The essence of the “Swedish socialism” created in the 20th century lies in “democratic functional socialism”. During the last 30 years, even after having refused part of its elements, it remains the foundation of the Swedish welfare state, and historically the name of the “Swedish socialism” is mostly related to the famous Swedish and global figure of the smart political powers, social democrat Olof Palme. The article reviews the features of the biography of Olof Palme and his both theoretical and practical activity opting for social justice and by creating a welfare state in Sweden by the means of “democratic functional socialism”. Olof Palme was also an advocate of human rights and freedoms, neutrality of small countries, an international mediator, an advocate of nuclear disarmament policy and a severe critic of neo-liberal ideas.