«ECON JOURNAL WATCH 12(3) September 2015: 400–431 Classical Liberalism and Modern Political Economy in Denmark Peter Kurrild-Klitgaard1 LINK TO ...»
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ECON JOURNAL WATCH 12(3)
September 2015: 400–431
Classical Liberalism and Modern
Political Economy in Denmark
LINK TO ABSTRACT
Over the last century, classical liberalism has not had a strong presence in
Danish social science, including economics. Several studies have shown that social scientists in Denmark tilt leftwards. In a 1995–96 survey only 7 percent of political scientists and 3 percent of sociologists said they had voted for (classical-)liberal or conservative parties, whereas support for socialist parties among the same groups were 51 percent and 78 percent. Lawyers and economists were more evenly split between left and right, but even there the left dominated: 31 percent and 25 percent for at least nominally free-market friendly parties and 38 percent and 36 percent for socialist parties.2 Very vocal free-market voices in academia have been rare.
This marginalization of liberalism was not always the case. Denmark was among the first countries to see publication of a translation of Adam Smith’s Wealth of Nations (Smith 1779/1776; see Rae 1895, ch. 24; Kurrild-Klitgaard 1998; 2004).
Throughout the 19th century the emerging field of economics at the University of Copenhagen was visibly inspired not only by Smith and David Ricardo but also the “Manchester liberals” and French classical liberal economists Jean Baptiste Say and Frédéric Bastiat, of whose works timely translations were made. The university had professors of economics who today would be termed classical liberals, e.g., Oluf Christian Olufsen (1764–1827), Christian G. Nathan David (1793–1874), Carl Johan H. Kayser (1811–1870), Niels Christian Frederiksen (1840–1905), William Scharling (1837–1911) and Vigand A. Falbe-Hansen (1841–1932). Olufsen
1. University of Copenhagen, 1165 Copenhagen, Denmark. I am grateful to Jane S. Shaw, Otto Brøns- Petersen, and three anonymous reviewers for useful suggestions and comments.
2. See Andersen 1998. The remaining shares were for two centrist parties and for “don’t know.” Only academics in the field of business economics had more (classical-)liberal/conservative votes than socialist.
was the first Danish professor of economics and an ardent follower of Smith.
David was a politician for three decades, first affiliated with liberal groups and later with more conservative ones. The latter four professors were all sometime MPs for either liberal groups or liberal factions of the conservative group in the thenemerging party system.3 Kayser and Frederiksen were explicit admirers of Bastiat, who as late as 1910 was a prominent name in Danish economics training (Boserup 1976, 22ff.; Christensen 1976b, 152ff.). But while these professors were influential in their times, they were not very original and rarely left an enduring mark on the field of economics. After World War I, ‘social democracy’ and an interventionist economy became the default position, both in intellectual debates and in party politics.
This paper seeks to give an overview of the status of liberal thinking among Danish social scientists in the latter half of the 20th and early 21st centuries—a topic about which very little has been written.4 The emphasis here is on classical liberal thinking as an intellectual and academic enterprise and in its politicalhistorical context. It is not a survey of Danish liberalism as a political or partisan movement (e.g., as associated with the self-declared liberal parties “Venstre, Danmarks Liberale Parti,” “Liberalt Centrum,” and “Liberal Alliance”). Nor is it a history of political activism and political polemics based on more or less freemarket ideas. Rather, the following survey is generally limited to individuals with an academic background who have contributed at length to academic or public debate. Finally, the focus here is on liberalism in its classical sense, as a persuasion in the traditions of John Locke, David Hume, Adam Smith, Jeremy Bentham, Herbert Spencer, John Stuart Mill, Ludwig von Mises, F. A. Hayek, Milton Friedman, and others, and with a special focus on political economy.5
3. See articles in Christensen 1976a, e.g., Boserup 1976; Johansen 1976, 118–123; Christensen 1976b;
Hansen 1976a; 1976b. David and Scharling were both Minister of Finance, and the former was also head of the Danish National Bank. The Danish classical liberal economists and free-market groups of the 19th century have, remarkably, been left almost entirely out of the most recent survey of 19th century Danish liberalism (Nevers 2013), which unfortunately presents Danish liberalism quite selectively as more or less synonymous with the positions of self-declared liberal parties and essentially as entirely politically liberal and egalitarian in its focus. Consequently, economically liberal ideas are written out of Danish 19th century “liberalism,” which is given a left-slanted character akin to the Anglo-American definition of liberalism.
4. A few works with brief passages of some relevance include, e.g., Palmer 1989; Kurrild-Klitgaard 1996a;
2010b; 2012; Gress 2011; Olsen 2013; Nevers, Olsen, and Sylvest 2013a. The book that includes the last two studies (Nevers, Olsen, and Sylvest 2013b) largely ignores the classical part of liberalism, branding it as “neoliberalism;” meanwhile, it uses the term liberalism as it is typically done in the United States and Canada.
5. In recent decades, the term libertarianism is often used in the Anglo-American world to signify classical liberalism. However, that choice may be less than fortunate for a number of reasons, and it certainly has never caught on in Denmark, although the adjective libertær occurs occasionally. Furthermore, ‘libertarianism’ has in the United States sometimes been identified more narrowly with an axiomatic natural-rights version of liberalism.
401 VOLUME 12, NUMBER 3, SEPTEMBER 2015
CLASSICAL LIBERALISM IN DENMARKThe paper is structured in the following way. First, an overview of some of the solitary figures and circles that represented a classical liberal perspective in Danish public discourse in the decades following World War II. Then an overview of the renaissance occurring in the decades since ca. 1980, centered on a presentation of three different organizations that have played a part in this.
Subsequently surveys are made of the individual intellectual profiles, split between those specializing in philosophy and history of thought and those in economics and political science, as well as a group of profiles outside academia.
It should be noted, as will become evident throughout the text, that the present author is not only an observer but also a participant in classical liberal circles. As such the article draws freely from my personal experience, reflects my personal judgments, and highlights the facts and the people that have made a personal impression on me as one immersed in the classical liberal efforts in Denmark—and should be read bearing that in mind.
The long drought (ca. 1945–ca. 1980) The period from the end of World War II to the early 1980s saw a steady decline and a new low point in the interest in Danish free market thinking. While parties that might be seen as more or less liberal in their orientations occasionally did well on the political scene, from around 1960–1965 they basically gave up stemming the tide of socialization. The time was not one of liberal discourse. The few pro-free market bastions of opinion struggled and faltered, while the institutions of higher learning were rapidly emptied of the few remaining, vocal nonsocialist voices. Virtually every academic article or book with any ideological flavor tilted left, or at least in favor of the status quo of an interventionist welfare state.
An illustrative example is Carl Iversen (1899–1978), who was professor of economics, a founding member of the Mont Pèlerin Society in 1947, and a very prominent academic in Denmark. He was full professor for almost three decades and chancellor of the University of Copenhagen, as well as the first chairman of the Danish Council of Economic Advisors. He was also a close intellectual ally and professional collaborator of the Swedish economist and Nobel Prize winner Bertil Ohlin, and seems to have shared Ohlin’s liberal approach to international trade.
Iversen had an interest in the capital theory of Mises and Hayek and met the latter when he visited Copenhagen in 1933. But whatever liberalism Iversen may have shared, it is little reflected in his work, and Iversen seems to have left no visible mark as a liberal—neither in his academic works nor in public discourse.
The same waning tide of free-market ideas characterized debates on public policy in newspapers. Few voices challenged the expansions of the state and VOLUME 12, NUMBER 3, SEPTEMBER 2015 402
KURRILD-KLITGAARDredistribution in the decades following WWII. One of the exceptions, who consistently championed and promoted a distinctly classical liberalism, was the economist and political writer Christian Gandil (1907–1999).6 Gandil had originally been educated with a double master’s degree in forestry and economics, but when he met F. A. Hayek and Ludwig von Mises, he chose a career as a writer and organizer on behalf of liberal ideas. Gandil himself had become a member of the Mont Pèlerin Society in 1948 (the year after its founding), and from 1968 to 1972 was its vice president.7 Gandil’s primary contribution was as an organizer, president, and leading voice of Erhvervenes Oplysningsråd (“Enterprise Information Council”), an organization founded in 1945 that aspired to become something like the American Enterprise Institute (founded in 1943). The organization was formally initiated by Grosserer-Societetet (the Chamber of Commerce), especially two businessmen, Rudolph Schmidt and Dethlef Jürgensen, and there was some overlap with an earlier organization called Frihandelsklubben af 1932 (“The Free Trade Club of 1932”). However, Gandil was the main intellectual force, and the primary inspiration for his project was Hayek’s The Road to Serfdom (in Danish as Vejen til trældom, Hayek 1946/1944).
The context of the creation of the Enterprise Information Council was debates over abolition of the wartime restrictions on commerce and the socialization plans pushed by Social Democrats and Communists. The Council sought to spread ideas about the value of a free market economy, not only to the public in general but also to executives. Intellectually, the Council was explicitly antiKeynesian and very positive toward the ‘Austrian school’ of economics (see Gandil 1971, 4). In practice, the Council aimed at influencing public debate through meetings, op-eds, and policy reports.
Soon after the founding of the Council, a number of other business organizations became members, including representatives from agriculture, industry, insurance, and banking. By the early 1970s, however, it became too difficult to raise money for the operation: The business organizations tended to appease an increasingly corporatist and interventionist Danish public sector, and in fact some organizations withdrew their support—after which it became too expensive for the remaining organizations.8
6. On Gandil, see Kurrild-Klitgaard 1999; Jensen 1999; Olsen 2013.
7. Gandil received the Danish Adam Smith Prize in 1989. The Libertas Society had instituted the Danish Adam Smith Prize the year before, with the purpose of honoring individuals who have affected public debate or policies in a free-market direction.
8. For a history of the first 25 years of the organization, see Gandil 1971. After the demise, some of the remaining funds of the Council were transferred to a new organization named Libertas: Næringsliv og Samfund (“Libertas: Enterprise and Society”), which organized a series of meetings in the 1970s. However, 403 VOLUME 12, NUMBER 3, SEPTEMBER 2015
CLASSICAL LIBERALISM IN DENMARKGandil was more of an organizer and public debater than an original thinker—earning him the nickname “Propa-Gandil.” His most weighty intellectual contribution to political thought at the intellectual level was probably the book Moderne liberalisme (Gandil 1948b), an anthology that took as its point of departure the 17th–18th century liberalism of Locke, Hume, Smith, Immanuel Kant, Thomas Jefferson, et al., but also drew on European liberals of the 1940s (Gandil 1948a, 5ff.). The book included essays outlining the thinking of economists such as Mises, Hayek, Wilhelm Röpke, Trygve J. B. Hoff, and Herbert Tingsten. The book called for a liberal revival and argued that Marxist socialism and national-socialism were based on errors and were similar in nature. It was for many years one of the few Danish books in print that dealt explicitly with liberal ideas.
Aside from the circle around Erhvervenes Oplysningsråd the only group in Denmark to systematically champion liberal economic ideas was a group of Georgists.
This group had connections to the so-called Retsforbundet (“Justice Party”) and the associated Henry George Society, which favored free trade and free enterprise.
However, the Georgists also championed the so-called ‘single-tax’ on land, which essentially would nationalize ownership of all land. While the latter was never popular with other liberals (or many voters), it is only fair to say that the Justice Party for many years provided the most consistent free-trade voice in Danish politics.
One of the more prolific individuals of this group was Knud Tholstrup (1904–1989). He was originally a farmer who had been kicked out of elementary school due to dyslexia—and went on to become one of the country’s most successful industrialists and self-made kroner-billionaire. He later went into politics as a member of Parliament for the Georgists and subsequently became the author of several books (e.g., Tholstrup 1986), many pamphlets (Tholstrup 1973; 1988), and numerous op-eds and letters to the editor on industrial policy, monetary policy,
growth, taxes, and so forth. Tholstrup was a proponent of liberalism in all its forms: