Wed Jul 23rd, 2008 at 06:48:50 AM EST
One of the first replies I got to a comment here on ET ran along the lines of "cool, you're Danish, can you do a diary on the Danish social model?" And I've been meaning to do so since then - but never quite gotten around to it. So with no interesting current events in my neck of the woods right now (one of our parties is disintegrating, but hey, what else is new?), I figure I might as well.
The first thing to remember in any discussion of "the Danish model" is that it's actually a Scandinavian model, not an explicitly Danish. It evolved in all three Scandinavian countries more or less in parallel. I don't know about Finland, but I'd suspect that they had a slightly different trajectory because their primary trading partner is and was Russia, while the Scandinavian countries were firmly in the American sphere of influence.
The second thing to remember is that the Scandinavian model is not an economic model. It's a social model. The fact that it provides a number of not insignificant economic benefits - such as flexicurity and built-in counter-cyclical spending - is incidental. Nice, but incidental. Because its justification is fundamentally one of social justice, not economic efficiency.
What is usually discussed in the context of the "Danish model" is the labour market model, because it is the part of the Scandinavian social contract that most obviously increases economic efficiency. But as I argued above, this view is entirely too narrow: The labour market structure is a part of a coherent social contract that has evolved as a whole. It is possible that the labour market structure could be taken out of this context and transplanted into other countries with different overall social models. But it's equally possible that it can't. And we don't know, because it's never been tried.
Keeping these points in mind, we can identify six principal pillars of the Danish welfare state (I'll focus on the Danish because it's the one I know, but most of the conclusions should be applicable to all Scandinavian countries and a lot should be applicable to Finland as well):
Promoted by afew
- Free, easy and equal access to child care.
- Free, easy and equal access to education (and educational subsidies that you can live off).
- Free, easy and equal access to health care.
- The labour market system.
- Universal pension that one can live off, and reliable care for the elderly.
- Reliable public infrastructure.
The purpose of ensuring reliable and free child care
First, it enables the emancipation of women in society by relieving them of many of the practical aspects of child care (even to this day and age, there is a significant gender difference in the amount of work put into childcare in Denmark, so anything that reduces the workload in childcare becomes a vehicle for greater gender equality). As a corollary to this point, it also increases class equality, because it eliminates the distinction between those who can afford a nursemaid and those who can't.
Second, it socialises the children. Having the children of the rich and the children of the poor attend the same daycare, the same primary schools, play in the same playgrounds and generally interact helps build inter-class solidarity and helps ameliorate the tendency of the rich and privileged to insulate themselves from reality as experienced by those less fortunate than themselves. Bluntly put, everyone in Denmark should - at least at some point in their lives - have seen, talked and played with both someone of higher social stature and someone of lower social stature. Further, Conventional Wisdom holds that children develop better social skills if they interact with many other children instead of solely with their siblings and parents. I'll reserve judgement on whether the latter part of the socialisation scheme actually works as designed, because I can see some significant drawbacks as well - but let's leave that for another diary.
Free, equal and easy access to education serves many of the same purposes as childcare: It levels the playing field between rich and poor, because there's no such thing as "can't afford to send my kid to college." It integrates different social classes in the same educational system, which helps build inter-class solidarity. And it gives the rich and privileged a stake in the same system that supports the education of the poor and underprivileged.
But it has a separate bullet because it serves another purpose as well: It makes children independent of their parents much earlier than in countries with tuition fees for higher education. Bluntly put, if an American teenager has a sufficiently severe falling out with his parents, he's screwed financially as well as privately, because he just lost the most likely source of funding for college. In Denmark, this is not the case. Not even the most antagonistic parent can financially prevent their child from seeking higher education.
An aside: This is a general theme of many of our social institutions - they provide the individual with the possibility of distancing himself from his family without risking financial ruin. This is one of the reasons that a little red flag goes up in my mind whenever people start talking about family this, family that and family the other. Yes, living in a stable and supportive family is A Good Thing, and society should do what it can to help build (or at least not actively undermine) stable and supporting families. But by making the family financially unnecessary, we have effectively created a two-tiered social safety net where the state helps those whose families can't or won't provide the necessary aid. And I cannot help but think that the (primarily conservative) focus on the family has more than a little to do with a desire to yank away the second tier of this net.
The benefits of universal health care are well known and we need not dwell excessively on them: It ensures that illnesses are not a financial catastrophe for the afflicted, it ensures (like universal education) that the rich have a stake in the system that supports the poor, it takes the pressure off families because they are not pressed into service as improvised nurses when one of their members falls ill, it maintains the health of the population and it makes people less dependent on having their own social safety net, by taking expenses and complications from the private into the public social support system.
I will not cover the structure of the labour market here, because doing it justice requires a diary in itself (which can be found here
is already half written - I just decided to cut it out of this diary).
A public pension scheme that one can live off serves many of the same purposes as the other institutions - it reduces the gender gap (because women are still working less and for lower wages, so their employer pensions and private wealth are generally lower), it reduces the reliance on the family as the primary social safety net and it ensures that nobody has to work literally until he dies of old age, irregardless of their social class.
The benefits of reliable public infrastructure should be crushingly obvious to all regular readers of this blog. But it deserves mention, if only because maintaining a reliable public transit system (and the road network) is one of the biggest items on the finance bills and absolutely essential for the smooth functioning of Danish society.
So far, so good. But so far it's been about ambitions and goals for constructing a welfare state. What's the actual state of the welfare state in Denmark?
The answer is, generally, very good, but going in the wrong direction.
1) Child care: Relatively inexpensive - it was never quite free, but the rates have been going up lately. The quality is quite high, but deteriorating as employees are cut and wages stagnant. However, the most worrying trend is the segregation of upper, middle and lower class (and the even worse off class formed by some groups of immigrants...).
- This segregation is based partially on ghettoisation: As people became more mobile, they congregated according to their wealth, income and general social standing. Thus, we have entire municipalities with nothing but upper-middle-class neighbourhoods (well, under the old municipal structure we did - with the newer, bigger ones, maybe not) and municipalities with mostly or only immigrants, unemployed and people in low-paying jobs with little in the way of job security.
- The other driver in this segregation is the fact that the rich and privileged (and, worryingly, increasingly the middle to upper-middle class) simply remove their children from public daycare and public schools in favour of private daycare and schools.
- Segregation risks undermining the inter-class solidarity that derives from common childhood experience - and of course it also means that the rich and privileged can casually watch as the public childcare system is gutted, safe in the knowledge that their children won't suffer for it.
2) Primary and secondary education is much the same story: Lower budgets, fewer employees and so on and so forth. So far, tuition fees for primary and secondary education are not on the table - or even on the horizon - but it is a running battle to keep higher education free and accessible.
- All the same segregationary trends that are mentioned for childcare hold true for public schooling as well, and given that the formative years of most people is in secondary school and higher education, the consequences of class-incestuous educational environments are potentially far more disastrous.
- As an aside, I am not against private schools or private daycare - they provide breathing room for people who have different ideas about the hows and wherefores of education and child care than the government, and that is valuable to any society. But I think it is a sign of trouble when private schools are preferred purely because their pupils have a better record of academic accomplishment. That is a sign of failure in the public school system.
3) Health care is a mess, in no small part due to the fact that it is in many ways best viewed as several different systems that have evolved separately, but just happen to have health as a common denominator.
- Dental care is pay-per-use with small or non-existing subsidies.
- Primary care is free and accessible, although there have been rumblings about instituting fees for doctor's visits.
- Hospital care is free in public hospitals, but increasingly we are seeing a trend towards private hospital care and private health insurance. This wave of privatisation by the back door was initiated when the Fogh 1 government decided to make health insurance tax deductible. Since most health insurance is employer-paid (and usually falls in the category "nice to have" rather than "need to have"), the emergence of a privatised health care industry and health insurance industry has passed virtually without public debate, providing the infrastructure for further privatisation down the road. Nobody ever said the Danish liberalists were stupid. Irresponsible ideological fundamentalists, yes, but not stupid.
- Medicine (both over the counter and prescription) falls in two categories: The medicine you get at the hospital counts as part of the hospital treatment and is thus free, while the medicine you get out of hospital does not, and thus you have to pay for it (I did say the health coverage was a mess :-P). Prescription medicine is subsidised to various extent.
- Cosmetic surgery and such things are privately operated and mostly user-paid.
- The state of the labour market system will be covered in the diary about the organisation of the labour market.
- The public pension system is a bad joke. I suppose that it's not that bad compared to much of the rest of the world, but measured against the ambition that everyone should be able to live off a public pension alone, it is a miserable failure. The principal source of pension funds for most people are the employer-paid pension schemes and the two or three payroll taxes that are directed into private accounts (but managed by a quasi-public pension company). But if you have only the public pension, you have to turn every coin over in your hand before spending it (even worse: If you haven't lived long enough in Denmark, you only get a fraction of the public pension. Then you're just plain screwed).
- The public infrastructure is not bad. We have fairly comprehensive intercity rail coverage and good bus networks. We have a good public water supply (I've diaried on that subject in the past) and our road network is in good shape. Now for the bad news, which is all too familiar:
- Mass transit is being heavy-handedly outsourced - with all the attending cost increases and loss of coverage and reliability
- We're building highways when we should be building railroads
- Light rail coverage in our major cities is either non-existent or a bad joke
- Renewable energy was shafted by Fogh 1 (I think it was Crazy Horse who very aptly called Anders Fogh the Don Quixote of the Danish wind industry...)
- Our railroads have not been adequately maintained for the next best thing to thirty years (it took a complete breakdown in the summer of 2006 to finally get the politicians going, and even then restoration is spotty and focuses on repairing the cracks (literally: The cracks) in the rails)
- A good third of our rail lines are still not electrified(!)
And there's probably a couple of other things that I've forgotten.
In summary, we have a strong set of institutions and social support systems, but even the best society can only withstand irresponsible governance and market fundamentalism for so long. And we're going in the wrong direction with worrying speed.