Neoliberalism with Scandinavian Characteristics: The Slow Formation of Neoliberal Common Sense in Denmark

This paper traces the ascension of liberal economic ideas in the macroeconomic establishment in Denmark since the 1970s. Based on a systematic analysis of documents from the Danish government and the Economic Council from the 1970s to the aftermath of the 2008 crisis, this paper demonstrates that Denmark experienced a marked shift in paradigms during this period. Full employment Keynesianism dominated the 1970s and neoclassical liberalism became dominant from the late 1980s and early 1990s on.
As such the Danish case fits the general understanding of the transition to neoliberalism. There are complicating factors though. The paper argues that the nature of this paradigm shift is more uneven and gradual than the literature traditionally suggests. Furthermore, the adoption of strict new monetary and fiscal policies took place in the early 1980s, before the intellectual tools of the new paradigm were dominant and developed. This suggests that it was not the intellectual dominance of liberal ideas that caused the initial adoption of neoliberal policies. It is argued instead that the central role of economic theory is rather in legitimating and justifying policy, and that the stability of economic strategy, despite changes in government, point towards a situation where neoclassical liberalism has taken the form of common sense in the policy elite. Remarkably this common sense even includes unions and labour parties. A fact that points toward a special form of neoliberal hegemony in Scandinavia that is more inclusive, technocratic and consensus-oriented, though no less orthodox, than in other countries.