicated that there are a few flaws in Utopia, there is little doubt that the Scandinavian quality of work life and cooperative management-labor relations provide significant lessons for the rest of the world.
This paper will not critique the merits of Scandinavia's workplace democracy. This paper attempts to provide an understanding of how one of these three countries, faced with the same pressures and issues as everyone else coming out of the industrial revolution, evolved such a unique approach to labor relations. This history lesson is also purposefully incomplete. It takes the reader from the Industrial Revolution to 1980. This stopping point is by no means arbitrary, for it was in the economic downswing of the late 1970's and early 1980's that some of the Scandinavian practices were found to be unrealistically excessive. The reader is encouraged to make comparisons between the Swedish experience and other nations' of which he/she is familiar with in order to develop a true appreciation for how this nation evolved such an unique approach to management.
History of Swedish Labor Relations
Industrialization began to expand in Sweden during the later part of the 19th Century. Manufacturing was centered in many small industrial towns. This differed from the British and U.S. experiences that saw manufacturing centered in larger industrial regions. With the growth of industrialization came the desire of workers to have greater control over their destinies in this new, strange environment in which they labored.
Originally, there was legislation restricting the formation of trade unions, but these laws were gradually abolished during the middle decades of the 19th Century. By the 1880's and 90's, many labor unions had been formed, primarily by craft. In 1889 a central trade union confederation, the Swedish Trade Union Confederation, (LO) was formed to improve the rights of its members. It was closely aligned with the Social Democratic Labor Party and strongly supported the Party's political beliefs (Forseback, 1980; Martin, 1979).
Although the Swedish government has generally had a tradition of favoring labor unions, there were periods when labor legislation was designed to inhibit union growth and power. In 1889 a law was passed that made it illegal to prevent strike breaking which remained a viable anti-union law until it was repealed in 1938. This, and other laws, helped the labor organizations to see that relations with employers should be determined through negotiation rather than legislation. Therefore, collective bargaining was seen as the way for the labor movement to control its own destiny.
In 1902 a general strike was called by various labor organizations in support of the Social Democratic and Liberal parties' demands for universal suffrage. Not expected by labor was the reaction caused by the strike. …