1. The case of Denmark - 30 years of reform
Martin Ågerup
President

2. Socialism didn’t work…
Capitalism Socialism

3. ...or is the Danish welfare state proof interventionism works?

4. “We should look to countries like Denmark”
“We should look to countries like Denmark” - Sanders
“We should look to countries like Denmark”
“I love Denmark” - Clinton

5. Conclusions
Denmark was rich and well functioning country before the welfare state
Apart from tax-and-spend Denmark is a relatively free market economy
Denmark wealthy because of economic freedom
High taxes and redistribution hurt wealth and create serious economic and social problems
30 years of market oriented reforms have kept Danish economy afloat and relatively competitive

6. Busting myths about Denmark
Wealthy because of the welfare state?

8. Wealth of DK relative to ”Old Europe” and US (1870-2030)
Sources: Maddison / OECD

9. Still: Denmark does (relatively) well despite welfare state – how?

10. Ideal framework for the innovation process
Markets
Competition
Ease of entry
consumer choice
Prices
Rewards to risk taking
Private property
Regulatory certainty
Low taxation on returns to risk
Economic freedom

13. Economic Freedom, Denmark (2013)

14. Slovak Republic:
no 47 – rating: 7.29

15. 15

16. The welfare coalition
Dependency as a percentage of the electorate,
Source: Statistics Denmark, the Ministry of Economic Affairs and the Interior, along with own calculations 30 35 40 45 50 55 60 65 70
Pct.
In 1980 the fraction of the
electorate
dependent on the
government was above 50 percent

17. The nordic welfare-”model” Cases: Sweden, Denmark and both
Teacher Union power diminished
Retirement reform
Wealth tax abolished
Corporate tax cuts
marg tax rate cuts
Market orientation
Privati- sation
Budget process reform
Unemployment benefit reform
Dereg of airlines, tele, retail,
DKK peg
Pension-
refrom
Inheritance tax abolished
Financial sector deregulation
”Taxreform of the century”

19. Development of real and structural employment (DK)
(Thousand)
Kons Soc dem Liberal Soc. Dem.
Real
Structural 19

20. The top marginal tax rate in Denmark (1975 – 2011)
Soc dem Kons Soc dem Liberal

21. Corporate tax rate in Denmark (1970 – 2016)

22. Expected official retirement age (after 2006 retirement reform)

24. Conclusion: You can have capitalism without the welfare state but you can’t have the welfare state without capitalism