Simply spoken, the Swedish model was created by one of the most impressing social movement mobilization of the 20th century. but the “model” was a compromise between the mobilization and the old ruling class, implying among other things that the mobilization had to demoblize. Understandably, the ruling class dodn’t bother about any compromise when the demobilization had gone far enough.
Nothing has happened but its compliance with the laws of nature: Pareto principle and normal distribution. You cannot go for too long suppressing those laws. The process is white noise plus a deterministic trend. You can do very little about it. The harder you try to minimize dispersion the worse the consequences down the road. Unfortunately, “this is the best of all possible worlds.” I am convinced the alternatives are even worse.
The graph isn’t telling you much. The gini numbers needs to be compared to some other country’s GINI number to show if the rise in GINI is bad or good. An oppresive system forcing people to spend money that becomes democratic (or becomes less oppressive) could have the same appearance. The 70s in Sweden were quite oppressive and communist friendly. You can’t tell from the graph if Sweden experienced increase in liberty (and therefore bigger differences between wages) or simply more poverty.
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