Monday, March 20, 2006

The Danish Model - the globalization yardstick

The British thinktank Centre for European Reform has published its annual review of the economies of the 25 EU countries. The Danish economy is given top grading. The think tank states that the Danish model ought to be copied all over the region.

The “Danish model” is said to be characterised by extensive welfare provisions being combined with a high level of economic growth.

President of the EU commission Jose Manuel Barroso agrees on this evaluation. At a meeting for the press in Brussels he declares agreement with the think tank. The Danish experience is seen as an inspiration for the so-called Lisbon process. In Lisbon in 2000 the EU heads of state agreed on an ambitious goal of turning the European economy into “the most competitive knowledge economy in the world” by 2010.

One of the recognized secrets behind the Danish success is the so-called flexicurity labour market model. A system of hire-and-fire has been institutionalised in the Danish labour market. It makes capitalism operate more smoothly, when it is easy for companies to hire and fire workers. The workers accept it because there is a good system of welfare coverage, - and “lifelong learning” educational programs in case of unemployment. In Denmark it is possible to receive unemployment benefits up to a period of 4 years, and the benefit level (dependent on previous earnings and up to 2.300 $ a month) is fairly high.

So here we have the successful globalizer: One of the most open economies. Low unemployment, balance of payments and state budgets in surplus, highest wage level in Europe and generous welfare provisions. How come this country becomes the focal point of the cartoons crisis? - Is there something we have misunderstood?

Well, in the first place Denmark has submitted to the sick neo-liberal logic: “How to become the most competitive economy in the world?”

How low can you get? – You measure people in terms of economic utility: What is their economic contribution? And what about those who cannot contribute much because they’re either too dumb, too tired, too lazy, too schizophrenic, or too interested in beer and soccer?

One can see the bad side effects of this competitiveness in the widespread use of alcohol, tranquillizers and other happiness-inducing drugs. Happiness does not arise naturally out of people’s everyday lives. Happiness is a commodity like other things in the marketplace.

In the second place welfare has not been introduced for the blue-eyed viking’s own sake. It is part of the logic of economic development. Perhaps welfare recipients sense that. That’s why they are not happy. Actually a large part of their energies is wasted on blaming the system for the predicament they are in. Probably much like welfare cases everywhere else.

Thirdly, statistics have just been published that show that the 1 million mark of people receiving some kind of public payments for their living has been passed. This is the seamy side of the much-acclaimed flexicurity model: All the marginalised individuals who cannot keep up with the competitive level of work in the globalized economy.

- What about trying to become the most humanitarian society in the world?


Blogger Sophia said...

Most of the time thinktanks in economy are sinking tanks. Argentinian and asian economies used to receive good grades until they collapsed few years ago and nobody was able to explain why !
Since argentinian economy started not to apply neoliberal IMF recommendations, it regained strenght, they even reimbursed few years in advance the IMF money they owed and they will not be doing any dealings with IMF in the future.

By the way I like your cartoons and montages. Are you the author ? Congratulations.
Is there any implicit message in putting Mr Rasmussen in a green crescent whith both the color and the shape being powerful reminders people of Islam !

4:04 PM  
Blogger Cosmic Duck said...


Yes, I have made the montage myself. And you're right about the intention of putting Rasmussen in the green crescent.

The think tank mentioned in the post is characterised by an extremely one-dimensional view of economics. Often the competitiveness is on somebody's expense. The knowledge economy may have detrimental effects on poor countries, like when aids patients in India must spend 110 per cent of wages, or more, for the medicine. We're so preoccupied with making our economies strong with no regard for the consequences.

8:21 PM  
Anonymous Anonymous said...

we don't NEED to become the most humanitarion country in the world, we already are.

Denmark gives the most in foreign aid per capita of any country in the world.

3:16 AM  

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