I posted this morning that Sweden is now engaged in serious reflection about the failure of school choice. Its ranking on international tests has declined significantly, while segregation of every sort has increased.

A reader asked why Sweden chose to adopt school choice, given the strength of unions in that country.

I asked Samuel Abrams, who wrote about Sweden in his excellent book “Education and the Commercial Mindset.”

He replied:

It’s an excellent question. And I addressed it in detail in my book. Below is the text (coming from pp. 267-269). In sum, Sweden, like other Nordic countries, benefits from a great deal of trust in government and corporate officials. Union leaders in Sweden went along with the privatization initiative in the early 1990s because they trusted independent school leaders to treat and pay teachers fairly. In fact, union leaders concluded that competition from these independent schools would drive up salaries for teachers. The union leaders were wrong, however, as independent schools didn’t have to hire certified teachers. So, the opposite occurred: competition drove down salaries. In 2006, the Swedish government said enough: independent schools could hire only certified teachers. But there was a grandfather clause: those already teaching without certification didn’t have to get certified.

– Sam

Beyond funding parity with municipal schools for independent school operators, administrative sovereignty for their leaders, and desire among many Swedes for school choice after decades of limited options, an interconnected, vigorous Nordic investment community played a substantial role in boosting educational privatization. The coordination of Swedish banks and businesses, in particular, has a long history. Called the “Wallenberg system” by Francis Sejersted, ownership groups with controlling interests in Swedish companies also hold major stakes in banks, which they, in turn, use to facilitate loans. Among the so-called “fifteen families” operating in this manner, the Wallenbergs have stood out, holding, for example, controlling interests through EQT and Investor in such companies as Alfa Laval, Atlas Copco, Electrolux, Scania-Vabis, and SKF as well as AcadeMedia while also maintaining a major stake in Skandinaviska Enskilda Banken (better known as SEB). In conformity with the concept of Jantelagen, in fact, the Wallenberg motto, chiseled into a black granite wall at SEB headquarters, captures this quiet ubiquity: Esse non videri [To be yet not seen].

But for EQT and Investor of the Wallenbergs, along with Bure Equity and Magnora, Kunskapsskolan and several of its competitors would never have evolved into sprawling enterprises. These school companies benefited, as well, from two additional advantages denied Edison and many other EMOs: first, much lower perceptions of corruption, or, as Transparency International puts it, “abuse of entrusted power for private gain”; and second, far less childhood poverty, meaning children come to school better prepared to learn as well as much less likely to cause trouble for classmates (or, in technical terms, generate negative peer group effects).

According to Transparency International, a think tank based in Berlin dedicated to measuring trust in government and corporate officials in countries around the world, Sweden, like its Nordic neighbors, has year after year been a model nation. Over the course of two decades of annual surveys, from 1995 to 2014, Sweden averaged a ranking of fourth most transparent (or least corrupt) country, ranging from most transparent to sixth most. By contrast, the United States has averaged a ranking of eighteenth, ranging from fifteenth to twenty-fourth.

In everyday circumstances, such trust can be seen in parents leaving infants in carriages outside cafés while meeting friends inside for coffee or in café proprietors leaving woolen blankets on outdoor chairs to keep customers warm. By extension, parents, union leaders, and journalists in the 1990s and early aughts accorded for-profit school operators ample trust that student interests would be paramount.

In fact, both teachers unions-Lärarförbundet (representing preschool and elementary teachers) and Lärarnas Riksförbund (representing secondary teachers)-welcomed the free school movement and continued to support it. According to Anna Jändel-Holst, a senior policy advisor at Lärarnas Riksförbund, teachers welcomed the opportunity to work at different schools and expected additional competition between schools to drive up salaries. Speaking in 2009 at her office in central Stockholm, Jändel-Holst, who was previously a lower-secondary social studies teacher for seven years, explained that many members of her union taught in commercially operated schools and that she had no objection herself to the concept. Her son, after all, was a ninth-grader at a Kunskapsskolan, she said, and was challenged and happy.

Jändel-Holst said the only problem with the voucher legislation was that it did not stipulate that teachers in friskolor had to be certified. Some schools consequently hired unqualified teachers, she said, and this exemption moreover put downward pressure on teacher salaries. Salaries for Swedish teachers did, in fact, sink from 2000 to 2009. In 2000, teacher pay equaled per capita GDP for primary and lower-secondary teachers and amounted to 1.07 as much for upper-secondary teachers. By 2009, primary teachers earned 0.93 as much as per capita GDP; lower-secondary teachers, 0.96; and upper-secondary teachers, 1.01. The trend in Norway was the same whereas the opposite was true in Denmark and Finland.

Along with her colleague Olof Lundberg, another senior policy advisor, Jändel-Holst agreed that both unions had erred in failing to anticipate the consequences of this exemption for friskolor. But both were quick to point out that legislation was passed in 2006 to mandate that teachers in all schools be certified, though uncertified teachers already unemployed at friskolor were grandfathered in.