Sanders for Prime Minister

Just when Bernie Sanders’s chances of winning the Democratic Party nomination are being written off and the Hillaryites (or whatever they’re called) are nagging him to drop out of the race, interest in his democratic socialism has blossomed in another quarter: His candidacy for prime minister of Denmark has been announced.

By now everyone knows of Sanders’s fondness for the Danish welfare state. I have mentioned that the Danes are keen on founding clubs and organizations. Now two of them, Peter Ahrenfeldt Schrøder and Jacob Esmann, have launched the “Sanders for Prime Minister” association (Sanders som statsminister). They outlined its objectives in an op-ed piece in Politiken, Denmark’s largest-circulation daily.

This is a clever prank, and also a serious one. The club spends much less space advancing Sanders’s platform than making a detailed critique of the current Liberal government and the Danish “right wing”, which the authors argue are attempting to systematically dismantle the distinctive foundations of Danish “welfare society” (in Europe, “liberal” means free-market proponent). It gives a fine summary of Sanders’s main proposals and explains how the corresponding institutions in Denmark that partly inspired them are being eroded. In other words, how Prime Minister Lars Løkke Rasmussen and his fragile assemblage of supporting parties (which command a majority in parliament by a single vote) have weakened some of them and are looking to do more damage. Here’s a summary for those who don’t read Danish:

Privatization wet dream – alas deferred

Education: An across-the-board budget reduction at universities that will shut down degree programs in some unpopular subjects. Proposals to require a minimum level of grades to enroll in gymnasium and vocational school, which the authors argue will reduce opportunities for disadvantaged youth. A proposal by supporting parties to reduce the (six-year) educational stipend and replace part of it with loans.

Health care: The Right Wing has a “wet dream” about introducing payments for health care services (although the government agreed to shelve the issue during its current tenure in office).

Pension: The Right Wing “came within a whisker” of reducing housing subsidies for 175,000 retirees.

Welfare and unemployment benefits: The government has “torn a big hole in the social safety net” by putting a ceiling on cash welfare benefits in an effort to make it more attractive to work. In 2010, the preceding right-wing government reduced by half the length of time you can receive unemployment benefits (to two years) and doubled the working period required to earn them. The Right Wing has also proposed limiting the right to strike.

Environment: The government wants to reduce climate targets, specifically a 40% reduction in CO2 emissions by 2020 and a phasing-out of coal and natural gas by 2030 in 2035.

Tax evasion: Three Right Wing parties recently tried to repeal initiatives of the preceding center-left government to publish companies’ business tax payments.

Low inequality = social mobility = the true American dream

The authors conclude that the American dream thrives best in Denmark, and the reason is the welfare state. Denmark leads the world in creating equal opportunity, and there is a clear connection between low income inequality and social mobility. Yet the current government has promised one of its supporting parties that it will cut the marginal income tax rate (from around 56%). It does not understand that the welfare state is the best “competition state”. In the nutshell, the answer to the world’s challenges is more social democracy. (End of summary.)

Neoliberal expropriation

The trick word in that last battle cry is “world’s”. Yes, it’s clear that the troubled planet as a whole could use more of the civilized and equitable values of social democracy. But that doesn’t prove that Denmark needs a larger public sector just now. It’s been around 56% of GDP since 2008, now number 4 in the OECD.

These are the usual leftist charges that recent centrist governments (including the Social Democrats’) are betraying Denmark’s egalitarian ideals. They’re all debatable, and many seem exaggerated. They sometimes ascribe intentions rather than citing concrete measures, especially the intentions of the evil Right Wing (whose largest party, the xenophobic Danish People’s Party, is actually one of the strongest defenders of the welfare state). Some of the proposals of small supporting parties that are criticized are meant mostly as bargaining chips rather than realistic legislation.

The authors also subscribe to the assumption that reducing or shifting any funding for an entitlement always amounts to taking (or “stealing”) money that belongs to its current recipients rather than a possibly sensible revision of priorities. The government actually favors cutting not the marginal tax rate but rather the lowest tax bracket, even though many Danish economists, such as Nina Smith, believe that the former would be more efficient in increasing output.

Too many chiefs

Take the admission standard for gymnasium, which is a rather demanding college prep program. Enrollment has risen about 50% in the past decade: One third of the students would not have attended 10 years ago. Most kids who don’t meet the proposed requirement of C grades in math and Danish in the ninth or tenth grade don’t finish gymnasium and go on to college anyway (ninth or tenth because if they’re not ready after ninth, they can take an extra year to claw their way up to C). Is giving them an opportunity to fail at gymnasium the most productive use of tax revenues and of their formative years? Granted, a small number make a dramatic improvement and end up pursuing professional careers, but if the requirement existed, they would probably have been able to mend their ways by tenth grade.

Although I don’t know the circumstances of the retirees’ housing aid or the business tax transparency policy, I don’t find these Right Wing positions especially noxious and agree with the labor market and educational system reforms. I would rather criticize the government for just recently volunteering to join the bombing in Syria without a plausible exit strategy and for maintaining the so-called blackout law that restricts public access to ministerial documents (both measures have the support of the world’s saviors, the Social Democrats).

Welfare for growth

The authors’ most questionable assertion is that the welfare state makes Denmark competitive. One can appreciate the welfare state for the higher minimum standard of living and social cohesion it fosters, but it’s something else to imply that bigger government means higher productivity or that more transfer payments increase prosperity. Denmark’s GDP has been stagnant in this century. From 1991 to 2015, the annual GDP growth rate has averaged 0.35%, while Sweden, which has been dismantling its welfare state for two decades (despite its idealistic generosity towards refugees) has seen growth around twice as fast.

Countries with low Gini coefficients rank high in happiness, but the egalitarian mobility model is not so simple (almost all those countries are also small). Economic growth may increase inequality but at the same time raise the average standard of living. Let’s not even get started on the failure of integration in Denmark that the major left-wing parties also now acknowledge has left a “parallel society” stuck in “passive support” outside the labor market.

In any case, not all Danes think Denmark is the socialist paradise that some Sanderistas imagine. Most probably don’t. Most think its problems are all about socialism, though – either too little or too much. And Sanders for Prime Minister does a creditable service in delineating the fault lines. If you feel a Danish bern, you can join it by liking its Facebook page, how else?