ABSTRACT
Economic crises have come in many different forms. Whenever they have come, they have upset existing arrangements of accommodation among different social groups. They have also invariably challenged prevailing conventional wisdom about basic social exchanges. The Social Democratic Party and the trade union organization (LO) led the way in articulating ideas, working out bargains with other social groups and political parties, and administering the new arrangements through control of the government. In Sweden the foundation of the postwar settlement was built in the 1930s. LO and the Social Democrats were able to impose an historic compromise on organized business. The immediate postwar years involved the renegotiation of the bases of European political economies. They had both reformist and radical goals. The reformist goals included full employment, higher wages, the social services of the welfare state and greater social equality a package which can be characterized as popular Keynesianism.
