Ho hum. Yet another article telling us all why Denmark is so fabulous - this time in The New Republic. Jonathan Cohn's piece, Neoliberal utopia awaits: Great Danes, is subscribers only. But fortunately Daniel Von Trier has posted it on his weblog. Here's an excerpt:
...nobody is suggesting that other countries could--or even should--import the Danish model whole. (Among other things, the strong sense of common purpose has an uglier side: relatively harsh treatment of foreigners and immigrants.) The idea, rather, is to take broad lessons from Denmark's experience. And the broadest lesson would seem to be the most obvious one: that it is entirely possible to have a large welfare state, with generous benefits, without choking the economy. Data from the rest of Scandinavia, which all use variants of the same economic model, support this argument.
In a recent Scientific American column focusing on the performance of these Nordic countries, Columbia University economist and best-selling author Jeffrey Sachs blasted the right's anti-tax, antigovernment conventional wisdom, concluding that "a generous social-welfare state is not a road to serfdom but rather to high levels of satisfaction, fairness, economic equality and international competitiveness."
Nor is Sachs the only prominent economist who has taken notice of Scandinavia's success. So have Harvard's Richard Freeman and Nobel Prize-winner Joseph Stiglitz, the former chief economist for the World Bank. Even some relatively conservative economists--like the American Enterprise Institute's Kevin Hassett, who has been an adviser to John McCain--will concede that the Nordic model works, although they are dubious that the United States could copy it: "The Scandinavians," Hassett says, "show that you don't have to have a terrible economy if you have a big welfare state and high taxes."
Even the more conservative of Clinton's economic adviser are interested:
For most of the 1990s, the Clinton administration pursued a relatively conservative set of economic policies that focused on efforts to improve overall growth, such as free trade and balanced budgets. Most economists believe Clinton's economic policies did, in fact, strengthen the economy as a whole. But it's also becoming apparent that the poor and middle class didn't benefit from the subsequent period of growth as much as the administration had hoped--and that both groups remain surprisingly vulnerable to economic dislocation today.
Of course, even back in the early '90s, not every member of the Clinton administration was so sanguine about the policies it was pursuing at the time. Among those dissenting was then-Secretary of Labor Robert Reich, who proposed that "if we blended our flexible labor markets with [Europe's] investments in human capital and put the safety net somewhere in between ours and theirs, you would have the best system in the world." Reich's argument famously lost out to those of Clinton's more conservative advisers--among them former National Economic Council Chairman Laura Tyson and former Treasury Secretary Robert Rubin.
And so it was a little ironic that, a few weeks ago, it was Tyson and Rubin, along with some other former Clinton advisers, who found themselves discussing Denmark at a panel on economic policy co-sponsored by The New Republic and the Brookings Institution. Tyson, who just completed five years as dean of the London Business School, first raised the possibility that Denmark might be a model for the United States, noting that "there is nothing in the growth rates to suggest that Denmark is paying a penalty for having a high level [of taxes and government spending]. ... This is not to mention in addition the fact that health care coverage in Denmark is universal, and it is not to mention the fact that, actually, Denmark has one of the lowest poverty rates in Europe and has the lowest poverty rates for children in all of the oecd countries."
Upon hearing that description, Rubin quipped, "I think I would like to move to Denmark." That, surely, isn't necessary. But a fact-finding visit might be worthwhile.
Forgive my scepticism, but if even a British Labour government balks at the idea of introducing the Danish 'flexicurity' model, then there is no hope of a US administration taking it up. It's not that the Danish aka Nordic aka Scandinavian model dosen't work - it does. But it is damn expensive. I doubt that taxpayers in Anglo-saxon countries are prepared to foot the bill.