By Jonathan Michael Feldman, June 20, 2025
Warfare and Welfare: A Misremembered Convergence
Esbati writes: “the 1950s, 1960s and 1970s are decades of rearmament. But this is also in many places a time for improved real wages and for the simultaneous expansion of social welfare systems.”¹
The timeline is accurate—but misleading. Sweden’s capacity to expand welfare while supporting military industries was a historically specific outcome of its neutrality during World War II. Unlike most of Europe, Sweden’s industrial base remained untouched by bombing. Its factories—discussed by the Allies as potential targets—survived, allowing for rapid postwar growth.³
This period of convergence relied not just on Keynesian demand management, but on a unique geopolitical position. Sweden’s non-alignment enabled it to grow exports, develop high-tech industries, and invest in welfare without direct military confrontation. But this balance was always contingent. It frayed as globalization exposed Swedish manufacturers to new competition, particularly from China. Instead of pivoting to green industries, Swedish industrial policy clung to military and nuclear sectors—locking in high-capital, low-labor industries with limited social or ecological benefit.⁴
Consider Vestas, the Danish wind turbine company, which grew into a global leader while Sweden prioritized defense production through Saab AB. Vestas eventually surpassed Saab in employment and profitability, illustrating how welfare-compatible industrial policies require strategic choices.⁵ Denmark chose energy democracy. Sweden chose jets.
The Wallenberg System: Elite Militarism and Neoliberal Restructuring
Esbati claims that the post–Cold War decline in defense spending coincided with rising neoliberalism and falling public investment, implying that these shifts were aligned across class lines. But this collapses two distinct logics. The Wallenberg family, Sweden’s most powerful capitalist dynasty, oversaw both the expansion of Sweden’s defense industry and the rollback of its social-democratic legacy.⁶
They did so by:
– Supporting privatizations of public services.
– Funding think tanks like SNS to advance market reforms.⁷
– Undermining wage-earner funds, which sought to democratize capital ownership.
– Expanding control over defense and surveillance sectors through Saab AB, Investor AB, and the Wallenberg AI, Autonomous Systems and Software Program (WASP).
In 2024, the Wallenbergs strongly supported Sweden’s NATO membership, describing it as “a new playing field.”⁸ This alignment has come at the cost of Swedish neutrality, democratic accountability, and long-term welfare capacity.
Ukraine, NATO, and the Weaponization of Sympathy
Esbati frames the war in Ukraine as a battle between democracy and fascism, asserting: “A progressive policy for support for Ukraine and Europe’s security cannot get around the need for more resources for military defense.”⁹ This framing adopts a moral vocabulary while abandoning strategic clarity.
Critics like John Mearsheimer have long warned that NATO expansion would provoke Russia, particularly through the inclusion of Ukraine and Georgia.¹⁰ In Harper’s Magazine, Benjamin Schwarz and Christopher Layne emphasize that the war cannot be understood without recognizing the history of Western provocation and U.S. strategic ambition.¹¹ This does not excuse Russia’s invasion. But understanding causality is not the same as justifying aggression.
Sweden’s current military buildup ignores this complexity. Worse, it participated in the very dynamics that empowered Russia militarily—namely, by importing Russian fossil fuels while underinvesting in renewable alternatives. These energy dependencies were the direct result of delayed climate transitions and an industrial focus on military and nuclear technology.
Unlike in the Cold War era—when Sweden combined military capacity with active neutrality—today’s policies commit Sweden to a global military bloc. That shift reduces the strategic value of defense spending while increasing geopolitical exposure.
Are There No Tradeoffs? Budget Realities vs Political Rhetoric
Esbati writes: “Not a single krona that the state pays for the purchase of defense equipment has become available because that krona has not been paid out to welfare services.”¹² In other words, he argues that the state is not fiscally constrained in the way households are. Technically, this is correct. But politically and materially, it is evasive.
Military R&D consumes skilled labor, raw materials, and capital goods that are not easily substitutable. Esbati admits this indirectly: “physical resources and labor are tied up in the production of things we’d rather not use.”¹³ Yet he downplays how sectoral lock-in distorts industrial priorities for decades.
We are already witnessing tradeoffs. In 2024 and 2025, Sweden’s government cut funding for:
– Public libraries and adult education
– Development aid
– Climate initiatives
– Cultural institutions
…while increasing defense spending by over 30%.¹⁴ These are not abstract reallocations. They reflect a material and ideological turn toward militarism.
Macro Correlation Is Not Structural Compatibility
Some macroeconomic studies, including Yu Wang’s “Revisiting the guns-butter tradeoff”, argue that military and welfare spending often move in tandem in Sweden.¹⁵ But such analyses often miss the strategic and structural preconditions for this pattern.
Sweden’s Cold War success in combining “guns and butter” depended on:
1. Free-riding on U.S. deterrence without being in NATO.
2. Postwar industrial advantage (factories left intact after WWII).
3. Peace dividend from neutrality and moral diplomacy.
4. Elite discipline, which constrained arms exports and ensured redistributive investment.
None of these conditions apply today. Sweden is now militarily aligned, industrially eroded, diplomatically marginalized, and increasingly post-democratic.
Conclusion: Strategic Clarity or Moral Drift?
Ali Esbati’s article reflects a vision of “left realism”: support Ukraine, expand defense, preserve welfare. But this vision obscures how militarism redirects investment, empowers authoritarian politics, and undermines the ecological and democratic foundation of welfare itself.
The so-called golden age of military-welfare convergence was an historical anomaly. Its success relied on non-alignment, industrial autonomy, and elite restraint. These foundations are gone.
To defend the welfare state, we must confront militarism—not partner with it.
References
1. Esbati, Ali. “Weapons or Welfare.” Dagens Arena, 26 March 2025.
2. Ibid.
3. Åmark, Klas. Hundra år av välfärdspolitik. Stockholm: SNS Förlag, 2005.
4. Marklund, Carl. “The Politics of Neutrality and the Path to Welfare.” Scandinavian Journal of History, 43(2), 135–156.
5. Vestas and Saab AB annual reports (2010–2020).
6. Glaser, John. Fuel to the Fire. Cato Institute, 2019.
7. Blyth, Mark. Great Transformations. Cambridge University Press, 2002.
8. Marcus Wallenberg, interview with Dagens Industri, May 2024.
9. Esbati, op. cit.
10. Mearsheimer, John J. “Why the Ukraine Crisis Is the West’s Fault.” Foreign Affairs, Sept/Oct 2014.
11. Schwarz, Benjamin and Layne, Christopher. “Why Are We in Ukraine?” Harper’s Magazine, December 2023.
12. Esbati, op. cit.
13. Ibid.
14. Regeringskansliet, Budgetpropositionen för 2024 och 2025.
15. Wang, Yu. “Revisiting the guns-butter tradeoff.” Defence and Peace Economics, 34(2), 170–189.
