{"id":76610,"date":"2016-07-25T12:00:53","date_gmt":"2016-07-25T11:00:53","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=76610"},"modified":"2016-07-20T17:01:27","modified_gmt":"2016-07-20T16:01:27","slug":"social-inequality-escalates-in-denmark-amid-bonanza-for-banks-and-corporations","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2016\/07\/social-inequality-escalates-in-denmark-amid-bonanza-for-banks-and-corporations\/","title":{"rendered":"Social Inequality Escalates in Denmark amid Bonanza for Banks and Corporations"},"content":{"rendered":"

18 Jul 2016 – <\/em>\u201cIncome inequality is on the rise. The rich control more of the country\u2019s wealth \u2026The ranks of the poor are growing. Sounds like the United States? Actually it\u2019s Denmark.\u201d<\/p>\n

So read an article \u201cActually, Denmark is becoming more like us\u201d published by CNN Money last October.<\/p>\n

Indeed, a sober analysis of class relationships in Denmark would confirm a growing inequality. As liberal newspaper Information<\/em> put it baldly,<\/em> \u201c<\/em>From 2003 to 2013 the richest tenth of Danes became 29 percent richer whilst the poorest ten percent became 1 percent poorer.\u201d<\/p>\n

An article by the journalist Kirsten Nilsson published in Politiken<\/em> last year noted, \u201cThe Gini coefficient [a widely used statistic to measure income inequality] has risen from 22 in 2002 to above 27 in 2012. It looked better during the economic crisis but inequality has begun to rise again since the crisis has abated.\u201d<\/p>\n

She points out that Denmark is no longer the world\u2019s most equal society, as it was at the beginning of the millennium, but now ranks 14th in the list of European countries. Not only are the other Scandinavian countries \u201cmore equal\u201d but so are some east European nations.<\/p>\n

This rising inequality finds expression not only in the number of people who are below the official poverty line\u2014in round figures 22,000 in 2002, 44,000 in 2012\u2014but also in life expectancy. \u201cThe richest quarter of men live ten years longer than the poorest quarter,\u201d the article continued. That is 82 years and 72 years respectively.<\/p>\n

Nilsson quotes Torben M. Andersen, an economics professor at the University of Aarhus, who writes: \u201cIf we summarise the development \u2026 the bottom finds it difficult to keep up with the middle, that is the middle class, and the top has run from the rest.\u201d She concludes, \u201cSociety is being split.\u201d<\/p>\n

Research carried out by both Kraka, an independent research organisation, and the Economic Council of the Labour Movement indicates that the widening gap between the richest Danes and the rest of society has been developing over the last 20 to 30 years.<\/p>\n

Kraka\u2019s August 2015 study, titled \u201cAre the absolutely richest Danes running albeit slowly from everybody else?\u201d shows that the richest 0.1 percent has enriched itself considerably over this period. The income threshold for membership of this tiny group has risen by 425 percent. In 2012, the richest had to have a minimal annual income of DK3.5 million (\u00a3350,000) to enter the 0.1 percent.<\/p>\n

The survey states, \u201cThe share of total income that falls to the top 5 percent of incomes has barely risen from 17 to 18 percent over the last thirty years whereas the top 0.1 percent\u2019s share has risen by around 40 per cent.\u201d<\/p>\n

Whereas 30 years ago small businessmen comprised about half of this layer, they now make up only a third. Instead, it is from the financial and consultancy sectors, together with the IT sector and pharmaceutical industry, that the top 0.1 percent is increasingly drawn.<\/p>\n

It is this tiny layer that owns more than 40 percent of shares and bonds and has 88 percent of net wealth. And its interests lie not in actual production but in property and speculation.<\/p>\n

Jonathan Perraton, a senior lecturer in economics at the University of Sheffield in England, wrote a chapter \u201cCorporations and capital accumulation\u201d in a compilation edited by Mogens Ove Madsen and Finn Olesen, Macroeconomics after the Financial Crisis: A<\/em> Post-Keynesian Perspective<\/em> (London and New York 2016).<\/p>\n

Addressing developments in Scandinavia, he writes, \u201cAlthough there was some tendency for wages to rise in the 1970s (albeit less pronounced than in other European economies) they have fallen from the 1990s in these economies.\u201d<\/p>\n

Profits on the other hand have been \u201crising from the 1990s to rates that are comparable to those during the post-war golden age or, for Denmark and Norway, even higher.\u201d (op cit<\/em> p. 63).<\/p>\n

Moreover, he concludes, \u201cWhereas earlier decades saw strong investment from retained profits and some further borrowing, investment has fallen sharply since\u201d (ibid<\/em>, p. 66).<\/p>\n

This process is illustrated by the fact that 16 of the biggest companies registered at the Copenhagen stock exchange that submitted accounts for 2014 sent around DK79 billion (\u00a38 billion) to their shareholders, up from DK60billion (\u00a36 billion) in 2013. Last year one company by itself, the pharmaceutical giant Novo Nordisk, distributed DK28 billion (\u00a33 billion) to its shareholders.<\/p>\n

Reflecting this, the C20, the index for the biggest companies on the Copenhagen exchange, has risen exponentially since the Lehmann Brothers bank crash that heralded the global financial crash of 2008.<\/p>\n

In contrast, the \u201creal economy\u201d has been described as sluggish at best. Tore Stramer, senior analyst at Nykredit, described 2015 as a \u201cdud.\u201d In June, Nationalbanken, Denmark\u2019s central bank, lowered its prognosis for economic growth in 2016 from 1.3 percent to 1 percent.<\/p>\n

The parasitism of capitalism is clearly shown in the case of the Danish banks, which following the crisis of 2008 were bailed out to the tune of DK200billion (\u00a320 billion) in a series of \u201cbank packages.\u201d Berlingske<\/em> reported June 15 on a Nationalbanken report, \u201cFinancial Stability: First Half-Year.\u201d It states: \u201ccredit institutions as a whole made in 2015 their highest profits since the financial crisis. The gain in earnings was aided by a big fall in write downs on loans and guarantees in relation to the year before.\u201d<\/p>\n

In fact, Tune Revsgaard Nielsen wrote in Modkraft<\/em> in March that the banks made DK200 billion (\u00a320 billion) in 2015, gifting DK15 billion (\u00a31.5 billion) to shareholders and retaining DK30 billion (\u00a33 billion) as interest-bearing capital.<\/p>\n

The financial aristocracy is not, however, merely parasitic. It is a kleptocracy. In January 2014, the Social Democratic-led coalition government sold 18 percent of its shares in DONG, the energy company, to New Investment S.a.r.l. a subsidiary of Goldman Sachs, for DK31.5 billion (\u00a33.2 billion). On June 9, these shares were offered on the stock exchange and their price estimated at DK100 billion (\u00a310 billion).<\/p>\n

Amongst those gaining were Henrik Poulsen, DONG\u2019s administrative director, who was allowed to buy shares at the same price as Goldman Sachs. It is estimated he will make up to DK27 million (\u00a32.7 million).<\/p>\n

Commenting in Politiken<\/em> on May 29, Kristian Weise, director of Cevea, a reformist think-tank, stated openly that a \u201cbonus of millions to Dong bosses reeks of kleptocracy.\u201d \u201cSuch a situation,\u201d he writes, \u201cis reminiscent\u2014in truth\u2014of what happened in Russia during the transition from communism to a market economy … In Russia state-owned concerns were sold for peanuts to a new group of oligarchs.\u201d<\/p>\n

He added, \u201cThe richest of the rich do not become rich through creating new wealth but by acquiring a greater share of the wealth already created.\u201d<\/p>\n

In stark contrast to the ever-increasing wealth of this layer, a 2014 Cevea report found that between 1991 and 2010, 146,000 industrial jobs were lost in Denmark. It noted, \u201cIn the same period 24 percent of all new Danish jobs have been created in low-wage sectors or categories at a wage that is 75 percent lower than the average wage.\u201d<\/p>\n

This is confirmed by the Economic Council of the Labour Movement in its November 2015 report, \u201cDecline in the wages of workers since the crisis.\u201d It reported, \u201cSince 2008 wages for ordinary skilled and unskilled workers have fallen in real terms by DK6000 (\u00a3600). In the same period they have risen by DK130,000 (\u00a313,000) or 8 percent for people in the upper class.\u201d<\/p>\n

Go to Original \u2013 wsws.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Indeed, a sober analysis of class relationships in Denmark would confirm a growing inequality. As liberal newspaper Information put it baldly, \u201cFrom 2003 to 2013 the richest tenth of Danes became 29 percent richer whilst the poorest ten percent became 1 percent poorer.\u201d<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[227],"tags":[],"class_list":["post-76610","post","type-post","status-publish","format-standard","hentry","category-scandinavia"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/76610","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=76610"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/76610\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=76610"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=76610"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=76610"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}