Manufacturing a Crisis

This chapter opens the empirical section of the book with the Swedish case. Beginning in the 1930s, policymakers across the world turned to credit rationing, state aid, and planning. This volte-face away from free markets was particularly pronounced in Sweden, which could rely on tight-knit networks to implement and scale new ideas through the politics of persuasion, compensation, and coordination. In many respects, Sweden eclipsed even France, the paradigmatic statist economy, both in its capacity to reform public policy as well as its ability to foster the growth of large, capital-intensive manufacturing enterprises. At the same time, state intervention proved increasingly dysfunctional over time, generating unsustainable trade and fiscal deficits and a deep economic crisis.