The contested relationship between democracy and the economy turned into emphasising private ownership

Throughout most of the 20th century, ‘economic democracy’ was one of the key political concepts in Finland and Sweden. Most political factions shared the goal of distributing economic power among citizens in an increasingly equal manner, but there was heated debate over the practical meaning of economic democracy.

For the left, the concept denoted societal planning and steering of the economy, as well as the power of employees in the workplace. In the vocabulary of the right, economic democracy referred to the dispersion of private ownership to wider ranks of people and consultative cooperation between employees and employers at workplaces.

In the 1990s, economic democracy practically vanished from political language. A doctoral dissertation completed at the University of Helsinki in the discipline of political history examines the political and ideological changes underlying this development. Often, political operators interpreted changes to circumstances, which challenged prevailing beliefs and concepts.

“New ways of thinking emphasised private ownership and a free market economy – often at the expense of democracy. In Finland and Sweden, new practices and beliefs were particularly promoted by organisations associated with the business sector and non-socialist parties ever since the economic crisis of the 1970s,” says doctoral candidate Ilkka Kärrylä.

Economic globalisation and notions of related limitations on economic policy, such as the threat of capital flight and a growing public debt, also constituted a problem for leftist parties.

“Controlling the economy politically or increasing the power of employees no longer appeared feasible. Instead, national economies had to be liberalised and made market-based to survive in global competition,” Kärrylä states.

In the new world order of free movement of capital, old ideas about economic democracy became gradually marginalised from mainstream political rhetoric.

The right's conflicting attitudes toward democracy

According to the dissertation, the right has always had conflicting attitudes toward the historical meanings of democracy. In capitalist modes of thinking and action, primacy is preferably given to economic expertise, used to establish and maintain free markets. Applied to the economy, the principle of democracy makes it possible to set demands on the powers that control the economy.

“Proponents of capitalism and the free market economy have preferred to highlight the economic role of people as free consumers, separating it from the role of democratic citizenship,” says Kärrylä.

Debate more ideological in Sweden than in Finland

Debate and conceptual transfer took place largely along the same lines in Finland and Sweden, but, as indicated by the doctoral dissertation, in Sweden the discourse was clearly more ideological. Economic ‘necessities’ limited politics and democracy in both countries, but in Sweden they were more strongly challenged, especially in the 1960s and 1970s, by invoking the intrinsic value of equality and democracy. In Sweden, the ideological nature of the discourse was brought about by a proposal to distribute company ownership to what were known as wage-earner funds, which the right and business life saw as socialisation.

“In this case, they appealed to freedom as a value in and of itself, whereas in Finland the same factions justified their goals mainly with ‘national interest’, something that was presented to be above political disputes,” Kärrylä notes.


Ilkka Kärrylä, MSocSc, will defend his doctoral dissertation entitled ‘The Contested Relationship of Democracy and the Economy - Debates on Economic and Industrial Democracy in Finland and Sweden, 1960s–1990s’ on 30 November 2019 at 10.00 at the Faculty of Social Sciences, University of Helsinki. The public defence will take place at Porthania, lecture hall PIII, Yliopistonkatu 3.

Associate Professor Hagen Schulz-Forberg from Aarhus University will serve as the opponent and Professor Pauli Kettunen as the custos.

The dissertation will be published in the Publications of the Faculty of Social Sciences series.

The dissertation abstract can be accessed through the E-thesis service.

Contact details of the doctoral candidate:
Ilkka Kärrylä
Phone: +358 50 523 7267