In the middle of August 1982 the Danes were informed that they lived in the best country in the world. Denmark was ranked number one among 107 countries in an American report which characterized quality of life by a broad spectrum of geographical, economic, social, political and cultural variables.footnote1 In an almost simultaneous public opinion survey of the eec countries, the Danes declared that they were content with their lives and their country. In glaring contrast to these happy tidings all politicians, economists, newspaper editors, and many foreign observers—on the right as well as on the left—claim that Denmark is in the throes of the most severe crisis since the 1930s, that we are on the verge of national bankruptcy, and that, within a very short time, we will be deprived of our economic self-determination by the tycoons of international finance. Or as a Norwegian daily more poetically put it: the Danes are heading for Hell, but they are still travelling first class. How are we to interpret these diverging assessments? Are the Danes guilty of collective self-deception on a grand scale? Or are the prophecies of slump and catastrophe just another invention for the ideological suppression of the working class? Or could it be that both versions are true?

The crisis certainly does have an economic and social as well as a politico-ideological dimension. Throughout the 1970s, the welfare state and the extension of the public sector were increasingly financed through borrowing on the international capital market. Denmark now has debts comparable in size to some of the worst cases in the world, and an increasing proportion of gnp and public expenditure is devoted to interest and repayment of this debt. During the same period unemployment increased tenfold, so that 300,000 (about 12 per cent of the aggregate labour force) are now temporarily or permanently out of work. In building and construction, in agriculture and manufacturing industry, enterprises are closing down daily—large and small alike. Until the last few years, however, the basic elements of the social security system were successfully defended against massive attacks from the bourgeoisie and sections of the petty bourgeoisie, particularly from the traditional non-socialist parties and the aggressively neo-liberal Progressive Party led by Mogens Glistrup.

Ever since this party appeared on the parliamentary arena in 1973, the Danish political system has experienced severe shocks and the traditional party structure has been dissolving. It is true that all but two of the seven changes of government since 1972 have resulted in governments led by the Social Democratic Party (the sdp), with Anker Jørgensen as Prime Minister. In September 1982, however, the Social Democrats were replaced by a four-party liberal/conservative coalition under Poul Schlüter, which was reconfirmed in office by the election of January 1984. In parliamentary politics we are now approaching the Italian situation.

The pronounced economic, social and class upheavals which Denmark has experienced since the end of the 1950s provide important elements for an understanding of the twin economic and political crises. The political crisis of the early ’70s was not directly caused by the international macro-economic crisis, though this accentuated and deepened the political problem. It would be more correct to say that the political crisis stems from the disintegration of a class structure that had remained relatively stable between the turn of the century and the 1950s.

Capitalism was established in Denmark in the latter half of the 19th century, in a mainly agrarian social formation. From the end of the 18th century, and particularly from the 1840s, the country found its place in the international division of labour, becoming an agrarian exporter to the large European industrial nations, particularly Britain. At first the main export was grain, but in the 1860s and in the international crisis of the mid-1870s this was gradually replaced by processed animal products. About 1900 manufacturing industry still only contributed ten per cent or so to gnp. Agriculture, though in decline as a proportion of gnp, accounted for almost 75 per cent of Denmark’s total exports against the 20–25 per cent recorded by manufacturing industry—a share which remained largely unchanged until after the Second World War. The service sector composed 44 per cent of gnp, and Denmark always seems to have been above the international average as far as this sector is concerned.footnote2