Scandinavian penal regimes are Janus-faced: on one side relatively mild and benign; the other intrusive, disciplining and oppressive. This paradox has not been fully grasped or explained by the Scandinavian Exceptionalism thesis which overstates the degree to which Scandinavian penal order is based on humaneness and social solidarity, an antidote to mass incarceration. This essay examines the split in the foundation of the Swedish welfare state: it simultaneously promotes individual well-being in the social sphere but enables intrusive deprivations of liberty and in some cases, violates the principles of human rights. The backbone the welfare state, Folkhemmet, the People’s Home, is at once demos, democratic and egalitarian and ethnos, a people by blood, exclusionary and essentialist. The lack of individual rights and an ethnocultural conception of citizenship make certain categories of people such as criminal offenders, criminal aliens, drug offenders, and other perceived outsiders particularly vulnerable to deprivations and exclusion.