Denmark’s general election in June 2019 was an important victory for the Left. Deploying left-wing rhetoric on economic issues, Mette Frederiksen led her Social Democratic Party back to government in a country renowned for its strong welfare state and almost universally unionized working class. Yet if this success promised an end to the decades-long onslaught of privatization, financialization, and deregulation, it is rather less clear that her government has, indeed, made a left-wing turn.

This is particularly apparent when we look at its adoption of the agenda proposed by the previous liberal-conservative government in 2018, notably a so-called “ghetto plan” that defines certain areas as “ghettos” based on the rates of “non-Western immigrants,” unemployment, and crime. For residents of these areas, the plan spells a regime of arbitrary rules and punishments — a disciplining process that will likely end in eviction and the privatization of their homes.

Fueled by racism and masked as social policy, the ghetto plan’s real aim is the dismantling of Denmark’s long-mighty system of public housing. In the campaign for June’s election, it was widely claimed that Denmark’s Social Democrats had adopted a harsh line on immigration in order to buy themselves political space to move left on economics. Yet looking deeper into the Ghetto Plan, we see that the two are not counterposed — and that the racialized stigmatization of the poor in fact goes hand in hand with the privatization of their homes.

The Ghetto

Right-wing populism has been a potent force in Danish politics in recent decades. Ever since the far-right Danish People’s Party first had direct political influence in 2003 by tipping the parliamentary majority toward joining George W. Bush’s war in Iraq, the party has had a growing influence over Danish politics. Through sweeping restrictions on immigration, complicating the path to citizenship, and the infamous 2016 “jewelry law” allowing the government to seize cash and valuables from refugees applying for asylum, the Danish People’s Party has successfully put national identity and migration center stage in national political debate — despite the fact that it has never actually joined the government.

Last year, the conservative government proposed a policy package dubbed “the ghetto plan.” The plan was sold as a solution to get rid of “parallel societies” where inhabitants experience high crime rates, high concentrations of immigrants (their words), and low levels of education.

People in these areas are now subject to a set of special laws deliberately designed to be disproportionately penalizing, and the police have been given the power to impose “special punishment zones” wherein punishments are doubled. Here, what would have been a 1,000 DKK fine for some infraction now costs you 2,000 DKK — and the same goes for a prison sentence.

Moreover, people on unemployment benefits are not allowed to move into these areas — and if you are already a resident and commit a crime, it is comparably easier for you to be thrown out of your home. This same penalizing spirit applies to the classroom. Alongside other measures, children as young as six years old are forced to take language tests, there are sanctions on families’ financial support if children skip school or exams, high schools are allowed to limit the number of students from immigrant families, and there are mandatory classes in “Danish values” for children from the age of one.

The plan also includes mechanisms that give the state new powers to intervene in these areas’ “composition” in terms of tenure and ownership. Once an area has been on the “ghetto list” for four years, it is classified as a “hard ghetto,” and the share of public housing has to be brought down to 40 percent of the total. This means that buildings can be torn down and the land sold off to private developers, simply because there are too many poor and ethnic-minority residents. Over the next few years, 11,000 people are expected to be evicted because they live in one of the country’s fifteen “hard ghettos.”

 
Racism: A Weapon of Capital

On n the surface, these policies could be understood as rational outcomes in a political landscape characterized by chauvinistic and racist sentiment. But the reality seems more complex. The ghetto plan also functions as a tool to advance a process of undermining public housing and “improving the business climate” for private landlords. The blatant racism of the ghetto plan is obfuscating the parallel, if not overriding, function of the legislation — namely to privatize public housing in a country where a majority of people live in homes more or less protected from market forces.

It is useful to look at the city of Copenhagen, home to one-fifth of Denmark’s population. From the start of the last century, the Social Democrats ruled Copenhagen city hall. They enabled a large self-governing social housing sector operating mainly through cooperatives. Housing was seen as an integral part of Denmark’s dominant welfare regime — and public control of the housing sector expanded up until the 1980s. By this time, almost 90 percent of new housing being constructed in Copenhagen was publicly financed.

Described by David Harvey as “commoning,” housing became “both collective and non-commodified — off-limits to the logic of market exchange and market valuations.” Fast forward to today, and almost no public housing is being constructed.

But even though the majority of new housing units being built today are private rentals, because of Denmark’s long history of public housing, only about one quarter of the city’s residents have a private landlord. About a third of all Copenhageners live in cooperatives, a fifth in public housing, and a fifth own their home. A considerable part of the housing stock in Copenhagen is therefore still a part of the “commons.” But as we discuss below, the cooperative model is under attack, in an attempt to remove its non-market characteristics.

City hall was still held by the Social Democratic Party in the 1990s, but the content of its politics was changing. At this point, in the advent of hegemonic dominance of neoliberalism, urban governance was in the process of changing in cities across the planet. Local government moved from mainly being concerned with servicing its citizens to concentrating on attracting global capital — a shift some analysts have described as the city governance moving from being “managerial” (handling the housing stock) to “entrepreneurial” (focused on profit).

All over the world, this process fills our cities with “capitalist realist pastiche” in the form of opera houses, relics from an industrial past, and repurposed factory buildings, imposing “culture” and “history” on otherwise sanitized spaces. Under the surface, it results in a financialization of people’s homes, turning housing into real estate. Over the last three years, over 70 percent of all investment in housing in Copenhagen has come from abroad, rising from 27 percent in 2012. This is part of a global trend, as 60 percent of the world’s assets are now bound up in buildings.

The fact that a considerable part of the Danish housing stock is off-limits to the logic of market exchange and market valuations now provides an opportunity, as the commons represent “virgin ground” onto which the frontiers of the real estate market can expand. To make this possible, public opinion first has to be swayed in favor of privatization.

Changing the Consensus

The groundwork started to be laid in the early 2000s in a period that has been dubbed the “Fogh Rasmussen time” — a reference to “Giuliani time” and the revanchist politics that reshaped New York City in the 1990s. In 2002, Fogh Rasmussen’s liberal-conservative government initiated a “battle plan” aimed at privatizing the hitherto collectively owned housing. The plan included steps such as phasing out of state support for building new cooperatives, dismantling the ministry of housing and urban affairs and placing housing under the jurisdiction of the ministry of economic and business affairs.

But perhaps most transformative was a public housing “right to buy” scheme inspired by Thatcher’s project. Described at the time as a “battering ram straight in the heart of the non-profit movement” that resulted in a substantial growth in cooperatives (as residents bought their houses together instead of individually), it was followed by a removal of both price caps on shares and restrictions on the private mortgaging using shares as security. Cooperatives were quickly pulled into the sphere of finance.

Since cooperative shares could function as securities for loans, it became tempting for members in the democratically run cooperatives to vote for raised share prices in annual assemblies. These changes thus made housing cooperatives more similar to outright house ownership. Further liberalization of the housing market gained public support as people’s access to cheap credit grew.

Denmark’s private debt soared after 2002 and peaked in 2008. It now ranks among the highest in all OECD countries, at 281 percent of net disposable income. The ghetto plan, effectively a tool to evict tenants and privatize public housing, should be understood as the latest step in this process of financialization and not only racism. Racism has not only been a tool for the political elite to retain power but also for the economic elite to create new opportunities for value extraction and the upward redistribution of income.

Lack of Change

The collapse of the far-right Danish People’s Party and the growth of the Left in June’s election could be the beginning of the end of an era dominated by far-right populism and financialization. But unfortunately, the ghetto plan is kept alive by the ostensibly left-wing Social Democrats and the Socialist People’s Party — suggesting that little is about to change.

It could be argued that the Social Democrats have moved to the right on social issues in order to be able to move to the left on economic issues. But the ghetto plan — a tool for financialization — demonstrates that this narrative is far too simplistic. The center left is squandering an opportunity to stand with ordinary tenants by willfully chaining themselves to a political program devised by the former liberal-conservative government.

On the Left, the Red-Green Alliance has been the only force to condemn the ghetto plan. But since the Social Democrats formed a government in June, this small party has changed its strategy to focus on softening the worst consequences of the plan.

In negotiations with the government, it has sought a softer implementation of some of the policies involved, for instance by arguing that evicted residents should be offered new, cheap public housing.

Some representatives of the Socialist People’s Party and the Social Democrats have also opposed the enactment of the Plan on the local level (for example, the Socialist People’s Party in the west-coast city of Esbjerg) but there has been little protest from within these parties at the national level.

In this context, racism continues to be a potent force in helping to privatize and liberalize the housing market. The right-wing populists have been so successful in shifting the debate that such draconian legislation in fact enjoys a large majority in parliament. A large part of the working class is being abandoned and its housing is being put up for sale. It is likely that this will only further alienate those who feel that no political party is taking their side.

Instead, a Left that wants to win in the long term needs to challenge the “common sense” that has dominated the country for far too long, explain how political decisions have led to the decline of the welfare state, and propose fundamental steps forward that benefit all workers, no matter where they live or come from. A Left intent on taking power, and keeping it, cannot only focus on the next election but needs to patiently challenge the hegemony of the Right. The Ghetto plan must be opposed — as must the processes that made it possible.

Anton Ösgård holds an MSc in urban and economic geography from Utrecht University, with a background as a climate activist in Sweden. He lives in Copenhagen.

Jonas Algers holds an MA in economics from The New School and is an economist at Norway’s Manifest think tank. He lives in Copenhagen.

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Anton Ösgård

Jonas Algers

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