This article analyses the reasons for the continuation of the Norwegian consensual model of capitalism with its strong focus on collective bargaining and a universal public sector. Two main causes are identified. First, capital in Norway is characterized by the predominance of small and medium-sized companies and, as a result, is comparatively weak. Second, the agency of labour has been decisive and trade unions are still able to balance the structural power of Norwegian employers. Prior to the 2005 elections, trade unions adopted a more independent position from the Labour Party, and the Campaign for the Welfare State broadened the social basis for the maintenance of the public sector by bringing together trade unions and social movements. As a result, the Labour Party moved towards the left and continued to support traditional social democratic achievements such as the universal public sector and a strong role for trade unions in economic and social policy making.