TCS Daily


Great Dane, Great Pain

By Henrik Rasmussen - January 11, 2007 12:00 AM

"It is entirely possible to have a large welfare state, with generous benefits, without choking the economy," says Jonathan Cohn of the New Republic in a new series of articles, glorifying the Danish economic model. He enlists the support of several prominent economists from left and right.

  • Economist Kevin Hassett: "The Scandinavians show that you don't have to have a terrible economy if you have a big welfare state and high taxes."

  • Columbia University's Jeffrey Sachs: "A generous social-welfare state is not a road to serfdom but rather to high levels of satisfaction, fairness, economic equality and international competitiveness."

  • Former Treasury Secretary Robert Rubin: "I think I would like to move to Denmark."

Before Mr. Rubin starts packing, perhaps a dose of reality from someone who has actually lived in Denmark is in order.

First, let's compare material living standards in Denmark and the United States, looking at the poorest, the richest and the middle class in each society. The Economic Policy Institute estimates that the poorest 10% of Americans on average earn 39% of the US median income while their Danish counterparts earn 43% of the US median income, as Tim Worstall recently pointed out. Thus, the poorest 10% in America and in Denmark have about the same annual income (accounting for purchasing power parities and all social income transfers).

Not surprisingly, the top 10% of Americans are much better off than their Danish counterparts with an average income of 210% of the US median income compared to 123% in Denmark. "Rich" people in Denmark thus do not make much more than the median income in the United States.

As for the average industrial worker, the Danish Ministry of taxation estimates that American workers earn roughly 33% more than their Danish counterparts when accounting for purchasing power parities and social transfers of income.

Taken together, these numbers indicate that the 10% poorest in the United States have roughly the same standard of living as their Danish counterparts while the remaining 90% of Americans are better off than the Danes.

Anecdotal evidence and hard numbers concerning material goods support this conclusion. If we look at housing, the Heritage Foundation estimates that Danes have an average of 558 square feet per person available compared to a US average of 721.2 - almost 30% more living space. The difference is even more striking if we look at cars: According to Eurostat, America has 759 cars per 1000 people compared to 354 in Denmark -- a difference of more than 100%. In particular, large passenger vehicles such as SUVs are extremely rare in Denmark.

In addition, Danes tend to have fewer household amenities than Americans. A case in point: my wife and I recently hosted a Danish friend at our home in Virginia. During the clean up after dinner, our guest was astonished by our garbage disposal, having never seen one or even heard of one before in her life.

Ironically, the taxation system, which is designed to redistribute income for the benefit of the poor, is one of the main reasons poor and lower middle class Danes are not doing better than their American counterparts. For instance, Denmark has a value-added tax (VAT) of 25% on all goods and services, which increases prices for everyone regardless of their income. Furthermore, certain goods such as cars and gasoline are taxed at even higher rates. The sales tax on cars is 180%, and the price of gasoline is currently 6.50 dollars per gallon due to taxes. Since the poor tend to spend a larger percentage of their income on consumption than the rich, the high VAT and special sales taxes hit the poor relatively hard.

The same goes for what Cohn admits is a "lackluster" service sector in Denmark. Personal income taxes start at 39% in the lowest bracket with a marginal income tax rate of 60%, not counting the 8% tax on gross income (dubbed "labor market support") that everyone pays before any deductions can be made. With such an enormous tax-burden on labor, labor-intensive services naturally tend to be much more expensive in Denmark than in the United States. Since the poor need many services just as much as the rich, the high price of services hurt the poor more - by forcing them to spend a relatively high proportion of their income on basic services or to spend their free time trying to perform these services themselves.

Which brings me to my second point. Cohn points out that "Americans simply work more hours, don't get as much vacation, and can't take such generous pregnancy or sick leaves." True, on paper Danes and Europeans in general have much more free time than Americans. However, as Constantin Gurdgiev points out in this article, recent research from Sweden and Germany suggests that Americans have just as much leisure time as Germans and Swedes when one accounts for the time spent on "do-it-yourself" services such as cooking, grocery shopping and home repair. While Americans spend more time on the job, Swedes and Germans spend more time working at home performing basic services that Americans pay others to do for them.

Anecdotal evidence suggests that the numbers from Germany and Sweden apply to Denmark as well. For instance, Danes rarely go out to eat compared to Americans, and shopping for groceries, clothes and other everyday items requires more time in Denmark due to smaller stores, higher prices, and a lower variety of goods. In addition, Danes tend to spend long hours stuck in public transportation due to the high cost of cars and gasoline. High taxes tend to complicate life and cut into people's free time in more ways than immediately meet the eye.

Finally, there are the "generous" non-cash social benefits of the Danish welfare state to consider, primarily the health care system, which all Danes can use free of charge. "Danish health care is no worse than the US version," Cohn states, "Yet we Americans pay far more for our system, because it's riddled with inefficiencies as insurance companies compete with one another to enroll healthy beneficiaries, rather than finance good care."

In fact, US healthcare is better than the Danish version, exactly because Americans spend more on healthcare than the Danes. As in most government-run healthcare systems, Danish patients face significant waiting times for many types of treatment that Americans can get immediately. The United States is also ahead of Denmark when it comes to employing modern technology. For instance, America has 62.1 DTX scanners (for osteoporosis) per 1 million people compared to 8.0 in Denmark. The ratio for MRI scanners is 27 to 10 in America's favor, and the ratio for CT scanners is 32 to 14.6, again in America's favor.

Furthermore, Americans have better access to many preventive drugs than Danes, who often have difficulties getting prescriptions until they show serious medical complications. Competition between insurance companies is exactly what causes this American superiority in access to drugs. Since the insurance companies work for profit, they have an interest in minimizing expenditures for hospitalizations and expensive treatment by encouraging their beneficiaries to stay healthy through preventive drugs and a healthy lifestyle. By contrast, the Danish health system is governed by narrow-minded bureaucratic interests that jealously guard their individual budgets and slow down the strategic shift from treatment to prevention that has taken place in the United States.

One question now remains: If the Danish economic model is, indeed, vastly inferior to the American model, why do most Danes continue to hold their system in such high regard?

Growing up in the Danish public school system, I experienced firsthand the kind of soft propaganda that keeps Danes loyal to the welfare state. "Denmark is a country where few have too much, and even fewer have too little" is one of the national mottos that many students are taught to take pride in. Moreover, when "learning" about the United States, students are left with a greatly distorted image of widespread poverty, out-of-control crime rates, and a culture of raw selfishness.

In recent years, however, globalization and freer movement of labor within the European Union have given many young Danes opportunities to live and work in countries with lower tax-rates than Denmark. As more and more Danes realize that high taxes are a bad deal, the political elites will either have to lower tax rates and cut social spending or face a massive exodus of the people that suffer the most in the current system: Talented and hard-working citizens with high incomes.

In fact, this mass exodus is already taking place. For instance, estimates of Danes living in London vary between 35,000 and 70,000, which is roughly 1% of the total Danish population of 5.4 million. According to the leading Copenhagen business daily Børsen, the average income of these Danish Londoners is more than $100,000 per year.

To put this number in perspective, imagine the reaction if 3 million high income Americans moved to London in search of greater economic freedom. Perhaps even The New Republic would realize that there's something rotten about high taxes.

Henrik Rasmussen is an immigrant from Denmark, living in Virginia. He is currently working on a book comparing economic, social and cultural conditions in Europe and the United States.


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146 Comments

let them move
Great article, and corroborates what I hear from european guys around. I particularly like the part about how, in spite of all the state run propaganda, so many Danes are leaving. With the EU no border controls it's increasingly humiliating for nanny states like Denmark, and harder for them to try to convince their people that it's the best place. Imagine how scarry it would be for them if the US allowed free movement between the US and Denmark? Here's my bet; even all those Wal-Mart workers who are supposedly so hard off, would not emigrate to Denmark, but very many more Danes than just this author would move to the States.

Probably not
As a Dane I can only agree with what the author is telling about the public school propaganda. For instance I am considered a fringe libertarian if I just favor a little user payment on doctor visits (say 10$) or abolishing the minimum wage or saying that a slightly rising inequality is no reason of concern. Most of the answers I get are something like this:

"You don't want Denmark to be like the USA where people are living on the street. You should be grateful for your education that the state has paid for you and that you get free health care"

On the other hand, I believe it is an exaggeration of the size of the problem when it is mentionned in the article that a great number of people are leaving the country. As a remeber from a study from Dansk Industri (a danish industry lobby), most of the Danes do return Denmark after a while.

Also, I'm not so sure if it is correct what the article is telling that poor people are just as well off in the USA as poor people in Denmark. In Denmark poverty is virtually non-existing and that is deffinately not my impression of the USA. It is just all too sad that I don't know if that impression is correct or if I have just been exposed to too much propaganda.

Finland and Norway, too
I worked a summer in Finland, '83 and visited Norway.

(I have distant family there.)

What struck me was how much the general population imbibes alcohol. Even to the point in Norway where they distill their own to counter high taxes.

Why did they drink so much? My opinion is they felt they were stuck. They could do nothing more to get ahead.

Life in a gilded cage.

That's not true
The Scandinavian countries are much more liberal and alcohol is just a part of our culture. In Denmark you start drinking in a very young age and you continue for the rest of your life :)

perhaps alcohol (and not the welfare state) is also the reason why Danes are some of the happiest people in the world ;)

Poverty and propaganda: Borta är bra men hemma är bäst
You'd like to know more about poverty and propaganda, arnoll? OK, two good books for you to check out regarding the measurement of poverty are "In Defence of Global Capitalism (Till världskaptialismens försvar)" by Johan Norberg, a Swede, and "Cowboy Capitalism: European Myths, American Reality" by Olaf Gersemann, a German. Both authors describe poverty's different measures as well as the propaganda opportunities the currently fashionable relative and subjective measurement regimes afford socialist politicians, socialist organisations and the socialist media.

From my personal experience living in Sweden for seven years, I agree 100% that Sweden is essentially a poor country according to an average American's standards. Personal anecdotes are weak, but I'll burden you with one, anyway.

While still living in Sweden in the summer of 2005, I went back to the States to visit family and friends, and the thing that blew me away most was how much wealthier they all were compared to when I saw them in 2003, and how their lot seemed to be average, judging from the dizzying number of luxury homes, cars and goods I saw on display everywhere. In contrast, Sweden changed in this regard as well - by getting poorer. The reason was that the Swedish state at all levels kept running out of cash before providing the quality and quantity of services it promised, forcing it to cut services while raising taxes. That's why Sweden has the oldest stock of cars on Europe's roads while its former prime minister had to wait over six months for "free" corrective hip surgery.

As you may have already guessed, I no longer live in Sweden. The highest taxes in the world and crumbling public services coupled with my strong instinct for self-preservation have rendered me a class war refugee. My wife, a Swede born and bred, misses Sweden quite a bit. But where we live now she earns an income twice as large before tax and three times as large after tax cmpared to the income she earned in Sweden for the same job. Even so, we see less poor people here than we saw in Sweden. (Ever been to the north of Sweden? What an impoverished dump!)

So if you're really interested in truth, arnoll, I suggest you read the two books I recommended while at the same time keeping your eyes open and mind active when consuming media propaganda regarding poverty, class and social issues.

Cheers.

where few have too much
what is it about the socialist mind set, that allows people to believe they have any right to decide what is too much for someone else to have?

poverty is virtually non-existent in the US as well
Most of the homeless that you see have mental disorders of one kind or another.
Also, in most of the US, it's possible to live outside without shelter for most, if not all of the year. Homeless in Denmark wouldn't last very long.

Ude er godt men hjemme er bedst
Hi Robertbenett

Thank you for the story. It is interesting to hear how other Scandinavians are doing in the USA. I can tell you that when I have finished my studies I have also planned to move to some other country, perhaps the USA or Australia, mainly because of the low marginal taxes and high salaries. I just hope that at that time I'll be able to persuade my girl friend to take with me.

ALso, thanks a lot for the recommendations. That is just what I have been looking for. I will order them right away. Hopefully they will help me when debating with friends and teachers.

The Social Pie
"what is it about the socialist mind set, that allows people to believe they have any right to decide what is too much for someone else to have?"

To a socialist, your money is not your money, MTG. Rather, it's just a small sliver of society's economic pie, the whole of which belongs to society, held in trust by the state. Furthermore, without society's efforts and contributions to your value as human capital, an earnest socialist will declare, you'd have earned no income, instead forced to live on the dole. So of course, society has a just and moral right to exact from you an amount of your income greater or equal to the amounts it invested in you, depending on what's best for society but not you.

The obvious weaknesses of these arguments never occur to an earnest socialist, such as opportunity cost, that is, what happens if society invests nothing in people? Obviously, society will get poor, lousy taxpayers in return for not investing in people (which assumes the obvious falsehood that in the absence of public education, people wouldn’t invest in their own children, but stay with me). If this is so, then society merely does as it must to avoid certain disaster, leaving it no just or moral claim against individuals.

This demonstrates how socialists view people: As a crop to be sown and harvested by the state to advance society's interests, which in turn demonstrates the extent of the socialist notion of human dignity, namely, that people are mere objects whose ultimate dignity the state's skill at husbandry determines.

How can a humanist also be a socialist? I just don't get it.

It is not as simple as it seems to define poverty...
...When people say that they see more poor people in the USA, I like to ask how do you know that they are poor.

Before we can debate we need to define poverty and its causes.

Someone has said the we have no poverty among people of Scandinavian decent in the USA.



I have know quite a few...
... Immigrants from Scandinavian countries (I live in Florida and there is a Finnish company that hires fins to work here.) and they seem to be drawn to the excitement of the USA.

poorest of the poor
if we're really going to talk about this, i think we need more data comparing the poorsest of the ppor from both countries, that bottom 10% that doesnt get re-examined here.
those are, after all, the folks that a 'welfare state' is trying to help, and so long as its doesnt *harm* (though obviously it limits the success of) another group we need to understand just how subsections of this 10% live... the lowest 10% may be equal, but is the bottom 1% of US even with the bottom 1% of Denmark?

Social drinking
I saw a lot of folks drinking to get drunk
(what other reason is there), to escape?

If you continue to drink like that for the rest of your life, it won't be a long life. Guess that helps keep the socialist medical costs down.




No people, no state.
I guess liberalism is is a mental disorder.

Strong, independent, prosperous people make strong states.

Regressive Taxation
**This is not an endorsement, merely an explanation.**

Though the Danish VAT and other consumption-based taxes are certainly high by our standards, they are very useful for maintaining a generous welfare state. For one, they are generally recession proof, especially as compared to capital gains and income taxes. Your income and stock portfolio might take a hit in the downturn, but you'll likely continue to smoke cigarettes and eat. Second, regressive taxes act as a proxy for user fees because most welfare services are used by the poor, and they are the most burdened by the heavy taxes.

Rubbish
Danes don't drink to escape reality, but just to have fun and enjoy life: alcohol is part of Scandinavian culture. If Danes really wanted to escape reality, why is it that Danes are almost always elected the happiest people in the world?

Also, Scandinavian average life span is about the same as in most other western countries.

I'm not sure if you can consider Denmark socialistic either. Although Denmark has very high marginal tax rates and very generous benefits Denmark usually scores pretty well on economic freedom indexes (due to a flexible labor market). This is probably also why Denmark isn't as poor as many other socialistic european countries. I think "Liberal" in the American way fits Denmark better.

(this should not be understood as that I favor the Scandinavian welfore model over the anglo-saxon one; I just want to correct some minor mistakes)

Recession Proof Taxes
Although I like the idea of matching the cost of providing services to recipients-proxy taxes are dishonest and provide for a government that benefits from choices that are inherently destructive. Too many states are doling out money from the tobacco settlement that has been paid by individuals mortgaging their lives and health at way to steep a rate. They rail on about Joe Camel, but we know they won't give up the revenues generated by cigarette taxes.

I think there's something to be said for NOT having taxes that are "recession proof" or even resistent. Although it is not the exclusive influence on aggregate economic activity, the government is the primary and most influential actor on the economy.

Ironically, if you subscribe to the Keynesian "pump priming" notions and fail to realize government expenditures are distortionary activities performed by an actor that is self-serving and expansive-you might think tax revenues should be reduced as spending goes up. (of course I realize the modern bast*ard stepchildren of Keynes NEVER think taxes should be reduced).

I want the government to suffer in bad times-not be an island of insular prosperity. What can be more tyrannical that having government protected from (its own induced) economic downturns-of having absolute security when others face the perils of unemployment?

Linking government to the effects of its policy was behind the idea of TIPS (Treasury Inflation Protected Securities) and even though thats a small part of the public debt-it provides ample incentive not to allow inflation. As I recall, this idea enjoyed broad support, even from left-leaning pols.













No Subject
i think the real question you need to be asking is why you need to reach that far to prop up the danish system. are 1% of the people really worth making the remaining 99% 2 or 3 times worse off?

I can consider Danmark socialist
Of course it is socialist.

The power to tax is the power to destroy.

How much better could Denmark be with lower tax rates and greater property rights?

And from what I hear, Copenhagen is a pretty wild place, both morally and criminally, Muslim gangs and such, like Malmo.

To Arnoll and Marjon both
Be careful about "Snapshot" takes on any country. Both of you have a somewhat negative view of the others' homeland from visits (though long snapshots in some cases). I would ask both of you how much time you spent in various income level housholds, markets, stores, etc.

Unlike the Danes, the U.S. does have it's truely downtrodden. As Mark pointed out, most of them have mental problems; but the reason they are on the street and not taken care of better is due to the breakdown of the family and a lack of proper government programs. (No, I don't eman more welfare!! Thank the liberals for emptying the asylums and not having anything in place to deal with the obvious consequences.)

Freedom is a double-edged sword; Americans have the freedom to live better and the freedom to go hungry. Unlike Denmark, single Americans have few welfare safety nets and pretty much have to work to have any kind of life.

Yes, things can be tough living here, but the payoff is much higher as well. The American working wealthy are 5 to 10 times richer than their Danish counterparts and the American Middle Class are roughly equal to the average well-to-do Dane. And, in the food and good distribution system, general use of technology, and availability of technology, Americans are far superior.

But Denmark has no homeless problem, has a far superior public transportation system and no Dane dies because he doesn't have access to medical treatment, as does, rarely, happen in the U.S.

The point is, neither country is a bad place to live, it depends on what your personal priorities and ambitions are. If I don't want to work too hard and have a strong safety net should I not be working, Denmark sounds lovely. If I want to excell and be paid well for my services, without losing too much to taxes, the U.S. is a pretty awesome choice.

BTW, I will stay in the U.S., it fits my priorities and ambitions.

Very good explanation
And I agree.

Liberals personified.
"Denmark is a country where few have too much, and even fewer have too little" This statement is the absolute crux of liberalism. They seek to equalize the masses and prevent the accumulation of wealth. This is presented as a noble cause. The failure of this thought is what incentive to build and grow a business, take risk, does the individual have in a society that both prevents his failure and limits his success? The great success of America is the unlimited ability to succeed. The ability to fail and succeed are as important to life as air. Liberals in general apparently abhore risk. Hence they move to create a risk free Utopia when in reality there is no such beast. I for one would forgo all saftey nets for the chance to achieve greatness. One final thought, name one great economic industry or product innovation to come from Denmark? Which countries bring forth the latest innovations, technologies, medicines? The free market is equality of opportunity. Liberalism is equlity of outcome (and misery).

Denmark
I am sure it is a very nice country and there is no intent to attack it. Rather this site often presents articles in the light of free market economies. Many on this site are strong free market advocates and the argument here is how the American liberals view of Denmark is flawed as the model for the US. Liberals in the US frequently point to Europe as the model for the US but the US did not become a 14+ trillion dollar economy by embracing EU sytle socialism. We did it by embracing American style capitalism and many here fear that the movement towards socialism will bring the US down from a economic power house to a second rate economy burdened with social spending (in fact we already are moving that way). In addition, the ability to accumulate vast wealth is what drives people in this nation to take risk and build industries and businesses. It would be truly interesting to see how Denmark looked if they adopted a market based economy. It would be a interesting experiemnt indeed. I suspect in 10 years you would not recognize the place.

the short answer is no
The U.S. welfare system is geared to moms, kids, disabled and old. Healthy, young males have no help in the U.S. system. Therefore, the bottom .5% to 1% in the U.S. are in pretty bad shape, whereas that group in Denmark is much better off.

But I have to agree with tetracycloide, so?

It is a grand though to have a system where no one is left out or slips through the cracks. On the other hand, it is impossible for this to not happen without a blanket welfare system that is extremely expensive.

I've been in pretty bad living situations as a young single man. But I had choices as well. I could choose to work and try to pull myself up or I could choose to sponge of others, commit criminal acts, and have nothing.

I choose to get a job and go get what I wanted. I think the welfare system goes too far, but I do think a better medical system is needed. (Not fully socialized medicine however. I may not think the present system is working in the best interests of anyone, but it is better than a system that only works for the poor.)

Now I'm in the worst situation of all, for someone who doesn't want to have to work too hard; I'm self-employed. When I don't feel like getting up and going to work, I will not get paid sick-leave. There is no "Paid Vacation"; all time off means lost income. The up-side is that I can take time off if I want it and I will not "lose my job". I also like the fact that I don't have to do "make work" crap. I decide what has to be done.

freedom
you can't have the freedom to suceed, without also having the freedom to fail.

I prefer living in a country that allows people to suceed.
Others prefer to live in a country where no one is allowed to suceed.

Taxes are the revenues for governments...
Therefore, before we talk about the economy of any society funding the tasks assigned to its government, let's talk about the work of government itself.

"...government expenditures are distortionary activities performed by an actor that is self-serving and expansive..." Nevertheless, we have not projected a condition in global society where we will not have the more-or-less 200 sovereigns we enjoy so much today. Therefore, government spending must continue.

By saying that the government is fundamentally self-perpetuating (self-serving and expansive) I think that you have defined it. If everyone, everywhere should live under this sovereign or that sovereign, then it follows that governments will compete, given the opportunity, to grow at the expense of their sovereign opponents until each available square meter of dry land and every man has been incorporated by some one of them. Further, governments must defend their properties and their populations from annexation or enslavement by competitive sovereign players. Military security must be job one.

Putting its productive resources to work creating wealth and then taxing some part of that wealth to sustain itself must constitute an urgent and immediate (if secondary) motivation for the sovereign. How best to accomplish this involves the art of Economics. Regretably, this discipline is not a science with reliable cause and effect principles.

The tertiary concern for the sovereign state is the method through which individuals join the government, how its decision-making hierarchy is constituted and how its processes are managed. Here too, political science is misnamed. Political behavior and political operations are artistic... bordering on theatre. Citizens must "suspend their disbelief" and agree to be lead by strangers. Under the military imperialism that creates the state it seems natural that military leaders should stand very close to the warm fire of central government and eat at the big table.

Nations are led by civilian politicians or actual generals. Perhaps civilian politicians who once were generals. Or by a civilian who was never a general himself but who, nonetheless, now serves as Commander in Chief. When in doubt, the generals often declare martial law in a coup d'etat and suspend civil liberties.

A strong central government maintains these priorities (in their proper order) going forward. Any political process (our tertiary, subordinated concern) that might disrupt the (integrity of the) security of the nation or the functioning of its prosperous economy must be resisted.

For example, democracy in the United States cannot be allowed to give us a Socialist government that would change the way we do business and create wealth. We could also not allow a President to come to power who would disarm the military, leaving us vulnerable to attack. Indeed, our politicians comfortably share power under a stable two-party paradigm that requires both of them and whereby the voters must believe that there is genuine competition and salient opposing views. However, nothing fundamental must change or seriously rock the boat. Therefore, our politicians struggle mightily over such issues as stem cell research, minimum wage rates and whether or not to legalize our resident, direct labor immigrant workforce.

Both parties sincerely want us out of Iraq as soon as possible and without further tragedy, loss of life or risk. Both parties want Iran to "cut it out" before Israel does something that might lead to larger problems. Both parties want North Korea to "cut it out" before Japan rearms and joins the nuclear club...that also might lead to larger problems.

Neither party knows how to accomplish these objectives (because if anyone knew what to do with any certainty we would certainly do precisely that) but they are willing to use such matters to make us think we have a democratic process and a choice about our government. While they sincerely work very hard to figure it out.

In China, they have military security and an economy that is doing pretty well. Their (tertiary consideration) political process makes no pretense of democracy. Nevertheless, the strong central government of the PRC gets the job done. And they might engage the same processes (about what to do next) behind closed doors that our leaders enjoy. They don't know what to do about Iran or North Korea either. And they need oil from the Middle East too.

Social services? Is this the job of the sovereign really? Only in so far as social services contribute to military security, the economic creation of wealth and the political process of sustaining the culture of government. Otherwise, social services and the wealth that is diverted to deliver them would be better left in our hands.

"...the government is the primary and most influential actor on the economy." This should be true only insofar as the government avoids its own stupidity. Economic evolution (in a progressive direction) should be left to us.


Great Dane Pain
The New York Times yesterday, in its science section, had an article which said Danes were happy because they had low expenctiations.

So Denmark becomes a "bedroom nation"...
Nice place to raise your children. Nice place to go home to die. Lousy place to launch a competitive company. So move away when you want to go to work. Keep your wife and kids up there, if they like. The family can fly in to stay at your flat in the city on holiday. You can move back when you are through. Fall in love with your grandchildren. Life is full of trade-offs. Be an adult or get out of the game!

Nations and governments don't create wealth. We do.

If the Danish want to live like this, it is not our business to tell them they are wrong. I just about bet they know the people living in their neighborhoods...do we?

Exactly my point
Thanks for agreeing.

We've all got happy kids like that...
Low expectations are not consistent with the human condition and neither is a sense of satisfaction or a lack of personal urgency.

We teach our kids that it was important for them to be happy. Even when they have not accomplished anything to be happy about. Maybe that's where the Vodka comes in.

Did the New York Times report this happiness as "a good thing"?

Well maybe
I agree we have no right to tell them at all what to do. That does not prevent me from objecting to the US doing the same. As to my neighbors, well that is cultural and also proximity. When I lived in Huntsville Alabama I knew most of them and it was a very nice place. Washington State on the other hand people are cold and I know not a sole. In fact, I am moving back for that very reason. A lot of it has to do with the way cities in are arranged and teh mobility of people in general. Small towns are friendlier then cities, even in Denmark I suspect.

EU still picking on Ireland?
Ireland was prospering because they lowered taxes causing the French to demand they slow down.

Iceland
I would like to see a comparison with Iceland.

They have an interesting economy and government history.

And I would like to find out if I am related.

(My ancestors are from Norway.)

The grass is always greener...
Now Denmark. So in my years of observation, the lefties wanted us to live exactly like:
1. Britian-They had all the stuff from the US and a lot of welfare benefits to boot. That ended and the Thatcher government had to come in an save them.
2. France-Get lots of free time. People get even more free time on unemployment.
3. Germany-Kindler, Gentler capitalism. Not capitalism at all. Your per-diems get taxed there to maintain fairness.
4. Sweden-Socialism and democracy. Nothing could stop them. Nothing is a broad term.
5. France-Some UN organization said they have better and cheaper healthcare than we do. WRONG!!!
6. Canada-Even though Canadians are poorer. But they can smoke dope (always a plus). Besides the Canadians come south to get away from the cold, not to get better paying jobs. Sure.
7. Japan-As if the average American could ever live in Japanese culture.
8. Now Denmark-They are not as wealthy but are definitely more satisfied. At least the polling data says so. Its on the internet it must be true.

It is all crap. The funny part is that the US has become more like these other countries and the end result has been more poverty, misery and less satisfaction both inside and outside the US.

Iceland
I would like to see a comparison with Iceland.

They have an interesting economy and government history.

And I would like to find out if I am related.

(My ancestors are from Norway.)

And small
Denmark is small and has a uniform culture.

Except for the immigrants, most have the same cultural, genetic and religious backgrounds.

The US was settled by people from all over the world at various times.

Since my ancestors are from Scandinavia, and many from WA state are too, I would suggest they are not cold, just reserved.

" Economics. Regretably, this discipline is not a science with reliable cause and effect principles.
I would suggest it has reliable principles.

Many economists, especially socialists don't like those principles.

Also, most economists don't know how set up the experiment.

No choice.
What happens to people when they have no choice but to live in a country where no one is allowed to succeed?

That is one reason I would prefer to 'open' borders with no welfare.

(I have commented many times what 'open' means.)

Helsinki taxis
I was suprised at the quality of the taxis in Helsinki in 1983. They were all mostly new Mercedes or Volvos or other very nice cars.

Private cars were small Fiat types from USSR or Citroen from France.

I was told taxis did not have to pay import taxes on their cars.

Life here in WA
Well the problem with posts is they lead to misunderstandings. I was raised in Western WA and lived there for the first 35 years of my life. After I lived in the SE and moved back I noticed a profound difference in the way people interact. In addition, a huge influx of people from California here has made things profoundly different. Even the Californians talk of how unfriendly LA and such is nowdays. However, Atlanta was a pretty cold place to visit.

Funding the GOV-AGs
Direct Income Taxes are not the only way to fund the moral functions of GOV-AGs (GOVernment AGents).

http://www.google.com/search?hl=en&q=repeal%2Bincome%2Btax
http://www.harrybrowne.org/articles/IncomeTaxDay.htm

I am loath to use the expression legitimate functions of GOV-AGs, as what is legitimate today is mostly immoral.

The Jante Law and the Whack-a-Mole Game
A brilliant Dane, Aksel Sandemose, dropped the dime for all time on the Skandinavian mentality and soul when he codified their mechanics as "Janteloven (the Jante Law)" in his novel "En flyktning krysser sitt spor (A Refugee Crosses His Tracks)". The Jante Law's ten provisions are:

1. You shall not think that you are special.
2. You shall not think that you are of the same standing as us.
3. You shall not think that you are smarter than us.
4. Don't fancy yourself as being better than us.
5. You shall not think that you know more than us.
6. You shall not think that you are more important than us.
7. You shall not think that you are good at anything.
8. You shall not laugh at us.
9. You shall not think that anyone cares about you.
10. You shall not think that you can teach us anything.

The "us" comprises an individual's social groups outside his family all the way up through the national polity.

Now, imagine the repression a free-spirited American such as yourself would experience in a society operating under the Jante Law, Pauled. Also imagine this: Growing up in the Jante tradition, you don't know any other way of being, nor can you even conceive of one. Rather, you are thoroughly socialized to believe that society is everything and you are nothing, even to the extent that you believe that the source of your repressed individuality and self-debasing character, which internally oppose the true man you believe yourself to be, is human nature itself, which society tells you is a hopeless cause but for society's micromanagement by the state.

Now, given the proper enhancements, your average Swede makes excellent human capital: Smart, hard-working, consciencious, and best of all, painfully honest and sincere. That's why Sweden was able to transform itself from an impoverished backwater that lost a third of its population to American emigration into the third richest country in the world in less than 100 years. However, the Jante Law under the guise of socialism kicked in politically around the middle of the 1960s, transforming Sweden into a Whack-a-Mole society, that is, a society who purposefully designs it laws to bring low individuals who dare elevate themselves above the average Swede in terms of wealth, income, or social status.

Consequently, today's Sweden is a mere shell of its former butt-kicking self thanks to its political embrace of the Jante Law. My point? Most Swedes don't know any better than what they've got, nor can they conceive it. Rather, their visions of the better life and society all lie down the Road to Serfdom, that is, more government, more social benefits, higher taxes, and more income equalization through redistribution. It's only those Swedes who are self-aware that can follow freedom's call to get the heck out of Sweden and make the most of their own lives, and that number is preciously small.

Freedom is neither a self-contained nor self-evident state. Rather, to exist freedom must burn fiercely in the hearts and minds of men, from which it is frequently barred ingress and where it is constantly exposed to the perils of greed, fear, and covetousness. So imagine yourself an average Swede, Pauled, and then tell me where you'd choose to live: America or Sweden.

just as many
Homelessness is not a problem addressed by the wellfare state. There are plenty homeless on the streets in Sweden where I live. Due to the climate they most often do not sleep on the streets but in garbage rooms, under bridges in home made shelters or with a church. There seem to be little difference between the nordic countries in the (in-) ability to care for the homeless.

The ultimate test of which system is better
I'm no expert on it, but it seems to me that the ultimate test of which system is best is the measure of in and out migration.

Mexicans, for instance, come to the US by the millions while few Americans emigrate to Mexico.

My general impression is that more Europeans emigrate to the US than vice versa, but I could be wrong.

Where people are free to vote with their feet they will generally vote for the better system.

Poverty is a mindset
It's an old saying but I think it true - being poor is a financial condition but poverty is a mindset.

Most of the "poor" in the US are either young or unskilled (which can be the same thing). By acquiring skills and experience they can increase they value to a potential employer. Other "poor" are mature immigrants who likely won't learn many new skills and may remain in lower wage jobs - but they have ambitions for their children and their standard of living, while "poor" in the US, is still better than in their country of origin.

The surest path to poverty is to rely on some nameless body of bureaucrats to take care of you. Those bureaucrats have no reason to help you develop the habits and skills necessary to improve your condition; rather, they have every reason to make you increasingly dependent on them. The War on Poverty created, and continues to create, more poverty. If poverty were suddenly "cured" those bureaucrats administering the various programs wouldn't have jobs and would no longer hold the power of life and death over their subjects (or clients if you prefer). The evidence is overwhelming that "government" never actually solves any problems which isn't surprising as the prime role of government is to create more government.

Possible error in article
It could be a problem with my ISP but maybe it's a continuing typo in the article. I keep seeing "Denmark" and "Danes" where I should be reading "North Korea" and "North Koreans".

Refer to the following excerpt...

"Denmark is a country where few have too much, and even fewer have too little" is one of the national mottos that many students are taught to take pride in. Moreover, when "learning" about the United States, students are left with a greatly distorted image of widespread poverty, out-of-control crime rates, and a culture of raw selfishness.

Comparing Incomes only takes you so far
The comparison of the income of the poorest with american incomes is misleading for 2 reasons.

Firstly this is obviously because countries have different per capita GNPs & individuals income must be drawn from the countries they live in. Denmark has a lower per capita GNP than the US - this has historicaly always been so & is thus not as strong a pointer to the standard of current government at to the societiy's history. For example the US ended WW2 as easily the richest country in the world whereas Denmark ended occupied by Hitler. in fact Denmarck has considerably closed the economic gap that then existed.

Secondly income differentials in pure exchange rate terms ignore that in richer countries the cost of living, particularly in terms of services is always higher. Try getting a hair cut in Beverley Hills for the normal cost in Acapulco.

The real problem with this article is that it seeks to establish one country & system as "better" than the other which is like proving whether apples or oranges are the better fruit. Better than both is to have a world where we do not expect all societies to be made from the same cookie cutter.

Actually it's fascism
True liberals are strong, independent and prosperous people who create strong states. True liberals also have no home in either major US political party.

What we're calling liberalism is actually fascism where the production capacity is privately owned but state controlled. Socialism is state ownership and state control of the production capacity.

Definitions
If you want to use the original meaning of liberal, I would call that 'classical', like the original meaning of the word gay.

I not would call today's liberals classical.

I would equate facism with socialism and communism.

I use von Mises definition of Socialism from his book.

In general, I define socialism as state control of private property.

And the US government is continously telling us what we can and cannot do with 'our' property.

Can't expect all societies to be free?
"Better than both is to have a world where we do not expect all societies to be made from the same cookie cutter."

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