PRODUCTIVITY

Politicians have two really irritating traits. The first is that they react immediately to everything, no matter how small, instead of saying something along the lines of "well, that's interesting, but we'll look at it next year/sometime in the future/never, because we have bigger fish to fry at the moment". The latest example in Denmark is an extension of the row about child benefit. The tax system gives you relief on transport costs to and from work if you travel more than 24km a day.That relief is in principle unlimited (though the rate falls if you travel really long distances), and is not restricted to Denmark. Someone worked out that if a Polish builder works in Copenhagen and drives home to Krakow three times a month, then he wouldn't have to pay very much in tax because of the huge tax relief generated by the many kilometres to and from work (that ignores of course both the motor vehicle costs of actually travelling three times a month to Krakow and back, plus the misery costs of doing so, but hey, don't let those get in the way of a good story). Cue a host of outraged politicians, who then filled the airwaves with ever more complex and surreal "solutions" to a potential problem that might in fact not exist (how many of these motorway-loving and homesick Polish builders are there? And why are Danish employers employing them when there are unemployed Danish ones, which is a much more difficult question to answer and/or do something about?).

The other irritating habit is the converse, namely ignoring well-thought-out proposals. The latest example this week was the publication of the final report by the Productivity Commission. Over the past decades, Denmark's high wage, high cost, high welfare economy has been losing competitiveness to both other countries in Europe and developing countries such as China. So the Government set up a commission, headed by a former head of the "economic wisemen" and stuffed with heavyweight businesspeople and academics, to look at ways of improving productivity in the Danish economy and society. The final report had 127 concrete suggestions, divided amongst 25 main recommendations. Yet even before the report was formally presented, politicians and Ministers were rushing to denounce their proposals and say that they would not be implemented. All of that work will, therefore, just sit on a shelf and gather dust.

Not thinking seriously about the long term, yet reacting obsessively to the short term, however trivial, is no way to run a whelk stall, as my mother would say. Unfortunately, many modern countries, and not just Denmark, have more and more the appearance of vinegary seafood vendors. This is not good.

Walter Blotscher