TRY SOME DELICIOUS DANISH? Some interesting discussion between Tyler Cowen and Matt on whether we can scale up Denmark's mixture of economic security and dynamism for a country the size of the US. The basis for this discussion is Jon Cohn's excellent examination of the development and success of the Denmark model, which is well worth a quick read. In short, they've made the most liberal of the neoliberal visions manifest: The economy is market-oriented and ruthlessly adaptive, while the government offers a robust safety net, a high level of economic security, and a promise that if the unemployed seek work, the government will make sure the work is there, and offer the training and counseling necessary to help the displaced. The economic outcome has been impressive: High GDP growth, low unemployment, high average incomes, low inequality, and dirt-low poverty. On the other hand, Denmark is a country of 5 million, more akin to a large city than the United States. Few of the Danish work in the low-paid service economy, which tends to run off imported labor. And Denmark's small population and high cultural cohesion exempts them from the problems of a giant urban underclass who've grown culturally alienated, been systematically exempted, and become ever more distrustful of the country's economic mainstream. That said, it isn't clear to me why we don't give a Danish-style model more of a shot. What's fascinating about the American system is that, for all its federalism, there's precious little variation. The most generous cities display only a couple degrees of difference from the least. Santa Fe may have a living wage, but it doesn't have single-payer health care, or paid maternal leave, or massive job retraining. We hear talk about the genius of the states, but they all tend to work on basically the same problem, in basically the same way, leaving little room for brilliance to burst forth. In part, that's because state exploration is shackled by funding streams, many of which trickle down from the federal level. But this sort of experimentation seems like the sort of thing the government should be offering grants for (in much the way it once did for welfare): Why we've not helped a major US city create a generous universal health program (San Francisco, it should be said, is trying) baffles -- if the hoped-for savings from integrated care could help lower costs from chronic disease in ravaged urban enclaves, the country would learn a lot, and possibly save even more. Same goes for serious paid maternal leave efforts, and job retraining, and all the rest. The Danish model may not work here, but then again, it may, and the nice thing about having 300 million people rather than five million is that it's not particularly hard to try. --Ezra Klein
