The Almost Nearly Perfect People Read online

  My skin prickles. I know this place. I have been here. And then, as the grand old man of Danish politics, chief architect of Denmark’s tax policy for many years, current speaker of the house and chairman of the ruling Social Democrats Mogens Lykketoft enters the room, it suddenly dawns on me why I feel this way.

  ‘Borgen!’ I exclaim gesturing around the room. Lykketoft frowns and looks slightly concerned. ‘I was just trying to figure out why this all seems so familiar. It’s because of Borgen, the television series.’

  Borgen is the Danish TV series featuring fictional female Danish prime minister Birgitte Nyborg, and is filmed in a replica of Christiansborg. It has been a major hit on British and US television, as well as, of course, here in Denmark, where half the population tuned in to watch on Sunday evenings, its storylines uncannily presaging the election of Helle Thorning-Schmidt as the country’s first female PM. Lykketoft, who, I suppose, is a kind of real-life version of the older, dishevelled man who councils Nyborg on how to handle the cut and thrust of minority government politics, continues to regard me warily as he sits down.

  Active in Danish politics since the 1960s, Lykketoft was there, or thereabouts, when most of the key decisions that shaped contemporary Denmark were made, not least those that have seen the tax burden double from 25 per cent of GDP in 1960 to its current world record of just under 50 per cent today.

  He recently published a pamphlet, The Danish Model, which highlights the many economic and labour policies he has helped to introduce since he entered parliament in 1981. The pamphlet seeks to explain Denmark’s so-called ‘bumblebee’ economy: conventional economic thinking has it that this high-tax, large public-sector model ought to stifle growth, innovation and competitiveness. It should not work but, just as the laws of physics tell us that the heavy, unaerodynamic bumblebee shouldn’t be able to fly, both bee and economy remain airborne regardless.

  ‘The driving motivation was to create a society that was competitive, with high growth and high employment, but that also had fewer differences between people economically than in most other countries in the world, with more harmony, more social security,’ Lykketoft, now in his late sixties and these days no longer sporting his once-trademark goatee, tells me. He sips his coffee and unwraps a sweet from the dish on the low table between us. ‘The Danish model of redistribution – of money and qualifications – has opened up to many more people than in the US or Britain the chance to make a decent living, to explore their own potential. We have been trying to demonstrate to all the sceptics of neo-liberal origin that this bumblebee can fly.’

  According to Lykketoft, Denmark’s post-war success was due to the redistribution of wealth and flexibility in the job market, supported by generous benefits. ‘We are more flexible than other European countries.’ He starts to bang the table for emphasis. ‘We had an obligation to make sure that people were not impoverished when they lost their jobs and that they were helped to get new jobs. This goes hand in hand with the ability we have had to create a more qualified workforce.’

  Does he not accept the Right’s argument that taxes are a disincentive to work, to innovate, to take risks? Naturally, he does not. When one looks at middle-class disposable income in the US and Denmark, once things like childcare and health insurance are taken into consideration, they are on a par, he says. In Denmark you get all these things for free – 75 per cent of childcare costs are paid for by the State, along with health care, of course, and much elderly care – while in the US you pay lower taxes but then have to pay for these services. It is merely a matter of at what stage you pay for them.

  ‘The real difference is that those who have a high risk of being ill or unemployed are better off in our system, and those who have a very high income are not. They are better off in other parts of the world. But does that mean that those high achievers, highly skilled people, migrate from Denmark to avoid tax? That’s the real question.’ Skilled politicians rarely ask questions to which they do not already have answers, and Lykketoft has one. There is no evidence to support this, he says. The wealth generators are staying in Denmark, there is no brain drain.

  Now, brain drains are rather tricky to quantify but, from what I’ve seen and heard, New York and London are full of creative, ambitious Danish émigrés. A few years ago the New York Times ran a story with the following headline: ‘Denmark Feels the Pinch as Young Workers Flee to Lands of Lower Taxes’, and the Confederation of Danish Industry has complained regularly over the years that high taxes are driving talent overseas.

  I also mention the country’s poor PISA performance, the complaints about the health service, and point out that Denmark’s public rail company, Danske Statsbaner (DSB), has recently skirted with bankruptcy. Is Lykketoft happy with what the Danish tax payers receive for their money?

  ‘There are certain corners of the public service where there is a deterioration,’ he concedes, carefully. ‘There are dysfunctionalities, of course, but we are catching up.’

  I point out that Sweden’s economy is doing significantly better than Denmark’s, and has been doing so for many years. Denmark is slowly sliding down the BNP charts while Sweden is holding its own. The Washington Post has called it the ‘Rock Star of the Recovery’, and a recent special feature in The Economist about how great the Nordic region is doing was really mostly about Sweden. Yet, in contrast to Denmark’s supposedly agile, responsive flexicurity system, with its relaxed labour laws and generous benefits, Sweden has much stricter employment legislation, with lower benefits but much greater job security (as I understand it, a Swedish employee would have to be caught defecating on the CEO’s desk while setting fire to the blueprints for their groundbreaking new product to merit the first written warning of the five required for it to go to arbitration, and even then, the tea lady would have to give her consent to his sacking). Meanwhile, Sweden is fourth in the World Economic Forum’s latest Global Competitiveness Index, while Denmark has plummeted from eighth to twelfth in just a year (from a high of third place a few years back). According to OECD predictions, Denmark is predicted to have the lowest BNP per person in all of Northern Europe, while Sweden will remain in the top 10. Many would point out that the key to Sweden’s success is that it slashed taxes, greatly reduced its public sector, and underwent a massive privatisation programme in the 1990s. Denmark is only just now beginning to be forced to consider such reforms.

  Lykketoft disagrees.

  ‘Yes, but they have taken advantage of devaluation during the financial crisis and they have sold their large stock of public companies, and that cannot continue.’ In other words, according to Lykketoft, Sweden’s recent economic performance is based on external factors, and the selling of the family silver.

  I like Lykketoft. He is one of the most well-thought-of politicians in Denmark, respected by all sides of Denmark’s kaleidoscopic political spectrum. But I can’t help feeling he has his head, if not buried in the sand, then at least sporting some nice, noise-cancelling headphones.

  Beyond questions of fat taxes, incubators and high-performing Swedes, the overriding concern for many observers of the Danish economy is its pitiful productivity levels, which have been lagging behind the European average since the mid-nineties. There have been public commissions, endless newspaper columns and TV debates on the subject, but no one really knows why the Danes aren’t making as much use of their working hours as the rest of us.

  Torben Tranæs at the Rockwool Research Fund believes he might have discovered why. ‘This is confidential, we are having a press meeting later this month,’ he had told me. ‘But we have carried out some data collection. We have had people register what they do every 10 minutes so we can see how much they are working compared to how much they say they are working. It shows that, though people say they are working more, actually [the amount they work] is decreasing.’

  What Tranæs appeared to be saying was that, a) the Danes were lazy and b) they were lying about it. Fittingly, for the home of Hamlet, it turns out
that the Danes are heroic procrastinators. During any given working day they will do their utmost to find something, anything, with which to occupy themselves as long as it is not productive work.

  ‘They [the Danes they surveyed] were telling us, “Okay, normally I work this much, but this week I had this thing at my kid’s school.”’ The excuses were endless – tending to sick children, dental appointments, anything. And the higher up the job scale, the worse it got: the CEOs were the most indolent of the lot. Tranæs continued: ‘There are many elements to this productivity thing, but I think that just not hanging in there as much as we used to do is a major one.’

  Of course, those on the right point, again, to Denmark’s high taxes as an explanation for low productivity: why work harder when you will only be taxed more or even take your earnings up to the top rate? ‘We have alcohol and fat taxes as a disincentive to drink and eat fatty foods,’ says Martin Ågerup. ‘So it seems logical that income taxes will have the same effect. Look at Sweden. They lowered marginal taxes in Sweden quite a lot in the early nineties and they found that people worked more and were paid more per hour.’

  Mogens Lykketoft was having none of this talk of taxes as a disincentive. ‘Well it was very few years ago that we were one of the three most competitive countries in the world,’ he countered, although he did concede that productivity was a problem. But, he said, rather than the Danes’ laziness being the explanation for their low productivity growth, Denmark had simply become a victim of its own success. The government had been so successful in activating such a large proportion of the working population (during the good times at the turn of the century, there was virtually no unemployment) that it had engaged the least productive members of society, consequently bringing down overall productivity. I suppose this might once have been the case but the truth, I suspect, is that the Danes have had it so good for so long that they have simply lost the well to fight. Another report, published in June 2013 by the government’s statistics department, no less, revealed that the Danes were working even less than previously thought – fewer than 28 hours a week.

  ‘There seems to be an inconsistency between how much we want to work, and how much we want to have of the public sector,’ is how Tranæs had put it to me. ‘I don’t think the Danes have a preference to work as much as they should, in order to support the [scale of] welfare state that they want.’ One can’t help feeling that reducing taxes even just a tad – say, to Swedish levels – and cutting back on the transfer payments and, for example, defence spending (after all, one can’t help wondering, given its track record, what exactly the Danish military is for) might help turn all this around and provide an incentive for the Danes to spend a little more time at their desks, and a little less time at the hairdressers.

  Nevertheless, as I was leaving Lykketoft’s office, a chilling thought suddenly occurred to me. Looking ahead, might he actually be in favour of raising taxes at some point in the future?

  ‘I would never be able to be quoted on this,’ he said (as far as I was concerned, the whole meeting was on the record). ‘But I think we will have at least to change the tax system even more in order to put taxes on resources.’

  People of Denmark, you have been warned.

  Chapter 10

  Denim dungarees

  IT WAS TIME to see some more of the fabled Rotten Banana. Could it really be as provincial and unsophisticated as my condescending cosmopolitan Copenhagen friends claimed? I packed an overnight bag, climbed aboard my geriatric car and headed west, crossing the mighty Storebælt Bridge – always a nerve-wracking experience given the playful crosswinds – and arriving on the island of Funen (Fyn).

  Hans Christian Andersen was born in Funen in 1805 and left as soon as he was able. Not much has happened since and, for many Danes, the island is little more than a stepping stone between Copenhagen and the Jutland Peninsula (Jylland). I think that’s a shame. Once you adjust to the slower pace of life here, the countryside is quite charming, especially in the south of the island, with its Teletubby fields, magical beech forests and beaches. Funen has not been quite so ravaged by industrial agriculture as Jutland and Zealand have, so the fields are smaller and there is some excellent produce to be had in the summer; a drive along the backroads in spring or summer offers plenty of opportunity to stock up on fresh peas, new potatoes, strawberries and asparagus, while autumn brings apples, plums and cherries. Americans would call these fruits and vegetables ‘heirloom’, but to the Fynboer, it’s just the stuff they eat with the seasons.

  As with the rest of the Rotten Banana, Funen’s population is declining in size and increasing in age. You drive through village after village of drab, cinder-block houses, many semi-derelict, without seeing a soul. The bakeries have closed, the butchers have disappeared, the grocers are gone, all retail activity is now focused on the supermarkets, in their charmless out-of-town warehouses, which siphon the life out of otherwise attractive, historic villages like Faaborg.

  I know this part of Denmark well, as this is where my parents-in-law live, so I press on for Jutland.1 I know Denmark’s peninsula less well, largely because every time I have visited I have departed shortly afterwards wondering why I ever went there in the first place. Jutland is windy and smells of manure. The people remind me a little of Yorkshiremen: blunt and chippy, mistrustful of Copenhageners and their fancy ways, and perhaps a little narrow-minded. The men wear denim dungarees and ride farty little motor scooters. The women, it has to be said, are staggeringly beautiful (particularly in Aalborg, for some reason), but Jutland offers little by way of cultural entertainment or natural beauty that you can’t get on Zealand. (Aside that is, so I’m told, from a brothel where those with a taste for, let’s call it, ‘pleasures of the fur’, can indulge.)2

  I felt it might be time for a reappraisal of Jutland, to give it another chance. After all, Jutland has Denmark’s best beaches, its highest point (an admittedly modest mound called Møllehøj, at 560 feet just over half the height of the Shard) and Legoland. It is also home to Denmark’s answer to Stonehenge and the Pyramids of Giza combined, the Jelling stones, my first stop.

  It is an unwritten rule that every Dane must visit the Jelling stones at least once in their life. They are two stones, tenth-century memorials: the oldest erected by King Gorm the Old in memory of his wife, Thyra; the second by Gorm’s son, Harald Bluetooth. This second stone commemorates not just a king, but also the transition of his kingdom from pagan worship to the arrival of Christ’s teachings and, in a sense, the birth of Denmark itself, as it bears the first written mention of the country’s name.

  Danish flags were fluttering throughout Jelling on the sunny spring morning I arrived there, as I suspect they do every day in this archetypal Danish village. Housemartins screeched and swooped above the gravestones and the smell of freshly mown grass completed the idyllic scene. In the well-appointed visitor centre across the road from the churchyard where the stones stand, they were selling the usual Viking tat – bottles of mead, paper napkins decorated with runes, CDs of Templar music – while an exhibition charted the various, largely fruitless archaeological excavations which had taken place there. The Danes have been searching for royal remains among the Jelling stones for centuries, but only ever seem to find Obelix-style menhirs.

  Over in the churchyard I stood for a while looking at the stones themselves. For a long time Gorm’s stone lay slumped against the church and was used as a bench. Today, now a cherished totem of the birth of Denmark, it resides in its own climate-controlled glass case to protect it from the elements. Both stones – one not much bigger than a postbox, the other about twice that – are decorated with faded runic inscriptions that were once coloured blue and red. They have been eroded by the wind over the centuries so that their inscriptions now look much like the ones convicts make on their cell walls to count off the days of their sentences. The runes also feature the first depiction of Christ found in Scandinavia: he is shown with branches wrapped around his body, in the pag
an style. Thus, the Jelling stones are not just an early royal public-relations stunt (neither Gorm nor Harald were in fact kings of ‘all’ Denmark, but this was the image they wanted to project); they are also the first recorded references to the one social force that, though these days it is almost a taboo, would come to define the societies of the North more than any other. Though the Nordic people have largely grown out of religion, boasting the lowest church attendance of all the Christian countries, and though its impact on society today is little discussed, their particular form of Christianity, Lutheranism, has been a formative influence on the Nordic psyche and remains fundamental to the way people here behave and relate to one another.

  In a sense, then, you could claim that the Jelling stones are memorials to the beginnings of Nordic exceptionalism itself. It was the arrival of Christianity – at that time, of course, Catholicism – which kick-started the long, slow process towards the civilisation of the Vikings, bringing to an end some of their less edifying practices – the polygamy, the use of slaves, blood feuds, and so on. Over the following centuries, the Church steered the development of the arts and literature across the region and the monasteries became the main seats of learning, with some bishops – like Bishop Absalon, the founder of Copenhagen – becoming as powerful and bloodthirsty as any king. And then came Martin Luther’s church-door antics.

  In Scandinavia, the Reformation was a more important cultural and social force even than the Renaissance. As T. K. Derry writes in his magisterial history of the region, ‘After the passage of three and three-quarter centuries, the view of religion which was shaped in Germany still received an ampler recognition in Scandinavia than in its homeland.’ Something deep within the Scandinavian psyche embraced Lutheranism to a far greater extent than it was in the land of its birth; Luther’s teachings – and their spin-offs, Calvinism and Pietism – gained a deeper purchase here, perhaps because the population had a more independent streak and tended to live in poorer, more isolated communities (Protestantism being less interested in overt displays of worship than Catholicism, and more about the individual’s inner conscience – that’s my theory at least). It also helped that the then Swedish king, the mighty Gustav I, became an enthusiastic adherent of Lutheranism for his own, mostly political, motives, and what GI wanted, GI got.