Schumpeter and Samuelson Revisited: Sweden’s Capitalist Reversal and the Post-2008 Mixed Economy

Magnus Henrekson () and Ulf Jakobsson ()
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Magnus Henrekson: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden, https://www.ifn.se/en/researchers/ifn-researcher/magnus-henrekson/
Ulf Jakobsson: Research Institute of Industrial Economics (IFN)

No 1572, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper revisits Schumpeter’s prediction that capitalism’s success would ultimately undermine its social and political foundations. We first reassess Sweden, where postwar policies favored large corporations, concentrated ownership, weakened entrepreneurship, and culminated in the radical wage-earner fund proposal. Sweden then reversed course: deregulation, tax reform, financial liberalization, and stronger private ownership helped generate a dense entrepreneurial ecosystem and Europe’s most vibrant listed-company sector. The Swedish case therefore refutes deterministic accounts of capitalism’s decline while showing how institutions can accelerate or reverse the tendencies Schumpeter identified.

We then examine Paul Samuelson’s reformulation, which emphasized the political consequences of economic stagnation, inequality, and perceived unfairness in mixed economies. His forecast fitted the 1980s and 1990s poorly but has become more relevant since the 2008 financial crisis, the COVID-19 pandemic, heightened geopolitical conflict, and the intensified rivalry with China. The emerging outcome is still not socialism, but a more politicized mixed economy in which private enterprise remains economically essential yet politically contested.

Keywords: Schumpeter; Samuelson; Sweden; institutional change; Entrepreneurship; Political economy (search for similar items in EconPapers)
JEL-codes: B31 G28 L26 O43 P16 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2026-11-02
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