The Atlantic Report on the World Today: Norway and Denmark

COMMUNISM has suffered one of its most clear-cut and least publicized reverses in Norway and Denmark. After the war, the Russians enjoyed considerable good will in Norway, having helped to liberate the country from the Nazis. This was reflected in the 1945 election, which gave the Communists 11 seats (out of 150) in the Norwegian Storting, the highest number they had ever held. Today (he Communists do not have a single deputy in the Storting. In Denmark’s first post-war election, the Communists emerged with roughly 10 per cent of the popular vote and 18 seats in the Lower House of the Rigsdag; in 1950, they obtained only 7 seats, having by this time lost two thirds of their popular vote.

In both countries Communist strength in the trade unions has sharply declined. The C.P. can find little grist for its mill in the domestic affairs of Norway and Denmark, pioneers of the welfare state. But in the international field, Norway and Denmark might readily have been drawn into a policy of neutrality. When the cold war shaped up into an irreconcilable conflict and the Atlantic Pact was in the making, Sweden sponsored the idea of a Scandinavian Pact which would proclaim the three countries′ aloofness from the East-West struggle.

It was Norway which gave the lead that brought Denmark into the Atlantic Pact, and it took a good deal of courage. Even before the war had ended, the Russians gave the Norwegians a taste of their idea of good-neighborly relations by demanding that Norway join with Russia in building military installations on Spitsbergen, allotted to Norway in 1920 and demilitarized by international treaty. Later the Soviets resorted to their familiar tactics to keep Norway out of the Marshall Plan.

But the Norwegians, as the Nazis discovered, are a remarkably stubborn people whom it is a mistake to try to bully. Russian bluster helped to crystallize the Norwegian government’s decision to stake its future on unreserved coöperation with the Western powers. This policy has the backing of every party in the Storting. Reginning with ratification of the Atlantic Pact, every major bill relating to defense and foreign policy has been carried unanimously.

In Denmark, there is not such complete unanimity. The Radical Liberal Party, though vigorously anti-Communist, has a strong pacifist, isolationist tradition, and it is opposed to a full military alliance with any foreign power. But the major political parties the Social Democrats, Agrarian Liberals, and Conservatives —and at least half of the Danes stand for all-out military coöperation with the West. U.S. officials in Copenhagen are confident that, in the event of a showdown, the Danes would fight to the utmost of their capacity.

Minutemen for defense

Neither Norway nor Denmark, with their small populations (roughly 3 and 4 millions, respectively) and their slender resources, can hope to maintain a professional army of any size; their defense plans hinge on lightning mobilization. In Norway, compulsory military service has been raised from nine to twelve months, and last years draftees were not returned to civilian life when their year had expired, Great stress is laid on the Home Guard or Minuteman type of defense in both countries. Last summer, boys in their late teens and men over the draft age could be seen training voluntarily on weekends all over Norway.

Norway’s military expenditures doubled in the twelve-month period following the Korean war, and next year they will account for 26 per cent or more of the budget. The target for 1952 is to be able to mobilize 270,000 trained troops. The air force will be doubled to 11 squadrons, and all the fighters will be jets.

Denmark’s rearmament program has been slightly less intensive than Norway’s, but it represents a considerable effort for a country whose economy is so predominantly agricultural. While both Norway s and Denmark’s direct military contribution to NATO will be of necessity small, their adherence to the Atlantic Pact has been a significant setback for the Soviets, It fortifies the West with Norway’s large merchant marine, which includes the world’s third largest tanker fleet; it has given the Allies a strategic foothold on the northwestern approaches to Russia; and it has appreciably strengthened the feeling among the Swedes — who have a useful army and the third largest air force in Europe — that their country should declare itself more openly on the side of the West.

Norway jacks up production

Norway emerged from the war with its northern province, Finnmark, utterly devastated by the Nazis; its principal pre-war customer, Germany, out of business; and hall of its merchant marine at t the bottom of the sea. The government decided on a five-year program of stringent austerity and intensive investment in heavy industry, which would jack up the nation’s productive capacity to above its pre-war level.

With the beginning of Marshall Plan aid, the Norwegian government raised the sights of its reconstruction program, but it did not raise rations. The Norwegians even went short of cheese, a staple item on their breakfast table, while cheese was exported to help pay for essential imports (in relation to its population, Norway has a larger import trade than any other country in the world except New Zealand). Capital, labor, and raw materials were channeled into rebuilding the fleet and expanding the electrochcmical and electromctallurgical industries, a source of great potential wealth, since they produce fertilizers, aluminum, and other metals with the cheapest hydroelectric power in the world.

All this was an exceedingly tough deal for the Norwegian consumer— but it has, incontestably, paid off. Full employment has been maintained. The export of aluminum, ferroalloys, iron ore, chemical products, and other items vital to Western rearmament has been steadily increasing. The merchant marine is a million tons larger than in 1939. And now - despite the diversion of so large a percentage of Norway’s production and resources to long-term investment — the over-all standard of living is slightly above the pre-war level.

Rearmament has forced Norway to cut back its ambitious development program and to continue curbs on consumption. Coffee, sugar, clothing and ol her textiles are still rationed — the people in Oslo look distinctly shabby compared with the welldressed Swedes. Imports are strictly licensed (as they also are in Denmark) to ensure that foreign exchange will be spent only on necessities —it is just about impossible, for instance, for a Norwegian or a Dane to purchase an automobile.

Norwav’s is one of the most tightly controlled economies in the world— even profits and dividends are regulated by the state— but there has been relatively little nationalization since the war. Private and governmental enterprise are thoroughly intermixed in the Norwegian system. For instance, the state and private interests are joint partners in the ownership and management of the big new aluminum plant north of Bergen: shipping is entirely in private hands, whereas the liquor trade is run by the state. The system works with an efficacy which should confound economic dogmatists of whatever stripe. Despite rigid planning and pervasive controls, the old-fashioned spirit of thrift, hard work, and individual initiative is still very much in evidence.

The biggest domestic issue in Norway‚ as elsewhere, is price stabilization. Up until 1949, the government’s anti-inflation program, which hinged on subsidies and rigorous freezing of i profits, had been amazingly successful. The lid was blown off it by devaluation of the krone, rearmament expenditure, and the rise in world prices caused by the Korean war. The cost of living, which had risen only 2½ per cent between 1945 and 1949, climbed 15 per cent in the next two years and is on its way upward. The government is fighting inflation with still more drastic taxation— there is ev en a tax on ice cream cones.

Denmark’s comeback

The Danes, whose country took less of a beating in the war than Norway, are better clothed, better fed, and better housed than their neighbors to the north. They, too, have made an impressive post-war comeback. Through plant modernization with ECA financing and technical help, Denmark has expanded ils industrial output to 75 per cent above 15)95; and its livestock products last year were slightly above the 1935—39 average. But because of the peculiar structure of its economy, Denmark, which until recently earned 80 per cent of its foreign exchange through agricultural exports, is up against a threatening economic situation.

The trouble is, first, that most of Denmark’s imports of oil cake and coarse grains needed to feed its livestock have to be purchased from hard currency countries, whereas the payments received for its dairy products and bacon are in nonconvertible currencies. Second, in a world which once again places guns before butter, the price of Danish exports has not kept up with the inflationary trend in world prices. As a result, Denmark would have to export roughly one third more than it did before the Korean war in order to pay for the same volume of imports. In actual fact, its balance of payments last year showed a deficit of $100,000,000.

Seventy-five per cent of Denmark′s butter exports and 90 per cent of its bacon exports have been going to Britain under a long-term agreement whereby prices are renegotiated once a year, and may be raised or lowered up to 7½ per cent. In 1950, the Danes obtained slightly less than the maximum increase (and a 30 per cent increase in the price of eggs). But they complain that their good friends, the British, are buying from them cheap and selling to them dear — and, what is more, are not selling them enough of such desperately needed items as coke and coal.

The British answer is that they are actually paying slightly better prices than Denmark can get for its products in bulk elsewhere, the proof being that the Danes are voluntarily selling to Britain more than they are required to by the trade agreement. As for the coal, Britain just hasn’t enough to go round. The bedrock fact is that the world’s distempered economy is making things specially tough for Denmark.

American tariffs hurt

While they are immensely grateful for Marshall Plan aid, and conspicuously pro-American, the Danes sometimes complain, politely, that the United States is pursuing a decidedly inconsistent policy in the matter of free trade. ECA has been pressing Denmark to relax its import controls and to seek to balance its foreign trade by finding new markets, preferably in hard currency countries, for Danish exports.

The United States, however, will not grant import licenses for Danish butter; and recently the U.S. dairy interests succeeded in getting a rider attached to the Defense Production Act (by Representative Andresen, Republican, Minnesota), which reduces the quota for cheese imports, and has cut back Denmark’s sales of cheese to this country by two thirds. The Andresen Amendment hurts the American consumer, undercuts the basic principles of the Marshall Plan, and has been protested by seven countries as being the diametric opposite of what the United States is preaching to the Europeans.

Meanwhile, Denmark has increased its sales of hams and cheeses to this country, and it is struggling to enlarge its small dollar earnings from such luxury items as silver, porcelain, mink, and modern furniture. On the import side, the ECA Mission in Copenhagen is fairly confident that the Danes, who are among the world’s best farmers, can so readjust their crop and feeding pattern over the next two years that they will be able to dispense with most of the feed they now have to purchase from the dollar or hard currency area.

The winter Olympics

The average Dane or Norwegian, while wide awake to the danger of war, seems to do less worrying about the Russian menace than most Europeans or, for that matter, most Americans. His chief preoccupations revolve around the happy moment when, after the day’s or week’s work is done, he collects his skis or his fishing tackle, or puts on his hiking boots, or climbs onto his bicycle, or gets into his boat—and heads for the great outdoors.

In winter, most of the able-bodied inhabitants of Oslo, after leaving their offices at four and eating a quick dinner, pile into a railway which starts from the city’s main square and which they proudly refer to as “the subway,” and in twenty minutes (four of them spent underground) they are at the starting point of the Holmenkollen ski-run, 1600 feet above sea level, whence a superb, electrically lit course brings them back, on skis, right into town.

The Holmenkollen course, with its awesome ski-jump, will be the seat of the winter Olympics next February. It will be the first time in history that the winter Olympics will have been held within the precincts of a city.