It's become commonplace for American progressives to point to the successful economies of western Europe, and specifically the Nordic countries, as evidence that expansive welfare states don't undermine growth and prosperity in the way that fiscal conservatives warn they will. 

(This happened to me twice on Friday alone.) (Although that was my fault, because I had, in a Twitter exchange, pointed to Spain as a cautionary tale about what happens when the state gets too big.) 

I wanted to follow up on those exchanges because although I don't have a problem with social services and safety nets per se (file under, 'things one would hope should go without saying') I do think that a big state is better under certain conditions than others. 

Let's take Denmark as an example of the Nordic model, because Denmark has been in the news a bit lately. A few weeks ago, Suzanne Daley reported, in the New York Times, that although Denmark's high-tax, high-services model is "close to a religion here," and that even the conservative politicians there are reluctant to suggest changing it, the expert--such killjoys, those experts--say that they're going to have to be less generous in the future. Nancy Folbre, at the New York Times's Economix blog, offers a different perspective on how Denmark is doing: 

Despite high marginal tax rates (or perhaps because of them) they are about as rich, on average, as Americans are. The World Bank estimates that gross domestic product per capita in Denmark for the 2008-12 period at $59,889, compared with $48,112 for the United States. Adjusted for differences in the cost of living, Danes’ G.D.P. per capita is slightly lower than ours.

The Danes spend far less on health care per capita than we do in the United States, yet achieve better health outcomes in many areas, including life expectancy. Their child poverty rates are far lower: About 6.5 percent of Danish children live in families with disposable incomes under 50 percent of the median, compared with 23.1 percent in the United States.

While the Danes debate--and for more on this, see the New York Times's Room for Debate section--let's just posit, for the sake of the discussion, that the Denmark model works pretty well. 

That doesn't mean it would work well for the United States, because the United States is different from Denmark. And while some states may be more like Denmark than the country as a whole, others, including Texas, are reeeealllly different. 

I was putting together a table summarizing some of the differences, but it was getting pretty messy with asterisks and side notes because a lot of the figures I wanted to include were gathered by different agencies, over different time frames, etc. So instead I made this diagram, which I will explain below: 
First of all, Denmark is vastly more homogeneous than the United States. In terms of ethnicity, most Danes are not just white but ethnically Danish (PDF). In America, slightly fewer than two-thirds of the people are non-Hispanic whites. Similarly, although Danes may not be as overtly religious as Americans are, 79.1% identify as Lutheran (unsurprising, given that that’s the state religion). As of 2012, 77% of Americans identified as Christian, according to Gallup, which is a much broader category. Denmark also has an official language; the United States doesn't. Overlaying this demographic similarity is, apparently, a high degree of top-line political consensus; Denmark is famously the happiest country in the OECD, and as Daley noted in her article, politicians on both sides are in favor of continuing with the Denmark model. 

Secondly, Denmark is more static than the United States. (I was going to say "consistent" instead of "static", because I thought static sounded pejorative; then I thought, do I only think that because I'm an American and we resist all tranquility?) Its fertility rate, as of 2013, was 1.73, meaning that the average Danish woman has 1.73 children; in the United States, the figure was 2.06. Its population growth, which is a function of the birth rate plus the immigration rate (minus the deaths and emigration numbers), is also lower than that of the United States.

So now let's look at immigration, because that's where the difference between the Danish model and the American model becomes apparent. In the United States, according to the Census bureau, 12.8% of the population is foreign-born. In Denmark, as you would guess, the figure is much lower: 10.1% of the people are immigrants or the recent descendants of immigrants. 

"Immigrants or descendants"--that's the category given in Statistics Denmark
In America, of course, that category isn't frequently used (although the Census does collect data on it, and most recently found that 33 million Americans--another 11% of the population--have at least one foreign-born parent). The occasional outbreak of birtherism notwithstanding, having a foreign-born parent is an interesting biographical aside, not a legal complication. That's not necessarily the case in Denmark, which has famously strict immigration laws (even compared to other states in Western Europe). This, then, points to the difference between the Danish model and the United States. It's not that America has more immigration than Denmark; it's that the American system is a more open one. 

The Denmark model is, by contrast, a high-touch approach. If you're a single parent, as in the case Daley described, you get a lot of benefits; if you manage to migrate there, the state will provide a lot of supports. And it's not surprising that the people of Denmark would support the implicit social contract. The country is doing well; they are, for the most part, doing well, and if they weren't, 96% of them told the OECD pollsters that they know someone they could turn to in a time of need. In other words--and with apologies for being reductive about it--it's like they're living in Richard Scarry's Busytown: the country is half the size of Maine, with fewer than six million people, the vast majority of whom share a common ethnicity (Viking) and that character-building official language (Danish).

There's nothing wrong with that in itself, but it's radically different from the United States, which is big, sprawling, heterogeneous, pluralistic and, shall we say, debate-oriented. Under those conditions, a smaller state may be better for both political and pragmatic reasons. First, the smallish state seems to work as a pressure valve for the discontents of diversity--diversity of opinion and culture, to say nothing of race or religion, those old American fault lines. For the most part these debates are civil, but when they fall into us-vs-them narratives--as occasionally happens, even in Denmark--one thing that mitigates some tension is the fact that the stakes are logically smaller when the people being "othered" are perceived to be receiving less. I’ve said before (as have others) that this is one of the reasons Texas has been relatively temperate about unauthorized immigration; we don’t hardly have a safety net, so it’s not like anyone can be accused of taking ruthless advantage of it. 

And then, setting aside the political psychology stuff, a country as big as the United States is bound to be more varied and more variable than a small, compact, centralized one is going to be. This is why, to me, it makes sense for us to have a (relatively) limited federal government, leaving the individual states to overlay the federal apparatus with systems and services according to the needs, abilities, and preferences of voters there. In other words, a state like Massachusetts (which is small, affluent, and educated, and has been that way, more or less stably and predictably, for a long time) might prefer a more "Scandinavian" model; a state like Texas, which is young, growing, mutable, and evolving, might reasonably prefer a lighter hand.  

For more along these lines, see my op-ed from the Dallas Morning News last week. I would also recommend Jonathan Cohn's article from last year, "Blue States are from Scandinavia, Red States are from Guatemala", which I don't fully agree with but nonetheless found thought-provoking and enjoyable. 
05/06/2013 10:19

I think you make a very compelling case that more homogeneous societies have an easier time building comprehensive welfare states because those gated-community social democracies -- so to speak -- have a high levels of trust. When people believe that the poor are "like them," they're more likely to support gov't intervention.

But I don't think pro-immigrant liberals who also believe in big gov'ment welfare statism deny that it's harder to expand Medicaid in MA than it is in TX. I just deny that the political difficulty of winning support for redistributive programs is a reason not to try implementing them at all.

05/06/2013 10:41

Ilya, thanks for the comment. I think it's a fair point although I would clarify that in Texas the Medicaid debate has been less about redistribution than efficiency. That is, Texas already spends a lot, proportionally, on Medicaid--a big slice of a miniature pie--and barring new revenue streams or an expansion of the existing one, allocating more to Medicaid would presumably mean cuts to public education or higher ed (see here for FY2010, filter by %):

Correspondingly, the people arguing for the Medicaid expansion are pointing out that the state and local governments already spends a lot on uninsured care, in which case expanding Medicaid would be more efficient:

05/06/2013 11:23

Ms. Grieder,

Have you seen the book, "The Narcissism of Minor Differences" by Peter Baldwin?

An interesting look at how the U.S. compares to many developed countries on a whole host of social and economic indicators.

05/08/2013 20:29

I assume that you are aware of Milton Friedman's well-known quote on this topic, and here is an interesting perspective based on that quote -

05/11/2013 15:54

That was actually a very good comparison. I think it can be hard to explain to people who haven't been to or lived in a scandinavian country how homogenous we are. We celebrate the same holidays. The same way. While eating the same food. In the same cloth. And singing the same songs. (Because gathering in large crowds and singing is something we do)
And it can be even harder to explain why that is importent for a welfarestate.

I have to disagree when you say that Denmark is more static and less debating than America though.
We just debate other topics than you do and have another way of doing it. It is very much about getting to a consensus or at least a common understanding of the problem and the pros and cons of the different solutions. You might disagree with the chosen solution, but you understand why that was chosen. Again it is something about trust, engagement and understanding.


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