Friday, November 06, 2015
The Danish Model – don’t try this at home
So, Denmark first became rich, and then introduced the programs, which make up the welfare state. The huge increase in government spending has been accompanied by deep structural problems, which has made it necessary to reform the Danish economy and welfare state ever since. It can hardly be claimed that introducing the welfare state made Denmark rich; rather it was the other way around. Denmark first became rich, and then authorities began to redistribute some of the wealth. ...
In many respects, Denmark could serve as a model for the World (just like most other countries). But if you fail to learn the right lessons, it could be dangerous to try to imitate our model. Especially the idea that you can become rich by redistributing wealth or that there is a gentler way to socialism than the one experienced by typical socialist countries in general could get you into trouble.
And it would certainly be ironic, if the Danish case were to become an excuse for politicians in e.g. Greece or the US to avoid economic reforms, and fiscal consolidation, since we have been reforming and consolidating for decades to handle the problems created by the introduction of the welfare state.
It seems to be the path that the US is following.