In the 20th century, Sweden became a global beacon of socioeconomic harmony and political stability. While widely seen as a successful fusion of capitalism and equality, drawing international praise for its expansive welfare state and diplomatic humanitarianism, Swedes saw their nation as a “moral superpower” at home.
Today, this image is crumbling under the weight of grim headlines.
Unemployment hovers around 9 percent—one of the highest rates in the European Union—with youth unemployment nearing 25 percent. Despite an average income tax rate exceeding 40 percent, plus payroll taxes and a 25 percent national sales tax, public services are failing: patients in the public healthcare system often wait months for basic treatments, roads are in disrepair, and schools are grappling with plummeting performance. In 2022, 800,000 of Sweden’s 10 million residents were classified as illiterate, the highest number since the late 19th century.
Even more alarming is the surge in violent crime.
Once among the safest countries in the world, Sweden today has one of Europe’s highest gun homicide rates. In 2022, authorities recorded 391 shootings, resulting in 62 deaths. The violence has also spread from the big cities to smaller towns. A recent triple murder in a barber shop in central Uppsala—long considered one of Sweden’s safest communities—shocked the nation.
Also, bombings, previously inconceivable in Swedish society, have become common. In 2023, police reported 149 explosive attacks, up from a handful a decade ago. This situation has prompted authorities to designate more than 60 neighborhoods as “no-go zones,” and the government has floated the idea of deploying the military to help restore order.
Analysts argue that immigration is the cause of this upheaval. Since the 1990s, Sweden has indeed accepted over two million migrants, mainly from war-torn countries like Syria, Somalia, and Afghanistan. Thus, immigration has emerged as the country’s most combative political issue, and in the 2022 election, the populist Sweden Democrats surged to become the second-largest party. Yet, despite its hardline immigration policy, the party’s platform mainly reflects the ideals of Sweden’s traditional welfare state rather than the conservatism of notables like Donald Trump.
One must look deeper into Sweden’s historical identity to understand this paradox.
Swedes’ self-image traces back to the 16th century when it broke away from the Danish-dominated Kalmar Union, transformed into an autocratic, Lutheran military state, and in the 17th century, gained great power through its Thirty Years’ War exploits. This unlikely ascent—from a poor, sparsely populated country to a regional empire—was achieved through military ingenuity, bureaucratic efficiency, and hefty sacrifices imposed on the people through high taxes, forced labor, and mass conscription.
This combination of implausible success and suffering helped forge national unity. Even after the loss of their Baltic empire in 1718 and the cession of Finland to Russia in 1809, the Swedes continued to see themselves as a people with a divine mission—to show the world how a well-ordered state should function.
In the mid-19th century, this exceptionalist sense found a new outlet in capitalism. After centuries of hardship, Sweden’s Protestant work ethic and engineering ingenuity began to flourish. By the early 20th century, the country had become one of the world’s most industrialized nations, a development driven by figures like inventor-entrepreneur Alfred Nobel.
Then came the Social Democratic era. From 1932 to 1976, the Social Democrats held uninterrupted power, building a robust welfare state. Their rule initially promoted continuous growth through moderate taxation and focused on solving practical problems rather than pushing ideological agendas. By 1970, Sweden thus briefly became the third wealthiest nation on earth.
However, a turning point came around 1970 when the party shifted sharply to the left. Taxes rose, the healthcare system was socialized, and experimental policies like “wage-earner funds”—intended to transfer company ownership to workers partially—were introduced. As a result, the private sector began to flounder, and Sweden’s GDP per capita began to slip towards today’s 13th place globally.
This decline has been difficult to accept for a country whose self-image is bound up with the idea of national superiority. Yet, instead of rethinking their system, Swedish politicians across the spectrum clung to the welfare model with religious fervor. Case in point: The Sweden Democrats today echo the ideals of early 20th-century Social Democratic leaders like Per Albin Hansson, “the father of the Swedish welfare state,” more than present-day populists akin to Donald Trump.
Hence, Sweden’s current crisis is not just economic but existential. A nation once seeing itself as a model for the world struggles to reconcile its historical myths with reality.
To overcome this identity crisis, Sweden will be forced to do more than implement tighter immigration laws, introduce economic reform, and improve policing. It will be forced to go through a national reckoning: Confront past mistakes and discard outdated self-perceptions.
