Nancy Folbre: The Welfare Queen of Denmark To anyone who lived through Ronald Reagan's presidency, it's a familiar story. It begins with a detailed description of a woman living high off the hog on welfare. Then it asserts that runaway social spending poses a threat to economic growth and well-being. The up-close-and-personal touch makes a more memorable case for austerity than an argument based on numbers like debt ratios and growth rates. The headline on Suzanne Daley's article about a political kerfuffle in Denmark, recently published in The New York Times, summarizes its main point: "Danes Rethink a Welfare State Ample to a Fault." The star of this story, dubbed "Carina," is real, unlike the single mother in Ronald Reagan's famously fictional anecdote. But the economic claims made in the debate go far beyond "welfare" (means-tested benefits) to concerns about the effects of excessive assistance to students and pensioners - recapitulating the evolution of austerity arguments in the United States from the early 1990s to the present. Certainly, policy debates in Denmark, as here, reflect partisan dynamics. In 2001, a conservative coalition came to power in Denmark, with the strong support of the anti-immigration Danish People's Party. The Social Democratic Party regained power by a narrow margin in 2011. Many members of this party see support for mothers like Carina as a means of reducing child poverty; as in the United States, conservatives put a lower priority on this goal. Most important, however, are the economic arguments that come into play, both within this article and the larger genre. Ms. Daley reports concern that public benefits reduce incentives to work. While Danish labor-force participation rates are higher than those in the United States, average hours worked are lower because of more part-time employment, longer vacations and paid family leaves from work. Is this a problem? It's not as though the supply of hours to paid employment is constraining economic growth in Denmark or elsewhere. On the contrary, distressingly high rates of unemployment in both the United States and Europe indicate a shortfall of labor demand. Many Americans would love longer vacations and paid family leaves. As Ms. Daley points out, surveys rank Denmark as the happiest country in the world and even conservative politicians are not suggesting abandoning the Danish model. Christian Bjornskov, an economics professor at Aarhus Business School, elaborates: "We probably spend our money differently here. We don't buy big houses or big cars, we like to spend our money on socializing with others. But note that the Danes are neither lazy nor poor. Despite high marginal tax rates (or perhaps because of them) they are about as rich, on average, as Americans are. The World Bank estimates that gross domestic product per capita in Denmark for the 2008-12 period at $59,889, compared with $48,112 for the United States. Adjusted for differences in the cost of living, Danes" G.D.P. per capita is slightly lower than ours. The Danes spend far less on health care per capita than we do in the United States, yet achieve better health outcomes in many areas, including life expectancy. Their child poverty rates are far lower: About 6.5 percent of Danish children live in families with disposable incomes under 50 percent of the median, compared with 23.1 percent in the United States. The Danish banking system, like most, took a hit in the financial crisis. But its banking regulations prevented major losses in mortgage lending. Overall levels of public debt as a percentage of G.D.P. are far lower than ours, and remain well below the European Union average. In short, the Danish record offers no support for the social-spending-hurts-growth position. That doesn't mean that some economists can't figure out a way to make that argument anyway. For instance, Daron Acemoglu, James A. Robinson and Thierry Verdier have devised a theoretical model to show why what they term "cuddly" capitalism of the Danish sort may just be free-riding on the "cutthroat" capitalism of the United States sort. The model posits that cutthroat levels of inequality, as in the United States, promote high levels of technological innovation. The benefits of these innovations cross national borders to help Danes and other Scandinavians achieve growth. In other words, they may be able to get away with being "cuddly," but some country (like the United States) just has to be tough enough to reward risk-taking, even if it leads to hurt feelings. The gendered language deployed in this model echoes a general tendency to view social spending in feminine terms: women like to cuddle and are often described as more risk-averse than men. It's not uncommon to see the term "nanny state" used as a synonym for the welfare state. Call the Scandinavians sissies if you like, but plenty of evidence in the latest World Competitiveness Report testifies to high levels of overall innovation there - as you might expect in economies even more export-oriented than our own. Danes are world leaders in renewable energy technology, especially wind power. Danes may do plenty of cuddling, but their form of capitalism is more aptly described as team-based. And international competition remains, to a very large extent, a team sport. And about welfare queens: According to Ms. Daley, Carina is taking home about $32,400 a year in public assistance. A constitutional monarchy, Denmark spends roughly $52 million to $70 million a year supporting its royal family, headed by Queen Margrethe II. Yet the Danish royal family is considered the most popular in Europe. Maybe that's because queens can't always be judged by their record of paid employment.