Crisis, Miracles, and Beyond: Negotiated Adaptation of the Danish Welfare System

By Erik Albæk; Leslie C. Eliason et al. | Go to book overview

CONCLUSION

Erik Albæk, Leslie C. Eliason, Asbjørn Sonne Nørgaard and Herman M. Schwartz


The Welfare State: A political problem primarily
and, only secondarily, an economic one

We started by asking what explained the remarkable resilience of the Danish welfare state, and what this told us about the future of the welfare state in general. We asked how this welfare state managed to survive during a quarter century that saw the collapse of Keynesian demand management and full employment, and a fairly successful and OECD-wide ideological challenge to the whole idea of the welfare state from the political right. We sought to present a comprehensive account and analysis of the institutional structure of the Danish welfare state in order to answer these important questions, and also just for the sake of presenting the first comprehensive account of the Danish welfare state and its situation in a specific set of macroeconomic policies, political institutions, and popular preferences. In this conclusion, we will not rehearse the details presented in each individual chapter. Rather, we will try to pull together a synthetic account that incorporates some of the most important findings from each chapter.

Recall that the Introduction argued, and some of the chapters demonstrated, that the theoretical literature on welfare state crisis largely over-predicted the severity and extent of constraints on the welfare state. Thus arguments that “globalization” or the collapse of the Bretton Woods system made large-scale welfare states impossible ignored the possibility that parts of the welfare state actually enhanced an economy’s competitiveness or the possibility that rising external demand for a country’s exports might help expand the revenue base on which the welfare state stood. Similarly, the remarkable reversal of Danish macroeconomic fortunes suggests that even if the Danish train neared the abyss, the engineers retained enough steering capacity to reverse course. Whether or not this reversal was purely the result of intentional action, the outcome suggests that there is nothing about the macroeconomic consequences of the welfare state that automatically produces disaster. Finally, the chapters nowhere suggest that European Union membership has forced a diminution or reshaping of the Danish welfare state. Indeed, the EU’s influence is noticeably absent in virtually every chapter, except the one on macroeconomic policymaking, suggesting that as long as the fundamentals are right there is substantial room for maneuver in terms of domestic social policy goals. This book thus suggests

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