It had to be Denmark, didn’t it?
If you are the sort of person who has better things to do — which is to say, a fully functioning adult who is not professionally obliged to follow these things — then you probably missed the exchange between Mrs. Clinton and Senator Sanders at last night’s debate, when she lectured him that the United States isn’t Denmark and he responded with a rousing defense of the Danish model.
Never mind, for the moment, that neither of these batty old geezers has the foggiest idea of what’s going on in Denmark, or in the other Nordic countries. Denmark, like Sweden before it, has been engaged in a long campaign of reforming its famously generous welfare state. The country’s current prime minister is the leader of a center-right party, which, strangely enough, goes by the name “Left,” Venstre. (You might even call it libertarian; its former longtime leader wrote a book bearing the positively Nozickian title “From Social State to Minimal State.” ) Denmark has been marching in the direction exactly opposite socialism for some time. Our friends at the Heritage Foundation rank its economy the eleventh most free in the world, one place ahead of the United States, reflecting Denmark’s strong property rights, relative freedom from corruption, low public debt, freedom of trade and investment, etc.
Don’t tell Senator Sanders, but Denmark’s corporate tax rate is a heck of a lot lower than our own.
Senator Sanders is not very serious about imitating Denmark. Denmark has a large and expensive welfare state, which Senator Sanders envies. He doesn’t envy the other part of that handshake: Denmark pays for that large and expensive welfare state the only way that you can: with relatively high taxes on the middle class, whose members pay both high income taxes and a value-added tax. If Senator Sanders were an intellectually honest man, he’d acknowledge forthrightly that the only way to pay for generous benefits for the middle class is to tax the middle class, where most of the income earners are. Instead, he talks about taxing a handful of billionaires to pay for practically everything. Rhetorically, he’s already spent the entire holdings of the billionaire class many times over.
Sanders’s line of thinking seems to go: ‘Bankers, money, evil, greedy, Make Them Pay!’
But Senator Sanders does not seem as if he thinks a great deal about these things. He worries about the size of the holdings of our largest banks (I’d bet a dollar that he could not explain the difference between an investment bank and a commercial bank) and frets that six big banks have assets equal to 65 percent of U.S. GDP. He does not consider that in Switzerland there are two banks whose combined assets are well more than twice Switzerland’s GDP, a reflection of the fact that the moneyed people and institutions of the world have a great deal of confidence in Swiss financial institutions, or that similar parties invest with American institutions for similar reasons. And never mind that Denmark’s largest bank has assets totaling 1.6 times Denmark’s GDP — a lot more than the 65 percent split among six banks in the United States that so troubles Sanders. Sanders’s line of thinking seems to go: “Bankers, money, evil, greedy, Make Them Pay!”
Democrats are positively delusional about this stuff, talking about Glass-Steagall as though not repealing it would have changed one thing about the way business was done at a pure-play investment bank such as Lehman Bros. or Bear Stearns. The policy is entirely unrelated to the problem, but neither the Democratic presidential candidates nor their voters understand the problem or the policy. They know only that Copenhagen is lovely, and people like Senator Sanders enjoy citing its “example” while shouting such nonsensical sentences as “Free health care is a right!”
#share#Denmark is on the mind of Francis Fukuyama, whose Political Order and Political Decay has now been issued in paperback, to the delight of cheapskate readers everywhere. Fukuyama, borrowing from a group of developmental economists, introduces his readers to the phrase “isomorphic mimicry,” by which he means the error that poor and developing countries make when they adopt the formal institutions of the developed world in the absence of the underlying values, habits, and culture that make those institutions effective. This is part of the problem he calls — surprise — “getting to Denmark.” Fukuyama:
The problem is that Denmark did not get to be Denmark in a matter of months or years. Contemporary Denmark — and all other developed countries — gradually evolved modern institutions over the course of centuries. If outside powers try to impose their own models of good institutions on a country, they are likely to produce what Lant Pritchett, Michael Woolcock, and Matt Andrews call “isomorphic mimicry”: a copying of the outward forms of Western institutions but without their substance.
(Here is the Pritchett-Woolcock-Andrews paper, which is well worth your time.)
#related#That isomorphic mimicry is a great stumbling block. We’re right now in the end stages of failing, spectacularly, in a project to impose liberal democratic institutions on a Muslim world that isn’t much interested in them, but some of our more energetic conservative interventionists still seem to believe that one day an Arab or a Chinese is going to happen across a copy of the U.S. Constitution and build a Connecticut in the Orient. Cult is the first word in culture, which bears some consideration: The American revolutionaries emerged from a Puritan-Quaker culture shaped by the hardships of colonial life with the savage frontier in front of them and the Atlantic Ocean at their backs; the French revolutionaries emerged from a decadent Catholic culture shaped by court life and European rivalries. Both parties cried “Liberty!” but one produced the Bill of Rights and the other produced the Terror. The cultural distance between 21st-century Anglo-American liberals and tribal jihadis in the Hindu Kush is rather greater than was the distance between Thomas Jefferson and the Abbé Sieyès.
Aping the superficial attractive forms of alien polities is not an error limited to the poor and the backward. Our progressive friends argued that Obamacare is just like the Swiss health-care system, which is generally quite highly regarded, and it is, with one important difference: Switzerland is full of Swiss people and the United States is not. The Swiss health-care system turns out to be poorly suited for a country that isn’t Swiss. Any bets on how well the Danish welfare state is going to play in Mississippi and New Jersey?
Progressives who imagine that Americans are one election away from getting to Denmark do not understand Denmark, or America, or much of anything.