WILL SUCCESS SPOIL THE WELFARE STATE? SOLIDARITY AND EGOTISM IN SCANDINAVIA
Logue, John
The international economic crisis that began in 1973-74 demonstrated the value of the welfare state everywhere in the West. It cushioned the shock for both the individual and the economy, and it...
...In 1960, Danes and Swedes were no more heavily taxed than Americans...
...Over time, successful public provision of services formerly provided by the family tends to crowd out the provision of such services between family, friends, and neighbors...
...The vision of the welfare state animating Social Democratic politics in Scandinavia for half a century has been realized...
...E Thank you for your kind cooperation...
...The trouble is known elsewhere: while every loophole has its well-organized defenders, there is no lobby at all for general tax reform...
...2 The analogy is a good one, for however it began, the welfare state now provides help for the well-to-do as well as the impoverished...
...The strain on the welfare state today is occasioned not primarily by countercyclical expenditures, high levels of benefits for the worst-off, or even the oft-cited growth in transfer payments to the elderly and the rising costs of treating the sick...
...programs could be extended into any area in which citizens agreed to accept obligation...
...From age 20 up, the incidence of illness among the employed dropped in each age category...
...Precisely the same situation obtains in a number of university-educated groups where extended periods of part-time work were once considered part of a normal career pattern...
...These costs have increased...
...Consider the impact of supplemental unemployment compensation paid to those employed part-time but seeking full-time work...
...Consider day care...
...It cushioned the shock for both the individual and the economy, and it helped avoid the abject misery and political extremism that followed in the wake of sharp declines in the past...
...Programs are put into place not by simple political decision but by agreement between interest groups and the state, with all the bargaining and horse-trading that implies...
...That remains true today...
...a comparable study had been made in 1966...
...only half that proportion between 60 and 66 did...
...Finally, there is the fourth, ideological problem: the Social Democrats are ill-equipped for retrenchment in the public sector, while the nonsocialists lack the political credibility to do so...
...It is also striking that unemployment rates by marital status reveal a curious sexual difference...
...9 and 5. Hans L. Zetterberg, "Hur varderingarna forandras i valfardsstaten," in Nordal Akerman, Vdlfdrd?\och sedan...
...Unlike attitudes toward sickness and unemployment, there is no question of changing social definitions here: this is exclusively a matter of economic incentives...
...E Statistiske Efterretninger, A 1982 no...
...The party sees it as the "strong society" that takes care of the weak, if not as a surrogate for socialism, and the party defends it with the same vigor that Congressman Pepper brought to dealing with the critics of Social Security...
...More people are employed in Denmark in day care alone than in the textile, garment, and shoe industries combined...
...They even pay taxes on taxes: the exorbitant excise taxes on gasoline, cigarettes, and alcohol are, by some Kafkaesque sleight of hand, considered to be added value for the purpose of assessing the valueadded tax (VAT...
...In fact, after the sick-pay system was improved by raising benefits and dropping the unpaid three-day waiting period in 1973, the number of people calling in sick actually fell in some firms, much to the amazement of employers...
...q 103 tism that characterized the bourgeoisie...
...One gets the anomalous situation where the captain of industry declines to borrow to buy new machinery for his factory while borrowing heavily as an individual to build a new house...
...The other side of the coin is that the return on savings after taxes and inflation has also been negative...
...100-107...
...But there seems to be a good bit of fragmentary evidence that high benefit levels over time change citizen perception of need...
...In a small group there is a natural limit to individual overuse and avoidance of obligation...
...Sickness, at this level, is voluntary...
...Ole Borre, in an interview in Politiken, Copenhagen, September 5, 1982 VISION IS NOT THE FIRST ATTRIBUTE one associates with politicians, but many Scandinavians would share election expert Ole Borre's sense that it has become less common than it was in the past...
...Most basic Scandinavian welfare programs, including unemployment compensation and the national health system, had their origins in benefit societies organized by union locals, farmers' organizations, or on a neighborhood basis...
...A homily endlessly repeated in the 19th-century Social Democratic press was the moral superiority of the trade unionist who accepted his duty to his fellows over the egoRe: Letters ?E Dissent welcomes letters, but we must ask that they be kept within bounds, about 500 words...
...These programs come with a built-in constituency...
...A university teaching assistantship, while still a step on a career ladder, now also represents a failure to find a full-time university job...
...And why impose on Grandma to keep the baby when excellent day care is available...
...apparently people who were willing to call in "sick" at their own expense were not willing to do so when they got paid for it...
...But there are some quirks in Danish unemployment statistics that suggest that good unemployment compensation (and Danes can draw 90 percent of their wages up to a ceiling of about $225 a week for 30 months) may change the definition of unemployment...
...Despite the notoriety of Mogens Glistrup's tax resisters' party in Denmark, political support for high tax levels in Scandinavia has been impressive, at least in contrast to the United States...
...In the long run it is going to be difficult to avoid marked changes in the Scandinavian welfare state...
...Mothers no longer give up paid employment until their youngest child reaches nursery-school age, but instead take only the paid months of maternity leave and consign infants to day care at the age of six months...
...Interest organizations see "their" programs as if they were contractual agreements that the state cannot abrogate unilaterally...
...In Denmark the public-sector expenditures for pensions, care for the aged, and all medical costs (there are no separate figures for the aged) increased from 12 percent of the GDP in 1970 to 13.8 percent in 1978...
...Though the Scandinavian Social Democrats were pragmatists, they also aimed to create a society that embodied class-specific and (they were convinced) higher values than those of bourgeois society...
...The sense of social solidarity remains engrained as a cultural norm and continues to be invoked to justify paying the heavy costs of social programs...
...But since the 1973 election plunged Denmark into something approaching parliamentary chaos, Denmark has had a succession of weak minority governments, and after 1976, Sweden's nonsocialist parties ran through four governments in six years before losing office to the Social Democrats in 1982...
...they de99 manded reciprocity...
...And they do...
...During the Social Democrats' long tenure, many values of the labor movement were institutionalized...
...If we limit concern to tax expenditures that are freely chosen, and not associated with earned income, then the specific tax benefits from interest on debt unrelated to the employment, from tax-privileged savings excluding collective pension funds, and from the tax-free status of realized capital gains on stocks, bonds, and mortgage notes amount to something like 6 to 10 percent of the GDP in Denmark in 1980...
...Coherent policy is difficult under these circumstances...
...Mogens Glistrup's celebrated characterization of the tax resister?\and he was thinking of himself?\as the modern equivalent of the Resistance fighter during World War II is the perfect rationalization of egotism...
...E Arbejdsloshedsstatistik, 1982:9 (December 8, 1982) and Statistiske Efterretninger...
...And it is generated by what are otherwise virtues of the public sector...
...Notes This article draws on and has been reworked from a longer paper, "Must Welfare States Contract...
...That public-sector expansion has so changed incentives that many of the strong now see more opportunity in the "strong society" than in the private sector is often difficult for Scandinavian Social Democrats to accept...
...More surprisingly, white-collar families get about 50 percent more of these benefits than blue-collar families...
...The provision of a superb, heavily subsidized day-care system has, in a single generation, changed the middleclass ideal...
...They must be typed, double-spaced, and carry the full address and name of the sender...
...those with full employment can afford higher rates...
...The most obvious was an explosion of budget deficits to over 10 percent of the GDP, more than twice the level induced by Reaganomics...
...Vision in an Era of Moral Ambiguity "There's a lot of talk about lack of vision...
...Breaking the link between benefits and obligations has encouraged the use of benefits and avoidance of obligations...
...It is in fact not difficult to find examples of universitytrained professionals who make more money working part-time than industrial workers make for full time yet top off their wages with unemployment compensation...
...Older workers were sick for longer periods, but far less often.' One could attribute this most unexpected finding to the success of the health-care system: the longer one lives, the more exposure one has to it, and the healthier one becomes...
...When restraint is no longer automatic, even Social Democrats who draft blueprints of the future social-welfare system have to talk less of "cooperation and reciprocal aid" and more about manipulating individual incentives and disincentives to encourage self-restraint...
...They are higher today and will continue to rise...
...Though interest rates in Denmark doubled from 9 percent in 1971 to an apparently prohibitive 18 percent in 1980, the posttax rate 100 for those at the 70 percent marginal level went only from 2.7 percent to 5.4 percent, lagging far behind the rate of inflation...
...The traditional ties of obligation in civil society?\of family, neighbors, workmates, and friends?\depended on reciprocity...
...There is a good bit of evidence that the structure of material incentives in the Scandinavian welfare states is undermining the norms that made them work well in the past...
...While the connection between benefits and obligations remains at a societal level, it is far more abstract than the individual obligation of the past...
...Organization for Economic Cooperation and Development, Economic Surveys: Sweden, 1981, Table 12...
...Your obligation is to pay your taxes...
...Again a major reason is the increased demand for services stimulated in the middle class when programs initially designed for workingclass mothers proved successful...
...It is to each individual's advantage to run every cow on them that he can, but if everyone does that, the common lands will quickly be overgrazed and cease to support village herds...
...But reshaping economic behavior to fit the tax code does little for the efficiency of the economy...
...Generalized benefits, universalistic criteria, and the elimination of the stigma attached to using public programs signaled the extension of the idea of solidarity from the trade-union benefit fund to the entire society...
...Perhaps the welfare state in its attractive, solidaristic Scandinavian variant can only be a one-generational phenomenon...
...The state found itself expanding social services that have tended to crowd out civil society's obligations between family and friends...
...This deduction has also fueled a boom in real estate prices that has pushed housing costs from some 13 percent of net disposable family income in Denmark in 1966 to 21 percent in 1976...
...but it will not, by itself, eliminate the strain, for it will reduce only cyclical expenditures...
...The marginal tax rate for additional family income in Sweden was 68 percent in 1978 for production workers if the husband doubled the household income but only 37 percent if the wife achieved the same result by taking a job...
...The American welfare state, such as it is, has rested on a self-limiting combination of altruism and self-insurance: altruism toward the worst off, self-insurance for oneself...
...K. K. Steincke, Fremtidens Forsorgelsesvaesen (Copenhagen: Schultz, 1920), pp...
...But the effect has frequently also been to accelerate the atomization of society, creating a need for greater state aid...
...So Danes and Swedes pay taxes on practically everything, necessities as well as luxuries, virtues as well as vices...
...Most notable has been the development of excellent systems of home assistance for the elderly and day care (and after-school care) for children...
...the public sector does it better...
...Other factors, of course, also contribute: consumption plays a bigger role in personal identity, and the tax structure adds special incentives for wives to enter the labor market.' The unemployment-compensation rules now require that unemployed mothers keep their kids in day care so they remain "available for the labor market" and hence eligible for unemployment compensation...
...In Denmark an individual drawing nothing but unemployment compensation who has the bad judgment to claim no deductions will pay fully 40 percent of his total income in income taxes...
...As in the case of the sick-pay system, we are discussing here not abuse but a change in attitudes...
...the Danish figures were 63 and 44 percent...
...A sentence discussing the Haitian boat people should have read, "However, the Act [of 1980] did not provide refugee status for those who are in that twilight zone...
...Sales and excise taxes affect consumption patterns...
...Should you really insist on helping old Mrs...
...If there is a common root for the current ills of the Scandinavian welfare states, it is that in the eagerness to see benefits generalized and minimum levels raised, the ties of reciprocal obligation have been lessened...
...Let us explore the impact of this changing definition of need in Denmark in terms of the excellent sick pay and unemployment compensation systems that replace 90 percent of lost earnings, up to a maximum equal to the average industrial wage...
...During the economic crisis, the price tag for direct subsidies to workers and enterprises in Sweden seems to have ranged between 3 percent and 5 percent of the GDP...
...Are Danes really becoming sicker...
...The tax advantages of borrowing will decline sharply...
...I M. Kjaer Jensen, Sociale problemer , p. 57...
...If current conservative proposals to reduce unemployment by driving women back into the kitchen are motivated more by discomfort with sexual equality than by concern for the family, it is still true that the open-ended commitment to public-sector provision of some of the usual "housewife's" tasks has proved expensive...
...This admirable system not only protects those dependent on the weather, such as construction workers, and on intermittent or seasonal work, such as longshoremen and workers in fish and packing plants...
...The possibility of tax arbitrage, given high marginal tax rates, deductible interest, and tax privileges for capital gains (taxfree in Denmark and taxed at low rates in Sweden), has induced real creativity in converting current income into quick capital gains, frequently through deeply discounted shortterm bonds and borrowed money...
...A part-time university instructor, for example, who draws a very good hourly wage in Denmark, will now generally draw supplemental unemployment compensation as well...
...The state has this right legally, of course, but in those sectors where corporatism is strong, its hands are tied by the need for continuing corporatist relations in the future...
...Scandinavian welfare systems bear little resemblance to the poorhouse systems that preceded them and continue, in modernized form, to shape many welfare programs elsewhere, including those in the United States...
...Part-Time Work or Part-Time Unemployment...
...The right to benefits was premised on the obligation to contribute...
...And so the situation in Scandinavia today resembles the old problem of the common village grazing lands...
...The Changing Definition of Need ?E There is generally an inverse relationship between levels of benefits and demand for them...
...Arbejdsmarked 1983: 1 (February 2, 1983...
...However, after we account for both maternity and use of sick days to take care of sick children?\and men take some for the latter purpose?\the young still have a higher incidence of sickness than the old.' I know of no objective evidence for increased malingering...
...In my experience the typical Social Democratic response is either to deny the existence of the problem or to regard it as cheating, to be dealt with as harshly as one deals with economic criminality...
...Far from stifling initiative, as conservative journalists allege, high marginal tax rates have given Scandinavians every incentive to divert taxable income into tax shelters...
...Mogens Kjaer Jensen, Sociale problemer og ydelser 1966-1977 (Copenhagen: Socialforskningsinstituttet, 1980), p. 15...
...But what does a politician get out of vision if the voters throw him out in the election...
...Teorier och experiment for ett alternativt samhdlle (Stockholm: Raben & Sjogren, 1981), p. 107...
...Still, supplemental unemployment compensation was not intended to provide an income increment for reasonably paid professionals...
...We may not be as quick as Pavlov's dogs, but the learning process is just as certain...
...in Denmark the 101 direct costs for countercyclical programs?\and here our definition is a bit broader?\have risen steadily from 3 to 7 percent of the GDP, as contrasted to 1 percent in the pre-1973 period...
...The first is obvious: governmental stability and, with it, consistency in policy have declined dramatically...
...The Scandinavians have managed their economies well enough to pay very high rates indeed...
...It is reassuring for one's belief in democracy to find that the ordinary person can demonstrate as much ingenuity in pursuing tax deductions as a corporate tax expert...
...884, 890...
...The 1977 study found, startlingly, that the incidence of illness was notably greater among the young than among the old...
...When your marginal tax rate (the tax paid on your last dollar earned) hits 70 percent as it does in Denmark at about $20,000 in taxable income, or, worse, 85 percent as it did for many in Sweden prior to January 1983, you learn to run for the nearest loophole...
...Part of the increase is accounted for by the larger proportion of mothers of small children in the labor force in 1977...
...1 " Statistike Efterretninger, A 1980 no...
...Nostalgia...
...After all, why should professionals who can only find half-time work be treated worse than dockworkers who aren't paid when there are no ships to unload...
...Heavy pension and medical costs?\the price of an aging population?\are tending upward...
...What seems to be happening is that the threshold for considering oneself sick?\at least as far as going to work is concerned?\has been progressively lowered...
...Worse, differences in taxes actually paid among normal-income families depend on their willingness to "exploit" the tax system, and the difference in living standards that results is clearly visible...
...Overloading & Undermining the Welfare State "Eat green, vote red, and work black...
...The resumption of steady economic growth would help...
...But it is not cheating, and it does exist...
...But so long as they are concentrated on daily necessities and on those vices without which life seems unbearable, their ultimate effect on behavior is limited...
...Unfortunately for employment, industrial investment is interest-sensitive...
...Through the intermittent hard times since 1973, Danish and Swedish welfare states have proved their worth?\from their employment and income-transfer policies to their care for the old, sick, and handicapped...
...In economic adversity they remained decent societies: that is, the continued prosperity of those with work was not bought at the cost of increasing hardship for the weakest members of society, as in Reagan's America or Thatcher's Britain...
...The high interest rates that won't hamper household borrowing do deter business borrowing for investment...
...But the professionalization of the mother's role has also promoted a kind of day-care ideology, which holds that only professionals are fit to raise small children...
...In Sweden in 1970, for example, it required a taxable income of the equivalent of 500,000 Swedish 1981 kronor?\about $100,000 and a very high income?\to reach the marginal tax rate of 70 percent...
...The rapid expansion of devices to reduce taxes has dwarfed the growth in social programs, as household economic patterns have been reshaped to fit the contours of the tax code...
...But the higher benefits, expanded coverage, and higher utilization rates of the last two decades sent costs soaring...
...Much of the growth in socialwelfare outlays in the last 15 years has been a consequence of a shift to the advantaged of benefits originally intended for the disadvantaged...
...E Unemployment, at least in times of recession, has traditionally been as involuntary as death or taxes...
...An interesting policy innovation is the Swedish tax reform, which halves the deduction for interest on private debt while cutting marginal tax rates so that, by 1985, 90 percent of all taxpayers will face marginal rates of 50 percent or less while only 5 percent will have marginal rates of over 55 percent...
...Now that benefits are a matter of right, there has been a generational change in the attitudes of the middle class toward using them...
...45, 54-55...
...There is little pretense of egalitarianism in the reform?\it benefits those who save relative to those who borrow, and savers have traditionally been well-to-do...
...This surely is a core concern for the welfare state, and the only socially equitable way to reduce costs markedly?postponing the pension age for healthy elderly?\is hardly practical as long as unemployment remains substantial...
...Between 1971 and 1981, deductions rose from 13 percent to 23 percent of taxable income in Denmark despite some tightening of tax provisions...
...Once this was internalized as a class-specific cultural norm...
...The solidaristic values of the generations that built the welfare state seem to be giving way to more egotistical values in the younger generations...
...Probably...
...Or is it primarily a result of state policy...
...It is this economic security that provides a basis for individual liberty...
...K. K. Steincke, who as Social Democratic minister for social affairs laid the foundations for the welfare state in Denmark with the social reform act of 1933, defined "the special ethics" of the working class to include "a feeling of solidarity, a willingness to sacrifice, a subordination to common economic and political goals," which gave promise of a better social order based on "cooperation and reciprocal aid...
...the demand for public services, greater...
...The second problem exists no matter which party is in office: while budget and tax expenditures are pushed up without decision or even consent by the political authorities, political factors militate against any cuts...
...During the last decade, the posttax, postinflation interest rates for the majority of middle-class Danes and Swedes have always been negative in real terms...
...The question is whether these will take the form of general benefit cuts that conservatives advocate, which will hit the worst-off hardest, or whether the Social Democrats can develop better alternatives...
...We know the clout that American public-employee unions have in municipal politics, and in Denmark and Sweden the tie between public-sector unions and the Social Democrats rivals that of the Firemen's Benevolent Association and the party in machine-run cities in the United States...
...Longer illnesses were equally frequent in both years...
...Freeloaders had to be very charming indeed if they were not to be ostracized...
...You no longer victimize friends and colleagues but cleverly fool some distant opponent...
...Between 1966 and 1977, "the number of periods of sickness a little more than doubled, and almost all the increase occurred 97 in sickness of less than eight days' length.'" And the 1966 figures included those who went to work despite being sick under the less generous sick-pay rules of the time...
...Nevertheless, the last decade has revealed serious structural strains in the Scandinavian welfare states...
...Hansen next door with her shopping if the city will provide her with home assistance...
...Although the number of day-care places in Denmark increased by 150 percent between 1971 and 1981 and the number of under-twos in day care doubled (from 20 percent to more than 40 percent of children) between 1976 and 1981, waiting lists in many places have lengthened...
...Above all else, of course, they pay high taxes on income...
...Your help is irregular...
...The overall structure of Scandinavian tax expenditures has encouraged households to increase debt-financed consumption, stretching family budgets to the breaking point, and increasing demand on welfare programs for emergency relief...
...One principal culprit is the deductibility of interest on private debt, a feature common to the American, Danish, and Swedish tax systems but rare in other industrial countries...
...It will appear in revised form in Futures for the Welfare State, edited by Norman Furniss...
...Symptomatically, official Danish daycare statistics categorize children as "taken care of in day-care institutions" or "taken care of by [approved] day nurses," and "not taken care of," that is, left to their mothers.' The result has been an explosion in demand for day care...
...The combination of high marginal tax rates and deductible interest means that household borrowing ceases to be sensitive to interest rates...
...Unfortunately this optimistic explanation does not stand up...
...At the Scandinavian rates, deductions and taxprivileged income have risen far more quickly than taxable income, because tax expenditures amount to voluntary, open-ended entitlement programs...
...Countries with high unemployment rates, for example, typically pay low rates of unemployment compensation...
...There seems to be a long-term rise in the use of social-welfare benefits that is independent of objective need...
...Public-sector expenditures account for three-fifths of the gross domestic product (GDP) in Denmark and for two-thirds in Sweden, as contrasted to onethird in the United States...
...102 The third problem is closely related: the corporatist structure of the Scandinavian political systems...
...The burdens on the welfare state of increased countercyclical spending (principally for unemployment compensation, emergency employment programs, and emergency welfare payments) have, unquestionably, been heavy...
...By contrast, the Social Democratic concept of reciprocal obligation contained no intrinsic limits...
...In the three-month period studied, more than a quarter of employed workers between the ages of 20 and 29 were sufficiently ill to draw sick pay...
...Estimating the price of tax expenditures is easier...
...The situation is new...
...The success of the welfare state?\like that of the commons?\depends on some restraint in use...
...it has also encouraged firms to maintain their full labor force on short hours (with supplemental unemployment compensation) during the downturn...
...Likewise, every tax expenditure is stoutly defended by those with a vested interest in it...
...More disturbing, at least to this admirer of Scandinavia's Social Democrats, is what seems to be a deep shift in attitudes...
...The welfare state in Scandinavia is, after all, a Social Democratic creation...
...Even at the individual level, willingness to pay has been startlingly high...
...but its force has diminished, and the limits it puts on the pursuit of individual interest are increasingly nebulous...
...I am not alleging cheating...
...It is still more difficult to assign a cost to the upward trends in the use of sick pay, unemployment compensation, and day care...
...The Younger, The Sicker ?E After the 1976 reforms, the Danish Social Research Institute undertook a survey of citizen use of social benefits and institutions...
...104...
...As a consequence the benefits provided to the unemployed single mother, say, have increasingly been eclipsed by those accruing to people far better off...
...While single, divorced, and widowed women all have lower unemployment rates than their male counterparts, married women have higher unemployment rates than married men.' The best explanation for the discrepancy is that married women are more likely than others to hold part-time jobs while seeking fulltime work...
...That and maternity leave account for part of the discrepancy between sick rates in different age categories...
...But there is evidence that this, too, is changing...
...who might be called 'economic migrants for political reasons.' " PETER I. ROSE top 5 percent of households, deductions jumped from 17 percent to 37 percent in the same period...
...but I also suspect that it reflects reality...
...Tax Expenditure as Entitlement FINANCING Scandinavian-sized public sectors is expensive...
...Letters will not be returned to senders unless they are accompanied by stamped, self-addressed envelopes...
...Moreover, there are good reasons to believe that these tax expenditures have created substantial economic dislocations, particularly in Denmark, which probably reduce the efficiency of the managed market economy...
...But the greater expenditures imposed by countercyclical policies, demographic trends, and rising rates of program use have stretched resources to the breaking point, especially as tax expenditures steadily erode the resource base...
...Ailments ignored in the past (and hence not registered in the 1966 survey as "going to work despite being sick") have become grounds for staying home...
...The only route to economic security for individual working people was through collective measures...
...The curiosity is that the Social Democrats come closer than any other group in having an interest in the general health of the capitalist economy...
...Anonymous graffiti, Copenhagen 1982 To EXPLAIN the nature of public attitudes toward the welfare state, Swedish sociologist Hans Zetterberg recently invoked the medieval cult of the Virgin with her infinite compassion...
...In Loco Familias ?E Among the most expensive new programs initiated in Denmark and Sweden have been those in which the public sector has assumed some of the traditional family responsibilities for care of children and the elderly...
...Today Scandinavian taxes take roughly half the GDP versus a third in the U.S...
...they call in sick when their children are ill...
...The reason, surely, is that the Scandinavian welfare states are notable not only for their benefit levels but also for their principles...
...but neither offered a basis for more far-reaching programs...
...Thus the long-term effect of high, progressive income-tax rates is not to increase economic equality but to accelerate tax planning...
...Unlike other welfare-state programs that have some relation to need, the only qualification for a tax expenditure is having taxable income...
...The public sector has become a mass employer in its own right...
...The Protestant industrial countries have secularized . . . this vision of a helping hand that, through all life's changes, is available to the good and the bad, the happy and the unhappy, those who can express themselves and those who mumble...
...Unemployment records show supplemental payments to be more common among the university-trained than among blue-collar workers except those most affected by the weather as are, for instance, bricklayers, and those for whom fulltime jobs are rarities as they are for musicians...
...Altruism was sufficient to prevent starvation, and collective self-insurance cut risks of catastrophe...
...in 1981 you could achieve the same distinction with an income of under 100,000 Skr...
...Hard Choices in Economic Stagnation," presented at a conference on Futures of the Welfare State at Indiana University, March 1983...
...Tax statistics testify to citizens' adaptation of their behavior to the contours of the tax code...
...As far as I can judge, there is very little abuse, in the sense of getting benefits one is not legally entitled to, despite the laxity of safeguards in Scandinavia...
...This pattern is not only legal but, in a sense, just...
...12, p. 376...
...Needless to say, the principal beneficiaries were the well-to-do: among the Erratum In my brief commentary on refugee policy in the Fall 1984 issue of Dissent, there is a strategic omission...
...Political Barriers ?E Four political problems, all institutional and ideological, make it hard to modify the welfare state...
...The aim has been admirable...
...Yet the Scandinavian welfare states rest on a clear moral premise: the obligation of society to protect its weakest members not only against thieves, murderers, and foreign enemies, but also against economic catastrophe...
...The Danish Employers' Federation statistics seem to support the survey's finding that the young are sicker than the old...
...Moral Dilemmas ?E To discuss politics in terms of moral choices strikes a chord of unworldly idealism...
...The logic, over time, becomes compelling...
...The development of these programs reflected not only the traditional Social Democratic concern with conditions of working-class families?\mothers forced by economic necessity into the factories, toddlers abandoned to the tender mercies of slightly older siblings?but also responsiveness to the new women's movement...
...This ethical view reflects not altruism but a fundamental sense of group solidarity...
...For these family roles had been viewed as women's responsibilities...
...Steincke's faith in the solidaristic norms of the working class rested on a firm commitment to the rationality of class action...
...Norway escaped the economic crisis because of its oil boom, but Denmark and Sweden, heavily dependent on international trade, were hard hit...
...Doing so requires heroic assumptions...
...We reserve the right to edit letters down to fit our space and to choose which shall be printed...
...without the latter, the former could not have existed...
...This, unfortunately, is not true of high-income tax rates...
...E Jon Sundbo, Annemarie Knigge, Susanne Dalsgaard Nielsen, and David Bunnage, Arbejdsfravaer (Copenhagen: Socialforskningsinstituttet, 1982), pp...
...At these rates, every loophole acquires a constituency of users that extends beyond corporate lawyers, society surgeons, and the very rich and will include carpenters with a bit of overtime and nurses who work inconvenient hours...
...It pays households to borrow, not to save...
...What we see now are the problems of its success...
...but current tax expenditures are probably more inegalitarian and, worse, impose tax penalties on civic morality...
...But the public sector makes no similarly direct demands on the individual...
...Is the rising demand for day care principally a product of cultural change, independent of the state...
...The wife's half-time position, which used to be a welcome supplement to the family income, is now a bigger supplement because it is only half of a full-time job...
...The major beneficiaries of the public subsidy to day care (which in Denmark is now larger than the cost of higher education) are higher-income families...
...From 1929 to 1973 the Social Democrats governed Denmark for all but ten years, while their Swedish colleagues held office continually from 1932 to 1976, except for a few months in 1936...
...In their original form, these benefit societies owed their existence to a clear connection between obligation and rights...
...But when the nexus between obligation and benefit dissolves and the citizen deals not with his workmates or neighbors but with the state, the stigma attached to "using" the system is much diminished...
...This was particularly true in Scandinavia where benefit levels had been raised sharply, coverage expanded, and new programs initiated in the prosperity of the late 1960s and early 1970s...
...26, pp...
...What I am suggesting is that the Social Democratic success in eliminating the stigma once attached to receiving welfare benefits has not been without costs...
...M. K. Jensen, Sociale problemer . . . , pp...
...And, over time, the prevalence of high income-tax rates for average people has 96 promoted a speculation in tax deductions and tax-free income?\the tax-expenditure side of the welfare state?\which characterizes only the wealthy elsewhere...
...Everyone has a right to use them?\and should...
...They have done so with startling success...
...And taxes, among rational people, were made to be minimized...
...98 A final testimony on changing attitudes: despite increased eligibility for unemploymentcompensation payments, the elimination of the unpaid waiting period, and a doubling of real benefits between 1966 and 1977?\which is reflected in the fact that only about a quarter of the unemployed in 1977 reported drawing out family savings while unemployed?\the proportion of the unemployed seeking emergency aid from the social relief office almost doubled between 1966 and 1977 from 12.5 percent to 23 percent.' And this increase occurred although the unemployed in 1966 were more likely to be blue-collar workers and the sole support of their families than those in 1977...
...Yet they have come through the crisis with none of the misery that afflicted the unemployed in the United States...
...But my concern here is with a change in attitudes toward the use of programs more voluntary than those for the elderly and the hospitalized...
...The situation seems analogous to the American urban freeway problem: when we build more, more people drive to work and the traffic jam remains...
...The biggest union in Sweden today is no longer the metal workers' but the municipal employees...
Vol. 32 • January 1985 • No. 1
