Starting out from Thomas Piketty’s Capital in the Twenty-First Century, this chapter will look at the problem of increasing inequality in wealth and income in Sweden from a historical perspective. We have two theses, which can be stated as follows. First, the period 1950–c. 1995 in Sweden can be characterized as a period in which individual wealth formation was challenged by collective wealth formation, in the form of public pension reserve funds and also in the form of so-called wage-earner funds. Occupational pension funds also increased considerably. An aspect of this development that is relevant for Piketty’s general thesis is that collective wealth formation can be construed as an alternative to wealth taxation and progressive income taxation when it comes to altering the balance between labour and capital. However, this possibility is not open to Piketty since he defines pension payments as income and refrains from tackling the issue of how the source of this income in accumulated wealth pension payments might be dealt with. Suppose that the labour share of value-added decreases. Our claim is that the higher the share of collective wealth in total wealth, the lower will be the increase in inequality from the decreased labour share. This is simply because collective wealth is more equally distributed than individual wealth.

Our second claim is that the process of collective wealth formation in Sweden has in essence rested on a political process, and that ideological conflict between labour and capital in Sweden has manifested itself in these issues. Collective wealth has been fundamentally controversial, and this is so because the distribution of wealth is closely linked to the distribution of power. Power as a central aspect of wealth, i.e. the question of control as an aspect of ownership, is not very explicit in Piketty’s great work. We will discuss the political issues related to collective wealth formation later.