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The Realities of Capitalist Denmark

It is not uncommon for me to see U.S. citizens point to Denmark as a socialist alternative. With this article, I would like to correct this misconception and demonstrate that capital accumulation is the guiding principle in Danish society.

Although the working class in Denmark has succeeded over generations in collectivizing a number of social services, such as childcare, care for the elderly, and education, and in wresting parts of the housing stock from the clutches of the market. Despite having won victories in fighting for a relatively progressive taxation structure—according to the social democratic motto, “the broadest shoulders carry the greatest burdens”—Denmark is permeated by the mutecompulsion of capital, and no Danish government would ever use the term socialism to refer to Danish society.

When the capitalist class in Denmark has conceded to the working class what we (on festive occasions) call “the Danish model,” it is only partly because of the fear that their employees would be too inspired by their socialist neighbors to the south and east. Without belittling the trade union movement and the influence of proletarian political parties, the main argument behind the employers’ benevolence towards the much-vaunted “Danish model” is that it strengthens the labor market with what we call flexicurity—a conflation of flexibility and security.

I will let the Danish government’s Agency for Labour Market and Recruitment explain in their own words what “flexicurity” means for profit creation:

Employers are guaranteed flexibility through “relatively low Employment Protection Legislation (EPL), which gives employers the flexibility to reorganise the workforce to adapt to changing market conditions,” a flexibility made possible by “a system of income security for the unemployed with a relatively high level of compensation.”

In other words, the primary concern is security and flexibility for the capitalist class to hire and fire according to the size of the order book while keeping the working class alive and relatively healthy, ready to enter the labor market once more hands are needed in production.

The same logic applies to the tax-funded infrastructure that provides clear competitive advantages in the world market, the freely available health care that maintains the workforce, the high-quality public education that makes a larger talent pool available to capital, and the public child and elder care that enables women in particular to focus their energies on generating profits for the capitalist class, rather than wasting their precious time on unpaid reproductive domestic work.

What may at first glance appear to be socialist policies are, in fact, aimed at ensuring an obedient, highly educated, well-nourished and relatively healthy workforce—to the great benefit, first and foremost, of monopoly capital.

The Political Situation in Denmark

In Denmark, like the rest of the world, the political picture has been distorted since February 24, 2022. Just as September 11, 2001, set new limits to what is politically acceptable, in the current situation we see a parliamentary left that has shifted to supporting NATO and is completing the journey away from progressive EU resistance.

The Social Democratic government, together with the reformist Socialist People’s Party and the right wing, was quick to exploit the anxiety of the peoples to its fullest. In a so-called “historical national compromise,” the war budget of Denmark was increased dramatically and an urgent referendum was held to integrate Denmark into the EU’s military buildup. As we now know, the plan was successful. Economically, Denmark is affected by the proxy war and the economic warfare of the West. In June, the annual inflation rate was 8.2 percent, according to the National Statistics of Denmark. This is a far greater increase than what wages—let alone unemployment benefits and pensions—have been able to achieve.

According to Danske Bank, price increases are currently running away from wages “at such a high rate that Danes have been hit by a historically large decline in their real wages.” Per this calculation, the price increases mean a fall in real wages of 3.9 percent—the largest fall for as long as quarterly data have been compiled.

This, naturally, creates great insecurity. A Gallup poll from June showed that almost 43 percent of Danes surveyed worried about their ability to put money aside for unforeseen expenses. In addition, 32 percent “even express concerns about whether they will be able to afford everyday necessities like food, hygiene products and so forth in the future.”

A Weakened Trade Union Movement

The great insecurity, with inflation outstripping wage growth, comes after a long period of union membership erosion. An organization rate (denoting the percentage of the workforce belonging to a trade union) of about 70 percent in the year 2000 had dropped to 53 percent in 2018. In 2020 alone, Denmark’s largest umbrella organization of trade unions, Fagbevægelsens Hovedorganisation, had a total decline of 27,100 members, a drop of 2 percent.

The degree of organization among the working class is crucial in Denmark, where our long tradition of a strong, unified trade union movement has yielded unique results. Our entire labor market model is based on collective agreements between employers and trade unions. Hence, we now observe how a shadow labor market, as a consequence of the exodus of members from the trade unions, is gaining ground. Especially in the sectors of hotels and restaurants and among couriers and drivers—not to mention agriculture and large-scale horticulture—wages and working conditions are very far from the glossy picture that the Danish labor market model is usually made out to be. Meanwhile, the pressure on the unemployed and sick has made losing one’s job or suffering from long-term illness a social and economic disaster.

Increasingly, we see a labor market that has become effectively divided into A and a B factions, where one group is covered by collectively bargained agreements on the basis of collective organizing, and the other is outside the vision and reach of the trade unions.

You don’t have to be a nuclear scientist to understand that this development is putting further pressure on the level of organization. The united trade union movement—as well as the massive degree of organization among workers—is not only of decisive importance for the majority of wage and working conditions for the working class in Denmark, but also carries a latent strategic challenge for the revolutionary movement.

As a space where workers have been organized from cradle to grave, an alternative power factor based on democratic and activist collectives where the common good has been on the agenda since the late nineteenth century, trade unions have long constituted an important strategic element for revolutionaries in Denmark, where the aim has been to turn trade unions into militant organizations for fundamental social and political change. If the working class loses ground in terms of organization, an important platform for the working-class struggle for common interests also disappears.

EU Minimum Wage

Alongside this, the EU has decided to introduce a directive on a common statutory minimum wage. This is despite the fact that the EU Treaty stipulates that the EU must not interfere in member states’ labor-market policies. The directive does not directly state that Denmark will be forced to introduce a statutory minimum wage. But it does open the possibility that Denmark could be taken to the European Court of Justice and forced to follow suit.

In this light, the directive is an attack on Danish workers’ rights, the collective bargaining system, and the working class’ right to conflict, just as the directive will undermine the struggle for collective agreements across Europe. The directive is a direct continuation of the EU’s decades-long move towards a single market without regulatory barriers to the flows of capital and labor across national borders. It undermines not only the Danish bargaining model, but also collective, tax-funded welfare, which is already under severe pressure after decades of liberalization, tax breaks for the elite, cuts, and an increasingly cynical approach to working-class people. This is now heightened due to price rises and massive war armaments.

The EU is trying to mask the directive as solidarity—it is not!

Experiences with politically determined minimum wages in countries such as the United Kingdom and Germany show quite clearly that the minimum wage does not ensure a floor for living conditions, but, on the contrary, sets an upper bar above the normal wage for a large part of the working class. At the same time, the minimum wage is constantly being eroded by the Wild-West labor market which, with new types of jobs, zero-hour contracts, and bogus “self-employment,” is creating working poor and even lower levels of unionization.

For the EU, the Minimum Wage Directive is a natural step towards full harmonization, allowing companies to move capital and labor around easily and freely, without having to deal with collective workers’ agreements or union and political rights.

A united resistance is needed against the monopolies’ EU and its undermining and erosion of national bourgeois democracies.

Denmark within NATO

Every single Dane pays DKK 6,000 (€800) to the military every year. This puts Denmark in fourth place among those NATO countries that spend the highest amount per capita on the military, behind only to the United States, the United Kingdom, and Norway. According to NATO figures, Denmark spent DKK 22.7 billion on the military in 2014. In 2022, Denmark will spend DKK 37.7 billion.

In March 2022, the Danish Social Democratic government, together with a majority of the parties in Parliament, reached a so-called “national compromise” on Danish security policy. The compromise increases Denmark’s military spending to 2 percent of its gross domestic product (GDP), as demanded by NATO. According to calculations by the Ministry of Finance, this means that annual military expenditure will have risen to DKK 53.4 billion by 2033.

Although the increased armament has gained new momentum since February 24, the growth of the state war machine is not a new phenomenon.

In just a few years, the Danish government’s purchases of military equipment have exploded: whereas in 2014, around 10 percent of total military expenditures were spent on buying military equipment, by 2022, 30 percent of total military expenditures will be spent on buying military equipment such as new fighter jets, missiles and warships.

For instance, the Danish military has purchased 54 SM2 missiles from the United States, which will be installed on three Danish warships in 2026. No less than DKK 1 billion has been allocated to purchase the new missiles, update the existing missile systems, and set up a new “missile workshop” in North Jutland. According to the Ministry of Defence, the missiles were purchased because they are “a capability in demand in NATO.” Denmark’s current missile system is designed for self-defense, and has a range of 25 kilometers. The new SM2 missiles have a range of almost 400 kilometers—and can be used to attack other ships as well as targets on land.

U.S. Bases on Danish Soil

The Danish government and the U.S. Department of Defense are currently negotiating, in deepest secrecy, a new military agreement that could give the United States the right to station its soldiers on Danish soil. While we await the outcome of the negotiations, we can already observe how Danish infrastructure is being militarized.

In May, the Danish Ministry of Defence issued a press release in which it was made clear that Esbjerg Port has, strategically, a good location and size, proximity to logistical infrastructure and several large military barracks, with corresponding accommodation possibilities. Thus, according to the statement, the United States has shown interest in using the port as a possible hub for “deployment of allied forces to the Baltic Sea region and the Baltic States.”

This quickly prompted Denmark’s Social Democratic Defence Minister Morten Bødskov to jump up and wag his tail. In the press release, where we hear that the minister has gone to Esbjerg to inspect the port with his own eyes, he says:

Russia’s terrible attack on Ukraine makes it very clear that Denmark must live up to the expectation that we can provide host nation support for allies who want to pass through Denmark. This is where Esbjerg comes in. The Port of Esbjerg is ideally placed to support our NATO allies—and the United States in particular—with the deployment of equipment to the Baltic Sea region. It is a great opportunity for Denmark to provide support to those countries sending reinforcements to ensure the security of us all.

It is expected that the port will be ready for its new military purpose by the end of 2023.

Both the stationing of U.S. troops on Danish soil and the opening of Danish infrastructure for transit by NATO movements will not only have far-reaching consequences for Denmark’s ability to determine the use of armed force launched from Danish soil, but will also make Denmark a target in a possible large-scale war.

So does the steady flow of arms the Danish state is shipping to Ukraine—and, in general, the blind loyalty the Danish government is showing the United States.

The EU Military

During the tumultuous weeks following the outbreak of the proxy war on Ukrainian soil, the Danes suddenly had to rush to the ballot box to vote on the abolition of the special Danish Defence Reservation, which has kept Danish defense policy free of EU supranational legislation since 1993. It was no surprise, with a large-scale war looming, that the situation was exactly as favorable to the project as the political majority had hoped. In the end,66.9 percent of Danes voted for the abolition of the reservation, while 33.1 percent voted against. In all constituencies in the country, there was a clear yes majority. However, the overall turnout for the vote was 65.8 percent—second-lowest for an EU referendum in Denmark. Now even crucial elements of Denmark’s defense policy have been placed in the hands of the lobbyists in Brussels.

Racist Marginalization

Denmark has become known as one of the core countries of Islamophobia. The racist tone in both the media and parliament is extreme, and over a number of years Danes have become accustomed to a fierce everyday racism that has marginalized, in particular, Muslims and so-called “non-Westerners”—a new distinction used to legitimize discriminatory legislation and practices.

In March 2022, the Institute for Human Rights published the report Ethnic Profiling. This report documents the use of ethnic profiling in Danish police practice. The analysis is the most comprehensive to date in a Danish context, and examines who the police are charging and what the outcome of the charges are. For, as the authors write in the report:

As a citizen, you can expect the police to only charge people with things they can be convicted of. The ethnic background of an accused person should therefore have no bearing on whether or not a charge results in a conviction. If the police systematically charge more ethnic minority citizens for offences they are not found guilty of, this may indicate that the police apply a lower standard for charging ethnic minority citizens compared to citizens of Danish origin.

The implications are clear: Immigrants are 27 percent more likely to be charged without conviction than “people of Danish origin”—for descendants of immigrants, the risk of being charged with a crime for which you are not convicted is 45 percent higher than if you look like the average white Dane.

In particular, people with roots in the Middle East and East Africa face discrimination from the police. Thus, people of Lebanese origin are 73 percent more likely to be charged without conviction, and people of Somali origin are 45 percent more likely to be charged without conviction compared to people of “Danish origin.”

While we with light skin and “Western culture” glowing from our attire can move around unhindered in public spaces, people with darker skin or with, for example, Middle Eastern or African cultural expressions are reduced to their ethnicity, skin color, or religion—they are racialized. While white majority Danes are able to feel at home and don’t have to worry about being forced to identify themselves on a daily basis, racialized people are stopped by the police, humiliated, searched, required to produce identity papers, and, in general, treated as outsiders—something alien that doesn’t belong. Something unwanted.

Treat people in this way and it is certain that some will seek alternatives to the surrounding society. The threat of parallel societies thus comes not from the people who have chosen to travel many thousands of kilometers to settle in Denmark, but from the society that prejudges you on the basis of the color of your skin; the society that ridicules your culture, denigrates the religion of your parents, and treats you as an enemy. The strong ramifications of structural racism in Denmark have wrapped themselves tightly around the roots of bourgeois democracy, threatening the unity of the working class.

Ghetto Laws—An Attack on Social Housing

The same tendency can be seen in the “ghetto laws” criticized by the United Nations. The laws were passed by a broad political majority, and are jealously maintained.

The ghetto act was created to avoid high concentrations of “non-Western” residents in social housing areas, which are areas with housing that must not generate profit and are therefore cheaper than market housing. In November 2021, the Danish government was “examined” by the UN Committee on Racial Discrimination (CERD). This led to sharp criticism of Danish ghetto legislation and a number of recommendations to the Danish government. The UN Committee pointed out, among other things, that ghetto legislation has a “discriminatory impact on ethnic minorities.” The UN Committee also expressed concern that the ghetto legislation’s division of citizens into “Westerners” and “non-Westerners” could lead to “the marginalisation and stigmatisation of those classified as ‘non-Westerners,’ and that this may lead to a distinction between those considered ‘real Danes’ and ‘the others.’”

The committee was also concerned that the ghetto legislation’s labeling of public housing areas as “parallel communities” could lead to residents being stigmatized in the areas of, for example, employment and access to housing. Against this background, the UN Committee called on the Danish government to “stop using the terms ‘Western’ and ‘non-Western’ in policies and laws.” However, the criticism of the United Nations has not made much of an impression in Denmark. Most recently, this summer, the Regional Court (Østre Landsret) approved terminating the tenancies of “non-Western” residents in a housing project in North Zealand.

The aim of terminating these tenancies was to bring the proportion of residents with a “non-Western” background in the housing project down to below 50 percent—and thus avoid the area being labelled as a “tough ghetto,” potentially leading to the housing association being forced to either demolish homes or sell 60 percent of its social family housing to private investors.

Besides the racist overtones of the so-called ghetto laws, the attack is also directed against the working class in general and a number of its hard-won democratic rights. In fact, social housing has to a large extent been separated from the market and has, historically, been democratically run by residents. All of this is now under attack in the war against so-called ghettoisation.

Nature and Agriculture

Danish wildlife is in a historically bad state. Denmark is ranked lowest in the EU when it comes to protecting nature. The quality of habitats for animals and plants in Denmark is also among the worst in the EU.

A team of researchers has estimated that 54 percent of species are in decline after examining a representative sample of the more than 13,000 species found in Denmark. The decline is mainly due to the fact that the species’ habitats are under severe pressure. Only 19 percent of all habitats are stable or improving. High-intensity, industrialized and heavily chemical-dependent farming plays a major role in undermining biodiversity.

Agricultural land is a scarce, strategically crucial resource. In Denmark, 61 percent of the total land area is used for farming. It is therefore of great importance that a liberal reform in 2014 transformed Danish agricultural land into an investment target, not least for foreign speculators. The reform paved the way for Danish and foreign private equity funds, joint stock companies, and foreign wealthy individuals to freely buy up agricultural land in Denmark. With the stroke of a pen, the requirement for production to be managed by a resident farmer was scrapped. Also eliminated was the preferential right of small local farmers to buy up land.

Danish legislation in this area is among the most liberal in the EU, and the consequences are obvious. A total of 2.9 percent of Danish agricultural land—corresponding to a total of 81,940 hectares—was under foreign ownership in 2020, according to a study by the Institute for Food and Resource Economics. This constitutes an increase of over 2,000 hectares in just one year. Meanwhile, there is no requirement to register as an owner of agricultural land, hence there is no overall view of who owns the land.

One of the foreign investors we know of is the German speculation company Munich Re, which—via its Danish subsidiary Dansk Demetra—owned Danish farmland for DKK 578 million in 2021. This is an increase of more than DKK 100 million compared to 2020, when the company owned Danish farmland worth DKK 460 million.

Another company that has taken advantage of the deregulation and bought up Danish farms is the global investment company FarmCompany. FarmCompany currently owns five large farms in Jutland, with a total of 1,645 hectares of land.

The investment company’s stated objective is to invest in and operate ten to fifteen farms over a total of 5,000 hectares of land in Denmark. The majority shareholder of the Farm Company is wealthy Englishman David John Hughes, but the consortium also includes investors from Hong Kong and the Netherlands. FarmCompany’s website gives foreign investors ten good reasons why it’s smart to buy Danish land.

Demand from the foreign big-money speculators is driving up the price of farmland. According to the estate agency EDC, the price of agricultural land in Denmark rose by 13 percent in 2021 alone. Thus, an average full-time farm today easily costs DKK 50 million.

Skyrocketing prices not only make it difficult for new, young farmers to start up their own farms, but provide a favorable environment for large-scale industrial farming at the expense of small farms. This contributes to the concentration of ever more agricultural land onto ever fewer hands—and to the removal of the landowner from production. This is not just a democratic problem, but also an ecological one. It matters very much who owns the land, to nature, to the climate and to the communities.

Foreign investors are not part of the local community. For them, investment is about making money from intensive, large-scale farming Meanwhile, smaller local farmers who are part of the community are much more likely to look after the land because they and their children will be living off it for many years to come. To ensure future food production in a way that does not degrade but rather rebuilds soil fertility, democratic control is needed over who owns the land and for what it is used.

Mental Health among Youth

Capitalist Denmark is not only a threat to nature, but also to the people who live in Danish society. This is particularly evident when looking at the mental health of Danish children and young people. Studies from 2019 show that about 15 percent of children and teenagers have been treated for a mental illness before they turn 18. Among young women aged 16 to 24, 34.4 percent experience poor mental health, according to the Danish Health Authority 2022. Among pupils aged 11 to 15, 11 percent say they have low life satisfaction. A total of 57,100 Danish children and young people suffered from a mental illness in 2019. This corresponds to 5 percent of all children under 17 years old, according to the Ministry of Social Affairs.

Approximately 11,000 children and young people start treatment in psychiatric hospitals each year. This represents an increase of almost 50 percent since 2008. Moreover,at least 16 percent of Danish children experience mental health problems or mental illness before the age of 10.

This is a tragedy with massive social consequences, not least for future Danish society.

All these are just a few examples of how the Danish state prioritizes profit over people, the interests of monopoly capital above the environment and the free market above human wellbeing—and that the fairy tale of the social democratic paradise far to the north is greatly exaggerated. Far more should Denmark be known as a willing accomplice of U.S. imperialism, a deeply racist and intolerant country where the destructive logic of capital always takes precedence over our common future.