The Swedish wage-earner funds and economic democracy: is there anything to be learned from them?

Abstract

In 1983, the Social Democratic government in Sweden proposed that wage-earner funds should be implemented in the country and this proposal was adopted by parliament. The reform was initiated by LO, the large blue-collar trade union, and had been debated for more than a decade. Its purpose was to develop economic democracy, counteract the concentration of capital ownership but also to increase collective savings and supply capital for investments. When a coalition government, led by the conservatives, took office in 1991, the wage-earner funds were abolished. It is unlikely that this type of reform will reappear on the Swedish political agenda in the foreseeable future. Nonetheless, collective funds of some kind might be a way to start dealing with the lack of economic democracy and the unequal distribution of capital. In light of the Swedish experience with wage-earner funds, this article discusses some issues related to such a strategy.