Globalization, stagflation and economic uncertainty challenged the Swedish welfare model during the 1980s, driving renegotiations of state-market relations domestically as well as re-conceptualizations of Sweden’s place in the world internationally. This article addresses how a key media event – the 1638–1988 New Sweden 350th Anniversary of the New Sweden Colony in North America (New Sweden ’88) – reflects these shifts. Drawing upon materials from the National Committee for New Sweden ’88 and various public-private Swedish-American foundations and initiatives as well as Swedish and US media reception, this article argues that the performance of this media event signaled a shift in state-market relations in Swedish public diplomacy as well as a renegotiation of Swedish self-identity in the late 1980s. The New Sweden ’88 project reflected the more polarized self-perceptions beginning to proliferate in Sweden at the end of the 1980s – self-perceptions which would set the transformations of the early 1990s into a sense of inevitability, which in its turn matched calls for far-ranging reforms of the Swedish welfare model which followed during the globalized 1990s.