When the Market Destroys a Community

In 1985, when I was four months old, my family moved from Kiruna to Luleå, a city in northern Sweden. My father had found a job with the Swedish State Railways, and we were given a firsthand rental contract for a four-room apartment in Hertsön, one of the city’s largest housing estates. Hertsön had been built as part of Sweden’s massive public housing program of the 1960s and ’70s. But there was another reason for its construction. It was meant to house workers for a vast new industrial project: Steelworks 80 (Stålverk 80).

Steelworks 80 was conceived in the early 1970s by Sweden’s Social Democratic government as an expansion of the country’s steel industry. It was supposed to transform the economy of northern Sweden, create thousands of jobs, and reverse decades of depopulation. Instead, in 1976, the project was abandoned in the middle of one of the deepest crises in the global steel industry of the twentieth century.

My family, therefore, moved into a neighborhood built for a future that had already disappeared. My father once described our situation with a phrase that has stayed with me: we live in the aftermath of what never happened. That sentence captures something about capitalism that goes beyond the history of one Swedish city.

A Future Built on Growth

The hopes attached to Steelworks 80 were enormous. Northern Sweden had long suffered from unemployment and depopulation. During the 1960s, almost thirty thousand people had left the municipality for other parts of Sweden. The region had been transformed by earlier waves of industrialization. Mining, railways, and energy production had made northern Sweden crucial to the country’s economic development while also creating an economy heavily dependent on exports. Its prosperity therefore remained vulnerable to economic fluctuations elsewhere.

Steelworks 80 was presented as a way out. The plan was to move from exporting iron ore to producing steel on an enormous scale. The proposed complex would have been comparable to the world’s largest steel plants. It was expected to create around 2,300 direct jobs and roughly as many indirect ones.

For the Social Democrats, the project represented more than industrial investment. It embodied a particular postwar political idea: that the state could intervene in the economy, direct investment, create employment, and use industrial development to produce social progress. For the state-owned steel company, the project offered an escape from decades of poor returns, unsuccessful investments, and growing criticism of working conditions. Different interests could therefore find something to believe in. Politicians saw jobs and regional development. Company managers saw expansion and survival. Workers saw the possibility of a future. And the city was transformed accordingly.

Hertsön was built with thousands of apartments. Other housing projects followed. Older buildings in central Luleå were demolished to make room for larger developments, shopping centers, and a hotel designed for the business travelers expected to arrive once the new industrial complex was operating. The entire urban landscape began to anticipate a future that depended on one enormous investment. For a region accustomed to losing people, the transformation was dramatic. Journalist Lennart Håkansson, who followed the project, described the situation in a phrase that captured the reversal: “Not a single apartment was empty.” People had arrived from other parts of Sweden and from abroad to work on the project. The city was full of activity. For a moment, the future seemed certain. Then the future disappeared.

When the Market Decides

The first problem was that the global steel market did not behave as the planners had expected. Steelworks 80 assumed a continuously expanding demand. It also assumed that the new plant would be able to compete successfully with steel producers worldwide. But in 1973, the global economy entered a profound crisis. The downturn spread to industries including shipbuilding and steel. Steel production continued to increase while demand fell.

There was steel. There simply was not enough demand for it. The plans for Steelworks 80 were gradually reduced. First, the project was cut in half. Then it was reduced to a quarter of its original scale. Finally, it was abandoned.

Some people had warned that this might happen. Critics questioned whether the enormous quantities of steel could actually be sold on the world market. Researchers commissioned by the Swedish Employers’ Federation challenged the economic assumptions behind the investment. Their criticism was dismissed by the head of the steel company as theoretical desk work that failed to understand the realities of the industry. But those realities were precisely what the project could not control. The steel industry was not governed by what Luleå needed. It was governed by a global market. This is what makes Steelworks 80 more than a story about a misguided industrial policy. It is a story about the constraints that global capitalism places on national economic planning.

The postwar decades had created a powerful illusion of stability. In Sweden, as elsewhere in Western Europe, the thirty years after World War II brought rapid economic growth, rising living standards, expanding welfare states, and relatively stable employment. In Sweden, this period produced a particularly strong political compromise between capital, labor, and the state.

Capitalism seemed capable of producing both prosperity and social security. The state could regulate markets. Trade unions could secure higher wages and better working conditions. Public investment could build housing and infrastructure. Industrial growth could provide employment. However, the contradictions of capitalism had not disappeared. They had been contained.

Steelworks 80 was partly a product of that historical experience. It was difficult to imagine that the conditions of postwar growth might not continue. But capitalism does not guarantee that they will. The central contradiction is simple. Individual firms must expand in order to compete. They must invest, increase productivity, produce more, and search for new markets. Yet when production expands faster than demand, the very productivity and productive capacity that made expansion possible can become a source of crisis.

This is what happened to steel. The problem was not that society lacked the ability to produce steel. It was that steel could not be sold profitably in sufficient quantities. From a particular company’s perspective, expanding production can be rational. From the perspective of the system as a whole, the result can be overproduction.

Steelworks 80 was therefore conceived as a solution to a regional economic problem at precisely the moment when the global system was producing the conditions that made the solution impossible. That contradiction has consequences far beyond accounting figures. Because when capital expands into a place, people reorganize their lives around it. Homes are built. Workers move. Families settle. Infrastructure is constructed. Political promises are made. Expectations take root. A whole community can be organized around the assumption that investment will continue. But capital is not bound to a community in the same way that people are. When profitability changes, investment can be reduced, redirected, or abandoned. The consequences, however, are endured locally: in the homes and communities people built and in their forestalled hopes and expectations.

Living in the Aftermath

This is where the history of Steelworks 80 becomes personal. When I grew up in Hertsön, the neighborhood had a bad reputation. It was associated with crime, addiction, and immigrants. It was given nicknames such as “Hash Island” and “Bosnia-Herzegovina.”

Many Luleå residents rarely went there. Even some on the 1970s left, including activists who had moved north from southern Sweden in order to “proletarianize” themselves, often remained distant from Hertsön. As Lennart Håkansson later recalled of the left-wing group he belonged to: “The most important thing was to know a worker, but we never actually went to Hertsön.”

The irony is striking. Hertsön had been built to house the workers of a gigantic industrial future. When that future disappeared, the neighborhood remained — but its social meaning changed. It was no longer imagined as a symbol of industrial progress. It became a symbol of decline.

This transformation is important because economic crises not only destroy jobs or investment. They change how people understand themselves and how others understand them. A neighborhood can become stigmatized. Its inhabitants can be treated as social failures. The disappearance of stable industrial employment can become a story about supposedly failing individuals rather than a story about an economic system that has reorganized the conditions of their lives.

Hertsön was not simply a place where the working class lived. It became a place where people lived with the consequences of a broken promise. And this is perhaps the most important lesson of Steelworks 80. Capitalism does not only produce commodities. It produces expectations about the future.

People are encouraged to believe that growth will continue, that investment will create jobs, that new industries will bring prosperity, and that the next economic expansion will solve the problems created by the last one. When those expectations collapse, the consequences are experienced materially and psychologically. The future can become a form of loss.

The Remains of a Promise

The land where Steelworks 80 was supposed to stand is now an empty space covered with gravel. The site has since acquired various possible futures. Wind power has been discussed. New industrial projects have periodically been proposed. Every few years, the empty land becomes “hot” again as someone imagines a new use for it. But the physical landscape still carries the memory of the original project.

So does Hertsön. The neighborhood is objectively beautiful: close to the archipelago, surrounded by forests and green spaces, with walking paths and allotment gardens. Yet it has also become a living monument to a failed industrial promise.

Perhaps this is what my father meant when he said that we live in the aftermath of what never happened. Economic history is often written in terms of factories, investments, production figures, and employment statistics. But people live inside the consequences.

They live in the apartments built for jobs that never came. They grow up in neighborhoods whose original purpose has disappeared. They inherit the stigma of economic decline even when they had no role in causing it. They learn to understand their own futures through the rise and fall of industries over which they have no control. The empty site of Steelworks 80 therefore represents more than a failed Swedish industrial project.

It represents a basic contradiction of capitalist development: entire communities can be built around the promise of future accumulation, while the logic of accumulation itself can make that future impossible. The state can build the housing. Politicians can promise jobs. Workers can provide the labor. Companies can invest billions.

But none of them can guarantee that capital will continue to find profitable investments. When that promise fails, capital moves on. People often cannot. And what remains is not simply an abandoned industrial site. It is a city, a neighborhood, and generations of people living in the aftermath of a future that never happened.

The lesson, however, is not that industrial strategy is a quixotic attempt to outrun the market. Rather, what this story tells us is that industrial strategy requires institutions capable of reducing a community’s dependence on the profitability of any one firm, export market, or investment cycle. The failure of Steelworks 80 was not simply a failure of the state to predict the future; it was also a failure to build sufficient economic resilience for the people whose lives were being reorganized by the project. A more durable strategy would diversify ownership and employment, strengthening public and cooperative institutions and ensuring that housing, infrastructure, and social security do not rise and fall with the fortunes of a single industry. The answer to capitalism’s uncertainty is not resignation but stronger collective control over investment and public institutions that treat the security of communities as an end in itself.