305operating in competition with private actors on an open telecommunications market. Even though many factors contributed to this result, it is likely that Comvik’s successful nonmarket activity over the course of these three battles contributed to the abolishment of the monopoly.

2.2 Overcoming Vested Interests in Finance:

Optionsmäklarna and the Stockholm Stock Exchange

Financial exchanges provide an example of an industry in which vested interests have blocked progress on a large scale. Despite evidence piling up in favor of fully digitalizing the exchanges, not least from within the brokerage ﬁrms already active on the exchanges in the late 1960s (Wells, 2000), years passed between the emergence of the ﬁrst digital trading system and the full digitalization of the New York Stock Exchange (Gorham & Singh, 2009). Surprisingly, it was in Sweden and the Nordic context that change ﬁrst came to ﬁnancial exchanges and then spread across the world. This was the case in terms of both technological adoptions leading to the removal of the trading ﬂoors, and the emergence of the for-proﬁt organizational form as the primary way of organizing such operations (Cheung et al., 2021). For both the technological and organizational innovations to happen, the regulation that gave the Stockholm Stock Exchange a monopoly needed to be overturned, despite strong interest groups and political forces being in favor of the status quo. A key player in this process was the entrant-born-digital-options-exchange Optionsmäklarna (OM), which began operations in 1985.

306K. A. M. Eriksson and R. Nykvist

Aspect 1, Despite a Regulated Monopoly: The Emergence of an Entrant Options Exchange OM could only be created due to a contingency in the regulatory process leading to the Stock Exchange law of 1980, which regulated the incumbent Stockholm Stock Exchange. As it came to pass, the law not only gave the Stockholm Stock Exchange a monopoly on equity trading, but it also created a list of ﬁnancial instruments that could be traded at the exchange. Stock options were not included on this list, which meant that with help from the head lawyer of the Wallenberg group, OM was able to launch in 1985 (Blomé, 1990).

The entrepreneur responsible for creating OM, Olof Stenhammar, was initially driven by the business opportunity and was certain that an options market was necessary in Sweden. As he continued to work with the idea, however, circumstances forced him and his company into a position in which their business activity was supplemented by a rich array of proactive nonmarket activities (Ernkvist, 2015). Stenhammar had a background as an options trader in the United States and would gather information about how regulation worked at the Chicago Board Options Exchange (CBOE) and then inﬂuence the regulators with this information to gain the ﬁrst option to act. He would also garner support for his venture—both ﬁnancial and political—from one of the main Swedish industrial groups, run by the Wallenberg family. Following these initial activities, OM would be the main agent to inﬂuence the inquiry into the Swedish ﬁnancial markets that subsequently led to the opening of the ﬁnancial exchanges market. Its successful business model and technological solutions played an important role in the passing of this regulation. In terms of the organization of the market, technological change, and the lack of activity from the incumbent Stockholm Stock Exchange were also important factors. Aspect 2, A Lack of Response From the Incumbent Stock Exchange As with the telecommunications industry, the monopolist played an integral role in facilitating the policy changes. This was the case in both technological development and efforts to deregulate the ﬁnancial markets. Testimonies from interviews with members from the board and management highlighted how the organization went through a big change as a new CEO was appointed in 1985. With a background of working with politicians and business leaders alike as the old CEO of SNS, a research-based organization with the goal of facilitating discussion between Swedish industry and politicians, Bengt Rydén moved the exchange away from being old gentlemen’s club to being a more modern organization striving for efﬁciency for its members and with core goal of creating beneﬁt for society. While part of the stock exchange organization was strongly against reforming ﬁnancial exchange regulation and allowing new entrants, Bengt Rydén did not have a clear position on the issue. This was partly due to his background as an economist and view of the ﬁnancial markets as a societal good but also because the Stock Exchange board would not give him the mandate to interfere in the regulatory process. This in turn was because the board was split over whether or not it would act in favor of OM as a separate organization from the Stock Exchange. As this split manifested in an inconclusive inquiry into how the options Public-Steering and Private-Performing Sectors: Success and Failures in the. . .

307market should be organized, the hands of the CEO were tied until the new regulation was put in place. As the new regulation was decided, the former monopoly needed to decide what its role in a free market would be. Following long internal discussions involving the board and management of the stock exchange, the result—as the new regulation came into effect on January 1, 1993—was that the Stockholm Stock Exchange became the ﬁrst for-proﬁt, publicly traded national exchange in the world. The technological developments and market structure of both OM and the Stockholm Stock Exchange became integral to the subsequent emergence of the internationally successful Swedish ﬁntech sector.

2.3 The Case of the Municipal Planning Monopoly

The Swedish Planning and Building Law, with its municipal planning monopoly, is another example of Sweden’s relatively far-reaching—from a Western perspective—politicization, centralization, and monopolization during the welfare capitalism era. We argue that this sector went further than the other centralized sectors in Sweden during this era. There are several reasons for this long-lasting centralization, but the core goes back to the very identity of welfare capitalism in general and the social-democratic movement in particular. Sweden was a very poor and unequal society during the nineteenth century and early twentieth century. Stockholm was known as one of the dirtiest cities in Europe with small, damp, and unhygienic homes for most of its expanding working class and their families. Ten people living in one room was common. Tuberculosis, cholera, and alcoholism spread rapidly in these environments. From the early twentieth century, a gradual shift toward more public involvement in city-building and housing emerged with relatively strong consensus across the political spectrum. In 1907, the ﬁrst municipal city planning monopoly was launched. It was very limited compared to today’s far-reaching authority but with the gradual growth of the Social Democrat party, this planning monopoly expanded to almost every part of building activity and city development.