This chapter discusses the rise of the idea of Sweden as a particular model of welfare capitalism in the social sciences from the 1930s onwards. Drawing on a constructivist approach to political economy, it proposes that prevailing analytical concepts of the Swedish model as a politics-against-markets type of intervention into the capitalist economy are today falsified, as both the welfare state and social democracy have been thoroughly caught up in the process of marketization. The defining features of welfare capitalism in its original sense have undergone a transformation. Neoliberalism was introduced in Sweden, the chapter concludes, through the welfare state, functioning as a de facto series of quasi markets.