Shakai-Seisaku (Social Politics)

Sweden faced what may be termed a time of crisis at the dawn of the 20th century. Despite the dissolution of the union with Norway and the very tangible threats posed by imperialist powers such as Britain, Germany, and Russia, a large portion of the population—mainly young people who should have been the core drivers of the economy and national defense—emigrated to the United States, while labor-management conflicts intensified with the advancement of full-fledged industrialization. One could claim that if the country had made just one mistake, it would have ended up collapsing.
 
Amid these circumstances, the state had to ponder what path forward to take. Gustav Cassel’s Social Politics was one attempt at such a path. Cassel was an internationally recognized expert on currency and monetary issues in the 1920s and was one of the most well-known economists in the world at the time. Moreover, because he was an opponent of Keynes and the Stockholm School, he is generally thought to have been a conservative. Nonetheless, it was with the publication of Social Politics that Cassel came to public attention in his home country of Sweden. As is evident from this book, he was rather a reformist and liberal polemic when it was published.
 
Considering the Swedish predicament, Cassel advocated the promotion of economic growth by healthily guiding market functions through social policies, thereby achieving class reconciliation. One could say that rather than fighting over limited pieces of a pie, he desired to make the pie bigger and have people work together. Sweden thus found a way to simultaneously achieve national unity and economic growth. That is, the goal was to balance the economy and welfare.
 
Incidentally, Cassel believed that the market competition he was observing was widening the gap between the rich and the poor, resulting in the physical and mental degeneration of the latter. For market competition to work as desired, it was necessary to change its framework. What Cassel expected was increasing organization of cooperatives and trade unions, among others, in civil society as well as direct intervention from the state as a complement—in other words, what he thought of as social politics constituted policies that encouraged the above kind of organization and complementary direct state intervention. Parts of his concrete vision are reminiscent of the solidarity wage policy and the aggressive labor market policy that would later be implemented. As suggested by these policies, post-World War II Sweden simultaneously pursued economic growth and social welfare development in the context of a so-called mixed economic system. As such, we may identify Cassel’s Social Politics as one source of Swedish social welfare ideology.
 
Sweden is essentially an unfamiliar country to many. This volume is meant to show one aspect of how a small-scale agrarian country on the outskirts of Europe developed into one of the world’s most representative welfare states. If there is something here that interests you, it is my hope that you will pick up this volume.
 

(Written by ISHIHARA Shunji, Professor, Graduate School of Economics / 2023)