The Nordics – up Close and Personal

Norden - tæt og personlig (The Nordics – up close and personal)

In Sankt Peders Stræde in the middle of Copenhagen’s old Latin quarter, I strolled into Vækst, a beautiful restaurant centered around a beautiful greenhouse. I was starving. I asked for a table. There was none.

However, the host of the restaurant had an idea. He asked a lady who was eating alone if she would let me join her table, and she agreed. My first-hand experience with the Nordic trust just happened.

The gracious Astrid, (name changed for privacy), an art curator from Stockholm, invited me to join her table for a genuinely gastronomical and intellectual Nordic experience. Over a beautiful new Nordic meal of locally grown fresh vegetables and meats, I learned a resident’s point of view, the Nordic aspect of life and politics. She summed it up as “comfortable” and “safe.” While she may not be earning a lot, she and her family had health care, education at any age was free, and the residents had the freedom to define how they wanted to live their life.

Her primary concern is how unkindly the world is treating the planet, and she was worried if her children will have the earth to live their life. A point of view so eloquently shared and rightly said, something very few of us in the US with our stock prices, 17-18 hours work days, stop to ponder.

Danmark – Kort Historie (Brief History)

Danes have a broad sense of reality that they have built, from relatively unpromising foundations, the most prosperous society on earth. Danes are down to earth, friendly and egality comes quickly to them. They have created an economically and gender equal society which has facilitated their social and economic development in the last hundred years. My favorite quote of my understanding of the Danish culture is as follows:

“. And we will have made great strides in equality when few have too much, and fewer too little.”

Digging into the specific policy and social investments, beginning in 1930 when the Danish Social Democratic Prime Minister Stauning, made a substantial political settlement with the opposition Liberals. The deal addressed unemployment, consolidated [1]agricultural earnings and laid the groundwork for a social reform that gave social welfare benefits to those in need as a right – not as alms. Even though Denmark and Germany had signed a pact of non-aggression, on April 9th, 1940 Adolf Hitler invaded Denmark, and for political reasons, Denmark had little choice but to submit to life as a pliable German Satellite; Churchill giving it the title of “Hitlers’ pet canary.”

The attack by Germany was perhaps the most defining moment in the history of Denmark, the catalyst that led to Denmark’s making – even more so than their belief in Lutherism, and their Viking Heritage. The challenging situations in the 1940’s bound the society together, to look inwards, instilling a sense of resolve to create a self-sufficient community which is economically sound and took good care of its own and what it had.

From bleak fundamentals, the Danes have built one of the most prosperous societies on earth. An essential step in the countries success is Denmark’s Great school Commission of the mid-nineteenth century, which arranged the fundamentals for one of the first free nationwide primary school systems in Europe. It was followed by the folk high schools founded by poet, theologian N. F. S Grundtvig. Other key moments in Denmark’s history also include its peaceful move towards democracy. These are a few defining landmarks in the Danish history and society which have created a Nation where babies are left sleeping in outside café’s, performs better in all aspects of the better life index, a 7.5 grade vs. the OCED average of 6.5.

Danmark I dag (Denmark – Today)

Comparing the OECD better life Index for Denmark and the United States. Denmark performs very well in many measures of well-being relative to most other countries in the Better Life Index. Denmark ranks above the average in many dimensions: work-life balance, social connections, environmental quality, civic engagement, education and skills, jobs and earnings, work-life balance health status, subjective well-being and personal security. It ranks below average in housing while the United States performs very well in many measures of well-being relative to most other countries in the Better Life Index. The United States ranks at the top in housing, and income and wealth. They rank above the average in health status, jobs and earnings, education and skills, personal security, subjective well-being, environmental quality, and civic engagement. They rank below average in work-life balance and social connections. [2]

Analyzing the OECD better life index, there were two key points which we learned from our visits to Maersk, Nova Nordisk, Carlsberg, Novozymes, work-life balance, gender equality, creating shared value, and trust. Trust and creating shared value are one of the most under-analyzed characteristics of the Nordics which we in America have overlooked while focusing all our energy on their welfare model. The Nordic citizen’s display unprecedented high level of trust towards each other, politicians, government, and the legal system than America. As we learned from the leaders at Maersk, Carlsberg, and Nova Nordisk, they share best practices with their competitors, partner on challenges, make environmentally and socially sustainable company policies to decrease corruption, promote innovation, to save the planet for future generations to come. Some have also dubbed Trust – like the Nordic Gold. And that’s what I could note from our meetings and discussions with the Nordic leaders. People trust each other because they know that everyone pay’s the same tax and the public authorities manage tax revenues in a fair and efficient way, free from corruption. [3]

In light of the socio-economic history of Denmark, how the Danish socio-economic culture has evolved, and how its citizen views their role on the planet, I now understand and empathize with the discussions we were exposed to during our trip.

Denmark is a small country with 5.5 million inhabitants and an area of 44,000 square kilometers. Since 1973 it has been a member of what is now The European Union (EU). Denmark has a GDP pr. Capita of 43,719 dollars in 2017. And the World Transparency Index ranks the Danes as the world champion in non-corruption. While Danes have no ambitions of dominating other large and small countries, they do believe that they can contribute with good experience and ideas on how democracy and social relations can enrich society. And it is up to us to learn from them.

The Danish model is not so much about capitalism as it is about humanizing it by “insisting on a fundamental structure of society providing more equal rights and strong security for the individual as opposed to the free play of the market forces.” [4]

The successful Danish model is not an outcome of one master plan, it has been a gradual process of learning, improving, repeating with a focus on creating social progress for ordinary people with lower incomes – striking a balance to uplift the society as a whole. In the last 60 years, Denmark has experienced economic and social changes generated by two unique revolutionary factors – an extensive migration from rural areas and women entering the organized labor markets. [5]In 1950, 33% of the workforce was female, in 2007, it was 48%. The employment rate in 2008 was 80 % for men and 74 % for women. There are quite a few investment and policies United States can test, improvise, and learn from at individual state levels. Some of them are as follows:[6]

1. A stable general level of education with a high-quality primary and lower secondary school which emphasizes social trust and not competition – development of social skills and development of the ability to improvise on situations, ideas, and solutions for socio-economic challenges.

2. A very liberal industrial policy, where a government does not come to the rescue of companies in trouble. Follow a philosophy of enabling private competition and protecting the consumers from exploitation by private monopolies handled through increased cross-border competition and a more effective national and EU regulation than through public ownership.

3. The pursued economic policy has supported growth and changes in the private sector. Beginning from the 1950s tax legislation giving the companies very generous depreciation possibilities on all kinds of machinery made a crucial contribution to the renewal of the Danish industrial sector.[7]

4. The relatively narrow wage differentials in Denmark are the result of decreasing number of unskilled workers and a rise in the number of well-trained semi-skilled workers.

5. Employment combined with the structure of the unemployment insurance system – the so-called flexicurity-model - have supported creation of more and better-paid jobs on the Danish labor market.

6. Furthermore, the Danish corporate tax is relatively low and the possibilities of depreciation deductions, etc. are favorable. It is attractive to run a business in Denmark. Moreover, there are practically no statutory employers’ or company contributions to social insurance (nor to a social pension or voluntary early retirement pension schemes).

A dominant part of the welfare state costs is funded by taxes,