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March 25th, 2012

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The views of Denmark’s newest mainstream political party are radical. They propose cutting the maximum level of tax to 40 percent, making people pay to use the health service, halving the corporate tax rate, completely abolishing early retirement schemes and reassessing all those on disability benefits to ensure that everyone who is capable of earning a living, does so. Immigrants are welcome, but they can’t make a claim for social benefits such as free healthcare for five years.

As their name suggests, Liberal Alliance (LA) is libertarian to the core. They fight for market solutions, smaller government and increased personal freedom. Their views run contrary to Denmark’s dominant left-wing ideology and ask whether the relationship between individuals and the state ought to be fundamentally overhauled. 

Outside of Denmark, these views are hardly extreme and could easily be found on the manifesto of any liberal-minded party. And yet during the decade of rule by Denmark’s last government – a centre-right coalition (VKO) consisting of the liberal and conservative parties, Venstre (V) and Konservative (K) and buoyed by the anti-immigration Dansk Folkeparti (DF) – the tax pressure did not diminish, nor did the size of the welfare state. In short, VKO’s governmental policies seemed neither liberal nor conservative.

According to Christoffer Green-Pedersen, a political professor at Aarhus University, VKO’s move towards the middle created an opening for LA.

“To take power, Venstre had to move toward the middle and become more anti-immigrant,” Green-Pedersen explained. “This left a group of discouraged liberals who had no-one to vote for.”

The party was initially called Ny Alliance (New Alliance), and was founded to provide the government with a realistic alternative support party to DF that the government relied upon to keep its majority. But after taking only 2.7 percent of the vote in the 2007 election, Ny Alliance collapsed. After a change in leadership and name, the party went on to gain five percent of the vote at the 2011 election, earning them nine seats in parliament. Polls since last September’s election indicate that LA has maintained the same level of support since.

According to Green-Pedersen, the party’s success can be attributed to its clear branding. Whereas Ny Alliance was more of a centrist party hoping to support a liberal government and ensure its majority, LA is firmly and uncompromisingly libertarian. Its goal is to act as an outsider and pull the government back toward liberal policies – formally supporting a government would require it to compromise on its policies and undermine its very existence.

A market-orientated and small government party, LA’s policies often mean it is cast as the party of the selfish. But its leader, Anders Samuelsen, argues it is quite the opposite.

“Liberal Alliance seeks to represent all those Danes who believe that the state has become too big and too expensive and who believe that the state should interfere less, not more, in people’s personal lives,” Samuelsen said. “This is not an agenda only for the so-called ‘super wealthy’, but is a policy that will benefit all. Not only does everyone benefit from more personal freedom, but halving the tax on companies and cutting income taxes to a maximum of 40 percent will boost both growth and job creation, and benefit all levels of income.”

It is Samuelsen’s belief that all Danes would be better off paying less tax. But the immediate effect of cutting tax rates would create a massive hole in public finances, which in turn would require cutting the welfare state. This may potentially undo much of the work done to redistribute wealth and maintain the high level of equality. Samuelsen, however, is unconcerned by this scenario.

“Denmark today has the highest level of income equality in the world,” he said. “Even with a total implementation of Liberal Alliance’s economic policies, Denmark would still be one of the most equal countries in the world.”

It’s no secret that LA is less than convinced of the existence of poverty in Denmark. One of their MPs, Joachim Olsen, caused a minor uproar when he wrote on Facebook before Christmas that “it is an insult to all the millions of starving people across the world to talk about poor people in Denmark […] If there are any people who cannot afford to hold Christmas then it’s their own fault!”

Olsen’s comments then led to a national debate over poverty, in which Socialistisk Folkeparti’s Özlem Cekic trotted out an example of a ‘poor Dane’ that largely backfired.

According to 21-year-old Rasmus Brygger, the national president of LA’s youth party, Liberal Alliance Ungdom, the Danish obsession with equality is one of the issues the party is uniquely critical of. 

“As long as there are equal opportunities, equality isn’t a problem,” Brygger said. “You always have an opportunity in Denmark because you can always go to high school or university regardless of whether your parents are rich or poor.”

Brygger was a former member of V’s youth party but joined LA out of dissatisfaction with V’s centrist and left-wing policies. He argues that only reducing the maximum tax rate to 40 percent would encourage economic growth in a country whose citizens have resigned themselves to a culture of allowing their money to go through the government’s hands before ending up back in their pockets.

“This mindset is a greater problem than the [left-wing] policies themselves,” Brygger argued, adding that one of the party’s main goals is to make Danes take greater responsilibty for their lives. “We want to turn it around and say the problem is actually that there is too much equality. I know we’re seen as extreme, but really all we are doing is proposing a maximum 40 percent tax rate.”

LA paints a picture of a Danish state that inhibits rather than enables. They argue that with a lower tax rate, entrepreneurs and business people would be able to hire more employees, and the abolition of early retirement would empower people to re-enter the workforce after being paid to sit at home.

But most Danes don’t buy it. Christian Albrekt Larsen, a political professor at Aalborg University, explained that despite the emergence of LA – and the 16 million kroner spent on advertising their message in 2011 – the libertarian ideology is still not popular.

“Studies have shown that the basic value orientation of Danes over the years is towards the left-wing,” Larsen said. “Their views are gradually shifting toward more left-wing positions, as you can see by the move of right-wing parties towards the left.”

Green-Pedersen also cited studies that indicate that the majority of Danes are highly supportive of the welfare state.

“Apart from the ultra rich, most wealthy people get a lot out of the welfare state. While the upper middle class may pay in more than they get back, they get enough back from it in order to support it,” Green-Pedersen said. “People understand that if they pay less tax, it will affect the services they use, such as the health or education system.”

And if LA thinks it could appeal to a Dane’s sense of self-interest, they may be disappointed to discover that Danes are not, apparently, highly selfish voters.

“Income only seems to affect voting habits in families that have pre-tax incomes of about 800,000 kroner,” Rune Stubager, a political professor at the University of Aarhus, said. “Only the top ten percent of earners tend to vote more for the right wing.” Stubager added that while Denmark as a whole might be economically better off under LA’s plan, the average Dane baulks at willingly increasing inequality.

“Danes just don’t agree with their policies. Ninety percent of Danes cannot be swayed by economic incentives and that large group is willing to pay the price of the welfare state,” Stubager said, adding that LA could probably never earn more than ten percent of the vote.

Even if Danes support the welfare state, that does not mean it is sustainable. According to Samuelsen, the welfare state is too expensive in its current form to survive. “Reforming the welfare state and turning it into a welfare society with a smaller state and a smaller government is not just an option, it’s a necessity if Denmark is to secure the core welfare such as healthcare and education,” he said.

If they hoped to capitalise on this position they were out of luck. The Socialdemokraterne-led (S) government recently kicked off a debate to find areas of welfare that could be cut in order to provide better targeted services for those who need it. It seems to be a strange twist: the VKO government was accused of following a left-wing agenda by not reining in the welfare state, and now S is following a liberal agenda by seeking to reform it.

But with public support for the welfare state running so high, it’s hardly a wonder that even liberal-minded parties have carefully cultivated the welfare state. It seems that Danes still view the welfare state as a public ‘good’ and even LA’s more restrictive ‘welfare society’ assumes that the government has a role in providing for society’s weakest. 

The views of LA have always been present in Danish politics. But whereas before they were jostling for attention within the V and K parties, they now have their own platform to freely promote their message. On the surface, it could be argued that their rise represents a growing discontent with the welfare state. In fact, the opposite is more likely – that if it were not for the continued support of the welfare state by a majority of Danish voters, the small contrarian voice would never be given a chance to set itself apart in the first place.