Small is Beautiful: the Danish experience

My three years of ‘feeli feeli’ (naked eye) experience with the Danish culture and the sharp contrast it reflects on my Ghanaian ‘magna sub-culture’ has compelled me to share this experience with my compatriots who patronize this forum. I would start by sharing tourism ‘101’ on Denmark with you. Do not be bored with me since I intend to make a point out of this later. According to the official Danish web records, Denmark is the smallest of the Scandinavian nations, located between the North Sea on the west and the Baltic Sea on the southeast. Denmark is separated from Norway by the Skagerrak and from Sweden by the Kattegat and the Oresund. In the south, it shares a 68 km (43 mi) border with Germany. The Faeroe Islands and Greenland have been part of Denmark since the 14th century and are now self-governing units within the nation. During the 9th century the name Denmark (Danmark: "border district of the Danes") was used for the first time.

As a result of the unsurpassed bravado of the ‘Vikings’, Denmark ruled over much of Scandinavia and western Europe which largely helped to develop a common Nordic European culture. Today, Denmark's balanced economy (with GDP per capita of USD $29,000) in which much of its agricultural and industrial output is exported, gives the country one of the highest standards of living in the world. Through high taxes levied by the government, Denmark enjoys one of the most advanced welfare system all over the globe.

My focus on this piece is to highlight some aspects of the Danish welfare system and more importantly the Danish simplistic way of living which in fact largely accounts for the Danish economic miracle. I call it miracle because it defies the old growth paradigm which posits that the bigger the economy the higher the level of economic growth. Kutznets and Svennilson have buttressed my assertion by arguing that the success of the small European countries emanated from the close interaction within the national system and the construction of the welfare state that took care of the losers in the game of change respectfully.

The beginning of the Danish experience of public welfare provision dates back a long time, but for the development of modern Denmark, the early beginnings were, like most European countries in the latter part of the 19th century. The welfare state is generally understood as a form of state which grants social rights to its citizens based on Marxist concept of egalitarianism (meaning equal right and opportunity for all citizens).

The raison d’etat of the welfare system as stated by Beveridge is to establish the institutional framework for the fight against what he denoted in those days as the five giant evils of modern society: want, disease, ignorance, squalor, and idleness. He argued further that these evils could be fought by establishing the following institutions: basic income security in the case of inability to work (sickness, old age, child birth, invalidity, unemployment, accident, etc.), health care for all, housing, basic education, and full employment. Indeed, Political science ‘101’ will teach you that the cardinal role of the state is to provide welfare that guarantees, or sees to guarantee, the welfare of its citizens. Arguably, the Danish state is providing this welfare system to the fullest.

The corollary question then is: what is the secret behind the Danish welfare system? The answer to this question is given expression in what Schumacher will call ‘small is beautiful’. For starters, the Danish welfare system thrives on high level of taxation; according to the Danish ministry of taxation: the reason for this is that many social security benefits are made available by the state and are paid for through taxation. Tax payments therefore finance a vast number of welfare benefits, e.g. social assistance benefits, unemployment benefits, kindergartens, education, care of the elderly, access to medical assistance, hospitals etc. In this way Denmark differs from many other countries where benefits are financed by private insurance schemes or by social security contributions.

What I would wish to add to the high burden of taxation is that, the informal sector is held in high esteem in Denmark. The farmers, the carpenters, the cleaners, the drivers and all the related professions are covered by the tax system and they are all shouldering the same tax burden. The government recognizes the crucial role played by the informal sector and it is treated as such. A cleaner can easily get access to bank loan, contributes to social security and takes a paid vacation in the same manner as the bank manager does.

One other fascinating thing is the Danish work ethics by which I mean the way ‘the boss’ is harnessed in the entire production or service delivery process. The boss is not revered as a demi-god like we have in Ghana, he is scheduled to work like the other employees asides his/her managerial role. This is a perfect case of leadership by example. Simple econometrics will tell you that in so doing, productivity is boosted and cost is drastically cut since the presence of the boss boosts the morale of the employees coupled with the fact the that the boss is being utilized fully..

The Danish sensitivity to mother nature and consumption of material goods are also worth emulating. Denmark has chalked a ‘class A’ environmental record within the European Union. According to the Danish culture, you do not formulate policy if you cannot implement it, as such the government has put in place pragmatic environmental standards which are in fact working very effectively. For example, in an attempt to deal with plastic shopping bag waste, plastic shopping bags are sold at the supermarkets making people to keep them for next shopping. Collection of empty bottles is in fact a big business in Denmark since it gives good money.

The other facet of my argument is the Danish mentality about the material world. Clearly, it is very difficult to differentiate between rich and poor people in Denmark since showing off in Denmark is frowned upon. The Danish architecture is very simple and beautiful and yet serves the same purpose as those we have in East Legon! The use of bicycle is highly encouraged, the rich as well as poor people ride on bicycles to work and to the supermarkets (I must acknowledge that there are bicycle lanes all over the major streets in the city making it safe to ride). Business executives join the public transport to work and use their jaguars, BMW, Mercedes and VWs only when the need arises. (It may interest you to know the Danish government imposes over 100% tax on private cars). The result is that unlike other big capitals in Europe, Copenhagen is free from vehicular traffic. This means that events could be better planned and workers do not go to work late and in consequence productivity is boosted.

To conclude, the message I would wish to put across is that we as Ghanaians can learn a lot from the fascinating Danish culture. I am not suggesting that everything about the Danish culture is superb, what I imply is that just as the Japanese capitalized on reversed engineering, we as Ghanaians can also capitalize on ‘reverse culture’. To me, this is one of the ways we can defile the odds of under-development in a bid to attain a middle income nation ‘now’ as opposed to ‘within the shortest possible time’.