In 1976 Sweden adopted a law on workplace democracy, presented by the Social Democratic government as the ‘reform of the century’. What can the reform tell us about the history of the Swedish Model and how it was revised during the early 1970s under the prime minister, Olof Palme? This article compares four grand narratives of the development of welfare states, viewing dominant narratives of the Swedish Model as influential myths in their own right. The article argues that despite its global reputation as a hallmark of ‘democratic socialism’, the Swedish workplace democracy reform was a broad cross-class compromise, in the wake of a pan-European wave of similarly labelled reforms. Furthermore, the reform served to protect workplaces against Communist activism. The argument builds on the internal meeting protocols of the board and executive committee of the Swedish Social Democratic Party.