The harsh winter of 2011 may have cooled down man and beast, but it also brought with it a bit unexpected renaissance for the long since frozen Swedish model. It was said and written about the Nordic tiger economies that they were as strong as Pippi Longstocking, and ”The Nordic Way” was the subject of special seminars at the World Economic Forum in Davos. For those of us who grew up surrounded by talk of the Swedish model as a national brand closely associated with the social democratic welfare state – not to mention lax socialism, suicide, sex, drinking and sin in general – version 2.0 of the Swedish model certainly requires some analysis.

Is Sweden changing fundamentally? Or is it just Sweden’s image that is about to be updated?

On a superficial level at least, the current emphasis on ‘Nordic capitalism’ suggests that something fundamental has happened. When Sweden and other Nordic countries are praised by the Financial Times and The Economist, we know that we have moved some way from the days when Olof Palme’s colleagues in the Socialist International paid tribute to Sweden as a pioneering country over others. And the emergence of Sweden’s new image also coincides with what looks like the Social Democrats’ collapse, and Moderates’ takeover of the title as the state-bearing party.

But at the same time, a more profound analysis comes to light, of what I call ‘the Swedish social contract’ – that basic continuity is at least as prominent as radical change. What is perhaps more peculiar is that Sweden differs from the norm with respect to two key variables that are usually measured in various international surveys. My thesis is that the conditions for the specific nature of Swedish capitalism can be traced precisely to the fact that Sweden appears to be a ‘different country’ in terms of trust and individuality.

Traditionally, one primarily associates Sweden with solidarity and a system of social protection, which usually is described as a willingness and ability to subordinate self-interest to a collectivist rationality. Often this emphasis on solidarity is perceived as being in conflict with the market’s fundamental principles. We have talked about the characteristics of the Swedish model, which is that certain essential goods – health care, schools, and social services – have been removed from the market and its cold logic. This was a perspective that the father of Sweden’s image, Marquis Childs, had already made famous in the 1930s, when he wrote about Sweden as a “middle way” between altruistic socialism and selfish capitalism, to use the current primitive opposites.

But this has always been, at best, a half-truth. Behind the myth of Sweden as comfortable, nice, and a bit boring, one can maybe catch a glimpse of a less flattering image of a Sweden inhabited by free and strong individuals. And the rhetoric of solidarity and collectivism has, I think, also concealed a strong, if not extreme individualism that pervades both social relations and political institutions in Sweden. Rooted in values that connect the Law of Jante and the Viking spirit, the love of freedom and passion for equality have a distinct moral principle attached that has come to influence the formation of the modern welfare state, including social and family policy. Although the line was not always straightforward, one can discern a general ambition to liberate the individual from all forms of domination and dependence.

In practice, this moral and political principle has been realised through a series of specific laws. The interpersonal dependency has been minimised by the introduction of, amongst other things, individual taxation, and reform of family law that moved the responsibility for the elderly from the family to the state, universal access to preschools (which made it possible for women to work), as well as student loans that were not means-tested on parental or wife’s/husband’s income and wealth.

All this legislation has made Sweden and other Nordic countries the least family-dependent and most individualised in the world. This does not mean that the family should disappear. The point is rather that the Nordic family today is characterised by the same values as the rest of society, with an emphasis on independence and equality. The ideal family is composed of adults who all work and are not financially dependent on each other, and children who are encouraged to be independent as early as possible.

There are probably some who deplore such democracy in the family, but it is difficult to argue that the Swedish family is decaying. It is true that lifelong marriage is no longer an obvious norm, but the new Nordic family takes parenting seriously, both in purely demographic terms (we have in Sweden higher fertility rates than in the stereotypical traditional family of Southern Europe) and in terms of how much time parents, married or not, spend with their children.

Data from the World Values Survey confirm this picture and show that Nordic countries, and especially Sweden, occupy a special position from a global perspective. Scandinavians are characterised as emphasising the importance of self-realisation, individualism, and personal autonomy, this with respect to the degree of identification with the ”emancipatory values of freedom” and ”secular-rational values.” By contrast, the ‘traditional values’ that emphasise God (religion), nation/patriotism and family values are less prominent.

The welfare state has therefore not come into conflict with the market economy. Rather it is the harmony between the Swedish social contract’s individualistic spirit and individual-based market logic that is the distinguishing feature. Swedish capitalism’s vitality and strength are intimately linked to Swedish society’s emphasis on the individual – not family, clan, ethnic group or religious community – and that the purpose of Swedish politics has long been to maximise individual independence and social mobility.

The result has been that Swedes in general can, with great enthusiasm, participate in market society, both as consumers and producers. There is less dependence on family and individual companies as guarantors of security – but still they are protected from extreme risks because of the public insurance system – individuals can afford to be mobile and flexible in the labour market, and at the same time they have developed far-reaching demands for products and services that previously were satisfied within the family.

The image of a very individualised market society inhabited by solitary consumers may seem petty and sad – a theme that has a long history among social commentators. The early key figures of social science such as Marx, Durkheim, Simmel, Weber and Tönnies, believed that modern humans were characterised by an unhealthy individualism that distanced them from the security of community ties and the trusting relationships that characterised traditional societies.

With the city’s freedom, and the anonymity of mass society, followed alienation (Marx) and anomie (Durkheim), a movement from Gemeinschaft to Gesellschaft (Tönnies), a life surrounded by an ”iron cage” (Weber). On one side, the modern, bureaucratic state weakened more organic social community ties, and on the other hand, it promoted the consumption and the market society a superficial narcissism and materialistic selfishness.

This civilisation-critical approach has been a constant recurring theme for both politicians and social scientists. To force an idea seems, to modernity’s own history, to coincide with parallel and constantly repeated anxieties about its inherent dynamics, and with inexorable necessity undermines the very bonds of trust needed to hold society together. In the fifties, David Riesman made an impact with the book The Lonely Crowd, in which he analysed the contemporary American’s loneliness in mass society.

A few decades later, Christopher Lasch wrote about the ”narcissistic individualism” that undermined local communities and led to the family’s decay. In our own time, this classic rhetoric of impending social collapse has found expression in some new forms of language, but remains the same in its substance and gloomy conclusion. Some have pointed out the various dangers that lurk in today’s ”risk society”. Others have described an increased threat to the ”life world” and raised the alarm about the declining ”social capital”. Common is the concern that people’s trust in institutions is steadily and constantly breaking down.

But beyond the traditional dystopian discourse of modernity’s downsides, we have in the past decade have seen new and comprehensive empirical data to measure and compare social trust in almost all countries of the world. Certainly, these data can be criticised as problematic in a number of respects, but it is nonetheless clear that this empirical work – the theoretical research on the relationship between trust, individualism, and modernity – is faced with a series of new – and significant – challenges.

First, social trust varies dramatically from country to country. Even if we only look to the relatively wealthy and modern Western world, it is obvious that modernity itself cannot explain the large differences in the trust that exists between Sweden and other modern countries like France and the United States.

Moreover, this variation is structured in an interesting way. It turns out that only a few countries in the world claim that a majority of people have faith in others. Among these we find Sweden and the Nordic countries. What is interesting about the high level of trust in these countries is that it creates even more problems for the classical theories that associate modernity with the dissolution of social ties and a decrease in social trust. For if there is one epithet associated with Sweden, it is, as we have seen, precisely modernity and individualism.

Sweden’s radical difference from a comparative perspective, combined with the fact that Sweden, together with the other Nordic countries, represents a special group with common features suggests that an analysis of the conditions for trust in Sweden in particular is of interest. Could it be that a specific Nordic variant of modernisation, where the individual’s liberation from the traditional and close community ties of family, clan, community and nation, plays a crucial role in the development of a cooler but more widespread social trust?

Trust seems to also have deep roots in Sweden. Already in the 19th century there was talk of ”the dumb Swede” during immigration to America. The term refers not only to the fact that Swedes were often terse and spoke poor English, but also to the supposed gullibility that marked out the Swede. In comparison with many other nationalities, Swedes were known for being honest to the point of naivety. Someone who willingly stood in line, followed the rules, laws and regulations, and relied on the good morals and goodwill of his fellows.

According to the hard-boiled logic of game theory, those who more resolutely follow what short-term self-interest dictates are smarter, go ahead in the queue and look at others with the same distrust that they themselves deserve. Although the result in the long run it is disastrous on the aggregate level, but for the individual, it is a way to reduce the immediate risk of becoming the one ending the game holding Black Peter. The stupid Swedes, however, were inclined to take a sort of leap of faith into the uncertain. Such gambling emphasised their expectation that other people were honest and that the common institutions were not corrupt, so their tendency was to belief rather than disbelief. The result has been a society where law-abiding and confidence have been internalised as social norms, and where the need for police interventions and control is less.

Viewed from an economic perspective this is extremely important. In economic language, you would say that trust reduces transaction costs. Distrust and suspicion will cost, however, on many levels: socially, politically and economically. Both corruption and control are associated with major losses of time and money. In addition, it infects social relations and undermines policy, as well as the legitimacy of public institutions and confidence in companies.

What is striking about Nordic countries is that the widespread social trust also goes hand-in-hand with a relatively high level of trust for private companies and public institutions. The rule of law also has a long history in Sweden. Not for nothing has the motto ”country must with law be built” long been at the heart of Swedish self-understanding. Everyone, including the king, stood under the law and, even before Sweden became a unitary state, the population obeyed its provincial laws. Tinget (the District Court) was the place where the law was both created and enforced – and even today the word survives in the Nordic languages in the importance of both the court (as in tingsratt) likewise the legislative assembly (as inlansting).

From a trust perspective, social relations in Sweden are often formal and relatively ”cool”. The community is broad rather than narrow, in contrast to cultures where trust relationships are ”hot” in the more narrow confines of family and clan. Historically, the movement from a society based on blood ties and honour towards a society based on legal regulation was crucial. The figure of thought is powerful and was made popular by Geijer: the free Swedish peasant went to the court, where he both founded the law as a citizen and was forced to obey the law as a legal entity. The law, which was written in the Uppland Act of 1296, was founded as ”all the people are the leadership, both rich and poor.”

In this way, the law and the state were not primarily seen as a despotic supremacy but as an instrument of popular will, and this explains the legitimacy of state and law in the Swedish political culture. And this is critical for Swedish individualism’s modern institutionalisation, which is built on a positive view of the state and its role in the liberation of the individual from traditional community forms.

At the same time it must be emphasised that these dynamics are not specifically Swedish or Scandinavian. The Swedish social order can be viewed as a local but especially refined solution to a universal dilemma: that man is simultaneously obsessed with the desire for individual sovereignty and the need to be part of a community. The modern Swedish welfare state’s strength has been the ability to offer citizens the maximum freedom without it being necessary to compromise the fundamental moral order in society.

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This social contract is based on an alliance between state and individual – the Swedish state’s individualism. Social equality and personal autonomy are fundamental values in this alliance where the state’s role is to ensure that these can be realised and maintained. In this social order one can, as we discussed above, sense a movement from alms and charity, to rights, where the goal has been to free the poor from dependence on charity, to emancipate women from the patriarchal family, to protect the old from thoughts of suicide for fear of being a burden, that give workers power in their dealings with employers, to write children’s rights and ban corporal punishment.

In this respect, Sweden – and to some extent the other Nordic countries – is separated not only from the traditional family, clan and tribal-based societies, but also from other modern welfare states and market societies. Although the classical liberal idea of the individual’s civil rights is a common concept in the Western world, there are wide disparities in the perception of what is sometimes called ‘social citizenship’.

In Anglo-Saxon countries, as in continental and southern European countries, there dominates the view that the family and religious communities, businesses, charities, private insurance companies and other actors in civil society should take a lead responsibility for child and elderly care, schooling and education, medical care and assistance to the unemployed and socially disadvantaged groups.

In the U.S., this has to do with the negative view of government, which is always perceived as a threat to individual freedom, family values and civil society’s independence. In Europe, there is not the same coherent anti-statism, but the family’s importance and role of civil society is fundamental, not least through the context of the doctrine of subsidiarity, the lynchpin of Catholic social doctrine. These dynamics can be described as a ‘love triangle’, with the state, family and individual in the lead roles. In Sweden state individualism reigns; in Germany the state and family are united; in the U.S. the trump cards are individual rights and family values.

If we move from the institutional to the existential perspective we can understand the difference in terms of different ways of looking at love and friendship. In Sweden dominates what I have called a ”Swedish theory of love”, which postulates that authentic human relations must always be built on the solid foundation of independence. Only if you are not in debt or in a dependent relationship, can you know for sure that the relationship is voluntary and true. This is where Pippi Longstocking becomes relevant as a symbol of the Swedish tiger economy: on the basis of a bulky bag of gold (the welfare state?), she can come out into the world, free and independent, despite a dead mother and an absent father.

The Swedish social contract’s modernity has had great benefits. Paradoxically, the state’s individualistic project was, until not long ago, under the leadership of a quasi-socialist party, and it brought Sweden into an ever more perfect harmony with market liberalism’s fundamental principles. Today, the leadership has been taken over by parties that formally are more sceptical about the role of the state, but who have shown great sensitivity in terms of the welfare state’s discrete charm – and popularity among voters.

But perhaps it is nevertheless true that the individual’s position is about to be further strengthened. Possibly it is time to dust off Per Albin but this time to replace ”the people’s home” – with its emphasis on collectivism and perhaps even ethnic homogeneity – with his second, somewhat forgotten concept, namely “the citizens’ home”. To the extent that the latter term more clearly emphasises the individual over the people it opens an even deeper debate on state individualism’s other front – the weakness of individual rights in the Swedish social structure. Beyond freedom of choice reforms and pre-paid services, looms the idea of more robust powers for individuals.

A legacy of the welfare state’s ideology was the fact that in the zeal to achieve equality through the introduction of social rights, controlled by experts and politicians in the government, the legal rights that we see as obvious in our dealings with companies in the private sector were sacrificed. The powerlessness that the Power Inquiry reported in the late 1980s lives on. With a greater emphasis in Sweden’s new national image on individual freedom and power, this might be changed.