Taastrup, Denmark. In the beginning of January we had another general election in Denmark, only one year after the last election which made the tax-negating Progress party the second largest party in the Parliament (and which was described in my column in the May 1974 REASON).
This new election was in principle caused by the difficult economic situation which is well known in all parts of the industrialized world, but which for specific reasons inherent in the Danish politico-economic structure has been worse here than in most other countries.
The economic difficulties manifest themselves in such convincing results as increasing inflation (over 16 percent per year), increasing debt to foreign countries and, most alarmingly, an increasing rate of unemployment which is now approaching 15 percent (as compared to about 2 percent in the beginning of 1974).
In this connection it is relevant to point out that the increase in wages in Denmark during the period 1969-1974 has been 105 percent accompanied by an increase in taxes during the same period of 177 percent (make your own guess about the cause-effect relationship involved) as compared to, say, Sweden with an increase in wages of 70 percent (taxes 83 percent) and the U.S.A. with an increase in wages of 36 percent (taxes 55 percent). Add hereto that the government during 1974 put a severe restraint on public building expenditure and it is not difficult to understand that in combination with the "oil crisis" industry has been forced to cut down production.
Furthermore the round of central bargaining between unions and employers for the wages for the next two years started in late 1974 with the unions requiring a 25 percent increase in wages and the employers requiring a standstill. The government proposed to intervene into the negotiations, but Parliament could not agree to its plan and writs were issued for an election.
The outcome of the election was not very encouraging. The left wing parties gained some seats (but are still far from having the majority); there are still 10 parties represented and the difficulties in reaching agreement on anything (which have been very marked in the past year) have not diminished, as can be seen from the fact that it has not yet (the beginning of February) been possible to form a satisfactory government. The Progress party lost 4 seats and now has 24 (out of 175) which makes it the third largest party as the liberal government party gained enough support to make it the second largest with 42 seats (the Social Democratic party is still the largest with 53 seats).
The continuing success of the Progress party is, however, remarkable. Particularly when one considers that during the past year when the party has been represented in Parliament, it has been avoided by all the other political parties as if its members were carriers of some infectious disease, resulting naturally in very little political influence. Furthermore the news media have almost all agreed to continue to make the Progress party their scapegoat and in TV interviews its representatives have been treated with more hostility and less fairness than what is shown to the Communist party.
And, finally, Mr. Mogens Glistrup, the leader of the Progress party and so far still its only outstanding figure, has been put on trial and charged with tax evasion on his own and his clients' account. It is a serious affair which may cost him a huge amount of money, up to four years of prison, withdrawal of his right to practice as a lawyer (he has the greatest law office in the whole country) and of course put an end to his political career.
Mr. Glistrup himself claims that he has not committed any unlawful acts and that the process is politically inspired in order to get rid of him and his troublesome ideas. The charge itself is very complicated for a nonlawyer (and for lawyers also, for that matter) to look through, but the essential ingredients as understood by a layman are as follows. It seems that the main issue is that the money transactions made by Mr. Glistrup and his clients are claimed to be merely fictive and only carried out in order to evade income taxes and that this is against the "spirit of the law." Whether this is true or not, I am not capable of judging, but it sure is interesting to make a comparison with those social workers who are proud of proclaiming that one of the most important aspects of their job is to find all possible loopholes in the welfare laws so that they can get the greatest amount of money and help to their clients. And surely nobody is dreaming of charging them with anything!
As for the question of whether the case is political, one may of course argue that if its main point is to establish that Mr. Glistrup has acted contrary to a not too evident intention of the law, then it could be classified as political, but it is not thinkable that it is inspired by some obscure political plot (and, incidentally, the supreme court has already determined that it is not a political case). However, it is more than plausible that the case was brought against Mr. Glistrup (and not somebody else who might have violated the spirit of some law) because he provoked the authorities and the whole country by stating publicly that he could and did manage to avoid paying taxes by cleverly exploiting the existing laws.
But this whole legal tangle does not seem to affect the voters to any large degree. In spite of all the denunciations of the press, the unwillingness of the other political parties to cooperate with the Progress party and the lawsuit which probably will drag on for years and thereby drain quite a lot of Mr. Glistrup's working capacity from his political work, there is still about 13 percent of those that voted who believe that his party is needed on the political scene—and now, less than a month after the election, the opinion polls show that the Progress party has already regained the support that it had in the 1974 election.
The interesting question in this context naturally is: what has the Progress party accomplished during the year that it has been represented in Parliament? And that is a difficult question to answer. Understandably its direct influence with 28 seats out of 175 and nobody willing to have anything to do with its ideas has been limited. But there are signs that its indirect influence has been rather great. Just the fact of having a rather large tax-negating party in the Parliament has made the other politicians talk a lot more than they used to about cutting down the expenses of the state and—oh wonder, never seen before for more than a lifetime in this country—has probably been the reason for a reduction of the income tax for 1975. Never mind that it's only a small reduction and that Parliament still has not been able to agree upon which reductions in expenses (or probably rather new indirect taxes) are going to finance it: we got a reduction in direct taxes!
As for the future, a word of caution might be well placed. As I have stated in my previous reports on this subject, the Progress party does not have a consistently libertarian platform and, as a matter of fact, does not even consistently vote against tax raising measures when they estimate that the political situation requires otherwise. Lately there have even been signs that they are willing to compromise quite a lot in order to get some degree of political influence. But taken together with other voices that are beginning to be heard, exposing the dangerous economical road that our welfare state is taking, they might prove quite a help in bringing about at least a more sane economy.