Let's try a thought experiment.
What if the state took all the money from the richest Danes - businesses, homes, investments, pensions - EVERYTHING?
How long could Denmark function then?
The Danish public sector spends around 1,300-1,400 billion kroner per year today.
So let's play this thought all the way out.
If the state confiscated the entire fortune of the richest 3% of Danes - all businesses, shares, homes, savings and pensions - it would total around 5,000 billion kroner.
That would finance the Danish state for approximately -
3-4 years.
That's it.
After that, the money is spent.
But even this calculation is only the theoretical mathematics.
Because in the real world, these values don't sit as cash in a money tank. They sit in businesses, investments, production machinery, workplaces and capital - which is what actually keeps the economy running.
If the state confiscated them, the consequences would come almost immediately.
Capital would flee. Investments would stop. Businesses would be forcibly sold or closed. Hundreds of thousands of jobs would disappear. Tax revenues would collapse. The krone would weaken. Inflation would eat savings and wages. Pensions would be hollowed out.
The economic engine that the welfare state lives off would simply grind to a halt.
The result would therefore not be 3-4 years of stable welfare.
The result would be a rapid economic collapse, where the state very quickly stands without capital, businesses, jobs or tax revenues.
That's the part of the calculation that almost never gets mentioned.
It leads to the question politicians rarely touch, because it's hard to win votes with -
Where does prosperity actually come from?
To understand this, you have to understand something completely fundamental about economics.
Prosperity in a society doesn't arise because money moves around between people.
Prosperity arises because people CREATE VALUE.
When a farmer grows more than before.
When a company invents a better machine.
When an engineer develops new technology.
When a craftsman builds a house.
When a business organizes production so a thousand people can produce more efficiently than before.
Then more value is created in the world. And it is the recognition of that process which throughout history has made humanity richer. In the last centuries in the western world - markedly much richer.
Two hundred years ago, almost the entire world's population lived in poverty. Even in Europe, most people lived at a level that today would be considered extremely poor.
This did NOT change because someone began redistributing money.
It changed because PRODUCTIVITY EXPLODED.
The industrial revolution, technological breakthroughs, trade, investments and businesses made it possible to produce far more value with the same amount of work.
That's why we today have hospitals, pensions, education systems, infrastructure and a welfare society.
These things were not created through redistribution. They were created because society became far richer FIRST.
So where did the welfare state actually come from?
There's also a historical point here, which is also often conveniently "forgotten".
The welfare states we take for granted in Europe today - with pensions, hospitals, free education and social safety nets - did NOT arise in poor societies.
They arose in VERY RICH societies.
Before the industrial revolution, almost all people in Europe lived in something resembling permanent scarcity. Even kingdoms struggled to finance something as basic as health, education or infrastructure at scale.
It was only when productivity exploded in the 1800s and 1900s - through technology, industrialization, trade, capital and businesses - that societies began creating so much value that the state could even begin building large welfare systems.
In other words -
The welfare state was NOT created BEFORE value creation.
It was created AFTER.
It was built on top of an enormous growth in prosperity, where businesses, innovation and investments made society many times richer than before.
Welfare can therefore ONLY exist on top of value creation.
It cannot replace it.
And it disappears again - almost immediately - when value creation stops.
That's why it's important to understand that when we talk about wealth in a society, particularly the western liberal democracies built on the western world's civilizational model, many mix two different things together.
Fortune is a stock.
Value creation is a flow.
Fortune is everything that already exists - homes, businesses, machines, savings, shares, pension funds etc.
It's value that has been built up over many decades.
But it is NOT the fortune that finances society every year.
It's the flow of new value that gets created every single year.
When businesses produce goods.
When people work.
When technology makes production more efficient.
When investments create new businesses.
Then a continuous flow of new value arises in the economy.
It's from this flow that the state can take a portion in taxes and finance hospitals, schools, roads and pensions.
You can think of it as a lake and a river.
The fortune is the lake - the water already sitting there.
Value creation is the river - the water constantly flowing in.
If you once drain the lake, you do indeed have a lot of water for a moment.
But if you simultaneously destroy the river that fills the lake again, then the water is quickly gone.
That's precisely the difference that often gets overlooked in political debate.
It leads us to the brutal reality that parts of political life would prefer you overlook, by speaking to your emotions and setting you against "the rich" -
You can redistribute wealth in a society.
But you cannot in the long run replace value creation with redistribution.
If investments disappear.
If businesses can no longer grow.
If capital flees.
If the incentive to create and build value disappears.
Then prosperity sooner or later begins to disappear FOR EVERYONE.
That's why welfare ultimately doesn't depend on how much money you can take from the rich once.
It depends on something far more fundamental - whether society continues to create value.
Whether businesses get built.
Whether there's investment in the future.
Whether people work, invent, build and develop.
It's that process which every year creates the values that tax revenues come from.
It's that process which makes it possible to finance hospitals, schools and pensions.
Without ongoing value creation, the foundation for welfare disappears.
That's why the only path to better conditions, greater security and more dignity - a better life for everyone - in a society is that we become better at creating value.
And that we make room for the FEW people in each generation who have the drive to work tirelessly on their visions - and who through their businesses, inventions and innovation end up creating jobs, prosperity and opportunities for far more than themselves.
If you want an image for it, you can think of society as a garden.
The state's role is not to decide which plants may grow, or to cut down the tallest ones.
The gardener's role is to create the best possible conditions for the garden to grow - so everything healthy in it lives optimally -
Good soil, light, water and space.
So everything that is strong, beautiful and filled with an upward pull gets the best conditions to unfold.
Because when that happens, the garden doesn't become poorer.
It becomes richer for everyone.
❤️🔥🪽
Sidenote:
Total private net wealth in Denmark sits around 10-12 trillion kroner. If the state confiscated all private wealth in the entire country - all homes, businesses, savings and pensions - it could theoretically finance the Danish state for about 7-8 years. After that, there would be nothing left.
(Figures based on Statistics Denmark's accounts of household wealth and public expenditure.)
And as a side side note: no, I'm not one of those who people want to eternally extra-extra-extra tax. But I'm working on becoming that. ☺️
