Ståhl argued that a welfare state needed an efficient system for calculating the value of an individual over the life cycle, because without this indicative value, all forms of social planning would be suboptimal. Such a system appeared grotesque in its extreme rationality, but in Ståhl’s argument figured both a social-capital argument in the Chicago school sense, and an idea that the welfare state replaced possible market solutions to the same problem of human value.

Because the complexity in the calculative process of planning was infinite, Ståhl came to the conclusion that any rational planner must come to see a pure market model as the only acceptable system. His conclusion here is noteworthy: the social democrat that Ståhl still was saw the planning problem as the logical demonstration of the fact that social democrats must embrace the market system, because social democracy was a rationalist movement that had promised to optimize human welfare. .. Instead, they could be offered a government-subventioned loan. Again, Ståhl used a human-capital argument by which the state could legitimately invest in people, so long as, realistically, they provided economic returns over their life cycle. A voucher or a loan was a forward-looking economic investment, in lieu of a costly social policy.

...

To Lindbeck, the wage-earner funds issue confirmed his idea that social democracy was a kind of political market, and that trade unions would always overreach for power unless stopped by some institutional mechanism... Wage-earner funds would build up a dangerous concentration of capital in the hands of trade unions, and the creative role of capital would be destroyed.

Ståhl, in contrast, became convinced of the ideological necessity to defend the market economy, joined the neoconservative think tank Timbro after 1978, and engaged actively not only with Gordon Tullock but also with libertarian Leonard Liggio. In 1985, Ståhl was the central force behind the 1985 Marknadsekonomiskt alternativ för Sverige report, which laid out the blueprint for privatization in housing, schools, daycare systems, hospital care, and credit

This article has suggested that thinking about the mixed economy was a central site for the development of neoliberal ideas, and that, over time, arguments that began within the social-democrat framework developed into arguments that could no longer remain social-democrat. The comparison between three Swedish economists—Assar Lindbeck, Ingemar Ståhl, and Gösta Rehn—shows that this was for all three a process in which theoretical economic problems mixed with personal experience and ideological conviction. Ideas that may well be viewed as neoliberal already figured as part of their universe in the 1950s and 1960s—within a social-democrat frame. In their stories, social democracy and neoliberalism meet, not as separate thought systems, but as essentially hybrid ideologies, knowledge traditions, and alternative forms of social rationality. Ultimately, I have suggested that the reason why social democrats turned neoliberal was not, or at least not simply, because of ideas coming in from the outside, but because of a long historical process of thinking about the limits of the social-democrat project. There were both knowledge-based and ideological arguments in this process.

how being completely incoherent about workers and magic of capital can doom socdem economists. (not that central planners did better at the time, but lmao at being mad about unions owning means of production)