More power to the people: Electricity adoption, technological change and social conflict

a column by Jakob Molinder, Tobias Karlsson and Kerstin Enflo for VOX: CEPR’s Policy Portal

History has shown that new technology can disrupt societies, and current developments in automation have raised anxious speculation on what might happen if stable middle-class jobs are taken over by machines.

This column analyses the impact of technological change on labour markets and social protests, taking the case of the adoption of electricity in early 20th century Sweden. It finds that electrification did increase the incidence of local strikes, but that disputes were associated with workers demanding higher wages and better working conditions rather than attempting to block innovation.

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Strikes and local politics

a column by Jakob Molinder, Kerstin Enflo and Tobias Karlsson for VoX: CEPR’s Policy Portal

Conflicts in the labour market are detrimental to economic growth and welfare. Sweden was among the countries with the highest incidents of industrial disputes in the 1920s, but experienced declining levels from the 1930s onward. Using Swedish data from 1919 to 1938, this column shows that towns with both powerful unions and strong Social Democratic presence experienced labour market peace. The results point toward the importance of labour market peace for strategic political reasons, rather than to politicians offering tangible concessions via municipal governmental power.

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