SOCIALISTS AT THE GATE Rikard Westerberg Twice in the last century, organized capital in Sweden clashed with organized labor on the issue of private ownership and state intervention. First, in the 1940s following proposals on increased regulation, higher taxes, and potential nation- alization. Thirty years later, when business interests felt pressured by radical- SOCIALISTS AT THE GATE ized politics and a threat of losing ownership to union-controlled wage-earner funds in the midst of an economic crisis. For the captains of industry, the perils SWEDISH BUSINESS AND THE DEFENSE of socialism were to be fought by convincing the general public of the benefits OF FREE ENTERPRISE, 1940–1985 of free enterprise and assisting the non-socialists parties to return to power. This study analyzes business counter-reactions: its attempt to influence public opinion through PR-campaigns, public protests, research financing, press sub- sidies, and political donations. Applying theories on interest group formation and with access to previously closed archives, it finds that it was the level of radicalism within the internationally uniquely strong Swedish labor movement which incentivized business to act. It also analyzes the previously unresearched connections between Swedish employers and pro-market organizations abroad, including the relationship between prominent free-market economists and pub- lic-relations experts within the Swedish business community. In addition to shedding new light on how organized business tried to reach its Westerberg Rikard political goals during the Cold War era, the thesis helps us understand how ideas of deregulation, competition, and individual choice got a foothold in a country so characterized by social democracy. SOCIALISTS AT THE GATE GATE THE AT SOCIALISTS RIKARD WESTERBERG is a political business histori- an at the Institute for Economic and Business History Research at the Stockholm School of Economics. He has previously worked as a journalist, editorial writer, political advisor, and communication consultant. This is his doctoral thesis. ISBN 978-91-7731-180-5 DOCTORAL DISSERTATION IN BUSINESS ADMINISTRATION SPECIALIZATION IN ECONOMIC AND BUSINESS HISTORY STOCKHOLM SCHOOL OF ECONOMICS, SWEDEN 2020 SOCIALISTS AT THE GATE Rikard Westerberg Twice in the last century, organized capital in Sweden clashed with organized labor on the issue of private ownership and state intervention. First, in the 1940s following proposals on increased regulation, higher taxes, and potential nation- alization. Thirty years later, when business interests felt pressured by radical- SOCIALISTS AT THE GATE ized politics and a threat of losing ownership to union-controlled wage-earner funds in the midst of an economic crisis. For the captains of industry, the perils SWEDISH BUSINESS AND THE DEFENSE of socialism were to be fought by convincing the general public of the benefits OF FREE ENTERPRISE, 1940–1985 of free enterprise and assisting the non-socialists parties to return to power. This study analyzes business counter-reactions: its attempt to influence public opinion through PR-campaigns, public protests, research financing, press sub- sidies, and political donations. Applying theories on interest group formation and with access to previously closed archives, it finds that it was the level of radicalism within the internationally uniquely strong Swedish labor movement which incentivized business to act. It also analyzes the previously unresearched connections between Swedish employers and pro-market organizations abroad, including the relationship between prominent free-market economists and pub- lic-relations experts within the Swedish business community. In addition to shedding new light on how organized business tried to reach its Westerberg Rikard political goals during the Cold War era, the thesis helps us understand how ideas of deregulation, competition, and individual choice got a foothold in a country so characterized by social democracy. SOCIALISTS AT THE GATE GATE THE AT SOCIALISTS RIKARD WESTERBERG is a political business histori- an at the Institute for Economic and Business History Research at the Stockholm School of Economics. He has previously worked as a journalist, editorial writer, political advisor, and communication consultant. This is his doctoral thesis. ISBN 978-91-7731-180-5 DOCTORAL DISSERTATION IN BUSINESS ADMINISTRATION SPECIALIZATION IN ECONOMIC AND BUSINESS HISTORY STOCKHOLM SCHOOL OF ECONOMICS, SWEDEN 2020 Socialists at the Gate Swedish Business and the Defense of Free Enterprise, 1940–1985 Rikard Westerberg Akademisk avhandling som för avläggande av ekonomie doktorsexamen vid Handelshögskolan i Stockholm framläggs för offentlig granskning torsdagen den 3 december 2020, kl 13.15, sal Torsten, Handelshögskolan, Sveavägen 65, Stockholm Socialists at the Gate Swedish Business and the Defense of Free Enterprise, 1940–1985 Socialists at the Gate Swedish Business and the Defense of Free Enterprise, 1940–1985 Rikard Westerberg ii Dissertation for the Degree of Doctor of Philosophy, Ph.D., in Business Administration Stockholm School of Economics, 2020 Socialists at the Gate: Swedish Business and the Defense of Free Enterprise, 1940–1985 © SSE and the author, 2020 ISBN 978-91-7731-180-5 (printed) ISBN 978-91-7731-181-2 (pdf) Front cover illustration: “The Octopus of Bureaucracy”, excerpt from the brochure Krångel eller Trivsel produced by Byrån för Ekonomisk Information, 1948. Back cover photo: Juliana Wiklund, 2017 Printed by: Brand Factory, Gothenburg, 2020 Keywords: business interest associations, public opinion, Sweden, free enterprise, cor- poratism, interest groups, SAF, wage-earner funds, 1940–1985 To Axel and Hjördis Foreword This volume is the result of a research project carried out at the Institute for Economic and Business History Research at the Stockholm School of Eco- nomics (SSE). The volume is submitted as a doctoral thesis in business administration (with a specialization in economic and business history) at SSE. In keeping with the policies of SSE, the author has been entirely free to conduct and present his research in the manner of his choosing as an expression of his own ideas. SSE is grateful for the financial support provided by Kjell och Märta Beijers Stiftelse, which has made it possible to carry out the project. Göran Lindqvist Hans Kjellberg Director of Research Professor and Head of the Stockholm School of Economics Department of Marketing and Strategy Acknowledgments As a history buff from a young age, it has been a true privilege to dedicate four and a half years of my life to this project. There are many out there who have helped me realize this dream and for whose wise counseling, guidance, friendship and support I am exceptionally grateful. First of all, my benefactors. The Stockholm School of Economics’ doc- toral scholarship got me through the first two years while a generous grant from the Kjell and Märta Beijer Foundation (Kjell och Märta Beijers Stiftelse) enabled me to continue for an additional two and half years. Anders Wall and the rest of the board deserve my deepest gratitude. My supervisors Udo Zander, Hans Sjögren and Erik Lakomaa have kept me on the right track and offered good advice along the way. Erik, your door remained open as always, and your extensive knowledge in economic and business history has broadened my views. Hans, you have encouraged this project from the first e-mail I sent to you back in 2015. I am not sure it would ever have gotten started without you. Thanks also to Hans De Geer, whom we brought in as co-supervisor due to his unique understanding of Swedish employers and the history of their organization in Sweden. Niklas Stenlås’ pioneering study on the Enterprise Fund (Näringslivets Fond) in the 1940s has been a source of inspiration. Niklas also offered val- uable input as discussant on my thesis proposal at the end of the first year. At the end of the fourth year, Nils Karlsson gave constructive critique as opponent at the mock seminar. The Institute for Economic and Business History Research (Institutet för ekonomisk-historisk och företagshistorisk forskning, EHFF) at the Stockholm School of Economics has everything an aspiring scholar needs. Friendly and talented colleagues, an environment encouraging critical think- ing and unbiased debate, a serious coffee maker and a microwave oven where viii SOCIALISTS AT THE GATE one can heat today’s matlåda. Many thanks to Elin Åström Rudberg, Carin Sjölin, Axel Hagberg, Anders Perlinge, Tino Sanandaji, Michael Funke, Elise Dermineur and the rest of the participants at EHFF’s bi-weekly seminar. Mi- chael’s close reading of the thesis improved parts of the text I struggled with during the last couple of months. At the Stockholm School of Economics, I also wish to acknowledge the work of Ute Harris and the rest of the school’s competent librarians. Many thanks for putting up with all my interlibrary loan requests. I was waiting to receive an e-mail saying that I was not allowed to borrow any more books, thankfully that e-mail never came. Maiju Wuokko, my fellow “political business historian” at the University of Helsinki, has offered well-informed advice and commented on various drafts and conference papers. Susanna Fellman at the University of Gothen- burg has also encouraged me in my work and helped me sort out my thinking regarding method and theory in business history. Thank you both. Without access to the previously closed archives, this study would not have been possible. I am particularly indebted to Janerik Larsson, former information director at the Swedish Employers’ Confederation, and Karin Svanborg-Sjövall, former managing director at Timbro. They gave me the keys to all the relevant archives at the Centre for Business History in Bromma. Thanks also to all the knowledgeable archivists who facilitated my four-year-long archival digging. This project would not have been possible without the love and support of my family. My parents have always encouraged me to go my own way and trusted my judgment. My mother, Birgitta, has given me the gift of curiosity, and my father, Sten, the love for history.