Answering economic inequality other than with populism and protectionism: the Danish formula of inclusive capitalism

Chih-Mei Luo ()
Additional contact information
Chih-Mei Luo: National Taipei University

Asia Europe Journal, 2020, vol. 18, issue 1, No 8, 139-155

Abstract: Abstract EU politics have experienced vast changes since 2014 from the rise of anti-globalization populist right parties to Brexit. Similarly, populist and nationalist sentiments also appeared in some Southeast Asian democracies such as Taiwan and the Philippines. Despite their national and regional differences, one common characteristic of these developments was that it was those left-behind and economically disadvantaged voters who delivered such results. Trade protectionism and populist nationalism were their answers to ever-growing economic inequality. The growing economic inequality thus has become a common policy challenge to both European and Asian leadership. While political and business elites appealed to inclusive capitalism to address the economic inequality, no holistic, realistic policy combination was ever proposed. This paper is an attempt to translate inclusive capitalism from aspiration to systematic policy actions by employing an Inclusive Development Index (IDI) to the study of an indicative country—Denmark. It was found that those areas which Denmark has been performing well in were areas surrounding acquired equal opportunities: quality public education, health and active labor market policies for developing personal capability from childhood to adulthood, and uncorrupted public services and business-friendly legal and tax regimes for facilitating market competition from business creation to operation, especially for small businesses. Governance was a key to the functioning of this self-producing policy ecosystem, centrally staged as a big investor and enabler for both labor and capital. The distinctive thinking underpinning policy-making—treating economic policies as social policies and vice versa—reconciled economic growth and distributive justice simultaneously, resulting in inclusive capitalism in day-to-day realities. The Danish formula has shown that it was not capitalism that needed to reform, it was the prevailing liberalist orthodoxy that guided governance that was in desperate need of an overhaul.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10308-019-00538-2 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:asiaeu:v:18:y:2020:i:1:d:10.1007_s10308-019-00538-2

Ordering information: This journal article can be ordered from
http://www.springer. ... es/journal/10308/PS2

DOI: 10.1007/s10308-019-00538-2

Access Statistics for this article

Asia Europe Journal is currently edited by Ulrich Volz and Lay Hwee Yeo

More articles in Asia Europe Journal from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().