The less happy among us

Except for the free newspaper MX Metroxpress, Politiken is Denmark’s largest-circulation daily (DK). In the past, it was associated with the Social Liberal Party. Now it is formally independent, but it still has a left-leaning political stance and its readership is decidedly sympathetic to socialistic currents in the country and the welfare state in general. One expression of this approach is a tendency to see victims everywhere, that is, to identify people as neglected or slighted and to showcase their plights. Of course the media have responsibility to identify injustice, analyze its origins and workings, and place the blame where it belongs. But Politiken’s treatment seems excessive.

I’m hardly the first to notice this phenomenon, but surveying some examples offers a curious angle on the ramifications of the “welfare society” that produces the highest relative happiness rankings in the world. Few of the opinions represent the newspaper’s own explicit editorial positions. Some reflect the journalist’s or commentator’s views, some belong to the subject of the pieces, and some are from letters to the editor. But they all reflect the kind of topic the paper wants to draw attention to (the paper has an English-language extract).

Disasters natural and man-made

So who are victims? I’m not referring to the obvious, indisputable cases covered by all newspapers: hurricane victims, earthquake victims, the persecuted Rohingya. Migrants who drown in the Mediterranean. Yemenis suffering from hunger, cholera and war. Sri Lankan children kidnapped and sold for adoption. Random shooting victims and residents of Copenhagen neighborhoods with gang wars. These people may be portrayed with more or less pathos and indignation, but they are not the type that Politiken specializes in. Here is a random sample from the past couple of weeks.

Students who feel compelled to take Ritalin and beta blockers because of pressure to perform. Families with more than three children, who because of an administration proposal would see their “child-check” reduced. One hundred and ten Siemens employees in Jutland who were laid off because jobs were moved to France and Germany. Train passengers who are delayed more than an hour and don’t get the free meal they’re entitled to according to an EU directive. Divorced men who miss out on those same “child-checks” because their children have their official address with their mother.

Jobless, pedestrians, girls, the EU

Children who are bullied at school, despite the decline from 25 percent to 10 percent over the past 20 years. Local citizens who must pay for the cleanup of a nature preserve polluted by the military. Young girls who don’t read a book everyday (41 percent instead of 32 percent seven years ago) because peer pressure makes them chat on social media instead. Quota refugees whose reception the Danish administration has postponed until 2018. The unemployed who are denied permanent disability benefits and forced to undergo job training because of a stricter policy. The mentally ill and handicapped who were not approved for aid by their municipalities and won on appeal.

Children seduced into becoming compulsive gamblers by computer games. Pedestrians on a new bridge over Copenhagen Harbor who are endangered by cyclists. The EU, which is being cheated out of EUR 5 billion in taxes by the likes of Google and Facebook. Civil servants who get emails from work on Sunday. People swindled into sending money for purchases of iPhones on Facebook. Senior citizens who want to supplement their low income with home equity loans and are rejected because their income is too low. Young women who have to live with emasculated men.

Smokers, politicians, nurses, trippers

Smokers on welfare who do not get a bonus for quitting smoking as other citizens do. Hospital employees who are overworked and hospital patients who are under-served because of a reduction of funding. An adoptee from India who is perceived as non-Danish. Children born to older mothers who have an elevated risk of ADHD. Politicians whose budget proposals are heavily criticized in the media. University students who can’t find an apartment or room to rent. Children whose parents won’t let them be vaccinated. The world, which will experience more hurricanes because of global warming.

Denmark, which will get a politically unqualified US ambassador. Alcoholics, who can’t get good treatment because Danish culture encourages overdrinking. The unemployed, who are subject to a longer qualifying period for benefits. Students who are abroad for more than one year and according to a legislative proposal would lose their stipend. The elderly, who do not receive adequate care in nursing homes. Babies who suffer from understaffing at day-care centers. Everyone who does not have access to psychedelics, which according to the chair of the Psychedelic Society should be a human right.

Universal basic well-being

I’m not saying that many of these things aren’t legitimate grievances. Only noting that there seems to be an endless supply and asking, in the welfare society, where do these purported human rights end? The Danish concept of “millimeter democracy” refers to a contest in which if one person gets favorable treatment, another person feels entitled to the equivalent, and the next in turn, ad infinitum, or at least until you have accumulated the world’s largest public sector. If it confers great happiness, why does it also produce so much resentment? What used to be known as the right to the pursuit of happiness often comes to be viewed as a right to every comfort and convenience, if not happiness itself. Why not just break out the soma?

The agonies of European multiculturalism

Douglas Murray is a British journalist and associate editor at the Spectator. His latest book, The Strange Death of Europe: Immigration, Identity and Islam, which came out earlier this year, is of great importance for understanding developments in the past 50 years in Europe. It concerns the growing Muslim population in the region that poses an intractable social problem because it is not being integrated in European culture. A combination of mass migration, a falling birth rate among Europeans, and the acquiescence of Western European politicians has led to a situation in which traditional liberal Western values are being undermined.

The acts of jihadist terrorism that the book recounts are well known. The less sensational but disturbingly frequent incidences of rape and anti-Semitic attacks are also becoming familiar. The most shocking revelations of the book, however, concern the denial and guilt displayed by Western European politicians and the mainstream media, partly because they run counter to the skepticism about immigration that Western European populations have shown since the 1960s.

From guest workers to sharia law

At that time, when there was a labor shortage, Western European countries invited “guest workers” from Turkey and elsewhere to fill the shortfall. They were expected to return home when they were no longer needed, but they stayed. They were expected to become integrated, and when they did not, politicians denied that there was a problem because they were afraid of being called racist and would not admit that their policies had been mistaken. The police and the media supported this position by suppressing news of gang rapes and white slavery, for example.

Even though the large majority of the Muslim population does not commit acts of terrorism and violence, there is surprisingly widespread support among it for sharia law, the Islamic State, honor killings, female genital mutilation, and so on. The earlier predictions of problems that were treated as alarmist proved to be underestimated.

A religion of peace

And when news of atrocities did get out, politicians insisted that the acts had nothing to do with Islam, a religion of peace. They blamed their own culture for its colonial history and maintained that Europe had a unique responsibility to shelter even those opposed to its basic values. This is political correctness taken to masochistic lengths. At various times, for example, Swedish cabinet members and prominent figures have said that everyone is a migrant, that Swedes were jealous of the authenticity of Middle Eastern culture, and that a failure to accept migrants was equivalent to the Holocaust.

The book describes this syndrome in the UK, France, Germany, the Netherlands and Sweden, and it also describes a resistance to it in eastern Europe, notably Hungary. It makes little reference to Denmark besides the Mohammed cartoon crisis, but the implication of its message for Denmark is striking: with its infamous 50+ measures to restrict immigration, the current Danish government is actually taking the course that Murray recommends to mitigate the worst integration problems afflicting its neighboring countries.

Fake Syrians and children

Consider the issue of repatriating people whose applications for asylum have been rejected. In Germany, Sweden and elsewhere, there have been thousands of cases of people whose applications have been rejected for making false claims of being Syrians, of being minors or of being persecuted on political grounds. In very few cases, are they returned to their homeland or to the country where they should have sought asylum according to the Dublin III accord. The authorities lose track of them. Perhaps they survive economically on the black market or join criminal gangs. In any case, the official policies are considered impossible to enforce.

In Denmark, the number of such cases is relatively small, but they have been identified: In the first half of 2017, some 1,835 rejected applicants were repatriated. As of August 3, there were 941 waiting to be repatriated (DK), including 434 who could not be repatriated because of difficulties reaching agreements with their home countries. There is a debate between humanitarian organizations, which argue that those who cannot be sent home be given residence or work permits, and the administration, which argues that such measures would encourage others to enter the country on false pretenses.

Racist or realist?

Rejected asylum applicants have also escaped from Danish refugee centers and disappeared from view, but the concrete figures on the issue, the open debate on the policy and the negotiations conducted with the applicants’ home countries set Denmark apart from the usual practices and attitudes that Murray describes. The center-left Social Liberal party now also favors (DK) a reduction in the number of refugees, and the Social Democrats now propose (DK) following the Australian model in which applicants are processed outside the country. Because of a reduction in the number of applicants, Denmark using the allocated funding to support refugee camps (DK) in North Africa, as Murray and others recommend.

Denmark has been vilified for exemplifying xenophobic tendencies that have appeared in France, Germany and elsewhere, but if Murray’s portrayal is credible, its recent policies exemplify rather a more candid and realistic attitude toward the European cultural crisis than is found in most of the continent.

Welcome to the happiest country

The Expat Insider 2017 report has just been released by Internations, the networking organization for expats (disclosure: to which I belong). It is an extensive annual poll that this year surveyed 13,000 respondents in 65 countries on the basis of 43 factors. It is interesting to compare the results with those of the international happiness surveys because the results differ greatly. For those who consider moving or posting abroad, this report may be more relevant as an indication of what to expect when living in a country than the surveys of native populations.

Recall that in the World Happiness Report (WHR), the same group of countries filled the top ten spots year after year: almost exclusively northern European countries and smaller (population-wise) Anglo countries such as Australia. The overall ranking in the Expat Insider (EI) report is called “Top Destinations,” and the top three this year are Bahrain, Costa Rica and Mexico. The results are also much more volatile; Bahrain moved up from No. 19 in 2016. Without considering the size of the sample or whether the methodology is as rigorous, we can expect expats’ opinions to vary and change as a matter of course because they are on the move and in the process of adjusting to a foreign setting.

Slicing and dicing life abroad

The survey breaks the results down into several indices (shown in the left-hand column below). Each of the indices, in turn, is based on rankings according to more specialized parameters. For example, Quality of Life comprises Leisure Options, Personal Happiness, Transport, Health and Safety.      

Here’s a summary of the results in each index for the top-ranked country, Denmark and the US:

Summary: Expat Insider 2017

Index	No. 1	Denmark	USA
Top Destination	Bahrain	30	43
Quality of Life	Portugal	12	47
Ease of Settling In	Bahrain	65	28
Working Abroad	Czech Republic	9	28
Family Life	Finland	4	36
Personal Finance	Vietnam	56	37

NB: The Family Life index covers only 45 countries, and the Personal Finance parameter seems to concern primarily the cost of living.

No welcome wagon

The most glaring inconsistency between the two reports is that Denmark, the recurring No. 1 in the WHR, ranks 30^th overall among expats. It scores at the extremes of the EI indices. We know that, on the one hand, it is safe and has good child care and a good work-life balance, and also, on the other, that with its high taxes and duties it is expensive. The surprising score, which along with the cost of living drags down the overall ranking, is that it comes in dead last on Ease of Settling In, while countries such as Nigeria and Kazakhstan land in the middle.

Does this mean that the Danes are the most unfriendly people to foreigners? Consider the subcategories of this index: Feeling Welcome: 61; Friendliness: 59; and Finding Friends: 64. In the last subcategory, Language, it ranks 40^th even though everyone speaks English. Yes, the results suggest that the happiest people in the world are also the most unwelcoming – a disturbing combination on the face of it. Denmark has gotten a reputation for being anti-immigrant and anti-refugee, but the expats in this survey are generally well-educated people who don’t intend to live in the country permanently and don’t consume more than their share of its social benefits.

Tops in foreign aid

It looks like the Danes are happy among themselves and don’t want to share their happiness with others. But at the same time, Denmark managed to rank first in the 2017 Commitment to Development Index. It feels an obligation to the world and discharges it in a thoughtful, exemplary manner. Some other affluent, relatively happy countries rank near the bottom for “Settling In,” even those most welcoming of the big refugee wave of 2015, which were also near the top in Commitment to Development: Sweden: 49; and Germany: 56. In contrast, this was the best index for the otherwise not very tempting destination USA.

Another “parallel society”

I have attended several Internations events in Copenhagen lately. These well-attended cocktail parties and other activities have a lively, pleasant atmosphere. The typical participant is a single, thirty-something professional from another European country, and there is also a fair share from the Middle East. Many work in IT and pharma-biotech. A recurring topic is the difficulty of infiltrating mainstream social life in Denmark.

Even when everyone is supposed to speak English at international companies, Danes speak Danish among each other. They usually leave work early and don’t stop for a drink on the way home. Their leisure activities are focused on their families, extended families, and clubs in their local communities. Expats flock to these Internations events because they often cannot find activities as accessible and welcoming among the Danes. (Caveat: This sample may be not be representative: Many foreigners who are integrated probably don’t have the same need to attend expat events.)

Investing in the future

I can speak from both sides of the integration fence. It is possible to become fairly well integrated. It helps to be outgoing, enterprising and willing to mispronounce the language for a while. The quickest is to marry a Dane, get a permanent residence permit and have children here. Then you learn the language, become part of the child-care and school system, and begin to benefit from the advantages in quality of life. But even after living here many years, few immigrants can pass as real Danes, and their children may always make fun of their accents.

I should add that more foreigners than ever are working in Denmark and that, to the relief of industry associations, the government is proposing to expand the tax break for highly skilled foreign employees to attract more. The trend will continue, and as the country becomes more cosmopolitan, it may be able to crawl off the bottom of the hospitality league. But it has a long way to go to become a melting pot.

Tax cuts and inequality

Last week the Løkke Rasmussen administration presented a proposal for tax reforms called Job Reform Phase II.  The measures are intended to provide tax relief to various income groups and give greater incentives to work. They inevitably provoked controversy about how much was necessary and who benefits most.

One of the basic issues under debate on tax reform has been whether to reduce or abolish the high marginal tax rate in order to prompt high earners to work more or to reduce the rate on the lowest income group in order to bring more people into the labor force. The Liberal Alliance party had made the former its cause and had been virtually holding the government hostage with the demand. Leading economists have also endorsed the position, saying it would be revenue-neutral. The Danish People’s Party, the largest party supporting the administration, on the other hand, has demanded tax relief for low-income workers. So who won?

Take-home pay

One of the key measures was an adjustment of the employment deduction. People in the lowest income bracket would get a new deduction of DKK 4,500 ($720). The rationale is that this would make it more appealing for a segment of the population to work instead of receive transfer payments. The government estimates that the measure would reduce this segment from 50,000 to 21,000 people.

At the same time, the ceiling on the employment deduction would be removed, and this would benefit people in the highest tax bracket (with a marginal rate of 56%). There are several other measures, most of which also seem to benefit high earners, such as an acceleration of the increase in the threshold of the highest income bracket, a reduction on the tax on car purchases (to 100%) and a more favorable treatment of pension contributions.

Malleable statistics

In a simplified scheme, the administration estimates the tax savings for four income groups. It emphasizes that the lowest segment would receive the largest percentage reduction, 7.1%. The middle segments would receive about 3.8%, and the highest segment 5.7%. The absolute amounts, of course, paint a different picture. The lowest group gains about $800 and the highest (represented by an income of about $165K) gains $4,300. So the question is whether the administration is trying to sneak a tax break for the rich into the package without actually changing the marginal tax rate. And the real question is whether doing so is good or bad.

Other organizations calculate the effects differently, of course. The Economic Council of the Labour Movement estimates that the top ten percent would receive an additional $1,900 in disposable income and the lowest ten percent would receive $48, not even taking into account supplementary factors such as the tax on cars. Such estimates are always debatable. It’s difficult to make comparisons partly because of a panoply of other taxes and duties, such as 25% VAT.

Gini out of the bottle

The criticism from the left is that the measures would increase inequality. According to Cepos, the leading conservative think-tank, the reforms would increase inequality more than any other since 2001. They would raise the Gini coefficient by 0.46, from a level of about 28.8. This has elicited many protests and denunciations not only from opposition politicians but also from cultural figures. The actor Flemming Jensen, for example, launched a broadside on Facebook accusing the administration of betraying Denmark’s heritage of solidarity and equality and promoting a neoliberal “law of the jungle” that is creating a caste system while the number of homeless increases, hospitals are forced to reduce costs and so on. In a subsequent interview, he concluded that no one in Denmark needs an income of more than $160K: “Why the hell would we?” Imagine how that would play in a country with heroes like Zuckerburg and Bezos.

The administration acknowledges the rise in equality and calls it insignificant. It argues that putting more people to work and raising all disposable incomes inevitably increases inequality but the level in Denmark would remain one of the lowest in the world (the Gini coefficient for the US, in comparison, is one of the highest, at around 46-48). Finance Minister Kristian Jensen said that he has been to town hall meetings around the country and no one has ever asked about the Gini coefficient; they ask rather how the government will enable businesses to hire more people. But they were probably his party’s own constituents. The Danish People’s Party is against the abolition of the deduction ceiling.

The secret to happiness?

This debate goes to one of the central issues of the research on comparative happiness internationally. The happiest countries generally have very low inequality, but is equality the direct cause of happiness, the most important single factor, or a derivative effect of other factors? If it is a causal factor, is there a limit to its beneficial effects? It is possible that, for historical, political and demographic reasons, the socialist tendencies in Western Europe that have brought relative equality and happiness in the prosperity since World War Two are no longer able to sustain them in the current low-growth global economy.

But that’s a theoretical question. The political reality is that the populations of social democracies are split. The so-called “welfare coalition” of welfare recipients and civil servants generally favors higher taxation and a larger public sector. Those in the private sector would rather keep more of their gross earnings. There is a constant tug-of-war and a tinkering with the tax tables whenever the governing majority shifts between a center-left and center-right coalition. Although Denmark’s economy is somewhat stagnant, it is fundamentally sound. The country has the luxury of being able to take or leave the proposed reforms, which may have more symbolic value than practical consequences. Perhaps sooner than we think, robotics and AI will shift the debate on the labor market and inequality to how to implement universal basic income.

Dismantling the nanny state, gingerly

Most of the parties in the Danish Parliament have reached an agreement (DK) to reform the rules on the amount of time that people on unemployment benefits and early retirement can spend on voluntary activities without losing any benefits. Currently, they can work up to four hours without penalty, and any additional time results in a reduction of their benefits. According to the new rules, the unemployed can work up to 10 hours and people on early retirement 15 hours. For recipients of so-called flex benefits and those in a flexible job program, the current limit, also four hours, will be abolished completely. All the parties support the change except to two furthest to the left, the Socialist People’s Party and the Red-Green Alliance.

Examples of volunteer work most often mentioned are fundraising for philanthropical organizations and serving as assistant soccer coach. There have been cases of clubs needing to close or reduce their activities because they didn’t have enough staffing. Sports teams in Denmark are generally run by private clubs; they aren’t associated with schools and universities. Denmark has an extensive system of non-profit associations for all kinds of activity. That’s why rules in this area have a significant effect.

Win-win or zero sum?

The proponents of the reform argue that such activities enable volunteer organizations to thrive, they are satisfying and healthy for the volunteers, they give the volunteers experience and contacts that can help them find a job, and so on. Why is there a limit at all, one might ask? Isn’t volunteering always a good thing for both the participant and the recipients of the work?

The argument against it (DK) is that it reduces the need for paid work and keeps more people unemployed. The unemployed are in effect taking jobs away from themselves. They also have less time to seek paid work. A two-year study showed that the more time the unemployed spend on volunteer work, the longer they remain unemployed. Every spokesperson for the parties in favor of the change also adduces the need for such limits and maintains that the new ones provide a better balance.

Rules and subrules

The rules also distinguish between voluntary social activities, which are not subject to these limits, and voluntary unpaid work, which in principle could be performed by paid employees. They also distinguish between two subcategories of voluntary unpaid work: operations and maintenance on the one hand, and anything else on the other. According to the reform, it will now become possible for people to perform minor operational and maintenance tasks with a reduction in benefits in small organizations that do not ordinarily pay people to do such work.

These are the nuts and bolts of the nanny state. The rules on unemployment and illness benefits reportedly fill 26,000 pages (DK). I don’t know the extent of similar rules on volunteer work in other countries, and I don’t understand the economics behind the criticism of the reform. It seems unlikely that, if people are prevented from volunteering, an organization will always be able to hire a paid employee to fill the job.

Surveillance and criminality

The other question that comes to mind is, who’s counting? How do the municipalities, which administer unemployment benefits, know whether Assistant Coach Lars spent four hours or five hours with his six-year-old and his soccer teammates last week? Does the picnic lunch after game count as well? Driving the kids across town to a game?

The unemployed need to report to the municipality about their job-seeking activities, but are they questioned about everything else they do? Are the positions of volunteers published in association documents? Are fellow citizens encouraged to rat on volunteers as though they were working in the shadow economy to evade taxes? People on early retirement must report earned income, which above a certain amount can also reduce benefits. But I doubt that they need to show up at public agency regularly to report on their leisure activities.

Whose money is it?

Another factor to remember is that both unemployment benefits and early retirement benefits are based on individual contributions to programs resembling insurance policies. Both of them receive public subsidies, but any reduction in benefits for exceeding these limits represents a proportional loss of one’s own contributions. One’s own taxes also go toward the subsidies.

The reform is a positive step toward a more realistic treatment of social behavior. There is much less charitable giving in Denmark than in the US because the state takes better care of people in need and taxpayers feel they “gave at the office.” Because of the large number of clubs and associations, volunteering to support and administer them is probably the main way that individuals express their altruistic impulses. And the unemployed have more time to do it and probably derive greater benefits from it. If we return the basic question about what makes people in social democracies happier than those in countries with freer market capitalism, it isn’t because their bureaucracies have limited or criminalized such activity.