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

12
EXPANDING THE SOLIDARISTIC
WELFARE STATE

Compared to every other step in Sweden's welfare state developCment, demands for full retirement security in the 1950s stirred an unusually polarized debate. The social democratic labor movement insisted on legislation guaranteeing that, upon retirement, workers should no longer have to suffer deep cuts in income down to the level provided for by the People's Pension. After eight years of controversy, the Social Democrats' comprehensive pension bill finally passed in the Riksdag by only a single vote. But conflict threatened to continue after passage in 1959. The Conservative Party leadership promised to “rip up” the reform if ensuing election results offered a chance to form a coalition. The narrowness of the Social Democrat's legislative victory inspired them with hope.

Behind the political scene, things looked strangely different. Arne Geijer, the nation's top labor leader, confided all along to Bertil Kugelberg, his employer counterpart, that he preferred a collectively bargained solution instead of legislation. Geijer knew that was S AF's preference too. But the Social Democratic Party had irrevocably hijacked the issue, and carried on with legislation. Be that as it may, Geijer reassured Kugelberg, the labor confederation had exactly the same interest as Sweden's capitalists regarding how to administer the new pension funds, the issue that aroused employers' anxiety the most. He kept Kugelberg up to date on his successful efforts to secure those interests. A rude surprise, therefore, lay in wait for the Conservative Party: SAF and leading business figures soon insisted that the party drop all talk of trashing the legislation. Had they only known that employers would regard it as “not that bad”, rued future Conservative leader Gunnar Heckscher, his party would not have opposed the legislation so aggressively. 1

Swedish Social Democrats laid three major milestones in the development of the welfare state during the 1950s: first, a comprehensive health insurance

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