Palme SAP second term — third way, wage-earner funds, devaluation

Doctrine — stated goals and content

Palme's second SAP government, returning after six years of borgerlig rule, pursued a distinctive Swedish "third way" (den tredje vägen) between Anglo-Saxon Thatcher-Reagan austerity and classical Keynesian demand expansion. School: Rehn-Meidner social democracy combined with supply-side competitiveness via large step devaluation — Feldt's Finance Ministry doctrine. Left-right axis: centre-left within Swedish spectrum, to the left of the Fälldin years on distribution (wage-earner funds) but to the right on fiscal discipline (restraining deficit). Core policy content: (i) 16% krona devaluation 8 October 1982 — the single largest in Swedish post-war history, restoring profitability to export sector; (ii) 1983 Löntagarfonder (wage-earner funds) act, a heavily diluted version of the 1975 Meidner plan, channelling excess profits into five regional union-influenced investment funds, met by the October 1983 "4 October" demonstration (~100,000 marchers in Stockholm) — the largest business-organised protest in Swedish history; (iii) credit-market deregulation 1983-1985 (the "November revolution" 1985 removing lending ceilings on banks) that later seeded the late-1980s financial boom; (iv) wage freeze and incomes policy negotiation with LO-SAF. Popularity signals: 1982 election SAP 45.6% (a gain of 2.9pp from 1979); 1985 election 44.7% — narrowly held government with Communist external support. Palme's assassination 28 February 1986 on Sveavägen closed the era; Ingvar Carlsson succeeded. Coherence: high coherence — deliberate devaluation-plus- incomes-policy package sustained growth 1983-1985, but financial deregulation was the under-recognised seed of the 1990s crisis.