[Culturechat] Denmark: A Case Study in Social Democracy (From Mises Inst...

[WesTexas@aol.com]

Mr. Hansen, a Danish professor, referenced a serious proposal by three 
economists from the Danish Economic Council that the Danish government restrict 
emigration of young people (young taxpayers).  I have posted the relevant portion 
of the article below.   Obviously, Denmark is not East Germany; however, the 
Danes themselves are talking about proceeding down a path that would ultimately 
result in the Danish version of a Berlin Wall--which is exactly how Professor 
Hansen described it.   

In regard to the quality of life issue, I have absolutely no doubt that a 
majority of Danes are satisfied with their welfare state.  However, a majority of 
Danes either work for the government, or receive government benefits.   An 
interesting poll would be one that asked the minority (those paying the bills) 
if they were satisfied with the welfare state versus one that asked the 
majority (those being supported by the minority) if they were satisfied with the 
welfare state.

In general, the European welfare states are facing two major problems:  (1)  
demographics (too many retired people and too few young taxpayers, with the 
situation getting worse with time) and (2)  their labor costs are too high (also 
with the situation getting worse with time).   In the U.S., we of course are 
facing the same problems, but not to the same degree as Europe.  

In Germany for example, the payroll tax (for social benefits, paid by both 
employer and employee) has gone from about 20% in the early Sixties to about 42% 
today.   Companies simply can't pay these labor costs and be competitive, so 
they are leaving, or at least not expanding.  Young people can't find jobs, so 
they are also tempted to leave (thus, the suggestion that Denmark restrict 
emigration).   This results in a downward spiral of fewer and fewer taxpayers 
and more and more people receiving government benefits (again, the "solution" 
occurs to some to restrict emigration).   

Hal actually provided a real life example of this situation.  One of the 
primary reasons he gave for being hesitant about expanding to Denmark was because 
of the high costs.  If Hal does elect to do an Untours to Copenhagen, I think 
that it would be a good idea to set up some type of panel discussion for the 
Untourists, where the parties could discuss the pros and cons of the welfare 
state.  I also think that it would be a good idea to study the progress that 
Denmark has made in starting to convert to wind power--perhaps the Danes could 
make the good citizens of Cape Cod see the advantages of wind power.    

(By the way, I don't think that Hal and I agree on much politically, but I 
think that Hal, and his staff, run a first class organization and provide a 
valuable service).  

In closing, if things are so wonderful in Denmark, why do serious people even 
find it necessary to discuss restricting emigration?  Perhaps there is 
something rotten in Denmark after all (sorry, I couldn't resist).  

J. Brown

Excerpt from Hansen article:

<<One option for young people is to leave. It was recently proposed by one of

the three economists from the Danish Economic Council that if young people

in Denmark wish to move abroad after they have completed their education,

they should first have to pay back the costs of their education. Only when

they have paid enough taxes to cover all the expenses of their education,

would they be able to move abroad without having to pay the government

first.  Thus do we have proposed the social-democratic version of the Berlin 
Wall,

an economic barrier to prevent emigration so that the state can continue to

tax people to sustain a system that is unraveling. The mere suggestion is a

telling sign that Denmark has nearly reached the end of the road.>>