Sweden has long been regarded as a ‘model’ for societal development. Recently, with the rise of an anti‐immigrant party and negative news coverage of crime, the image of a progressive Sweden has frayed. Positive models for societal development have existed in the past and included the United States during the heyday of modernization theory. This paper argues that positive models are useful, partly to crystallize options among the much‐debated varieties of capitalism, and partly as ideals which can be held up by social thinkers and publics as aspirations for the good society. This paper reviews the evolution of the Swedish model from a ‘middle way’ between Soviet communism and American capitalism to a welfare state under strain. It also examines how the Swedish model has been reinforced by its high international standing. The perceptions of Sweden abroad and domestically have changed in recent years. While these perceptions have correctly identified challenges not just for Sweden but also for other countries with similar problems, Sweden's government and civil society may be able to address them. The paper explores the lessons that can be learned from the current shortcomings and potential renewal of the strengths of the Swedish model, including its wider influence.