Debunking Utopia by Nima Sanandaji

Author:Nima Sanandaji
Language: eng
Format: epub
Publisher: WND Books

Similarly, Danish researcher Casper Hunnerup Dahl has concluded: “The high degree of distribution in the Danish welfare state does not merely reduce the concrete incentives that some Danes have for taking a job or to work extra in the job that one already holds. Much evidence suggests that the welfare state also has a very costly and long-lasting effect on the working ethic of Danes.”17 There can be little doubt, then, that the erosion of norms due to long-term adaptation to welfare policy is an observable phenomenon rather than just theory. Roosevelt and Reagan were right, and those who believe that generous welfare does not erode norms are wrong.

For the outside world the Nordic countries are still today shining examples of how large public sectors can be introduced without the moral hazard of welfare policy. However, much of the policy debate during recent years in the Nordic countries themselves has been about how to deal with overutilization and deteriorating norms. Sweden has already cut down considerably on the generosity of public services and welfare transfers, at the same time reducing the taxes on work significantly. Denmark has seen a slower pace of reform. However, the Danes are quite aware that change is needed. Somewhat surprisingly, it is not only the conservatives or libertarians in Denmark who raise the issue of dependency on government handouts. The Danish Social Democrats themselves actively acknowledge this problem.

Bjarne Corydon, who served as the country’s Social Democrat finance minister at the time, made international headlines in 2013 by pointing to the need to reduce the generosity of transfer systems in Denmark. Corydon explained that it was no mere coincidence that the government was reforming taxes, welfare aid, and the system for early retirement: “The truth is that we are in full swing with a dramatically positive agenda, which is about strengthening and modernizing the welfare state, and the result of the change will be a much better society than the one we have today.” The leading social democrat went as far as formulating a new vision for the future of the welfare state: “I believe in the competition state as the modern welfare state. If we are to ensure support for the welfare state, we must focus on the quality of public services rather than transfer payments.”18 Denmark is today often held up as a utopian society by the American Left. How many are aware that the politicians on the left in the very same country are openly criticizing the idea of overly generous welfare programs?

“I believe in the competition state as the modern welfare state.” – BJARNE CORYDON, FORMER SOCIAL DEMOCRAT FINANCE MINISTER OF DENMARK

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