Jacob Christensen

Just a short reply to my colleague Peter Kurrild-Klitgaard who with reference to an article in The Economist argues that the public sector is a leviathan whose growth cannot be limited or stopped.

First, we should note that the tendency to rapid growth in public sector expenditure measured as a share of the economy stopped sometime during the mid- to late-1970s. From then on, we have seen stagnation even if economic growth obviously means that expenditure has increased since the early 1980s.

Second, the growth in relative expenditure in the last years must be seen in the context of the global financial crisis which a) saw GDP fall in many countries and b) saw increases in unemployment which again meant that a share of the workforce had to rely on some kind of public support. This is what the Keynesians call automatic stabilisers.

Third, the economic policies of Republican administrations and congressional majorities in the US are a cause for concern. The idea that tax cuts are the solution to any problem is by now intellectually – but not politically – discredited and the massive deficits created by Republican policies are a major problem for the US and world economy. In fact, US economic policy is a major theoretical and practical headache.

Kurrild-Klitgaard is right that special interest groups (farmers, anyone?) create a lot of blocking points in the policy process and that it is easy to find cases where resources are being spent in a way which is inefficient in the short or long run due to government programmes (my own example would be the Danish Early Retirement Benefit but in the US defence spending could be used as a warning case). It is also correct that the demand for services and transfers is in principle inexhaustible.

But this does not necessarily mean that the public sector is dysfunctional or uncontrollable as a whole.

Please remind me that I should have an opinion about this rant at some point.

Update: I’ve had an opinion. It’s comment #22 or something.

Back in the winter 2008-2009 Thomas Larsen, the political editor of what was then Berlingske Tidende, managed to destroy most of his reputation as a political commentator when he was the last person in Denmark to insist that Anders Fogh Rasmussen was not seeking an international position. It was too obvious for just about everybody (this link goes to an earlier post on the blog) that Larsen wasn’t making any analyses but simply passing on what centrally placed sources in the Liberal Party wanted conveyed. The nickname “His Master’s Voice” was used.

Who the centrally placed sources were is still not entirely clear but Larsen was later rewarded with access to Lars Løkke Rasmussen in order to write an interview book which was sympathetic to the beleaguered prime minister, a book which I haven’t read by the way. If I should make a – completely unsourced guess – guess about the identity of Larsen’s contact, we might be looking for somebody with the initials C, H and F. But that’s just my guess.

Anyway, when Berlingske publishes a comment by the very same Thomas Larsen arguing that the days in office of Integration Minister Birthe Rønn Hornbech are as good as numbered, it is a piece of information which actually carries some weight. The Liberal Party wants to send the message that holding on to Rønn Hornbech is no longer essential for the party – and needless to say, some of the government’s smaller supporting parties have come forward calling for an inquiry into the Integration Ministry’s handling of applications for Danish citizenship made by stateless refugees and their descendants. Throwing a minister overboard shortly before an election is highly unusual, but then again these are unusual times in many ways.

The story of Rønn Hornbech’s term in office is a strange one. Up until 2007 she was the darling of the centre-left (!) as an outspoken defender of legal principles. Post-2007 she managed to destroy her reputation even more thoroughly than Larsen.

So is she a bad minister? Not necessarily: She has also been in charge of the Ministry for Ecclesiastics and anybody with the slightest knowledge of the Church of Denmark will know that this portfolio is potentially explosive due to the way the Church is organised and the broad range of theological traditions accepted by the Church. But in the past three years, there have been few problems which have reached the media and none which have given rise to political action. If Rønn Hornbech was such a terrible minister, then surely some bomb would have gone off in the crypts of the ministry.

This means that we may have to look elsewhere for explanations. Rønn Hornbech is known to have a religious interest so as a Minister for Ecclesiastics she has her heart and interest in the running of the Church of Denmark and as a lawyer she also has the tools to solve legal problems and mediate in potential conflicts. The question is if she has her heart in integration policy in a similar way.

By this, I don’t want to imply that she is a liberal with regard to immigration policy but rather that she is stuck between a set of goals which she in all likelihood agrees with and a set of means and political strategies which she doesn’t know how to defend or use. The result has been that the relationship between the government and the Danish People’s Party more than once has descended into something looking very much like a political mess and that the running of the ministry similarly appears to be out of control.

The scandal which may eventually relieve Rønn Hornbech of the burden of ministerial office is not of her making. The decision to give – or the practice involving giving – stateless refugees misleading information about their legal rights dates back to 2002 when Bertel Haarder was Immigration Minister and the practice continued during Rikke Hvilshøj’s term in office. Obviously, Rønn Hornbech should have corrected the practice as soon as she learnt of it but we should remember that two members of the present government and one former minister are in the firing line here. Even if the practice is in breach of international conventions, it would fit the government’s line of restricting the access and rights of refugees from non-Western countries and in that way it is part of a larger picture.

Similarly, we have reason to assume that most of the government’s and DF’s voters would support – or at least not object to – a policy which meant that a group of refugees was denied a special right to Danish citizenship even if Denmark was obliged to grant this group special rights. DF can allow itself to speak out against the idea of international conventions but a governing party is in a more complicated position. A small state cannot disregard conventions as easily as larger states as there may be a price to pay in international negotiations.

All of this makes immigration policy in general and the stateless refugee question in particular very complicated to handle. From the 1990s onward a string of Justice, Interior and Immigration ministers have tried and many have either suffered defeats or decided to leave politics early. When Anders Fogh Rasmussen picked Birthe Rønn Hornbech as Immigration Minister in late 2007, he may have hoped that her legal skills would be sufficient to keep the area outside of public controversies.

As events since 2007 have shown, they were not.

It’s a bit of an anticlimax but now that I have watched “The Duel” (there will be a lot of shoot-outs during this campaign, it seems), I don’t really have too much to add. It was a fairly lacklustre performance where both parties played the expected roles: Helle Thorning-Schmidt attacked Lars Løkke Rasmussen for his (and Anders Fogh Rasmussen’s) record while Lars Løkke Rasmussen criticised Thorning-Schmidt for not presenting specific proposals.

For better or for worse, I had the feeling that both were good at delivering the lines they had rehearsed with their advisors but neither really engaged in a discussion. Very much like your typical debate in the Folketing, in other words.

After the previous debate (or duel, or whatever) which was on TV2, I felt that it was obvious that there were some fundamental (though not surprising) differences in Thorning-Schmidt’s and Løkke Rasmussen’s positions. For some reason, this never really showed in the same way during this debate.

The commentariat is busy discussing who the winner of the duel was. I’m not really sure this is a relevant topic, so I’ll just give both parties a “7″ (or a “C” in the ECTS scale) and move on. The early retirement benefit will continue to play a role in the campaign but I seriously doubt that this debate will have much of an impact.

PS: Over at The Economist, Johnson made some observations.

Weekend-Avisen repeats its annual “predicting the coming year”-quiz. Time to play pundit-at-large:

1. Will Josefine Klougart be awarded the Litterature Prize of the Nordic Council.

No.

2. Will Denmark get a Social Democratic-led government after the general election?

Yes.

3. Will Mogens Jensen become minister of cultural affairs?

Hmmm… No. (Depends a bit on the distribution of portfolios in a coalition government)

4. Will professional cyclist Matti Breschel win the cycling world championship?

No.

5. Will Susanne Bier win a Golden Globe for the film Hævnen/Revenge?

No.

6. Will a Danish artist be awarded The Golden Lion during the Venice Biennale?

No.

7. Will Caroline Wozniacki still be #1 on the WTA ranking on December 1, 2011?

No.

8. Will the Social Liberal Party join a Social Democratic-led government following the general election?

Yes.

9. Will the Danish government set up a commission to examine the separation of state and church in Denmark?

No.

10. Will the Chinese Central Bank raise its rate to more than 7% during 2011?

No.

11. Will Jussi Adler-Olsen still be in the top-10 on the German bestseller-list in December 2011?

Yes.

12. Will the Danish national football team qualify for Euro2012?

Yes.

13. Will Lene Espersen still be the leader of the Conservative Party in December 2011?

No.

14. Will Cristina Fernandez de Kirchner be reelected as president of Argentina?

Yes.

15. Will FC København reach the semi-finals of Champions League in the spring of 2011?

No.

16. Will Poul Erik Tøjner be selected as Business Manager of the Year in 2011?

No.

17. Will Philip Roth be awarded the Nobel Prize in Literature in 2011?

Hmmm… No.

18. Will Spain receive an economic rescue package from the EU during 2011?

Yes.

19. Will Liberal Alliance receive a larger share of the vote than the Conservative Party at the general election?

Hmmmmm … No.

20. Will open war break out between North and South Korea during 2011?

Well. Here’s hoping: No.

And since we have the results of the 2010 quiz, let us see how well I did:

1. Denmark did not qualify for the semi-finals in the 2010 football World Cup. Correct.
2. Jens Christian Grøndahl did not change publishers. Wrong.
3. Caroline Woznicki did not win a Grand Slam tournament. Wrong.
4. Lars Løkke Rasmussen did reshuffle his government. Correct.
5. The Iranian regime and president Ahmadinedjad were not overthrown. Correct.
6. There was no binding agreement after COP-16. Correct.
7. The Danish government did not set up a commission to examine the separation of state and church in Denmark. Correct.
8. No Danish rider won a stage in the 2010 Tour de France. Wrong.
9. Health warnings were not introduced on wine bottles in Denmark. Correct.
10. Neither Ida Jessen nor Peter Laugesen were awarded the Litterature Prize of the Nordic Council. Correct.
11. The US Government did not go bankrupt. Correct.
12. The Sweden Democrats won more than 4% of the vote in the Swedish general election. Correct.
13. MECOM did not sell parts or all of Berlingske Media. Correct.
14. Sophie Marceau was not cast in a leading role in a Lars von Trier film. Correct.
15. The Maldives did not disappear under the sea level. Correct.
16. Helge Sander was not Minister of Research after 1 December 2010. Correct … (YES!, YES!!, YES!!! Except: Who the heck succeeded him? Does anybody remember?)
17. Bob Dylan did not attend the opening of the exhibition of his paintings and drawings at the Danish National Art Gallery. Correct.
18. Keith Richards and Jack White did not record a cd. Correct.
19. Nikolaj Znaider was not awarded the Sonning Music Prize. Correct.
20. Peter Ramsdal is still the vicar at the Brorson Church in Copenhagen. Correct.

Well, that’s 17 out of 20. Not bad for a pundit, eh?

It is always tricky to evaluate a political debate and predict the effects and in the case of the Løkke vs. Søvndal even more so, because viewers had the opportunity to watch the women’s handball match between Denmark and Russia.

What we should remember is that these debates in general rarely move voters, but serve to mobilise supporters.

So what we had was Lars Løkke Rasmussen (again) rejecting the conclusions in the Audit Office’s report and using the health policies (as portrayed by Liberal campaigners for the last decade) of the 1990s as his main arguments. Taken directly, Søvndal didn’t kill off Løkke but as the debate was more about the past than future health policy Løkke didn’t manage to get at the inconsistencies in SF’s policies. On the positive side for Løkke, he avoided using technocratic lingo ad libitum. Søvndal on the other hand didn’t have to address specific numbers.

As I understand the polls, the government has a general problem because it doesn’t lead the opposition on health policy any more. Despite Løkke’s reasonably good performance, I doubt that today’s debate did much to change this.

The thing is: It is not immediately obvious who will be Dennis Weaver and who will be the demonic truck in tonight’s duel between Lars Løkke Rasmussen and Villy Søvndal even if Løkke was the one calling the fight and determining the setting (with the friendly assistance of TV2 News, headed by his former spin doctor).

Some interesting points:

1. We’ve had “duels” between Lars Løkke Rasmussen and Helle Thorning Schmidt as well as between Helle Thorning Schmidt and Pia Kjærsgaard. Now Lars Løkke and Villy Søvndal. The challenges go in all directions – which probably mirrors the movements among voters between the Liberals, the Social Democrats, the Danish People’s Party and SF.

2. A number of the smaller parties have been left out in these rounds – the Conservatives, the Social Liberals, Liberal Alliance and the Red-Green Alliance. I would expect the first three to form one cluster of voter movements while the RG’s mainly compete with SF.

3. Villy Søvndal is not famous for being strong on facts. Løkke is – often too much for his own good. On the other hand it is obvious by now that Løkke Rasmussen has a bad case as he withheld information about the deals made with private hospitals.

4. Much have been made about the recent decline in support for SF in opinion polls. Perhaps we should remember that a) 2007 was a very good result for SF in a historical perspective, b) the party may be covering a very diverse section of the electorate, c) we should never mistake polls of the public mood for voting intention and d) the Social Democrats are still flat-lining.

In any event, I’ll try an live-tweet my impressions tonight at twitter.com/jacobchr.

Torben Steno is one of the great warped minds of Danish television. Older readers might remember his take on the former GDR and the Danish left in the series DDR2 (prominently featuring ill-fitted brown suits), followed by “Den røde trÃ¥d”, an epic journey through the former Eastern Bloc (suitably made in a Tatra Limousine).

This December Steno has joined forces with sculptor and artist Kenn André Stilling to visit 24 more or less well-known monuments in Denmark (this time, dark suits and umbrellas included in the performance). As in the earlier programmes, the seemingly light approach reveals deep thoughts about the subject.

After watching the first five episodes I declare this must-see TV if you are just marginally interested in Danish history or society and understand some spoken Danish. The series homepage is here. Curiously, the individual 10-minute programmes are not available as podcasts.

The term “creative class” was fashionable some time ago and occasionally surfaces in the public debate here in Denmark. These days, though, the “creative class” is mostly used pejoratively as a synonym for what the British call the “chattering classes” – for examples look here and here. And yes, picking the cases from Politiken is slightly ironic.

Something which has always surprised me is that some of Richard Florida’s core examples of what constitutes creative work and consequently defines the creative class have gone completely missing from the Danish debate: Computer programmers and bio-tech engineers. Instead, according to Danish media and debaters the typical creative is somebody you will find on the pages of K-Forum and Copenhipster.

One possible reason for this may be that people in the advertising and communications businesses are very good at making themselves heard, another that IT and the sciences have a massive public relations problem in Denmark. Geeks cannot be creative, or so many would like to think. (Just to make the point clear: According to Florida, geeks are almost by definition creative)

Whatever the reason, a consequence is that “creativity” isn’t linked with (physical) production in the debate but rather seen as the opposite as can be seen in this article. I do think that the author is right in pointing out that a) the level of education in Denmark is lower than we would like to think and that b) vocational schools and colleges have generally been overlooked in education policy, though.

I have a number of issues with Florida’s definition of creativity and, especially, the concept of a creative class but I will leave these for a possible later post.

Apologies for not blogging about Ole Sohn (if the reader presses me, I might give it a try), but an intriguing comment by Niels Lunde on Politiken.dk caught my attention.

The thing is that following Karsten Dybvad’s move to the Confederation of Danish Industries (in itself a fascinating story as Dybvad has a past in the labour movement), the permanent secretary in the Finance Ministry Christian Kettel Thomsen was immediately moved to the position as permanent secretary in the Prime Minister’s Office. That left a vacancy in the Finance Ministry which had to be filled in a hurry, not just because we are in the early stages of negotiations about the 2011 Budget, but because – well, because the Finance Ministry is the #2 in the ministerial hierarchy.

(Many members of Finance Ministry staff would deplore this state of things by the way, remembering the 1990s when it was said that “Poul Nyrup is the prime minister in Mogens Lykketoft’s government”)

As usual, there were speculations, which in the end turned out to be wrong as the government chose David Helleman, a 39-year-old partner in McKinsey & Co. (LinkedIn profile here) as the new permanent secretary.

Helleman’s career is interesting because although he has a background in the Finance Ministry (and by definition knows the political process and in particular the budget process very well), he has also moved between the central civil service, state corporations and the private consulting business. Traditionally, careers in the Danish civil service were very much in a closed circuit – you could leave, but your chances of coming back very minimal.

Anyway, back to Niels Lunde’s discussion of Helleman. We are told that he is smart, brutal and creative (in the Danish civil service, the latter is in fact a questionable property), which is how 100% of senior managers in the business world and an even higher share of McKinsey & Co. partners would describe themselves.

Lunde doesn’t dig deeper into this but the McKinsey link is interesting: In organisational theory and policy studies, one line of research have focused on myths as an important element in the formulation and implementation of policies. In later decades what we might call “the McKinsey myth” has become, if not dominant then extremely widespread, and as new ideas – to the degree that anything coming out of McKinsey can be called new ideas – come with new people, recruiting a McKinsey partner also means attempting or intensifying attempts to McKinseyite the civil service.

One line of argument in Lunde’s comment is the creation of a parallel between private companies and the civil service (note the successful CEOs, Lunde is namedropping). This follows the traditional complaint from business managers that the state isn’t run as a (i.e. their) company.¹ A certain Mr. Krugman has debunked this myth of the-state-as-business a long time ago, but then again Krugman is an academic and business leaders have no time for such people in their very busy schedules. Especially if the academics say kind words about a certain Mr. Keynes.

It gets better – or worse, depending on your point of view: Lunde admiringly tells us that Helleman has the temperament of a hedge fund. Focus is on realising the goals in the sort term following leveraged buy-outs and budgets will be slashed and employees sacked without mercy. Helleman used to be the CFO of DR which has seen quite a bit of slashing and sacking, so the description of Helleman’s management style is probably correct. He appears to be the kind of person you would never ever invite to dinner unless you yourself had a distinct purpose with the arrangement.

But: The state as hedge fund? I’m troubled by Lunde’s image for many reasons. As a political scientist I will argue with Max Weber that the state’s first and main goal isn’t to deliver a profit to whomever the owners might be; it is to maintain a legal order and the monopoly on the use of violence. And even if we shouldn’t assume that the State of Denmark will exist until the end of mankind, chopping it up and selling the various bits and pieces would in fact amount to treason. Finally, even economists have been concerned about the increasing tendencies to short-termism in capitalism brought about by fickle investors and in the political world, the criticism that politicians only have the next election as their horizon is more than well-known.

So I hope that Lunde will realise that his image is an unfortunate one. There are many reasons why Denmark could use a better system of controlling the state budget (maybe a trip to Stockholm could be useful: The Swedes learnt their lesson following the crash of the 1990s and made thorough reforms of the entire budget process) but running the place like a hedge fund manager looks more like a recipe for disaster.

1. For a case in point: Try this, but just about any CEO will do. [↩]