DOCSLIB.ORG

The Stockholm School, Ernst Wigforss and the Great Depression in Sweden: an Outline

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Stockholm School, Ernst Wigforss and the Great Depression in Sweden: an Outline 067-092 Kragh.new_Layout 1 19/10/2012 9:35 π.μ. Page 67 3 The Stockholm School, Ernst Wigforss and the Great Depression in Sweden: An Outline Martin Kragh 1. Introduction In 1937, Swedish economist and liberal politician, Bertil Ohlin, pro- claimed the existence and relevance of a specific school in economics – the Stockholm School. 1 According to Ohlin, Swedish economists had early on analysed business cycle fluctuations using a dynamic method, an approach which in important ways had not only preceded but was also (in some respects) superior to Keynes’ General Theory of Employ- ment, Interest and Money .2 This view has later been much debated, and rightfully criticized, as too anachronistic, without however underesti - mating other important contributions by Swedish economists. 3 Further, the relative inaccessibility for foreigners to the major works by the Stockholm School due to language barriers has also added to the confusion. As was noted by Hansen, ‘The Stockholm School theory was [...] for a long time relegated to the status of an almost mythological doctrine, its major works inaccessible to non-Scandinavians, with Scandinavians mostly paying lip service only to an unknown god’. 4 1 B. Ohlin, ‘Some Notes on the Stockholm Theory of Savings and Investment I’, Economic Journal , 47, 1937a, pp. 53-69; and idem, ‘Some Notes on the Stockholm Theory of Savings and Investment II’, Economi c Journal , 47, 1937b, pp. 221-240. 2 J.M. Keynes, The General Theory of Employment, Interest and Money , London: Macmillan, 1936. 3 D. Patinkin, ‘On the Relation between Keynesian Economics and the “Stockholm School”’, Scandinavian Journal of Economics , 80, 1978, pp. 135-143. 4 B. Hansen, ‘Unemployment, Keynes, and the Stockholm School’, History of Political Economy , 13, 1981, pp. 256-277. 067-092 Kragh.new_Layout 1 19/10/2012 9:35 π.μ. Page 68 68 MARTIN KRAGH For a long time, perhaps the most accessible work on the Stockholm School in English was Brinley Thomas’ Monetary Policy and Crises .5 The foreword (not written by Thomas) may help to explain part of the mythology mentioned by Hansen. As was remarked, ‘Sweden is one of the world’s most civilized countries in the world. And in the field of economics, as in many other fields, both Swedish theory and Swedish practice are highly distinguished. Economists [...] seem, moreover, as a class, to have a better public reputation than elsewhere’. 6 About Sweden, one further learns, the recovery from the Depression was due ‘to internal action, based largely on the theories of Gunnar Myrdal, and executed with great political skill and economic insight by Ernst Wigforss, the brilliant Finance Minister in the Swedish Socialist government [...]’. A similar example is Irving Fisher, according to whom Sweden was an ‘oasis’ in the ‘desert of the world depression’. 7 Not in order to procrastinate and undermine this essay, but an instructive counterexample may be given by one of the participants in the Stockholm School, Erik Lundberg, who much later gave a slightly different interpretation of events. Strong economic growth in the 1930s, he argued, could be explained not so much by the implementation of new economic theories, as by the unplanned devaluation of the krona in September 1931. ‘The primary contribution by economic policy’, he noted, ‘was the fact that nothing really stupid was done, as in the US, France and other countries that stuck to the gold standard for too long’. 8 On the other hand, one may argue that ‘nothing really stupid was done’, because of the interaction between sound monetary thought and pragmatic policy. It is therefore still a relevant task to investigate the relation between economic thought and policy in Sweden during the interwar period. 5 B. Thomas, Monetary Policy and Crises. A Study of Swedish Experience , London: Routledge, 1936. 6 Ibid . 7 I. Fisher, Stabilised Money. A History of the Movement , London: Allen & Unwin, 1935. 8 E. Lundberg, Kriserna och ekonomerna [The Crises and the Economists], Malmö: Liber Förlag, 1984 . [ All translations from Swedish are my own.] 067-092 Kragh.new_Layout 1 19/10/2012 9:35 π.μ. Page 69 THE STOCKHOLM SCHOOL, WIGFORSS AND THE DEPRESSION 69 Development of economic thought in the interwar period was not isolated to any one specific country. However, economists who continued to work in their native languages were many – including the British (who only happened to be endowed with a language that would later be universal). The future direction of (macro) economics was not yet settled. Austrian economists such as Hayek wielded significant influence, not least on the Continent. In countries such as Poland and Germany there were Michal Kalecki and Carl Föhl, respectively, who both paralleled the work of Keynes. That their approaches today remain known primarily to specialists on the history of economic thought only is – apart from the language issue, since everyone read Keynes but not necessarily vice versa – perhaps indicative of the huge influence Keynes’ work would later command. This article attempts to shed some light on one of those European currents which now live only among antiquarians: the contributions by the Stockholm School economists. The purpose of this essay is to study the development of economic theory and policy in the interwar period. The response by politicians and economists alike to the Great Depression has traditionally been considered a case in point. 9 Simply put, there were nations which implemented Keynesian ideas as part of their official policy, and there were nations where these ideas did not find any role to play outside of academia (if at all). Whatever happened was a result of the interaction between economic thought, policy and political philosophy in each specific nation. Of interest here is the Swedish experience during the 1930s, with special emphasis on the Stockholm School and the theoretical contributions of Ernst Wigforss, for many years Minister of Finance for the Social Democrats. The first part provides some background on the economic development in the interwar period. This setting is important in order to assess the changing views on economic policy among economists and politicians alike, which started to gain momentum in the 1930s. The second part provides a short description of the actors in our story: the 9 P.A. Hall (ed.), The Political Power of Economic Ideas. Keynesianism across Nations , Princeton: Princeton University Press, 1989 . 067-092 Kragh.new_Layout 1 19/10/2012 9:35 π.μ. Page 70 70 MARTIN KRAGH Stockholm School and Wigforss. The third part summarizes the main theoretical contributions by the Stockholm School, pointing out some similarities and differences with Keynes. The penultimate part shines some new light on the theoretical work by Wigforss, especially his views on depression and economic crisis. The last part concludes. 2. Economic development in the interwar period No ideas emerge in a vacuum, and the context of the interwar period is as important to the Swedish experience as anywhere else. Aggregate GDP growth during these years was robust with two exceptions: the W-shape recession, 1916-18 and 1920-21, and the U-shape recession, 1929-32 (see Figure 1). However, long-term evidence on performance cannot fully explain some of the most important changes that actually occurred. A complementary story is told on the micro level, where more systemic changes can be seen. The two depressions, albeit relatively short, had raised crisis awareness in banking and business. This trend stimulated FIGURE 1 Year-on-year GDP growth in Sweden, 1914-1939 Source : <http://www.historicalstatistics.org/> (Sweden). 067-092 Kragh.new_Layout 1 19/10/2012 9:35 π.μ. Page 71 THE STOCKHOLM SCHOOL, WIGFORSS AND THE DEPRESSION 71 consolidation and reduction in the number of market actors. As the Social Democrats rose to power in 1932-33, this policy also found political support. Larger entities were deemed more compatible with the counter-cyclical measures planned at the time. Dedicated funds, to be used in order to uphold production during recessions, were thought difficult to administrate with many small firms on the market. 10 The events leading to the Kreuger Crash in 1932 – arguably the largest financial swindle in Swedish history – and the related moratorium on German debt obligations in the same period put further pressure in this direction. So, the new economic policies in the 1930s came to be implemented in an also increasingly fragmented world. Perhaps more noticeable from our more recent experience (post-World War II) was the powerful deflation which followed the depression of 1920- 21, and then remained as a long-term phenomenon for close to 15 years. As far as policy was concerned, the overriding goal in the 1920s was price stability, achieved through the re-establishment of the gold parity. On 11 March 1920, as inflation was still raging, Eli Heckscher literally forced the Riksbank – via a newspaper editorial calling on the public to change their notes for gold – to increase the interest rate and thus offset the deflation process. One may speculate if such a sharp reduction in nominal wages had been possible only a decade later, not least considering how the deflation was followed by a far-reaching rationalization process contributing to higher unemployment in the short-term. As noted later by Lundberg, fixating the gold parity was ‘the sole, concisely expressed goal’ for economic development in the 1920s. 11 Thus, ‘It was not simply a means to achieve other ends, but an actual central end in itself.’ In 1924, Sweden became the first country in Europe to re-establish the gold parity. As the parity was set at a low level, the export sector was given a competitive advantage. Knut Wicksell was – a bit surprising, considering his otherwise radical stance – arguably the 10 H.
Load more

Recommended publications
  • Den Socialdemokratiska Memoaren Som Retorisk Genre: Exemplen Palm, Erlander Och Persson
    ”Från mörkret stiga vi mot ljuset” Den socialdemokratiska memoaren som retorisk genre: exemplen Palm, Erlander och Persson “From Darkness We Rise Towards the Light” The Social Democratic Memoir as a Rhetoric Genre: the Examples of Palm, Erlander and Persson Magnus Gustafson Masteruppsats i litteraturvetenskap Termin: HT 2014/2015 Kurs: LV 2311 Nivå: Master Handledare: Christer Ekholm Abstract Master’s Thesis in Comparative Literature Title: ”From Darkness We Rise Towards the Light” The Social Democratic Memoir as a Rhetoric Genre: the Examples of Palm, Erlander and Persson Author: Magnus Gustafson Academic Term and Year: Autumn 2014/2015 Department: Literature, History of Ideas and Religion Supervisor: Christer Ekholm Examiner: Dag Hedman Keywords: Political Memoirs, Rhetorical Reading, August Palm, Tage Erlander, Göran Persson Although Social Democratic Memoirs comprise an extensive material, these texts have not attracted any systematic analysis as a distinct and yet varied form of textual genre. The focus in this MA-paper is the Swedish Social Democratic Memoir as a rhetoric genre. The main primary material is memoirs of the pioneer August Palm (1849–1922), the father of the nation Tage Erlander (1901–1985) and the political leader Göran Persson (1949–), published 1905, 1972–82 and 2007, respectively. The general aim is to find out what is the driving power of the memoirs and, more specifically, to shed light on the images of the party history and the history of the welfare state. The method is a comparative analysis of these texts. The overarching rhetoric of Social Democratic Memoirs relate to a general ideological theme corresponding to the progression from darkness to light.
    [Show full text]
  • From Democratic Socialism and Rational Planning To
    NORDIC COUNTRIES IN FINNISH PERSPECTIVE FROM DEMOCRATIC SOCIALISM AND RATIONAL PLANNING TO POSTMODERN IDENTITY POLITICS AND MARKET-ORIENTATION Ideological Development of the Social Democrats in Sweden and Finland in the Late 20th Century Sami Outinen D.Soc.Sc., University of Helsinki Democratic socialism and planning of term goal was a “socialist society” and “equality the economy between people”, which would be achieved by This article will deconstruct the ideological de- seeking the support of the majority of citizens. velopment of the Swedish Social Democratic Finland’s Social Democrats also favoured the ex- Party SAP (officially, “the Social Democratic pansion of public services, state companies and Workers’ Party of Sweden”) and the Social cooperatives, “democratic economic planning Democratic Party of Finland SDP. This will […] including the effective regulation of capital be done by analysing their own alternative movements” and “the societal control of com- scopes of action in relation to the concepts mercial banks and insurance companies”.1 The of major ideologies and economic theories SAP committed similarly in 1975 at its Party such as socialism, capitalism, economic plan- Conference to long-term planning of the econ- ning, market economy, postmodernism and omy (planmässig hushållning). It positioned Keynesianism as well as researching how Nor- itself as the representative of democratic social- dic social democrats redefined their conven- ism between communist planned economy and tional ideological meanings. capitalism.2 Accordingly, one of the motives for The SDP stressed at the Party Conference in stressing democratic socialism by the SDP was 1975 that democratic socialism was the basis to win the support of the radicalised post-war of its programmatic identity.
    [Show full text]
  • Finansministern I Domkapitlet Ernst Wigforss Som Ledamot Av Göteborgs Domkapitel 1918−1936 Jarlert, Anders
    Finansministern i domkapitlet Ernst Wigforss som ledamot av Göteborgs domkapitel 1918−1936 Jarlert, Anders Published in: Kyrklig rätt och kyrklig orätt 2016 Document Version: Förlagets slutgiltiga version Link to publication Citation for published version (APA): Jarlert, A. (2016). Finansministern i domkapitlet: Ernst Wigforss som ledamot av Göteborgs domkapitel 1918−1936. I M. Berntson, & A. M. Ciardi (Red.), Kyrklig rätt och kyrklig orätt: kyrkorättsliga perspektiv. Festskrift till professor Bertil Nilsson (s. 157-168). (Bibliotheca Theologiae Practicae; Vol. 97). Artos & Norma. Total number of authors: 1 General rights Unless other specific re-use rights are stated the following general rights apply: Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal Read more about Creative commons licenses: https://creativecommons.org/licenses/ Take down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. LUND UNIVERSITY PO Box 117 221 00 Lund +46 46-222 00 00 anders jarlert Finansministern i domkapitlet Ernst Wigforss som ledamot av Göteborgs domkapitel 1918–1936 Inledning Ernst Johannes Wigforss (1881–1977) var finansminister i Sverige 1925– 26, 1932–36, och – efter några sommarmånaders uppehåll – 1936–49.
    [Show full text]
  • Era of Regulation
    ERA OF REGULATION post-war fears eacetime prospects were discussed well in advance. According to 323 finance minister Wigforss (1954), ‘as of 1942, opinion shifted fairly P steadily towards expectations of a final victory for the Allies’. On 19 March 1943 the government authorised him to assess how the economy would perform after a cessation of hostilities. The government had acquired instruments for increased intervention and economic policy was more coordinated. Housing controls were intro - duced on rents and mortgage interest rates. The Riksdag approved emer - gency powers to control credit and foreign exchange. In autumn 1943 the government sent Gunnar Myrdal to Washington. Keeping in touch with the Americans was important because neutral coun - tries were viewed with suspicion. Myrdal’s impressions were published the During the crises in the 1930s and the Second 1951 Sweden joins the Bretton Woods World War, international economic activities system. Mats Lemne is appointed are increasingly regulated. Sweden’s domestic governor of the Riksbank. policy focuses on full employment and hous - 1952 Liquidity ratios are introduced. ing. The Riksbank administers controls for 1955 Per Åsbrink is appointed governor achieving internal and external balance. of the Riksbank. More and more market intervention is 1957 Åsbrink’s interest rate coup. needed to keep interest rates down. When 1958 The krona becomes convertible. the Bretton Woods system collapses in the 1964 The Riksdag institutes the Bank of early 1970s, the regulated economy becomes Sweden Tercentenary Foundation. harder to manage. The closing years of the era 1968 The Riksbank’s tercentenary. of regulation are marked by the first oil crisis, The Alfred Nobel Memorial Prize wage inflation and a growing budget deficit.
    [Show full text]
  • 'Wigforss Connection': the Stockholm School Vs. Keynes
    This article was downloaded by: [University of Stockholm] On: 09 January 2013, At: 06:04 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK The European Journal of the History of Economic Thought Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rejh20 The ‘Wigforss Connection’: the Stockholm School vs. Keynes debate revisited Martin Kragh Version of record first published: 09 Nov 2012. To cite this article: Martin Kragh (2012): The ‘Wigforss Connection’: the Stockholm School vs. Keynes debate revisited, The European Journal of the History of Economic Thought, DOI:10.1080/09672567.2012.708770 To link to this article: http://dx.doi.org/10.1080/09672567.2012.708770 PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: http://www.tandfonline.com/page/terms- and-conditions This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub- licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express or implied or make any representation that the contents will be complete or accurate or up to date. The accuracy of any instructions, formulae, and drug doses should be independently verified with primary sources. The publisher shall not be liable for any loss, actions, claims, proceedings, demand, or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or arising out of the use of this material.
    [Show full text]
  • Gunnar Myrdal, Stockholmsskolan Och Den Socialdemokratiska
    Gunnar Myrdal, Stockholmsskolan och den Socialdemokratiska efterkrigspolitiken Författare: Jakob Odelstad C-uppsats i ekonomisk historia, Uppsala Universitet, VT 2014 Handledare: Gabriel Söderberg Seminarieledare: Dan Bäcklund Ventileringsdatum: Juni 2014 Innehåll Innehåll .................................................................................................................................................... 2 1.Inledning ............................................................................................................................................... 3 1.1 Bakgrund.................................................................................................................................... 3 1.2 Syfte och frågeställning ............................................................................................................. 4 1.3 Metod ........................................................................................................................................ 5 1.4 Avgränsning ............................................................................................................................... 6 1.5 Disposition ................................................................................................................................. 7 1.6 Tidigare forskning ...................................................................................................................... 8 2. Gunnar Myrdal och Stockholmsskolan .........................................................................................
    [Show full text]
  • Practical Solidarity : Connections Between Swedish Social Democratic Women and Women in the African National Congress of South Africa, 1960-1994
    ORBIT-OnlineRepository ofBirkbeckInstitutionalTheses Enabling Open Access to Birkbeck’s Research Degree output Practical solidarity : connections between Swedish social democratic women and women in the African National Congress of South Africa, 1960-1994 https://eprints.bbk.ac.uk/id/eprint/40170/ Version: Full Version Citation: Lundin, Emma Elinor (2016) Practical solidarity : connections between Swedish social democratic women and women in the African National Congress of South Africa, 1960-1994. [Thesis] (Unpublished) c 2020 The Author(s) All material available through ORBIT is protected by intellectual property law, including copy- right law. Any use made of the contents should comply with the relevant law. Deposit Guide Contact: email Practical Solidarity: Connections Between Swedish Social Democratic Women and Women in the African National Congress of South Africa, 1960-1994 Emma Elinor Lundin Department of History, Classics & Archaeology Birkbeck, University of London Submitted for the degree of Doctor of Philosophy (PhD) July 2015 I declare that the work presented in this thesis is my own. Emma Elinor Lundin ABSTRACT This thesis discusses the struggle to increase women’s participation in public and political life by focusing on the activism of women within the Swedish Social Democratic Party (SAP) and the African National Congress of South Africa (ANC) from 1960 until 1994. It argues that internationalism was key to these women’s success, providing them with a source of support and funding as well as a stage to develop policies away from overwhelmingly patriarchal national settings. Creating and steering political trends and discussions in international fora, and bolstered by the approval of others in the international community, the women who feature here gained a foot in the door of power and created environments conducive to their presence, abilities and voices.
    [Show full text]
  • Chapter One: the Origins of the Great Transformation (1879-1900)
    THE CATHOLIC UNIVERSITY OF AMERICA Constructing the People’s Home: The Political and Economic Origins and Early Development of the “Swedish Model” (1879-1976) A DISSERTATION Submitted to the Faculty of the Department of Politics School of Arts and Sciences Of The Catholic University of America In Partial Fulfillment of the Requirements For the Degree Doctor of Philosophy © Copyright All Rights Reserved By Josiah R. Baker Washington, DC 2011 Constructing the People’s Home: The Political and Economic Origins and Early Development of the “Swedish Model” (1879-1976) Josiah R. Baker Director: James P. O’Leary, Ph.D. When Marquis Childs published his book The Middle Way in 1936, he laid the foundation that inspired the quest for an efficient welfare state. The Folkhemmet, or “people’s home,” initiated by the Social Democrats symbolized the “Swedish Way” and resulted in a generous, redistributive welfare state system. By the early 1970s, experts marveled at Sweden’s performance because the Swedish model managed to produce the second-wealthiest economy as measured by per capita GDP with virtually no cyclical unemployment. This dissertation demonstrates that capitalist and pre-industrial cultural forces dominated Swedish economic policy development throughout the years that the Social Democrats constructed Folkhemmet. The Swedish economy operated as a variety of capitalism that infused unique traditional cultural characteristics into a “feudal capitalism.” The system was far more market-oriented, deregulated, and free from direct government ownership or control than most assumed then or now. A process of negotiation and reason, mixed with pragmatism and recognition of valuing opportunity over principles, drove Swedish modernization.
    [Show full text]
  • Revi Thesis Final
    Constructing Citizens: Social Policy and the State-Citizen Relationship. Ben Revi Thesis submitted for the degree of Doctor of Philosophy in the Discipline of Politics School of History and Politics The University of Adelaide April 2011 Table Of Contents Abstract v Declaration vi Acknowledgements vii List of Abbreviations viii 1. Introduction: Social Policy Constructing Citizens 1 2. A Brief Review of the Literature on the Welfare State 12 2.1. Defining the Welfare State 13 2.2. The Conditions and Processes of Welfare Expansion 14 2.3. The Conditions and Processes of Welfare State Retrenchment 16 2.4. Social Investment: The Third Way, New Public Management and the Return of Social Democracy 28 2.5. Institutional Explanations for Policy Change 33 2.6. Europeanisation 40 2.7. Discourse, Governmentality and ‘Cultural Governance’ 42 2.8. Broadening Welfare Debates 45 3. Hegemonies of Citizenship 47 3.1. A Theory of Policy Change: Diffusion and Discourse 50 3.2. Diffusion 51 3.3. Discourse Analysis and Citizenship 56 3.4. The Governmentality Perspective 59 3.5. Citizenship and Hegemony 64 3.6. Policy Change at the Level of Citizenship 67 4. Building the State-Citizen Relationship 69 4.1. T.H. Marshall and the Social Rights of the Civilised 70 4.2. Welfarism: Keynes and Elitism 83 4.3. Neoliberalism and the ‘consumer-citizen’ 90 4.4. The Ideal Citizen, The Citizen Ideal 94 ii 5. Institutions and the State-Citizen Relationship 96 5.1. ‘Keynesianism’, ‘Embedded Liberalism’ and ‘Social Citizenship’ 97 5.2. International Welfare and the Designs of Bretton Woods 98 5.3.
    [Show full text]
  • A Brave New World: the Left, Social Engineering, and Eugenics in Twentieth-Century Europe*
    IRSH 55 (2010), pp. 265–296 doi:10.1017/S0020859010000209 r 2010 Internationaal Instituut voor Sociale Geschiedenis SURVEY A Brave New World: The Left, Social Engineering, and Eugenics in Twentieth-Century Europe* L EO L UCASSEN Institute for History, Faculty of Humanities, Universiteit Leiden E-mail: [email protected] SUMMARY: This article compares theories and social policies of social democrats and other representatives of the left-wing political spectrum in six European countries to explain why, in certain countries such as Sweden, Norway, and Switzerland, weak social groups became the target of illiberal and negative eugenic policy, especially isolation and sterilization, while elsewhere left-wing politicians and theorists were far less radical. One striking feature that emerges is the difference between a communitarian-organic and a class-bound form of socialism. Following Zygmunt Bauman, Michel Foucault, and James C. Scott, the article discerns a first variant of citizenship that is conditional and intended only for those with the right social attitude. Eugenics was perfectly consistent with such a view, since it offered a diagnosis and at the same time a cure. Prominent representatives of this approach were the Webbs in Britain and the Myrdals in Sweden. Such an organic-medical approach was less likely, however, in a more class-dependent variant of socialism embedded in a strong civil society. As long as social democrats and other leftist politicians believed social problems such as inequality and poverty were caused primarily by an unjust capitalist system, there was little cause for a eugenicist solution. * This article previously appeared in Dutch in a collection of essays edited by Jan van Bavel and Jan Kok, ‘‘De levenskracht der bevolking’’.
    [Show full text]
  • Economic Review 2005:3 Article 3 Civil Servent Or Politician? Dag
    ■ Civil servant or politician? Dag Hammarskjöld’s role in Swedish government policy in the Forties BY ÖRJAN APPELQVIST Örjan Appelqvist is university lecturer at the Department of Economic History, Stockholm University. It used to be said that the history of Sweden is that of its monarchs and contemporary history still tends to follow a modified version of this notion: the history of Sweden is that of its politicians. It is a view that is very much to the fore in assessments of how Swedish policy has been formed during the long period of social democratic hegemony. It is evident not least in discussions of how the crisis policy in the Thirties was arrived at and how post-war economic policy emerged. As I have pointed out elsewhere,1 works by Erik Lundberg, Leif Lewin and Assar Lindbeck continue to be the foundation on which most historical accounts of this period are built. They all focus on politicians and assign the active role to members of the cabinet, primarily Ernst Wigforss.2 But how were the decisions prepared? What part was played by the government institutions and drafting bodies? In my opinion, the political role the Riksbank and ministerial offi- cials played in the construction of Swedish policy is seriously underesti- mated.3 Dag Hammarskjöld was undersecretary in the Finance Ministry in the period 1936–45 and thereby immediately under the finance minister, Ernst Wigforss. From 1941 to 1948, moreover, he chaired the Riksbank’s board of governors. For a revaluation of the part played by government institutions in the practical construction of economic policy, it is relevant, in connection with the recollections of Hammarskjöld’s contributions 1 See Appelqvist, Ö., (2000), Bruten Brygga.
    [Show full text]
  • Ideas in History 2007-2 20071121.Indd
    Johan Strang Ph. D. Candidate, Centre for Nordic Studies, University of Helsinki Overcoming the rift between ‘is’ and ‘ought’ Gunnar Myrdal and the philosophy of social engineering Abstract This article discusses the attempts of Gunnar Myrdal to overcome the rift between ‘is’ and ‘ought’ from his youth- ful and critical Vetenskap och politik i nationalekonomin (1930) to his monumental An American Dilemma (1944). Myrdal often emphasized his intellectual debt to the Swedish philosopher Axel Hägerström and the non-cognitive ‘value nihilistic’ theory according to which a moral theory had to be ‘a theory about, not of morality’. Myrdal used Hägerström’s ideas as part of his criticism of ‘ideologies’ such as social- ism and liberalism. But he did not seek to eliminate values from social science; rather, his main aim was to find a way of introducing them into his programme of social engineering. According to Myrdal, social engineering had to have a politi- cal direction, and this could only be attained by introducing explicit value premisses, which were based upon the actual values of the studied society. However, his main challenge was to find a way of determining these values, and ultimately it seems as if his problem lay in finding a way of combining Hägerströmian value theory with his Enlightenment ideals and social democratic political convictions. © Ideas in History Vol. II • No.1/07 Overcoming the rift between ‘is’ and ‘ought’ *** Arguably nowhere is the priority of science over ethics as mani- fest as it is in the notion of social engineering. It represents the anticipation of and trust in scientific solutions to all of the important social and political problems of the modern era.
    [Show full text]