Sweden

Sweden achieved prosperity through a sequence that shouldn't have worked: export iron ore to both sides of two world wars, stay neutral while neighbors were invaded, then use industrial infrastructure that was never bombed to build the world's most comprehensive welfare state.

Geography blessed Sweden with ore but cursed it with cold. The iron deposits at Kiruna and Gällivare in Lapland were among the world's richest, but lay so far north that extraction seemed impractical until railways connected them to ice-free ports. The Iron Ore Line, completed between 1888 and 1903, ran from Luleå on the Baltic to Narvik in Norway on the Atlantic—solving the problem of winter ice blocking Baltic shipping.

The ore that flowed down those rails shaped 20th-century history. During World War I, Sweden maintained neutrality while profiting from rising demand for steel feedstocks from all combatants. The pattern repeated more controversially in World War II. From 1933 to 1943, Sweden supplied an average of 43% of Nazi Germany's iron ore imports—more than Germany's domestic production. Allied planners considered bombing the Kiruna mines; Nazi Germany prepared plans to occupy them. Sweden threaded between the belligerents, providing ore to Germany while allowing Allied intelligence operations on Swedish territory.

This neutrality preserved what war destroyed elsewhere. Swedish factories, ports, and infrastructure emerged from 1945 intact while competitor nations rebuilt from rubble. The immediate postwar period saw Swedish manufacturing—ASEA, Volvo, Electrolux, SKF—dominate markets simply by existing when German and British competitors had been bombed flat.

The Social Democratic Party, ruling almost continuously from 1932 to 1976, built on industrial prosperity to create the "Swedish Model": comprehensive welfare state, high taxes, strong unions, centralized wage bargaining. Public sector spending reached three-fifths of GDP. The iron ore that funded rearmament elsewhere funded healthcare and education in Sweden. By the 1970s, Sweden ranked among the world's wealthiest nations by per-capita income.

The model evolved as the economy transformed. Timber, hydropower, and iron ore—the traditional resource base—gave way to services, telecommunications, and technology. Ericsson, founded in 1876 as a telegraph equipment shop, became a global mobile network leader. Spotify emerged from Stockholm. IKEA reimagined furniture retail worldwide. The export mix shifted from raw materials to sophisticated manufacturing and services, reducing vulnerability to commodity price swings.

Today Sweden combines continued neutrality (though it joined NATO in 2024, ending two centuries of non-alignment) with an economy that exports more intellectual property than iron. Kiruna's mines still operate—LKAB remains Europe's largest iron ore producer—but mining represents a modest GDP share. The welfare state has been partially reformed but remains comprehensive by international standards.

By 2026, Sweden adjusts to new strategic realities. NATO membership changes security calculations that defined Swedish policy since Napoleon. The green transition could revive Kiruna's importance as demand for rare earths and specialty metals grows. Whether the Swedish model can adapt to aging demographics and global competition while maintaining social cohesion is the question the next decade will answer.