Here's the Economist's summary of the Swedish economic model:
In recent years defenders of the European social model—capitalism tempered by a generous and interventionist welfare state—have taken to praising Scandinavia to the skies. The Nordic region, to go a bit wider, has the world's highest taxes and most generous welfare benefits. And yet Sweden, Finland and Denmark (Norway's oil sets it apart) have delivered strong growth and low unemployment, and rank among the world's most competitive economies. Nordic companies are strong in technology and research and development. Their health-care and educational systems are much admired. And, unlike other European countries, most Nordic states run healthy budget and current-account surpluses.
Sweden, whose 9m people make it by some way the biggest Nordic country, is a particular favourite. A year ago the Guardian, a British newspaper, said it was the most successful society the world had ever known. As if to bear this out, the Swedish economy grew at a sizzling annual rate of 5.6% in the second quarter of 2006, enough to trigger a spate of interest-rate rises by the central bank. Sweden's big companies, such as Ericsson, SKF, Telia and Volvo, are breaking export records.
Of course, its ideology makes the Economist try very hard indeed to trash this model. However, if you read between the lines (and you don't really have to try that hard!), it's quite clear that the choices facing the Swedish people are between different versions of the Welfare State; the Swedish model is in no danger of being dismantled.