Denmark, 6 million wealthy people, 4% economic growth, 1.5% inflation, 2.9% unemployment, national debt of 25% of GDP and budget in surplus. How did it all go so right?
It's because people are living longer and their government retirement plan savings aren't enough to support living that long. Increasing the retirement age means you spend another five years paying into your retirement fund and have five fewer years to spend it. If you have additional retirement savings of your own, you can still retire earlier.
That depends on what driving it. If it’s because the budget was unsustainable and needs to be cut, that’s bad. If it’s because people are living longer, then it’s just an unfortunate consequence of good things. I suspect it’s the latter.
I don't know if I would so easily conflate necessity to political legislation. Both politics and politicians are very commonly out of touch with average citizens and what they need, and often ignore the policies that would benefit the state the most in favor of pursuing personal ideals and maintaining political positions and power. If a policy is good for a state 20 years down the line, but will cost them political positioning in the meanwhile or challenges their notions on what they are "suppose" to do either ideologically or socially, or results in their often substantial personal investments having lower returns, I wouldn't often bet on them choosing the state over themselves.
Dane here. It's not a coincidence that Scandinavian countries fare well in most stats. Most Danes point to a cultural bias towards very flat hierarchies in society and work life as the source of wealth, happiness and trust in each other.
Actually, the Danish economy was a lot more interesting (read more complex and diverse) a decade or two decades ago. Lots of mid-sized engineering companies, for instance. The government is rightly worried about things becoming a Novo Nordisk monoculture, becoming fragile, and ending up like Finland. Novo Nordisk is facing tough competition from Eli Lilly and many other pharmas, who have better GLP-1 drugs but were slower in their development.
The USSR and Yugoslavia and Albania and Cuba and North Korea and Vietnam and China pre-2000s have all had far higher tax rates than Denmark during their worst times, so probably not a great correlation.
Denmark is like all the other Nordic countries culturally, except they have much easier direct geographic lines to Central Europe. So it’s basically what you get when you combine the Nordic model (tiny homogenous Lutheran population) with more advantageous geography. Finland is Denmark with extremely unfortunate geography.
Cuba, Vietnam and Albania have way lower tax-to-GDP than Denmark. They are way below OECD average. Care to share your tax statistics on USSR, Yugoslavia, North Korea and pre-2000s China?
The Nordic model was created by socialist and labor movements in the 20th century. Finland, a tiny homogeneous Lutheran population, even had a brutal civil war over this. Nothing to do with religion or ethnicity.
But it has all to do with corruption. Croatia has one of the world's highest tax burdens per 1000usd earned (or at least it had from a study done some years ago) and you would think that all is is great but this couldn't be further from the truth in reality. Corruption eats it all.
The heydays of communism in those countries are long gone. Current tax-to-GDP stats are simply correctly reflecting those countries being poor and heavily black market driven.
And it’s everything to do with religion and history, why do you think all the Nordic countries had these same 20th century movements and all have extremely similar governance approaches.
> The heydays of communism in those countries are long gone.
Marxist-Leninist countries typically don't have high taxes. Which is kind of obvious as the state doesn't rely on taxes for income. North Korea claims to have eradicated taxes.
> And it’s everything to do with religion and history, why do you think all the Nordic countries had these same 20th century movements and all have extremely similar governance approaches.
Shared history sure: they were geographically very close to each other, or even under shared rulers (e.g. Finland under Sweden for half a millenium), Scandinavian languages are essentially dialects of each other, they were all part of the wider European socialist and labor movements etc. The religion and Lutheran churches opposed development if anything.
The Nordic system is not very radically different from the continental Europe in general, more a matter of degree.
Having lived in Denmark for quite a while, I will say that it is the societal coherence, and an attitude of working together for all which must have been influenced with the difficulty of surviving in that landscape in the past.
Societal coherence has been aided by the isolation, and here is the hot take: this cannot exist in "diverse" societies. Not because of bullshit genetic superiority justifications, but because no diverse society has so far demonstrated the capacity to have a shared purpose, coherence and high degrees of trust.
And yes, I do find monoculture societies (including denmark) very boring, and I believe diversity has other great benefits. But societal stability and long term prosperity in that sense? Doesn't look like it.
Before someone mentions the US as a counterexample, do not forget that all the prosperity of the US came from basically seizing an underutilised (in the industrial sense) resource rich continent, and now it is falling apart by internal divide.
The divide is a feature, not a bug. There’s a reason the US is called an experiment, with all the trials, tribulations, failures and successes that come with that. “We do things not because they are easy, but because they are hard.”
Portraying the largest conquest and ethnic cleansing of the Americas as a deliberate experiment to figure out multiculturalism leaves a bitter taste, I'm not gonna lie.
And if you gave me a choice between a world divided in small Denmarks or between the contemporary re-armament of the west due to the election of a populist buffoon combined with decades of mismanagement of a unipolar world, I wouldn't think twice.
Every culture has sins and skeletons. That’s not to absolve them but if we’re comparing contemporary national cultures, their stability and demographic makeup, it’s obviously a spectrum of stability, progress, etc.
You absolutely don't need to work 37 hours per week if you are willing to live 200km from the big cities in an old house.
You buy something dirt cheap for less than 80k USD. It's not great, it's old run down. But if you do minimal repairs and don't live the high life, you can get by with very little.
But if you want a new car and nice comfy house in a decent location, with all the modern amenities, well, that's expensive.
brother rusted out farm houses 2 hours from any office building, let alone one that hires programmers are like 350k in rural states. Idk where you live, but it ain't Earth.
For those who don't want to click, a house in Des Moines for $125000 - this was the very first house that came up when I searched des moines real estate, I didn't bother to look farther.
Houses less 400k DKK ~ 60k USD, granted houses at price range are small, worn down, far from cities and job market in area a bit challenged - but not impossible.
Productivity improvements have been partially eaten up by cost of living increases. We don't need everyone working, but how do we decide who has to work and who gets stuff for free? Should workers pay higher taxes to support more retirees?
Cost of living doesn’t wipe out productivity increase. Cost of living is a money transfer. People buy things from other people. The question is therefore where is this money actually going. A casual look at how richness is shared in the USA will give you the answer to that.
how are will still framing this as an ethical dilemma?! THE RICH should pay higher taxes to support retirees! there are people with hundreds of millions of dollars! we just turn down the dial labeled "how rich you get to be" until this shit gets figured out
If you’re willing to put up with 1925 living standards, you can get away with working way less than people worked in 1925, and way less than most people work in 2025.
What is 1925 standards? All organic food? Mostly tailored clothing? Custom fitted shoes? Only one spouse working? Brand new, incredibly high tech cars being made affordable to the average factory worker? Incredibly high tech entertainment centers? They even had washing machines. So are we talking giving up a dishwasher, a clothes dryer, and only having 1.5 baths in houses? Or are we talking the affordable city workers' hotels where man/women mingled, that enable people to live affordably with dignity in the city center, and actually have a life?
What does '1925' mean? No more shein plastic semi-disposable clothes that fall within what 1920's would consider sci-fi dystopian, universal basic income disposable clothes? Or hormone/chemical saturated 'food' that they wouldn't recognize as such? Or huge McMansions made of literal urea board and plastic extruded chemical 'luxury vinyl' floors? Brand new technology such mass produced cars, affordably available to the average person?
Only half of US households had electricity. I imagine many of the ones that were electrified didn’t have washing machines.
Likewise, about half of US households had indoor plumbing. So we’re not talking about giving up multiple bathrooms, we’re potentially talking about giving up bathrooms, period. Do you enjoy outhouses? I don’t.
Only one spouse working? That’s a myth. Who do you think was making those tailored clothes, washing the dishes, washing clothes by hand, and all that? Maybe you mean only one spouse getting paid to work, which is quite different.
You’re looking at a life in a small, drafty house that’s very cold in the winter and excessively hot in the summer (my houses were like that in the 1980s, even), crapping in an outhouse, and washing clothes by hand. But you won’t be washing a lot of clothes, because you’ll probably only have one or two sets.
If this lifestyle sounds attractive to you, you can have it right now for quite cheap.
Jevons paradox. Productivity has increased, but so has consumption because those productivity increases have decreased cost and made many things more affordable and normal.
Bring in more young people via economic opportunity and immigration.
Making kids easier to have really only has two real options:
1. Go back down the development timeline of a nation and remove rights from women (bad).
2. Implement more social programs to incentivize children.
The reason we need to do 2 now and not in the past is we've developed. Women have rights now, and we need real reasons for them to have kids, not fake reasons like we had in the past.
If everyone thinks that government will take care of them when they are old, they will prefer spending time on "self actualization" (whatever that means) instead of the boring dull work of raising kids.
Boring, dull, expensive and risky. We need to incentivize people to do it, not just give them vaguely nationalistic reasons to do so.
Pretty much the only people holding up births in the US is young people who accidentally got banged up. That demographic has only been shrinking as access to contraceptives and education goes up.
We don’t want to remove privileges from people, we want to add on incentives. Currently, there’s a million and one incentives not to have kids.
Not for the young people, no. Besides, countries like the US have made elder care a cash cow. We don’t actually want young people to care for the old, because we can’t bleed them dry that way.
How tiny of a fraction? Can you quantify this for us?
In principle I think some kind of wealth tax on fortunes above a certain level would be a good idea. But there are a lot of practical implementation problems in terms of identifying and valuing illiquid assets. Like for example I have friends who own forestry land (for softwood timber harvesting) in a foreign country. Those assets have some value but trade infrequently so there's no reliable market price. And they probably hold the assets through a foreign corporation rather than directly in their own names. What is a "fair" amount for them to pay in taxes, and how would the government enforce that in a consistent and cost-effective manner?
It's taxation, not brain surgery. If political will is present we can figure out the accounting. The central question is whether we want to drive the economic output of nearly the entire economy into the hands of the 50 richest people in the world, or if we feel that split should be more equitable.
It's always odd to see this dichotomy on HN comments:
1) I'm amazing, I can solve any problem, I'm enlightened by my own intelligence, I'm the mover and shaker who drives all worldly productivity, and I do it by wrangling the newest technologies in the most imaginative creative and intelligent ways, no problem is too great for my superior intelligence!
2) Pay taxes? Ah but, uhh, that's impossible; like ... who decides? There, there's a dealbreaker for you! Hah! And anyway how much? I.. I... there's complexity, don't you know how difficult and complex it is to ... own a forest? Nobody could make a decision, I can see already that the combined might of a nation's experts could not come up with a figure, forget AI, this is just ... give up already, come on, some problems are forever out of reach.
That's true. But I'd argue that everyone is better off when most people can chose to retire early, rather than the select few who are smart and disciplined enough to plan an early retirement.
Everyone is better off except the workers who have to pay higher taxes to support more retirees. That might still be a net positive for society but people are going to have a wide range of opinions on where to draw the line.
There are multiple pension-related plans to supplement or replace the government pension, and most work in ways so that it's not just "smart and disciplined" people.
Retirement age in Australia is 67. A report from 2024 going on the 2022/23 FY said the average age at retirement (of all retirees) was 56.9 years. People typically plan for 65.
Couldn't find Danish data, but 43% in AU rely on a government pension. 27% on superannuation or similar (I assume this will grow a bit). Those reporting no personal income is down from 24% to 12% over the last 10 years.
Here, companies compulsorily pay 11.5% into super funds for staff.
All that said, I'd rather see more support for people living in their prime rather than being tied to a desk. I don't see the point in purely waiting until retirement.
No everyone is worse off if their retirement date doesn't match when they want to retire.
the later you retire the less money you need. So if you are not personally ready why did you fund that much while if you sant to go sooner you need to save anyway.
Sure, but modern societies have solved the problem of needing to work until you're 70. Working until 65 or whatever still sucks, but 5 years is 5 years is not nothing.
Work isn't mandatory. You're free to stop any time, and accept the consequences of that choice.
What we should be doing is aggressively cutting the cost of living so that people who want to can afford to retire while still maintaining some reasonable quality of life. The number one thing that would help is to set policies that make it easier to build more housing because that's the largest expense for most people.
Well, yeah, life is largely about work. Retirement and living very comfortably off of one's savings/pension is a rather new phenomenon, and I'm not even sure it's a good one (in terms of health impact).
Or they could build their own wealth/have children to provide for them in old age and retire earlier not rely on what should be government backstop for the most incompetent.
Denmark’s immigration policies are not nearly as tough as their reputation nor to credit them as the source of economic prosperity.
Denmark’s economic prosperity comes from investment in free higher education for all, generally healthy lifestyles and the flexicurity-model, which provides a flexible labour market and promotes risk-taking.
Which western countries have "stricter" immigration policies? Even the US now doesn't treat refugees like Denmark did a few years ago (mass, wholesale expulsion to a country that was still at war, with very little exceptions). I get the reasoning behind it but the Danes are not the most welcoming of peoples, with regards to immigration.
I'm guessing the type of immigration each country receives is very different.
e.g. some examples from this list (% immigrant population):
- Qatar (76%)
- Australia (30%)
- Canada (23%)
- Belgium (20%)
- USA (15.2%)
- Denmark (14.2%)
I find that comment confusing because dissatisfaction with our immigration policy was a huge part of our recent election. It almost brought down the Liberal government.