Sweden is no longer a "social democracy"
Michael Roberts
The Next Recession
September 13, 2026
Sweden is going to the polls today for a highly contentious general election that could lead to the far right entering the government for the first time if the right-wing parties get a majority. However, opinion polls show the center-left opposition alliance ahead; Magdalena Andersson, the leader of the Social Democrats, is the closest person to sitting back as prime minister after four years in opposition. However, the difference between the bloc represented by Andersson melted significantly in the last days of the election campaign.
Ulf Kristersson, the leader of the center-right Moderates Party and the current Prime Minister, broke a deep-rooted taboo in 2022 for the minority coalition to form a government, reaching a compromise with the anti-immigrant Swedish Democrats (SD). This agreement gave the SD a disproportionate influence over government policies, especially crime and immigration, while Kristersson now raised the bar further and promised the SD ministerial seats if he came back to power. Andersson's Social Democrats also shifted to the right in the rush of reconsting voters on crime, migration and integration. This means that a possible victory of the left will not lead to a radical change in the current pro-hardness policies. As essentially witnessed in Denmark, the Social Democrats fully adopted the immigration policy of the right.
Not only that, they approved an end to Sweden's deep-rooted 'impartiality' line in foreign policy; they have become one of the most uncompromising actors who advocate for the continuation of the war against the Russian occupation in Ukraine by ardently supporting the country's NATO membership. As a matter of fact, the perception of 'threat' based on the assumption that Russia will invade Europe is the common theme of almost all political parties in Sweden. Andersson also told the Financial Times that his main priorities in the government are to "deepen cooperation" with Ukrainian and European countries; the cost of living or economic problems were apparently not among Andersson's priorities.
Already, Sweden's claim to offer a 'third way' between unbridled free market capitalism and dominant autocratic Communism was an illusion from the beginning. The enormous gains of the Swedish labor movement in the early 20th century have been taken back step by step. Just like other capitalist economies, neoliberal policies have been implemented in Sweden since the mid-1990s: a return to the free market, low tax rates for the rich and corporations, pruning in the welfare state and real wages, escalating inequalities...
Sweden may seem to have a more 'equal' income distribution compared to the US and the UK; but this distribution still harbors a deep injustice, and inequality is the fastest growth among developed capitalist economies in Sweden since the 1990s. While the 10 percent segment with the highest income pockets 33 percent of the total personal income after tax, the bottom 50 percent of the population has to be satisfied with only a 20 percent share.
In wealth inequality, the picture is even more serious. In 1980, the richest 1 percent held 17.7 percent of the total personal wealth; today, this rate has reached 22.5 percent. While the most affiest 10 percent had 54.4 percent of wealth in 1980, this share has increased to 68.2 percent today. In response, the lowest 50 percent of the Swedish population could receive only 13.4 percent of the total wealth in 1980; now, due to the exorbitant increase in borrowing (mortgage loans, etc.), their assets are at a level of minus 10.9 percent, i.e., they have more debts than their wealth (World Inequality Database data). In Sweden, as in most Scandinavian countries, tax reforms enacted during the 1990s eased the tax burden of wealthy households by reducing the capital gains tax, easing the wealth tax or completely abolishing it. Simultaneously, social benefits for the poor were interrupted.
Sweden is no longer the embodime of public service delivery. The country is among the world leaders in the provision of public services paid by the state by the private sector. About a third of secondary education institutions have the status of 'independent school' and the majority of them are run by for-profit companies; about 40 percent of primary health care providers are privately owned. In fact, the shares of these businesses are traded on the stock market. The transfer of service production to subcontractors brought with it the loss of quality. Swedish schools have regressed to "the most mediocre" among the best in the world in international evaluations. The Social Democrats have long opposed independent schools making profits and distributing dividends; however, they have never been able to gather a parliamentary majority to end this practice.
There is also the issue of immigration. After the disaster in Syria and Iraq, more than 600 thousand immigrants from the Middle East entered the country. The significant proportion of immigrants is young and single men; this workforce has contributed to capitalist enterprises and the public sector closing the heavy labor deficit in unskilled jobs. However, the density of immigrants per population is many times higher than all other European economies, and this situation has aggravated the pressure on public services, which is battered by neoliberal measures. While the small towns of Sweden were struggling with low wages and weakening services, they faced a heavy influx of migration. This was exactly the environment where the racist and nationalist discourse of the Swedish Democrats on the axis of 'Sweden belongs to the Swedes' found the ground.
The rise of the Swedish Democrats is a replica of the so-called wave of populism observed in Germany, France, Italy, Denmark and other EU countries, as well as the Brexit process in the UK and the Trump example in the US. This picture is a natural result of capitalism's failure to fulfill its promises after the close of the Golden Age in the mid-1960s, especially after the global financial collapse, the Great Recession and the Long Depression that followed. Swedish capitalism, just like Germany (but on a much smaller scale), has been experiencing a marked slowdown in economic growth for the past few decades and especially since 2008.
Whichever political bloc - whether left or right - gains a majority in the new parliament, the result will not change much.