The strong economy of social democratic DenmarkThis essay is part of a weekly feature on this blog that presents interesting stories from elsewhere in the world, particularly Africa, that are little reported in the American media. It's part of my campaign to get people to realize there is a lot going on in the world outside the US, Israel and Iraq.
If you can understand French, La Première Chaîne of Radio-Canada has a fascinating radio report on Denmark. No, not about those cartoons but about the Danish economy.
So-called conventional wisdom tells you that the social democratic (which some ideologues mislabel as 'socialist' or 'Marxist') policies are necessarily ruinous on the economy. Liberals and progressives usually point out that while such claims may be true, economics is not only factor people consider when determining that ephemeral characteristic known as quality of life.
Turns out they both might be wrong.
As Radio-Canada's report explains (my translation):
Denmark, a small country of only 5.5 million residents, is one of the most evolved societies in the world, with one of the most generous welfare states on the planet. It also has a very dynamic economy, based overwhelmingly on small and medium businesses.
The descendants of the Vikings have become conquerors of a new genre: they have made their place in Europe and in the world due to their sense of innovation and creation, all while remaining ferociously attached to their values of consultation and egalitarianism.
But the Danes are also pragmatic: they made a major change to their system of unemployment insurance, which links economic liberalism and social generosity. Thanks to 'flexecurity,' employers are free to hire and fire employees according to economic fluctuations.
The employees, for their part, can receive unemployment payments for up to four years, for sums equivalent to up to 90 percent of their original salary.
The report also noted that the Danes are able to maintain such a vibrant economy with low unemployment with a workforce that's 80 percent unionized.
Of course, that well-run 'welfare states' have good economies shouldn't be that shocking to those who pay attention.
According to the very capitalist Davos World Economic Forum, the top four most competitive economies in the world are respectively: Finland, the US, Sweden and Denmark. With Norway and Iceland also ranking highly, it means that five of the nine most competitive economies in the world are Scandinavian social democracies.
In addition to having competitive economies, Scandinavian social democracies also have high quality of life, with the five countries all ranking in the top 14 of the UN human development index. Then again, having a strong economy is PART of the quality of life equation.