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15 April 2016

Bicycles

Let’s forget about the monolithic welfare state for a moment and consider something simpler and more tangible that could also play a role the general level of happiness in a society: the bicycle. Copenhagen is one of the great cycling cities in the world. There are more bikes than people; about half commute to work or school by bike, including reportedly 63% of the members of parliament.

In the morning rush hour, the bike lanes leading downtown are packed up to three rows across with a cross-section of the population: kids on their way to school; women in dresses and high heels; middle-aged men in business suits; thirtysomething guys in full racing outfits who shower and change at the office; young parents taking a toddler in a seat behind or in a cart in front to day-care on the way to work; three-year-olds riding beside a parent with a hand on their shoulder or others cruising ahead themselves through intersections full of pedestrians, buses and merging cyclists. They ride year round unless there’s a foot of fresh snow, in full rain gear when necessary. Headphones are more common than helmets; some carry on an avid conversation with them in full career; others slow down only when they need to read or send a text.

“It’s all good”
When I first moved to the city and joined this movement four years ago, I was amazed at how smoothly it proceeded. It feels like being part of a complex self-organizing system as the streams of riders converge toward the city center, each at her own speed, winding around the slower ones, staying out of the way of the speed demons, signaling dutifully, stopping for busses to unload their passengers, negotiating detours around construction sites, timing the lights. Starting at an early age apparently explains how they adjust instinctively to the obstacles that arise. In Norway, you see toddlers on skis. In Denmark, they’re on bikes. In fact in these four years I’ve never seen a bicycle accident not involving me.

It’s obviously a healthy habit and a brisk wake-up drill, low-impact exercise whose aerobic pace you can dial up as much as you want, and especially convenient for people who otherwise have trouble finding the time. It reduces health care costs for society, including the mental health care costs of depression from inactivity. And of course it reduces traffic congestion, oil consumption, air pollution and CO2 emissions. Seems like it’s killing a flock of birds with one stone.

Nudging by car haters
But it’s not entirely an accident of Copenhagen’s extreme flatness or the result of a fitness craze or environmental conscience. It also owes something to the unsubtle influence of public policy, or if you prefer, the nanny state. The sales tax on new cars is onerous – 150% (after a recent reduction). The tax on gas is about $2.95 a gallon. The city invests in bike lanes and paths, particularly for commuting. There are bikes available for free or at nominal prices around the city for tourists to use.

The number of parking places has been reduced steadily by the left-leaning Copenhagen City Council, and led by the “mayor” for technical and environmental affairs, the democratic socialists wage a campaign to implement road pricing or rid the city center of cars entirely. You can’t get a driver’s license until the age of 18, and the high tax on cars makes most young people delay buying their first one until they finish college and get a full-time job. Denmark promotes collective traffic heavily – rail service is widespread – but it’s also expensive.

Can’t happen here?
So what can America learn from this phenomenon? The benefits are obvious, particularly considering two of the country’s most distinctive, acute and intractable problems: oil consumption and obesity. As I understand, there is a growing movement in the US to promote cycling. I was surprised to see the number of bike lanes in Manhattan. In Washington, DC, schools, young kids get bike training if they haven’t learned at home. Millennials seem to prefer cities to suburbs and are less attached to the automotive lifestyle than their parents and grandparents.

But of course the distances to destinations are much greater. People who live in a suburban tract far from work, school, the supermarket and everything else face a challenge. Few of the thoroughfares and roads are designed for bikes and may not be very safe or pleasant to ride on. There also seems be an antipathy toward bikes on the part of some motorists. While I was riding for exercise once in Charlottesville, Virginia, a few years ago, two teenage girls in a beat-up Chevy veered close to me, jeering “Get off the road, muthafucka!” There are bound to be some hiccups and fatalities in the transition.

05 April 2016

College for free

Abolishing college tuition fees is one of Bernie Sanders’s main proposals, and it’s no surprise that he’s popular among millennials, with student loan debt accelerating to staggering levels. Many can’t manage to repay it, and many who do keep up the payments can’t afford other things like a mortgage or rent or a child.

In several Western European countries, college, graduate school and vocational training programs are free. Denmark’s package is probably one of the most generous. Students get stipends while they study, beginning at 18, when their parents no longer qualify for a child allowance (the equivalent of a tax deduction for a dependent). They’re eligible for student loans on favorable terms, too, although they don’t accumulate crippling amounts. If that weren’t enough, if they don’t get a job as soon as they graduate, they’re eligible for unemployment benefits, even though they haven’t even begun paying the quarterly premiums. (The unemployment system works like a voluntary insurance policy, although most of benefits are subsidized by the state. Graduates are exempt from the normal requirements of a certain number of months of employment and up-to-date premiums.)

Too much of a good thing
How do Danish youth feel about this system? Do they appreciate the advantages they’re getting? Well, they tend to stay in school longer than the rest of the world. The average age when they finish professional training is around 28. They start elementary school one year later than in most countries, at seven, and many take an extra year, tenth grade, often at a boarding school, before starting gymnasium (the equivalent of a college prep high school program). After gymnasium, most now take a “sabbatical year” or two because they’re skoletræt (“school-tired”), and few complete university on schedule.

Some people argue that this leisurely approach is good because it gives them time to find out what they really want to do, and there’s some truth to that. But it can also encourage complacency. A couple of years ago a journalist found a character who became a sort of anti–folk hero and nicknamed “Lazy Robert”. He was about 40, and he’d managed to stay in university his entire adult life by switching to a new program whenever he was almost finished with one. He admitted that he didn’t want to work and was taking advantage of the system. A little while later he was apparently shamed out of his racket and got a spot on a reality show.

Pressures of student life
Danish students are loathe to lose any of their entitlements. In a recent reform intended to speed them up, the number of years they can receive the stipend was reduced slightly and the annual progress they must make to stay eligible was made more stringent. For example, if you fail or don’t complete a course, you have to complete in the subsequent semester along with the regular courseload scheduled for that semester. This caused an outcry, especially from those who work part-time and have trouble managing a full-time courseload. They say they’re going down from stress, or they have to quit their jobs and can’t pay the rent any longer. 

The latest cut came in a reform of the unemployment program last October, when new graduates’ benefits were reduced from about 82% of the full amount to 73% (except if they happen to have a child – Danish rules are precise and complicated, with exceptions to exceptions). They freaked out again.

Overcrowding 
They have a legitimate complaint about the difficulty of finding affordable rental housing in Copenhagen. Students don’t normally live on campus in dormitories; universities don’t have them. There are some run by private organizations that often aren’t in the vicinity of the schools, and their waiting lists are long. Rental apartments are scarce in Denmark generally, and rents in the city have risen sharply since the financial crisis.

But that difficulty is owing partly to the sharp increase in university attendance in recent years, which in itself could be a greater problem. The institutions are happy to have the business because they get funding by their headcount (the so-called “taxi meter” system). But an increasing number of university graduates are unemployed, while industry associations are warning of an acute shortage of plumbers, electricians and other tradespeople. Also increasing are professors’ complaints about the students’ lack of preparation, motivation and sound study habits. There’s rampant grade inflation and lax discipline for failing students; apparently they’re often given second and third chances to pass exams by review committees that include students.

Final grade
Despite Denmark’s participation in the general dumbing down of the affluent society, the educational system functions tolerably well. The attrition rate of about 30% may seem high but is not historically. When most students finish, they’re generally competent enough to do a professional job. They don’t often need to take service jobs for menial wages or start over afterward at coding bootcamp. They’re not saddled with onerous debt, so they can live on their own instead of with their parents, form a family, and prevent the population from shrinking.

Why not also in America?
So if this system works better than the one in United States, should the latter adopt it? I have to say no. Too many people attend college in the US already. The attrition rate is far higher than in Denmark. And according to several reports, the skills of many with bachelor’s degrees are scandalously poor, and the number who end up working at jobs that require only a high school diploma is scandalously high. Free tuition would only encourage more people to attend and result in a waste of resources. 

If the change were to be funded by reforming the tax structure, presumably by tapping the infamous one percent, it would have a wrenching and unpredictable effect on fiscal policy. Such a large cost should have more certain benefits, especially when the deficit and national debt are already far too high. There are other questions as well. The runaway rise in college costs is apparently owing largely to the growth in administrative positions and also to luxurious accommodations and facilities for students. What kind of incentives would subsidized tuition and virtually open enrollment give to college administrators?

Don't bet on it
So in this case, I don’t think the European system should or can be transplanted in America. I also think the scope of the entitlement in Denmark should be reduced. College in the US should be made more affordable by reforms; the student debt problem needs to be addressed; and perhaps competition with MOOCs and other innovative channels can make higher education more efficient. But for now, if American students want to avoid heavy debt, they could consider studying in Europe, where there are several English-language programs that are also free for foreigners or charge less than American colleges.

03 April 2016

The happiness sweepstakes

What do these so-called “happiness” surveys measure, and how do they make comparisons and rankings? The most famous is the World Happiness Report (WHR), which began in 2012. It is produced by an organization called the Sustainable Development Solutions Network, which was set up by the UN, and its editors include prominent economists such as Jeffrey Sachs and Richard Layard. It aims to measure “subjective well-being”. “Happiness” was chosen for the title, the report explains, as a deliberate simplification to attract more attention from laypeople (WHR 2015, p. 17), and I have followed suit in this blog.

Subjective well-being is ascertained by life evaluations, including overall satisfaction with life, and by reports of positive and negative emotions (the latter based on Gallup Global Wellbeing research). A complicated methodology aggregates various components that explain the differences in the countries’ composite scores: GDP per capital, social support, healthy life expectancy, freedom to make life choices, generosity and trust. The results make for catchy tabloid headlines, but the report is very comprehensive, slicing and dicing the data across many parameters and featuring extended essays on timely topics. It is intended as a supplement to purely economic measures such as GDP to be used in public policy decisions, and it is growing in influence around the world.

And the winner is...
Denmark ranked first in the WHR in 2013 and 2014, dropped to number 3 in 2015 behind Switzerland and Iceland, and then returned to the top in the recent 2016 update. The United States has landed consistently in the mid-teens. The exact ranking of the countries is not the essential information. The main point to notice in the list is the similarity of the highest ranked countries. The Nordic countries always fill most of the top slots. Rounding out the top 10 are other small European countries such as Switzerland and the Netherlands and the small or mid-sized English-speaking countries New Zealand, Australia and Canada. They are generally small, ethnically homogeneous, white, Protestant, peripherally located social democracies.

Another salient fact in the table is that the differences between the scores of countries adjacent to each other in the rankings, at least near the top, are usually smaller than the margins of error. This means that in a good year, any one of several contenders could land at the top, and they could all furnish instructive examples for America. Denmark seems as representative as any. I’m surprised, actually, that it’s back on top, since its economy is still rather stagnant and the political mood is contentious, but perhaps it shows that the rest of the world is doing no better.

In the feelgood category
When only the reports of positive emotion are used, as in Gallup’s Positive Experience Index, the results are markedly different. This survey asks people about their positive experiences the day before: were they well-rested and treated with respect “all day”, did they smile or laugh, did they learn something or feel enjoyment “during a lot of the day”. In 2015, all of the top 10 countries were in Latin America. “Money isn’t everything in life,” the report notes. Number 2, Guatemala, ranks 118th in GDP per capita. Curiously, the United States and Denmark are next to each other around the 25th spot. But about 20 other countries have the same scores as they do. As the WHR explains, it chose to focus on life evaluations for international comparison because emotional reports vary much less by region.

Another comprehensive report is the OECD Better Life Index, which began in 2011 and covers around 40 countries. It also has a complicated methodology combining 11 factors: housing, income and wealth, job earnings and security, social support, education, environment, “involvement in democracy”, health, life satisfaction, safety and work-life balance. Australia currently ranks first, Denmark fifth, and the usual leaders from the WHR fill out the top 10, with one exception, the United States at number 7.

A collective prize
As I said, the main conclusions to be drawn from a glance at the top of the lists are that that the countries are similar in type and nearly interchangeable in the rankings. This suggests strong correlations among demographics, ideology and subjective well-being. What causes what is less clear. Romina Boarini of the OECD says unequivocally, “We do know the more unequally the income is distributed the lower life satisfaction.” That would seem to support Bernie Sanders’s reform proposals and attacks on Wall Street and its Washington enablers (who’s enabling whom, or it symbiosis?). While Denmark fits the low Gini coefficient profile, another, more localized if somewhat counterintuitive explanation for its high standing has been circulating ever since these surveys began: low expectations. But that’s a topic for another day.


02 April 2016

Welfare for whom?

It might seem strange to start a blog about a putative model country soon after the place has been vilified in the international media for its supposedly brutal treatment of desperate refugees. At a time when its policies are associated not only with Bernie Sanders but also with Donald Trump. So, some background information – certain to prompt objections.

The Danish center-right government came to power last year on a platform of enacting stricter laws and rules for refugees and immigrants. It has tried to limit the number of refugees the country accepts. It reduced the monetary support that refugees receive and increased the time they must wait before they can bring family members to the country. It lengthened the period before they can apply for citizenship and made citizenship requirements more stringent.

Visitors not welcome
More controversially, it put announcements in Lebanese and Jordanian newspapers explaining the measures in order to discourage refugees from coming. This was in September, during the surge of migration and the death of three-year-old Alan Kurdi, when Sweden and Angela Merkel were welcoming all comers. That made Denmark seem harsh in contrast and put it in the camp with Hungary, which refused to comply with EU agreements and built a fence, and Marine Le Pen.

The last straw for public opinion was a measure authorizing the police to confiscate refugees’ cash and valuables above 10,000 Danish kroner, or about $1,500 (originally 3,000 kroner), to pay for their upkeep. Although the plan excluded items with sentimental value, this was the image conjured up in the media – Nazis ripping wedding rings off fingers and extracting gold teeth. The prime minister was compared to Hitler in a British newspaper. 

Unworkable anyway 
The rationale for the measure was that instances of somewhat affluent refugees applying for aid had been reported in other countries (aside from the large number traveling on fake Syrian passports and rumors of Islamic State fighters in their midst). Also, Danish welfare recipients are subject to a similar limit (although no one could recall Danes’ homes being ransacked for hidden stashes of jewelry).

But the reality on the ground – that is, at the border – was that the police didn’t feel qualified to judge on the spot whether refugees had too much money and didn’t want the task either. So few assets ended up being confiscated. It might seem that Denmark got itself a nasty reputation unnecessarily, but like the newspaper announcements, the initiative served the purpose of discouraging people from coming.

Penalized for prescience
Since then, Sweden, Germany and the EU altogether have changed their tune and adopted a position closer to Denmark’s. Not only are they returning refugees; Germany, Switzerland and the Netherlands also seized refugees’ personal property. In that respect, Denmark paid a price for being ahead of the game. It tried to remind the world that it still accepts an above-average number of refugees per capita, that its refugee benefits are much better than average, that its foreign aid as a percentage of GDP is among the highest in the world, and so on.

But if the general impression of intolerance from the “jewelry law” and the rest are difficult to shake, observers should note that many Danes opposed these measures – perhaps half at the peak of the crisis. They held demonstrations, transported refugees to Sweden personally and sometimes invited them into their homes, ranted on social media, wrote a series of op-eds expressing shame for a racist and xenophobic nation, and portrayed the Integration Minister Inger Støjberg trimming a Christmas tree decorated with a dead body. The government sank in opinion polls, and at times there was some doubt it would survive.

Fifth column on the dole
But to return to the original question: None of this invalidates the value of Denmark as an example of a successful social democracy for Bernie Sanders’s campaign or for America generally. It rather sets the issues in sharper relief. On the one hand, it might suggest that Denmark wants to reserve its welfare benefits for native Danes and that its prosperity or happiness owes something to its relative ethnic homogeneity. On the other, the consensus in Denmark now is that the integration of the existing minority population has failed and an increase in Muslim immigrants will exacerbate the problem of a “parallel society” outside the labor market.

After the terrorist attack last year and incendiary exhortations by certain imams, with a large majority of Danish Muslims favoring sharia law and Denmark sending the second-largest number of jihadists to Syria per capita, the dangers of Islamist radicalization have become more palpable.  Some see public support for forces that ostensibly want to undermine traditional Danish society as the strongest evidence that the welfare state has grown out of control.