After moving to Denmark and realizing that the famous ‘Danish happiness’ is not only a myth, I couldn’t stop wondering what could be the reason for the hyggelig – calm, optimist – happiness tangible almost everywhere. It surely cannot be the weather!
The theory that I came up with does not aspire to uncover the whole truth, for that you might want to read the analysis of The Institute of Economic Affairs; all I am doing is to share my own experiences and my own understanding on the issue. I believe that the almost fairytale-like indicators (Denmark ranking continuously on the top in the Eurobarometer since 1973) are the result of a social system which is based on a unique equilibrium of three seemingly exclusive entities: monarchy, liberal market and social solidarity.
At a first glance Denmark could be the land of contradictions: how come one of the most equal societies has a royal family? How come the liberal ideas did not retrench the generous social security system? How come the ideas of social solidarity did not limit the liberalization of the market? And the line of questions could be continued.
Without going too deep into explaining the historical development and reforms of the welfare state model (which you can find for example here), it could be plausible to say that the Danes (and the Nordic countries in general) found a working compromise between economic growth and social solidarity. This is clearly visible even in the division of the current government: 47 members from the Social Democratic Party aiming for more solidarity and social welfare and exactly 47 members from the Liberal Party pushing for more free trade and minimum state interference among other smaller parties. Thus Denmark is far from being a socialist utopia as for example Forbes ranked Denmark first in their newly published global league table ‘Best Countries for Business’ and also the country embraced several capitalistic reforms points out Sean McElwee when arguing that Denmark is better at realizing the American Dream than America. Furthermore, even the traditionally powerful unions – who played an immense role in developing the welfare state model – agreed to the model known as ‘flexicurity’ in which companies can quickly reshape the structure of their employees. It is true though that the ‘losers’ of ‘liberalism’ are immediately and effectively caught by a solid safety net which apart from cash benefits offers training and guidance in pursuing new careers. ‘In the end, there’s an economic trade-off’, says Danske Bank’s chief economist, Steen Bocian, ‘You could probably have higher growth in Denmark, allowing for more income inequality, but it’s a political question whether you would pursue that.’ (The Guardian goes into more details about the downside of this trade-off here.)
Income equality is one of the three crucial attributes of the Danish system that I would like to turn your attention to. It can be argued whether these are symptoms or roots, but they are indisputably important clues when trying to find the reasons for the Danish happiness.
Income equality and social solidarity. One of the first impressions a car-lover gets in Denmark is the striking lack of fancy cars. The Danes are firm believers of the values of social solidarity and one of the tools that they use is the compressed wage system that leads to U. S. Senator Bernie Sanders’s, assessment according to which while it is difficult to become very rich in Denmark no one is allowed to be poor. Valuing income equality is so deeply rooted in the Danish culture that most national surveys dealing with social strata do not divide the population into different income groups; instead, the population is categorized into five social layers, according to level of education and occupation. Of course the situation has not always been so bright as it is today when Denmark is often portrayed as a country that has successfully combined economic performance with social justice scoring one of the lowest Gini coefficients at 24.8 per cent, compared with 37.8 per cent in the United States or 27.5 in Hungary; but the study of Economic Policy Research Unit shed light on the long-run history of income equality in Denmark so I will not go into details here.
Egalitarian society. Where income equality and social solidarity peaks is the formation of a deeply egalitarian society. Despite the fact that Denmark is a constitutional monarchy (and it is the oldest one!), it is very different from other monarchies. The royal family’s wealth does not rank in the top 15 out of the less than 50 monarchies around the world and members of the royal family often bike to drop off their children at a public day-care center. Also as Pennlive reports, Prime Minister Helle Thorning-Schmidt was often seen shovelling snow outside her home in Copenhagen. Surprisingly – or only surprisingly for a non-Dane – these are not just ‘acts to satisfy an image’, the Danes are deeply modest and believe in equality which might have a strong connection to their general happiness.
Attitudes towards taxes. In several the majorities of countries one thing can be surely considered an unhappy event for most of the people: when it comes to paying taxes. Not so in Denmark, which boasts some of the world’s highest taxes, 66% of people still think that their tax rate is appropriate and more than one in ten think they do not pay enough. This happens when there is a 57% of total income tax and a 25% VAT tax. An American journalist living in Denmark, Sharmi Alberchtsen’s remark is telling about the different attitudes towards taxes: ‘Many Danes seem satisfied that they are getting their money’s worth – that is, they enjoy tangible benefits of the taxes they pay in terms of universal health care, tuition-free education through the university level, and employment benefits and security. The only way I would feel that I have received proper compensation for more than 10 years of Danish taxation is if I had 5 children who were all planning on going to medical school.’ What do the Danes? Jokingly and jovially diagnose that they work 3,5 days for the government and the remaining 1,5 for themselves…
So Denmark is and will remain The Perfect Place To Live? That’s not what I intended to say, and there are indeed some concerns about the sustainability of the present system or about the worrying phenomenon on high suicidal rate and anti-depression pill consumption. However, I do think that the Danish happiness has a lot to do with social solidarity and paying more attention to equality and fairness. I also believe that there are several parts of the system that could be implemented to other societies as well such as combining economic equality and opportunity with an open door policy for business. Maybe it is worth a shot?
The author of the blogpost is Linda Benczi currently studying at the University of Southern Denmark for a Masters degree in Comparative Public Policy and Welfare Studies. She is also a student at Mathias Corvinus Collegium specializing in International Relations.