Something new in Denmark
The Danes have learned how to help themselves — Result: Prosperity — Reasons: Education, Co-operation
IN THESE DAYS, when all the great countries of the world are rumbling and mumbling over the problem of economic security, it is refreshing to find a country or two where a solution to that vital problem has been attempted with courage, determination and, above all, with horse sense. Denmark is such a country; and while its ever-increasing army of tourists is discovering with delight that it is the original home of the platinum blonde and the paradise of the bicyclist, there is a great attraction in store, too, for those who are looking for ways out of the depression.
Whether he goes from Slesvig north to Jutland, or speeds in the new electric train from Esbjerg westward across the islands to Copenhagen, the traveller sees a succession of small but comfortable farms. If he goes to Copenhagen he will find himself in the biggest city in Scandinavia, with half of the country’s industrial workers living there. He will not be able to find any slums, because there are none. Unemployment has been cut down rapidly and effectively; Danish citizens have no fear of exploitation, old age, illhealth and destitution due to the inability to get work. Even charwomen belong to trade unions, and farmers earn as much as unionized industrial workers. And the standard of living of the Danish industrial worker is among the highest in the world.
Last summer I went to Denmark to find out how these things have come about. And because Denmark is primarily an agricultural country, first I visited a Danish farmer.
He was living on a small holding of fifteen acres; he owned his buildings and his land was leased in perpetuity from the State. He had a solid, attractive house with a thatched roof, and a solid, attractive wife with yellow hair.
“Danish farmers are well off,” he said, “and we have done it ourselves. The secret is co-operation. When I wanted to buy my farm, I borrowed money from a credit union; I buy my feed and fertilizer from a co-operative. Danish farmers send 86 per cent of their milk to co-operative dairies, 80 per cent of their pigs to co-operative slaughterhouses, and we buy 70 per cent of our retail purchases at consumers’ co-operatives. Then we form co-operative societies to purchase a bull or a boar, and we have cooperative milk-testing associations to which we send 40 per cent of our cows. These milk-testing associations have improved the quality of milk; they have raised the butterfat output from 112 to 300 and 350 pounds per cow per annum.
“We own and run our own co-operative societies. In that way we can go in for intensive small-scale farming with the advantage of large-scale machinery, and our associations are more flexible than commercial enterprises and can adjust themselves quickly to changing needs. And of course they save us money.”
There are 200,000 farmers in Denmark; 180,000 of them belong to co-operatives of one sort or another.
How did this remarkable development of co-operation come about?
Pigs on a Quota
ACENTUR Y AGO, most of the farms in Denmark were large holdings growing grain. Then during the sixties and seventies America entered the grain market, and Denmark found it impossible to compete in large-scale
production. So the farmers changed their methods; they switched from grain to dairy produce, and built up a market for butter and bacon. When they arrived at the point where it was necessary either to market through a middleman who would have set his prices high enough to make himself a substantial profit, or to do the marketing themselves, they chose the latter course, and formed cooperative societies for the purpose.
Since then co-operation has spread into every kind of enterprise. Even apartment houses are built co-operatively; it is a perfectly ordinary thing to hear a man say, “I have decided to buy an apartment,” or “W’e are thinking of selling our fiat.”
But co-operation is not the only factor in Denmark’s development. When I interviewed a Government official, and asked him how much Government assistance had been given to agriculture, his reply was this:
“There is no question that co-operation is a very significant feature of Danish agriculture, but Parliament has given important assistance. As far back as 1889, when the new trends in agriculture and the growth of the co-operative movement liad proved that the small farm was
particularly suited to dairy farming, a law was passed under which the State lent money to farmers for the purchase of land and the erection of buildings. Farmers acting under this law must be from twenty-five to fifty years old, must have been farming for at least five years, and must supply 10 per cent of the funds themselves. At first the size of these holdings was only six or seven acres; now it has been increased to fifteen, which has been found to be the most economical size. Sixteen thousand holdings have been established under this law. The farmer pays 3 per cent interest, with amortization in sixty years. Since 1929, when prices began to fall, the Government has reduced the interest and the mortgages. Thus for nearly seventy years the Government has assisted farmers by putting small holdings on the market and providing money on easy terms.”
I asked him whether land prices did not rise sharply when the Government set out to buy up large holdings which were for sale.
“Yes,” he replied, “they did. And when the fanners found this out, they formed .co-operatives to buy land
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quickly. The State encouraged this by granting $70,000 a year at 3 per cent interest to the co-operatives, to cover their legal expenses and so on.”
A change in policy was made after the war. In 1919 a new small-holdings law was passed, under which the holder need not pay for his land but may rent land from the Government. There are 6,(XX) such holdings; and the only cause for eviction is neglect on the part of the farmer. The farmer owns his buildings and his stock, and his rent frequently comes to less than the interest paid under the 1889 law. At present there are 135,000 small holdings of less than 37y¿ acres; it is found that they are most suitable for intensive dairy farming, and also give the greatest number of people the opportunity to be on the land. Thus the small holder is very important in the nation’s economy.
“The Government exerts a certain amount of control over marketing, too,” my informant went on. “For instance, your Ottawa Conference did us a bad turn by putting a 3-cent duty on every pound of butter we sent to England. Before long we found that the farmers had begun to specialize in pigs, and we began to be afraid that they would kill off too many cows. So the Government put pigs on a quota; it issued pig cards on the basis of the number of cows the farmer had. One farmer may buy up another’s pig cards, and so specialize in pigs; but under this system there is always a fixed proportion of butter to bacon.”
As I rose to leave, he added a suggestion. “I think you’d better go round and see the principal of one of the folk high schools. It’s there the farmers learn co-operation.”
How Co-operation is Taught
I FOUND this to be good advice, for it was from a folk school principal that I realized most vividly the importance of the movement. Long before the rapid growth of co-operation, as far back as 1844, that farsighted Danish national hero, Bishop Grundtvig, had begun to operate folk high schools for boys and girls who had left the ordinary schools and who intended to engage in agriculture. Today all through rural Denmark there are folk high schools open to boys for one or two winter terms of five months each, and to girls for one or two summer terms of three months each. Usually the students have left school several years before, and have been working on farms since. Where necessary, the Government will assist students to attend a folk school by paying up to 50 per cent of their fees. But their fees (which are less than $50 for three months, including room and board) do not cover the cost; and although the schools are privately owned and run, nearly all of them receive substantial Government subsidies.
Bishop Grundtvig founded the folk high school movement along the DanishGerman frontier, as a national movement to save Danes from Germanization. His aim was to make the schools “personal in method, individualistic in educational principle, ethical in purpose.” The schools are personal in method in that they are all residential and informal. They are individualistic in educational principle in that the curricula are varied to suit the needs and desires of the students. Co-operation is always on the curriculum, as are such practical subjects as animal husbandry, sewing, carpentry, etc. But the folk high school is not intended to be merely a rural technical school; it is designed to raise the cultural standards of the farmer. So literature, singing, biography, painting, and so on are included in the studies; and the value of this training is apparent in the filled bookshelves of the majority of farm homes.
Finally, the schools are ethical in
principle in that they attempt to put into practice Bishop Grundtvig’s conviction that nationalism and religion must be merged. The better the Dane, the better the Christian, was his reasoning; and events have shown that this training also made better farmers.
More than sixty folk high schools attract the best of the farming community. In addition, Denmark is internationally known for her excellent agricultural colleges; there are twenty-two of them, and they, too, have a long history. The first was opened in the same year as the first folk high school, the same year that the Rochdale pioneers in England formed the first consumers’ co-operative society.
I INTERVIEWED also some trade union officials, for most of the credit for Denmark’s enlightened social legislation must be given to the trade unions. The Danish labor movement is the backbone of the Social Democratic party, which has been in office since 1929. The Premier of Denmark, Theodor Stauning, is a trade unionist, and when he was faced with the problem of more than 200,000 unemployed in 1933, he set about reducing it by an extensive program of useful public works, for which the men were paid not relief rates, but regular union wages. By 1935 the number of unemployed was down to 60,000, and it has been steadily decreasing since.
Social legislation in Denmark falls into two classes: laws for the protection of labor, and social insurance provisions. There are three groups of statutes falling into the first category; those for the protection of women in industry (some of which have actually been resisted by the women, who demand equality rather than special discrimination), those for the regulation of child labor, and those governing the eight-hour day. They are not difficult to enforce; that is attended to by the trade unions.
The second class of social legislation— insurance—was formerly contained in forty laws. In 1933, thanks to K. K. Steincke, Minister of Social Affairs, these were replaced by four comprehensive ones, and co-ordinated so completely that today every Danish citizen may have them conveniently bound and sitting on his own bookshelf, so that all he has to do to find out what his rights are regarding insurance is to walk over to the bookcase.
These acts provide insurance for those who are unable to work due to old age, ill-health (whether or not caused by industrial accidents), or unemployment. A man permanently disabled gets 60 per cent of the wages he would have earned for the rest of his life, and at his death, payments are made to his widow and children. Everyone compulsorily contributes to health insurance, but those with an income of more than $1,000 may choose a nonparticipation scheme, under which they forego the benefits of insurance when they are sick, but must in any case pay a small annual sum. Those who participate, however, get complete hospitalization, including doctors’ fees and operation costs, for 40 cents a day.
Unemployment relief in Denmark is no longer considered a matter for charity, but a matter of rights. If the State cannot provide its citizens with work, it takes the stand that it must provide them with maintenance at a decent level. Formerly, unemployment insurance was dependent on the trade unions, who paid benefits to their members. Now it is compulsory on a national basis, the State paying a sum equal to 75 per cent of what the insured worker pays. Employers also contribute to special work-relief funds. •
All these laws apply to everyone in
Denmark, including such oft-forgotten workers as crossing-sweepers and charwomen. Thus no Dane fears eviction, starvation and disease as concomitants of prolonged unemployment.
Talking of civil rights, there are only four classes of people in Denmark who do lose their civil rights; they are prostitutes, tramps, chronic drunks, and, of all things, neglectful parents!
Small National Debt
ALL THIS social legislation and economic security sounds expensive. Let’s look at Denmark’s finances, and find out “where the money comes from.”
The first striking fact is that Denmark budgets not for deficits or an even balance, but for surpluses! In only one year since 1929 has there been a deficit, the year 1933-34, and this was due to declining revenue from State enterprises, loss of interest on investment, and relief and public works expenditures. Partly to offset this, after 1933 the amounts assigned to sinking funds, etc., for national debt reduction were decreased; it was considered more important to spend money than to save it in hard times. Nevertheless, a definite policy of consolidating the national debt has always been followed by the Government. Moreover, the budget was soon brought into balance again, once the worst of the depression was conquered, and for the six years from 1929 to 1935 taken together, the total surplus amounts to about $12,000,000. Last year the national debt stood at only $90 per head. Our Dominion debt in Canada is about $250 per head.
When the “reforms,” as the new social legislation is called, were instituted in 1933, Steincke made it clear that the object of them was not to entail further expense but to give more and better service for the same money. Two factors contributed toward the success of the scheme. In the first place, nearly all kinds of insurance are contributory, which naturally lightens the burden on the treasury. In some cases, as in that of health insurance, people may contribute a very small sum on a non-participatory basis, which is straight gain to the insurance fund.
Secondly, the organization and administration of various forms of insurance were already well established. The trade unions had for many years successfully managed unemployment benefits; and 1,650 “sick clubs” had administered a form of health insurance. Other mutual benefit societies were ready to be included in the new legislation; and although nearly half the entire budget goes to public welfare and education, this has not entailed new burdens on the taxpayer. On the contrary, the “reforms” have brought about two positive benefits, which are urgently needed in Canada today—standardization throughout the country of relief regulations, and redistribution of the financial burden of relief and insurance as between State and municipality, and among municipalities.
By far the largest source of national income is taxation, carefully graded to fall most heavily on those who can best afford to pay. Of the 109 million dollars which make up most of the national budget, thirty million comes from taxes on income and capital; three million from taxes on real estate; half a million from inheritance duties. The indirect taxes are the biggest item; they come to sixty-nine million dollars. They are, in the main, levied on luxury goods; 94 per cent of indirect taxation falls on liquor, tobacco, entertainment, motor vehicles and gasoline.
The Social Democratic Government has raised the income tax by small amounts several times since the depression. The
reason for the last increase in November, 1935, is interesting. There was a surplus of beef, and the Government wanted money to buy and distribute it to the needy !
Denmark, Sweden and Norway have the lowest per capita taxes in Europe. The Danish per capita tax (including both national and local taxes) is about $53; in England it is about $105; in Germany about $76. In Canada it is about $59. It is true, of course, that the Scandinavian countries are relatively less wealthy than England or Germany; nevertheless, the tax rate is lower.
While the direct credit for the able administration of social legislation must be handed to K. K. Steincke and the trade unions, it should be remembered that the way was paved by mutual benefit societies. Such self-initiated enterprises have, in nearly every field of activity, anticipated more formal organization.
"DESIDES setting standards of work and providing for those who cannot be given work, the trade unions have also entered the field of co-operation. They form “workers’ co-operatives.” which are really producers’ co-operatives—factories, services (such as barbershops), and processing plants. The shares in these co-operatives are not, as is usually the case, owned by individuals, but instead are owned by trade unions, and the dividends are paid to the unions as a corporate body. In this way the ultimate responsibility for the success of the enterprise falls directly on
the shoulders of the union members who do the work.
Just recently a Workers’ Council was formed for all Denmark, composed of representatives from the joint committee of the trade unions, and representatives from the joint committee of co-operatives. Five members of this council are Social Democrat Members of Parliament, although they are not on the council as official representatives of the political party. This is an indication that the party in power is strongly in sympathy with both unions and co-operatives.
I was fortunate in meeting Peter Cristensen, the chairman of this committee, who is also the mayor of Helsingor. the president of the Producers’ Co-operatives, and a Social Democrat M.P.
Meeting Mr. Cristensen threw a great deal of light on the rapid advance toward economic security which Denmark is making. I don’t suppose the Danish people are superior in intelligence to those of any other country, but they certainly appear to be better educated in understanding the economic forces and the possibilities of joint organization. Mr. Cristensen is representative of many of his countrymen in this respect. They have the foresight to try to control these forces, instead of letting the forces control them.
Scratch a Dane and the chances are you will find a co-operator and a folk high school graduate, or a trade unionist and a Social Democrat. You will certainly find a person who knows the modem meaning of “self-help” and puts it into practice.