Denmark Economic Report -- A Developed Economy Based on Agriculture and Services.

The Economic system in Denmark is The same as the rest of the western world, a mix of Capitalism and Socialism. The difference between Denmark and the USA is what the proportion is. In the USA, it's more Capitalistic than in Denmark, and in Denmark, it's more Socialistic than in the USA, but Capitalism is still the default system. Denmark’s economy is based mostly on human, not natural resources (though they do have some oil and gas production in the North Sea). Their principal exports are industrial and manufactured goods (mostly machinery and technical instrumentation, some chemical production - especially medical and pharmaceutical agents, and consumer durable goods like furniture), agricultural goods (mostly dairy and meats, also fish, and some grain). They are a net exporter of goods. Denmark is also well known for its logistics, shipping, and energy industries. They are a net exporter of energy as well. Their economy also benefits from a strong commitment to consensus-based labor policy. That is to say, employers, unions, and the government have a commitment to cooperation and a common understanding of the needs and goals of each party. While there are still issues, they are handled in a manner that causes minimal impact on the economic output of the country. As a country, they also have social services that encourage retraining, allowing agility of the workforce; proactive and preventative health practice, national healthcare (which reduces the cost-burden of healthcare); and strong environmental policy — namely they have a very strong tendency to address issues before they become more serious problems that are costlier to resolve. It’s not perfect, but the economy is very sound, given the small size of the country. Welcome to The Atlantis Report. Denmark has one of the strongest economies in Europe, characterized by a balanced state budget, stable currency, low-interest rates, and low inflation. Manufacturing; Energy; The Financial Sector; Transport; Communications; Educational status and industry; Labor market; Unemployment. Denmark is over 50% dependent on export for its GDP. Being able to trade has made the Danes able to remain in the rich nation's category. So protectionism is very bad for Denmark. Its domestic market is just too tiny to soak up global crisis trends leading to reduced export. When the world reduces consumption and production, Denmark does the same. This cyclic up and down movement of the economy wreaks havoc on many smaller economies. Denmark uses its welfare state policies, and the cooperation between unions and employer organizations to reduce the effects of this cyclic economic reality. Most of the time, it is a temporary short term global slow down. When the world is in crisis, and people in foreign nations struggle to make ends meet, this is what happens in Denmark. Unions and employer organizations strike deals that allow workers to get extra education and job training instead of getting fired. If they do get fired, there is a promise of two years rather high unemployment benefits. These mitigating circumstances mean the foreclosure rates in Denmark are higher in global crisis periods, but low compared to many other nations. So the Danes take a breather catching up with house renovations and education issues. And when the world again kicks into high gear, they are ready to work again and maybe even run a little faster now that there is a need for it in the economy. Denmark is by this open free trade society and small domestic market extremely susceptible to a global crisis. Yet there are few long-lasting recessions in Denmark and also a few long term high growth periods. Danish economy grows each year at a pace that would embarrass many developing nations. So how did it become so relatively wealthy? It did it by not getting a lot poorer in the recession like some,for example , (Greece, Argentina, Venezuela ; lots of other nations taking 25% economic cuts or more in a single year). Instead, it just took a minor step down and then returned to growth. 2008 -2017 was the worst and longest economic recession period for Denmark since the 1930s, and even in the 1930’s the situation in Denmark was mild compared to many western democratic nations. To use an analogy from a children's book: “Don’t brag about your lightning pace, for Slow and Steady won the race!” The best economic system for Denmark is one that supports business and trade, ensures financial stability, while it also focuses on investing in its main resource. Denmark is a tertiary and secondary industry country; services and manufacture, which adds value to primary industry products through labor. When you buy Chinese plastic from Denmark at three times the value of the same product from China, you paid Danish workers to add value to the product. You are willing to pay more because you perceive the work done by the Danes as having more value than work done by the Chinese. But if work by Danes costs more than work done by the Chinese, because work done by the Danes is better than by the Chinese, then is work done by the Germans better than work done by the Chinese, because work done by the Germans costs more than work done by the Danes. Denmark has strong labor unions that negotiate directly with industry unions. A contract is negotiated, with a set of rules and a set of compensations. The unions demand a fee from members, but members have strong legal backing during disputes. The government doesn’t set rules for what people must get or what the employer gets. There are few ‘rights’ on either side, except for what is in the contract. This results in an equilibrium where demand meets supply, with a little displacement of either curve and little economic waste. A hypothetical Germany has a highly regulated labor market, with a minimum wage set by the government, and workers' rights, described in the law. A hypothetical China has an unregulated labor market, with no minimum wage or workers' rights. The two also have, for hypothetical reasons, different levels of competency in labor, with value-added by German workers being higher than value added by Chinese workers. Both value their products with the same ratio to cost, so they are competitive. Denmark sells the same products, at the same value as Germany. But the value added by Danish labor is more efficient, so the value to cost ratio is different, and more competitive than either German or Chinese products. The economic return on labor is greater, and the strong unions, both labor, and industry maintain a balance on the pinpoint of efficiency between overvalued labor and overpaid executives. That is why Denmark is so rich. Denmark has been rich for a long time. They started as traders, invaders, conquerors, empire builders, and farmers. Even then, the wealth was split, not equally, but none the less the rewards trickled through the society. They could feed themselves, but the land did not support more people. The country formation and Viking area ended with Denmark consolidating around oligarchy and king based on Christian unity. The common man got a little less wealthy. The elite and church skimmed the cream. All the wars, conflicts, plague, civil wars initially made the Danish nobility richer, but out of this chaos, a very strong naval nation emerged. The Danes had become sailors, traders, and farmers. As the neighboring countries gained in population and started extracting the resources of their land (Denmark have basically no iron or chemicals worth digging for) .Denmark lost its political and military dominance. It was still a balanced population, the land could just feed the people, but when the harvest failed, people starved. In the mid 17th century, Denmark started losing its wars and chip by chip the country got smaller. What was left, however, was the core. A stronger, stable country with a common goal to stay independent. The late 17th century was an economic golden age. The navy shoveled money in. The constant fighting between France and UK was lucrative for a small neutral nation. Soon the good fortune changed, and Denmark got dragged into a military and economic disaster. The terrible treaty at Kiel in 1814 would see a bankrupt nation that had lost 3/7 of its population, 5/7 of its economy, and 9/10 of its land area. Its credit line was shut down, and it was in a real struggle to survive. To say the country reformed in a new quest for wealth is not doing the fight justice. Land and property reforms, land taxation, new farming techniques, cooperative trade networks for farmers and their products, public education, constitution, democracy. It all emerged out of a disaster. Two things happened. One the government debt from 1814 of 60 million had by interest risen to 260 million by 1835, and finally, the country could start paying back the loans, and 2 for the first time could Denmark not only feed a growing population but had more than enough to export. they had become an agricultural dominated state. By 1950 Denmark was still this farmer's paradise. Lots of small family farms joined in large coops. It was the only developed country based on agriculture, and 45–50% of the population was employed by the farmers and their products. 65% of the GDP came from agriculture. It was time to change again and join the industrialized age. By 1972 less than 4% was now employed in agriculture. People had moved to the cities, and production factories had transformed the country. The new status was short-lived. The oil crisis and new low wage Asian nations took over. So Denmark switched to a service-based industry. By the mid-1980s, the old shipyards and steel plants had closed. Hundreds of thousands of people had to be re-educated in order to fit in the new high tech society of today. This is where we are today. Denmark was and is rich because the wealth, for the most part, benefited all levels of the population. When so many had cash to spend, and the frequent upheavals meant the Danes had to be innovative and willing to take chances. Good state institutions, infrastructure, stable, supportive local communities are a key link to the Danish fortune. But the most important factor in all this is visible when looking at a map. Sweden, Germany, Netherlands, and UK. It is a very good location, and it is hard not to get richer along with them. This was The Atlantis Report. Please Like . Share. And Subscribe . Thank You.











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