It was succeeded on 1 October 1951 by the Erlander II Cabinet, a coalition government between the Social Democratic Party and the centre-right Farmers' League.

The architect behind the Swedish welfare reforms during this period was the Minister for Social Affairs, Gustav Möller.

The economist Gunnar Myrdal warned of this coming depression in his 1944 book Varning för fredsoptimism (sv).

"Hassle Sweden") and chastised the Social Democrats, branding them as an authoritarian party which wanted to regulate things solely because of principles.

The Svea Court of Appeal ruled the proposed inheritance tax as unconstitutional, since the constitution at the time stated that "no-one is to be deprived of their property without a legal verdict".

Morgon-Tidningen, a Social Democratic newspaper claimed that the People's Party was receiving contributions from "Big Finance", amounting to almost four million crowns.

In the summer of 1951, however, talks were resumed[9] and on 28 September 1951 it was agreed that a joint Social Democratic and Farmer's League government would be formed.