ON THE WELFARE STATE – IN NEPAL

Following the large gathering on 4 May, when more than 1.500 members of the Communist and Maoist parties gathered to commemorate the 200 year birthday of Karl Marx and listen to party leaders as well as some ‘experts’, the seminar organized by the Maoist Party on 6 May was more modest in numbers, but actually not less interesting from a substantive point of view. Local academics spoke knowingly about how to analyse class and caste developments in Nepal, and how to address the key challenges.

I had been asked to contribute with a perspective on the Nordic [Danish] welfare state, and the challenges facing this phenomenon, which is seen as a model to be followed in many parts of the world. I had accepted this challenge, although I am not an academic on the subject. The presentation was therefore framed as a personal perspective, focusing on the challenges facing the welfare state as I see it, including globalisation, increasing inequalities, and migration. Some of the key points are presented below.

after the struggle came the consensus

‘Development’ is a complicated concept and a complicated process; development includes dimensions of politics (ideology, parties, elections, governance), social structures (family, community, nation), economics (production, ownership, investment, trade), international relations (sovereignty, foreign policy, cooperation).

In addition, development has a significant dimension of time, which needs to be appreciated when we try to understand how societies like Nepal and Denmark have moved from point A to point B over a period of say 75 years. What made it possible for Denmark to achieve X, Y and Z in a certain manner during this period? What were the conditions and circumstances that defined the journey that Nepal embarked upon during this period?

Before I embark upon my personal journey, it is useful to mention a few aspects of the realization of the welfare state that is not always remembered today. It is often said that no matter what political ideology a Danish political party favors, it needs to embrace the basic ideas embedded in the welfare state. If it does not, it cannot win an election and get the control of the state, simply because the large majority of Danes take the welfare state for granted. We pay a large part of our income as taxes to the state; in return, we expect to receive education and health services almost free of charge from the state, just to mention one important aspect.

The liberal position of a small state that does not interfere too much with the life of ‘free’ and independent citizens has therefore been revised in the direction of the socialist position of a dominant and benevolent state, acting on behalf of the majority and ensuring values like equality, social justice, and fairness in general. Some would argue that the socialist position over time has also been ‘reformed’ in direction of the liberal position!

However, while it is true that over time, a rather broad consensus about the merits of the welfare state was established, it should not be forgotten that the idea of the welfare state was initially contentious and an important battleground between liberalists and socialists. Without a strong labor movement, the Social Democratic party and socialist parties to the left of the Social Democrats, with an ability to rally voters behind the idea of an egalitarian society, the welfare state would not have become a reality.

Therefore, the consensus only became a reality when liberals and conservatives recognized that they had lost the battle among citizens and voters about the welfare state. People in general saw it as an advantage. If liberal and right-wing parties wanted to influence’ and ‘manage’ this state, they would have to accept the basics.

A vision or an ideology?

My parents were young students during World War II. They fell in love right after the war ended in 1945, they married a few years later, and at the end of the 1940s, I was born as the first of four children. Both of my parents were the first in their families to get a longer education, both of them as teachers. By virtue of their own efforts and the support of the many different institutions of the state that were developed in the post-war era, they became members of a large and fast growing middle class of people that were beneficiaries of the Danish welfare state.

Some will refer to this state as a vision still being under implementation; others consider it an ideology of socialist origin. In any case, at the global level it is certainly seen as a construction particular to the Nordic countries, hailed and celebrated by some [for its egalitarian credentials and the benevolent role of the state], hated and criticized by others [focusing on what they see as a paternalistic and interfering role of the state].

More recently, this debate also found its way into the debates taking place in the US among candidates competing for the candidacy of the Democratic Party in the 2016 presidential election. Some – like Bernie Sanders in particular – saw the Nordic model as an ideal to be ‘copied’ or at least inspired by, because it protects the poor rom the excesses of the market and ensures some degree of equality. Others saw it as a product of the authoritarian, top-down socialist state, which they feel needs to be disempowered and minimized, because the state does not allow individual citizens the full freedom to define their life. To state it differently: the welfare state does not allow the forces of the market [private companies and financial institutions in particular] to manage their affairs as they see it best from their own perspective.

growing up after ww II

I never saw my state in this antagonistic black-white perspective. I grew up while the different elements of the welfare state were being developed, deepened and refined. In fact, it was being constructed as we moved along so to say, led by dedicated and determined Social Democratic politicians, socialist politicians and tough leaders from the labor unions.

My father, born in 1924, was the son of a small farmer, owning one horse, a few dairy cows, some pigs and many chickens. He could afford to pay one helper only, and he never became rich. He could only afford for one of his two sons to study, and this was my father. He ended up as a teacher, while his brother, my uncle, first became a firefighter and many years later founded a small window polishing company, using his firefighting colleagues as helping hands.

My mother, born in 1926, was the daughter of a Norwegian railway official, growing up in Norway before they knew about the wealth of oil sitting under the seabed, when Norway in general was poorer than Denmark. She was also the only of two sisters getting the chance to study, and she chose to become a teacher. My aunt became what we now call a social worker.

When I started going to school in the mid-1950s, the educational face of the welfare state was just about to find its feet. Denmark had just introduced a new approach to education, which emphasized the role of education in our democracy, including the right of all to an education. We were two brothers, and we both had the ‘right’ of getting the education our energy and abilities deserved. The state invested heavily in new school buildings and training of teachers, and because costs of going to school – from first grade to university – were funded by the state, with money from the taxes paid by all of us, most families could afford it. We started in first grade in the old-fashioned village school with a thatched roof and only one teacher to cover the first three grades. Five years later – in the early 1960s – we would be able to do sports indoors in large gymnasiums and have physics lessons in specialized classrooms. When I think about it, it is hard to believe that this transformation took place in less than a generation.

For a small country without many natural resources [this was before oil was discovered in the Danish part of the North Sea], education was a precondition for developing the agriculture-based economy of a small country into a competitive knowledge-based export country. We needed to be smart to produce for export markets – and to get the money required for welfare: education, health, roads, trains, busses, waste management, and much more. We also needed education for all people to have access to information, and thus be full members of our representative democracy.

i am a beneficiary – and a contributor

I first learned about the relationship between free education and health, and the payment of taxes, when we would visit my grandparents at their farm in the early 1960s. After dinner, the men would withdraw to the ‘cigar room’ to play cards and smoke cigars, and the children would manage the exchange of coins between grandfather, fathers and uncles, when the scores among winners and losers had to be settled. It was a secret and fascinating world for a small boy, although the thick and spicy cigar smoke would make my eyes run like a waterfall.

Often the discussion would be about why taxes to the state should be higher or lower. My grandfather was a member of the Liberal Party and a Chairman of the rural council. He believed in equality among men [maybe even women and men] irrespective of their wealth, but he also believed in the freedom of the market and the need for the forces of the market – supply and demand – set prices. My father did not really trust those so-called free forces, and he believed in strong shoulders paying more and weak shoulders paying less.

Overhearing the adults talking in the cigar room was probably my first lesson in what is one of the most fundamental contracts between the citizen and the state in a democracy: paying taxes!

Closely linked to this monetary exchange was the accountability of the politicians and the civil servants. Citizens should be able to see, in a transparent manner, what our tax money were used for. This would give us the opportunity to choose others to represent us at the next election, if we no longer trusted their ability to deliver according to the values we believed in. In this way, the belief in the state was closely linked to our belief in democracy.

By the way, in the early 60s, women were not ‘allowed’ – at least it was not the norm – to join the men in the cigar room at my grandfather’s farm, and women smoking cigars and playing cards were not seen as showing acceptable female behavior. As I remember it, women would have their own discussions about children, family and housework in the living room, although my own mother was a strong believer in equal rights for men and women, even to the extent that she would be willing to embarrass my father by speaking out on the issues she cared about. He was also a believer, but not in the dramatic manner, my mother could sometimes express it.

It was only in the late 60s and early 70s that kindergartens became the norm, very much thanks to the emancipation of women. The labor market required women to be part of the labor force, and the state had to invest in this, to ensure that the welfare state could continue to grow in scope as well as quality.

When I had my first child in the mid-1970s, she of course attended kindergarten. I considered this to be natural, as a right given to me as a citizen of the state. Although I was young and still not making a lot of money, and therefore not paying much in taxes, I knew instinctively that seen over my entire lifetime, I would be paying my part to the functioning of the state.

Going to school and attending kindergarten are two examples of how I have grown up with my state. Free access to health is another feature I could have used as an example. My father died young from leukemia, and he spent years in hospital without my mother having to pay from her limited income. My brother had a daughter born with a brain disease, which has also required years of hospital treatment, without ruining the family financially.

For me, with the values and ideals my parents taught me, there was never a shred of doubt about the convincing rationale for the idea of a welfare state. At the individual or personal level, it made sense to narrow the gap between those able to do extremely well and those finding it hard to make ends meet. Remember, the welfare state may be socialist in its origins and value base, but at the same time, it builds on capitalism as the economic model for the exchange of goods and services and thus the generation of wealth. Individuals own the means of production, and the protection of property rights is a very fundamental right, enshrined in the Constitution as well as in the broader system of rule of law.

voices critisizing the welfare state

There is no doubt in my mind when I look back: I have indeed benefitted tremendously from the resources of the state in many ways. I feel the two of us have established a very personal relationship. I also believe that I have contributed in many ways to our relationship, not only through my payment of taxes, but also through my participation in both national and local elections, writing books for children, sharing my ideas with others.

It is easy to see the dramatic changes Denmark has lived through since I was born. We often state that things today are much more global and therefore more complicated, and consequently the manner in which the state can act and deliver has to change. This is certainly true, and this is seen by many as a threat, not only because the new reality effectively is a threat, but also because the new reality in many ways is of an elusive nature and therefore is perceived as a threat, whether it is the case or not.

One example is the transnational nature of production and trade, allowing companies larger than many nation states [just think of Facebook, Google and Amazon] to manipulate with their legal status and avoid paying taxes to the state in my country. Another example could be the elusive and transnational nature of international terrorism, which requires states to cooperate closely.

The nation states most of us live in are too small or too weak to deal on their own with global threats like climate change, terrorism, tax evasion, or failed states creating large movements of refugees. Whatever the Danish welfare state can afford to do, it will be like throwing a handful of sand into a river thundering down through the gorges of the mountains. We need others in an effectively coordinated effort to manage the global challenges and threats.

You could argue that this is not a new recognition. This is what world leaders understood after WW II, leading to the signing of the UN Charter in 1945. For sure, the UN community of nations has not been able to make the world peaceful for all, nor has it been able to offer decent livelihoods and equality of income and gender for all.

However, I believe it can easily be argued that the world would be a much more unequal, unhealthy, unpleasant and unjust place to live, if the leaders had not agreed to form the UN. With all of its shortcomings, at least the UN is a meeting place, where leaders and representatives of nations can meet and listen to each other’s concerns, both formally and maybe even more important informally. That the present president of the US, a white supremacist, a vulgar nationalist and a vocal isolationist, seems to argue that we can do without the UN [and save some money], should not deter the rest of us from reaching out to the world for solutions, based on necessary and genuine international cooperation.

What we have to accept, whether we like it or not [and I honestly do not like it], is that in recent years, an increasing percentage of Danes, Swedes and Norwegians have started to question the very notion of the welfare state. These are some of the arguments:

  • It costs too much.
  • It will cost more in the future when the population grows older.
  • It has become too bureaucratic.
  • The public sector is highly ineffective.
  • Workers from other parts of the EU exploit our system.
  • Immigrants and refugees exploit the welfare system.
  • Too many people just receive without contributing.
  • Too many have lost the incentive to work because of benefits.
  • Taxes must be reduced to allow people to decide themselves.
  • Denmark cannot be an island in the world.

In Denmark, the loudest voices in the ‘choir of welfare state bashers’ are from the right-wing and neo- og ultraliberal parties. They will never suggest doing away with the welfare state as such; however, they will still suggest changes of rather dramatic proportions, resulting in the state – because of dramatic cuts in both direct and indirect taxes for individuals and taxation levels for private companies – no longer being able to offer the thin-masked safety net we have developed. I believe that a thin-masked net continues to be necessary to make sure that the most marginalized and weakest are offered support.

One particular issue should be highlighted, because it indicates the changes our society has been through, and it indicates what the political battle lines look like. This is the fact that the party we normally consider most right wing and xenophobic – the Danish People’s Party – DPP [the name indicates the position it wants to be in] – is not the strongest critical voice of the welfare state. On the contrary. On issues like health services and retirement benefits, the DPP is a vigorous defender of the welfare state – and this is one reason that the party has ‘stolen’ many voters from the Social Democratic party.

To fully understand this, we need to also understand the increasingly confusing and destructive role played by the issue of refugees and immigrants, with the combination of Islam and terrorism as an added element. Integrating people from other cultures into Danish society is obviously not an easy task. Using people from countries and regions where Islam is the dominating religion as scapegoats is much easier. Concluding that the influx of tens of thousands of Muslim refugees and immigrants are tearing the welfare state apart, because they only benefit and hardly contribute, is an easy conclusion.

The idea of the welfare state was conceived at a time when Denmark was ethnically and religiously much more homogenous than today; it was also conceived at a time when the class structure was different from today, with the traditional working class being much larger than today. Basic working class functions still need to be performed [cleaning offices, producing goods, building roads and houses], but many of the traditional jobs have been lost to globalization and automation. The class of people performing services [it, online trading, marketing, consultants] has grown, with people often working on short-term contracts and without the benefits, labor unions have fought for. This changes the relationship people have with the welfare state, and it changes the understanding of what socialism is all about today.

globalisation is a threat – and much more

I have argued that I have a very personal tax-based contract with my own state. Part of this relationship assumes that I can hold my elected representatives directly responsible and accountable, because of the democratic foundation the welfare state. If this was not the case, many citizens would probably not trust the contract I have described.

The difficult question today is this: Is it possible to maintain this rather personal relationship when we move parts of what we previously considered to be within the realm of national sovereignty to the institutions of the European Union in Brussels. And even more delicate: when decisions taken through my country’s signing up to various agreements and conventions in the United Nations?

Probably not! This is a large step away from what we are used to, what we can understand based on our own daily experiences, and what we feel comfortable with. However, this is a step we have had to take! My grandfather spent most of his life in a state that did not have the strong welfare dimension. My parents had their first child when the foundation of the welfare state was built. I had my first child when the vision of a welfare state had become a reality, and my children will spend a major part of their lives in a welfare state that needs to adopt to global challenges that were never discussed when I was a child.

There are all kinds of technicalities involved in calibrating a new relationship between the state and the need for a global state-like authority as convener, arbiter and decision-maker. What will be most important [and most difficult] to deliver is the political leadership required to explain to citizens what is happening. We need leaders who can lead in the global village 2018. This is a challenge very different from the global village 1945, about seventy years later.

Leadership in its old-fashioned sense, with leaders being able to explain, direct and comfort the people, is required precisely because this is a democratic challenge, not just a technical exercise. Moving decisions from the national to the regional and global levels, while at the same time making decisions transparent and accountable as we know it at the national level, is a democratic challenge of extraordinary proportions.

For citizens in small nations like Denmark and Nepal, the challenge is monumental, almost frightening. We can all agree that terrorism, climate change, cross-border tax speculation, and waves of refugees crossing borders, are issues that no single state can manage on its own. Precisely because these challenges are of such horrific proportions, many will instinctively seek refuge in the local and the national; seeking safety by looking inward. I understand that this is a natural reaction. From my own analysis of where the world is going, it is not a logical reaction. The opposite is necessary.