The most famous name in economics over the past century, without a doubt, is John Maynard Keynes, the founder of modern macroeconomics and the mind from which Western civilization was built during and after World War 2. However, he was not the only person to come to the conclusion that he did in his time. In the depths of a Swedish university in Stockholm (the Stockholm School of Economics, to be exact), a handful of Scandinavian economists came to a very similar conclusion as Keynes: that supply and demand could be stimulated by public spending, thus lifting the entire economy up at the same time. Here’s some more information about this fascinating school of thought…
Balance of social equality and economic efficiency
While the founders of the Stockholm School of thought came up with their ideas in the 1930’s, most of their ideas actually started to go heavily into effect in Scandinavian countries post-WWII. What was interesting about their heavy approach to macroeconomics was that they desired incredibly strong safety nets for the lower classes of society, in an attempt to create a stronger middle class. Their ideas struck an interesting middle ground in the worldwide ideological conflict between communism and raw capitalism. The end goal of these ideas to somehow create an environment that sported a strong balance of social equality, while also promoting economic growth and efficiency.
Brother philosophy of Keynesianism
As stated above, the ideas that are presented in the Stockholm School of thought are quite similar to those in Keynesianism, although the creators of both theories developed them at the same time, quite independently of each other. However, while Keynes focused more on business cycle economics, where downward movements of GDP could be used to create long-term upward economic trends, the Stockholm School instead focused more on creating general welfare, and attempting to have a stable bottom from which to build from. Although each theory contained pretty much everything from the other, they placed emphasis on different elements.
Established the current Scandinavian model of government
The systems that established most modern Scandinavian countries were developed when the Stockholm School of thought was dominating the public discussion in places like Sweden, Norway, and Denmark. Surprisingly, most of these countries stick with they balance that they found so long ago, which has allowed them all to create countries with strong middle class populations and high incomes, while also being incredibly business friendly and promoting stable growth.