¹ Kurzer, Paulette, Business and Banking in Western Europe: Political Change and Economic Integration in Western Europe (Ithaca, N.Y.:Cornell University Press, 1993Google Scholar).

² Ponrusson, Jonas and Swenson, Peter, “Labor Markets, Production Strategies an Wage Bargaining Institutions: The Swedish Employer Offensive in Comparative Perspective,” Comparative Political Studies 29, no. 2 (1996Google Scholar); Notermans, Ton, “Abdication from National Policy Autonomy: Why Has the Macroeconomic Policy Regime Become So Unfavorable to Labor,” Politics and Society 21, no. 2 (1995Google Scholar).

³ Goldstein, Judith and Keohane, Robert O., eds., Ideas and Foreign Policy: Beliefs, Institutions and Political Change (Ithaca, N.Y.:Cornell University Press, 1993Google Scholar); Hall, Peter A., “Policy Paradigms, Social Learning and the State,” Comparative Politics 25 (April 1993CrossRefGoogle Scholar); Berman, Sheri, The Social Democratic Moment: Ideas and Politics in the Making of Interwar Europe (Cambridge:Harvard University Press, 1998Google Scholar).

⁴ The term “cognitive locking” comes from Hamilton, Carl and Rolander, Dag, Att leda Sverige in i krisen: moral och politik i nedgângstand (Stockholm:Norstedts Forlag, 1993Google Scholar).

⁵ It is necessary to do so because such theories “do lend themselves to some of the sloppiest reasoning in ... political science. [The] existence [of interested agents] is often inferred from the asserted fact of common interests, and their influence is in turn inferred from policy outcomes in line with those interests ... to yield ... one great tautology”; Wade, Robert, “East Asia's Economic Success: Conflicting Perspectives, Partial Insights, Shaky Evidence,” World Politics 44 (January 1992), 308CrossRefGoogle Scholar–9.

⁶ Beckert, Jens, “What Is Sociological about Economic Sociology? Uncertainty and the Embeddedness of Economic Action,” Theory and Society 25, no. 6 (1996), 804CrossRefGoogle Scholar.

⁷ Ibid., 807.

⁸ See Hall, Peter A., Governing the Economy: The Politics of State Intervention in Britain and France (Oxford:Oxford University Press, 1986Google Scholar).

⁹ The concept of cognitive locking gives specificity to Pierson's notion of path dependence being a function of political beliefs exhibiting increasing returns. See Pierson, Paul, “Increasing Returns, Path Dependence, and the Study of Politics,” American Political Science Review 94, no. 2 (2000CrossRefGoogle Scholar).

¹⁰ See Eskil Wadensjo, The Committee on Unemployment and the Stockholm School, Occasional Papers Series, no. 314 (reprint; Swedish Institute for Social Research, Stockholm University, May 1991); and Berman (fn. 3), 160–70.

¹¹ See Carlson, Benny, “The Long Retreat: Gustav Cassel and Eli Hecksher on the ‘New Economics’ of the 1930's,” in Jonung, Lars, ed., Swedish Economic Thought: Explorations and Advances (London:Routledge, 1987Google Scholar).

¹² Bergstrom, Villy, “Party Program and Economic Policy: The Social Democrats in Government,” in Misgeld, Klaus, Molin, Karl, and Amark, Klas, eds., Creating Social Democracy: A Century of the Social Democratic Labor Party in Sweden (University Park, Pa.:Penn State Press, 1992), 138Google Scholar.

¹³ These policy goals are taken from, among other sources, Israel, Joachim, “Swedish Socialism and Big Business,” Ada Sociologica 21, no. 4 (1978), 342Google Scholar.

¹⁴ Steinmo, Sven, “Social Democracy vs. Socialism: Goal Adaptation in Social Democratic Sweden,” Politics and Society 16, no. 4 (1988), 419CrossRefGoogle Scholar.

¹⁵ See Landsorgamsationen, , Trade Unions and Full Employment (Malmo:Framtiden, 1953Google Scholar).

¹⁶ Meidner, Rudolph, I arbetets tjänst (Stockholm:Tindens Forlag, 1984), 275Google Scholar, quoted in Tilton, Tim, The Political Theory of Swedish Social Democracy: Through the Welfare State to Socialism (Oxford:Oxford University Press, 1990), 208Google Scholar.

¹⁷ Specifically, the most important economics actors, the governing SAP, SAF, and LO, shared the same ideas. For the trade union's view, see the 1951 LO report, Fackforeningsrōrelsen och den fulla sysselsāttningen: Betänkande och förslag från Landsorganisationens organisationskommitté (Stockholm:Landsorgamsationen, 1951Google Scholar). For SAF's perspective, see Söderpalm, Sven Anders, Arbetsgivarna och Saltsjöbadpolitiken: En historik studie i samarbetet på svensk arbetsmarknad (Stockholm:SAF, 1980Google Scholar). This is not to underrate the conflicts involved in getting to this position, especially given SAF's fear of nationalization in the 1940s. On the latter, see Pontusson, Jonas, The Limits of Social Democracy: Investment Politics in Sweden (Ithaca, N.Y.:Cornell University Press, 1992), 50–55Google Scholar.

¹⁸ Apropos the argument here, while the fact of these strikes may have constituted a structural break with the model, how LO interpreted and responded to them was not structurally determined.

¹⁹ Swenson, Peter, Fair Shares: Unions, Pay and Politics in Sweden and Germany (Ithaca, N.Y.:Cornell University Press, 1990), 85Google Scholar.

²⁰ Heclo, Hugh and Madsen, Henrik, Policy and Politics in Sweden: Principled Pragmatism (Philadelphia:Temple University Press, 1987), 121Google Scholar. See also the 1971 LO congress report on these issues, Demokrati I företagen (Stockholm:Landsorganisationen, 1971Google Scholar).

²¹ Swenson (fn. 19), 92–94.

²² Pestoff, Victor A., “Towards a New Swedish Model of Collective Bargaining and Politics,” in Crouch, Colin and Traxler, Franz, eds., Organized Industrial Relations in Europe: What Future? (Alder-shot:Avebury Press, 1993), 155Google Scholar.

²³ As Åsard argues: “The Social Democrats and the three bourgeois parties jointly supported the new labor laws. Even the employers’ confederation accepted, after some initial resistance, board representation and the codetermination laws.” Erik Åsard, “Industrial and Economic Democracy in Sweden: From Consensus to Confrontation,” European Journal of Political Research 14, no. 1–2 (1986), 210. See also Hadenius, Axel, Medbestāmmandereformen (Uppsala:Almqvist and Wiksell, 1983), 98–105Google Scholar.

²⁴ Steinmo (fn. 14), 431.

²⁵ Ibid.

²⁶ Åsard (fn. 23), 215, emphasis added.

²⁷ Olof Ljunggren, July 1, 1983, quoted in Larsson, Jan-Erik and Holmberg, Jon-Henri, Turning Point (Stockholm:Timbro Forlag, 1984), 6Google Scholar.

²⁸ Those leaders were Sture Eskillsson, Olof Ljunggren, Curt Nicolin, and Ulf Laurin.

²⁹ See Pestoff, Victor A., “The Politics of Private Business, Cooperative and Public Enterprise in a Corporate Democracy: The Case of Sweden” (Stockholm:University of Stockholm Department of Business Administration, 1991), 77Google Scholar, table 12.

³⁰ Ibid., 71.

³¹ While SAF does not detail the category “propaganda” in its accounts, a surrogate measure is the category “other administrative expenses.” “Other administrative expenses can cover anything not covered under other headings, including political activities such as ad-hoc campaigns, public opinion formation, meta organizations etc.”; Pestoff (fn. 29), 75.

³² Ibid.

³³ Ibid., 76.

³⁴ Pestoff(fn. 22), 163.

³⁵ Ibid., 157.

³⁶ Such threats were backed up by large fines for noncompliance. In 1987, for example, SAF fined the Bakery and Confectionery Employers Association one million krona.

³⁷ Israel (tn. 13), 351. Such subventions constituted up to 20 percent of the value of the commodities stocked.

³⁸ Pestoff(fn.22), 157.

³⁹ Author interview with Per-Olof Edin, Stockholm, June 6, 1997.

⁴⁰ For example, between 1976 and 1979 government spending on industrial policy quadrupled. OECD, , Economic Surveys: Sweden, 1976–1982 (Paris:OECD, 1986Google Scholar). The bourgeois parties also nationalized several major industries in this period, thus going beyond what the SAP ever did.

⁴¹ Between 1976 and 1981 public expenditure as a share of GDP rose from 52 percent to 65 percent. As this was not financed by a parallel rise in tax increases, the deficit rose to 13 percent of GDP by 1981. Figures from OECD (fn. 40).

⁴² Interview with Edin (fn. 39).

⁴³ For a discussion of the bourgeois parties' policy positions and their first year in government in 1976, see Bergström, Hans, Rivstart? Om övergången från opposition till regering (Stockholm:Tidens Förlag, 1987), 56–73Google Scholar.

⁴⁴ While bourgeois parties suggested tax cuts, it is crucial to note the language that was used to justify them. Such language serves as an indicator of the deeply embedded nature of LO's ideas and ofwhy this necessitated an ideological rather than a labor-market contest. For example, in the 1976 campaign the Liberals argued that “tax pressure encourages invisible transactions and thereby undermines the civic spirit and solidarity which keeps society together.” And “easing the tax burden, therefore, becomes paradoxically a means of defending the welfare state.” Similarly, the Conservatives campaigned in 1982 that taxes were bad for growth, not because of their “Laffer” effects, but because by being beneficial to business, they hit the low wage earner hardest. As such, the tax system had become a new source of poverty. Such policy positions clearly show how deeply the ideas of LO were embedded across the political spectrum. Quotes from Tarschys, Daniel, “Public Policy Innovation in a Zero-Growth Economy: A Scandinavian Perspective,” International Social Sciences Journal 31, no. 4 (1979), 699Google Scholar, 701.

⁴⁵ For discussions explaining the 1983 metalworkers' defection as being due to wage drift, see Andrew Martin, “Wage Bargaining and Swedish Politics: The Political Implications of the End of Central Negotiations,” Harvard University, Center for European Studies Working Paper Series, no 36 (1991); and Swenson (fn. 19), 171,227.

⁴⁶ Some authors and practitioners have suggested that SAF had been trying to get the engineering unions to defect since 1977. See Pestoff, Victor A., “Joint Regulation, Meso Games and Political Exchange in Swedish Industrial Relations,” in Marin, Bernd, ed., Governance and Generalized Exchange: Self-Organizing Policy Networks in Action (Boulder, Colo.:Westview Press, 1991), 327Google Scholar; De Geer, Hans, I Vänstervind och Högervåg: SAF under 1970 Talet (Stockholm:Allmänna Förlaget, 1989), 132Google Scholar–34; John D. Stephens, “Is Swedish Corporatism Dead? Thoughts on Its Supposed Demise in the Light of the Abortive 'Alliance for Growth' in 1998” (Paper presented at the Twelfth International Conference of Europeanists, Chicago, March 31-April 1,2000), 5. Interview with Edin (fn. 39). Quote from Pestoff.

⁴⁷ Stephens (fn. 46) qualifies this conclusion by arguing that such collective modes of representation were actually replaced by individual representatives from the same sectors. As such, nothing much actually changed (pp. 7—8).

⁴⁸ Pestoff (fn. 22), 157–58.

⁴⁹ Ulf Laurin, SAF-tidningen, February 16, 1990.

⁵⁰ SAF sponsored many such public awareness events throughout the 1980s on topics as diverse as inflation and education policy.

⁵¹ Larsson and Holmberg (fn. 27), 26.

⁵² Ibid.

⁵³ Some of these ideas involved less concern over taxes and more focus on the size of the public sector.

⁵⁴ See, for example, Lindbeck, Assar, Inflation: Global, International and National Aspects (Leuven:Universitaire Pers Leuven, 1980Google Scholar). However, see also idem, The Political Economy of the New Left: An Outsider's View (New York:New York University Press, 1977Google Scholar).

⁵⁵ Interview with Edin (fn. 39).

⁵⁶ This shift in economic thinking, as well as Lindbeck's central role in this, is also detailed in Lonnroth, Johan, Schamanerna: Om ekonomi som forgylid verdag (Stockholm:Bokforlaget ARENA, 1993Google Scholar). See also Sverenius, Torsten, Vad hände med Sveriges ekonomi efter 1970? en debattbok (Stockholm:Fakta info direkt, 2000Google Scholar).

⁵⁷ Hugemark, Agneta, Den fängslande marknaden: ekonomiska experter om välfärsstaten (Lund:Arkif Förlag, 1992Google Scholar).

⁵⁸ Ibid., 210.

⁵⁹ Ibid.

⁶⁰ SNS, : The Center for Business and Policy Studies (Stockholm:SNS, 1992), 1Google Scholar.

⁶¹ Söderström has been vocal about the need for nonlnterventiomst strategies since the late 1970s.

The original argument was that full employment accommodates the demands of trade unions, a situation that inevitably produces inflation. The argument later shifted to hold that government itself caused inflation directly by capitulating to insatiable demands for collective goods. Compare Hans Tson Söderström, “Den nya skepticismen,” Ekonomisk Debatt 2, no. 1 (1978Google Scholar); and idem, Normer och ekonomisk politik (Stockholm:SNS Forlag, 1996Google Scholar).

⁶² This metaphor is from SNS.

⁶³ For representative examples of SNS's position, see Hansson, Ingemar et al., Vägen till ett stabilare Sverige (Stockholm:SNS, 1985Google Scholar); and Henrekson, Magnus et al., “Disinflation, Integration and Growth: The Swedish Economy in 1992 and Beyond,” SNS Occasional Paper 37 (June 1992Google Scholar).

⁶⁴ For its closure, see the debate between Korpi, Walter and Henrekson, Magnus, “Economists, the Welfare State and Growth: The Case of Sweden,” Economic Journal 106 (November 1996Google Scholar).

⁶⁵ As Timbro's president commented: “I think that one of the major contributions Timbro has made is to introduce public choice economics outside the closed circle of academic economists ... to a broader audience of opinion makers.” Author interview with P. J. Anders Linder, president of Timbro, Stockholm, June 13,1997.

⁶⁶ See, for example, Stahl, Ingemar and Wickman, Kurt, Suedo-Sclerosis: the Problems of the Swedish Economy (Stockholm:Timbro, 1995Google Scholar).

⁶⁷ Boréus, Kristina, “The Shift to the Right: Neo-Liberalism in Argumentation and Language in the Swedish Public Debate since 1969,” European Journal of Political Research 31 (April 1997CrossRefGoogle Scholar); and idem, Högervåg: Nyliberalismen och Kampen om språket Isvensk debatt, 1969–1989 (Stockholm:Tidens Förlag, 1994Google Scholar).

⁶⁸ Interview with Linder (fn. 65).

⁶⁹ As Lindvall notes, the Blidt government declared that “thefixedexchange rate is an essential and definitive norm for economic policy.” Quoted in Johannes Lindvall, “The End of the Interventionist Macroeconomic Regime in Sweden” (Manuscript, Goetborg University, Department of Political Science, May 2001), 10.

⁷⁰ The ECU was the European currrency unit, which denominated the relative value of European countries' currencies in the European exchange rate mechanism of the 1990s.

⁷¹ Quoted in Lindvall (fn. 69), 11. ⁷²This section draws on the analysis of the Bildt administration provided by Hamilton and Rolander (fh. 4).

⁷³ Dwight M. Jaffee, The Swedish Real Estate Crisis, SNS Occasional Paper 59 (November 1994), 88.

⁷⁴ Ibid., 78.

⁷⁵ Hamilton and Rolander (fn. 4), 10.

⁷⁶ Ibid.

⁷⁷ Prime Minister Bildt even echoed Thatcher's “there is no alternative” rhetoric by declaring that he offered “den enda vägens politik”—the only way policy.

⁷⁸ For details of the impact of SNS's norm policy on the Conservative government, see Hamilton and Rolander (fn. 4), 33–61.

⁷⁹ On the importance of using counterfactuals in small-N case studies, see Fearon, James D., “Counterfactuals and Hypothesis Testing in Political Science,” World Politics 43 (January 1991CrossRefGoogle Scholar).

⁸⁰ See, for example, Skocpol, Theda and Weir, Margaret, “State Structures and the Possibilities for Keynesian Responses to the Depression in Sweden, Britain and the United States,” in Evans, Peter B., Rueschemeyer, Dietrich, and Skocpol, Theda, eds., Bringing the State Back In (Cambridge:Cambridge University Press, 1985Google Scholar).

⁸¹ Another example of this would be Thatcher's Britain, where mass opinion rejected the ideas of the policy elite, yet a massive institutional transformation was nevertheless brought about.

⁸² The “social power” literature of an early generation is built around exactly this observation. See Crenson, Matthew A., The Unpolitics of Air Pollution:A Study of Non-Decisionmaking in the Cities (Baltimore:Johns Hopkins University Press, 1971Google Scholar).

⁸³ Such ideas are not simply correspondence theories, since there are always multiple ideas available as to the cause of a given crisis. Which one wins out is politically, not functionally, determined.