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In 1939, a diplomat observer at the British legation in Copenhagen wrote in a report on the Danes: A few decades of material prosperity and the ministrations of an over-paternal Government seem to have sapped the spirit of a Viking race which can point to 1500 years of vigorous and independent history. The statement contains the officials understanding of Denmarks history and the Danes transformation from hardy, free-born Vikings to a soft and docile breed. He also indicated why things had gone wrong: material wealth and an over-protective Government. There is no reason to regard the statement as anything other than a worried diplomats hasty assessment, but he put his finger on two characteristic features of the Danish society in the first half of the 20th century, i.e. increasing affluence and the growth of the welfare state.

The Danes, a homogeneous Gothic-Germanic people, have inhabited Denmark since prehistoric times. Danish is the principal language. English is a required school subject, and fluency is high. A small German-speaking minority lives in southern Jutland; a mostly Inuit population inhabits Greenland; and the Faroe Islands have a Nordic population with its own language. Education is compulsory from ages seven to 16 and is free through the university level.

Although religious freedom is guaranteed, the state-supported Evangelical Lutheran Church has a membership of 83% of the population. Several other Christian denominations, as well as other major religions, find adherents in Denmark. Islam is now the second-largest religion in Denmark, with the number of Muslims in Denmark estimated at slightly more than 4% of the population.

Denmark is not a typical European country in ideational terms. Denmark was for a considerable period of time marked by a peasant ideological hegemony, pointing to strong bottom-up features in the construction of Denmark as a political project. Such a state of affairs established itself through a series of foreign policy catastrophes during the Napoleonic wars, and against an increasingly unified Germany. Having taken hold and later largely shared by the labor movement, with a relatively weak bourgeoisie and late industrialization, this hegemony quite forcefully brought about a rather homogeneous and 'folkish' political culture in the Danish state. The rather strong feelings of togetherness shared by the population at large have been culturally permeated by libertarian as well as solidarian attitudes.

Maps of the world can be drawn in several ways. Generally, area measurement is used and, represented in this way, the kingdom of Denmark - excluding the Faroe Islands and Greenland - with its 43,098 square kilometres is smaller than many of the individual states of the United States. However, if measured by the share of the annual product spent on development assistance, Denmark is placed very high internationally. The same applies if the yardstick is the number of Danish police and military forces sent out on peacemaking and peacekeeping missions or the results in a sport such as men's and women's handball. Considered from these - albeit unusual - angles, the miniature state momentarily assumes superpower status.

Denmark is often called the Welfare State Denmark. Another expression often used is the Danish Model. What do they mean? In a way, it all started in the world of poetry. The clergyman, author and politician N.F.S. Grundtvig (1783-1872) wrote in a song about Denmark that a country has progressed far when "few have too much and fewer too little". This is precisely the formula for the Danish welfare state. With the taxes as a tool, an equalisation of income is achieved so that everyone has the necessary material framework for living a reasonable life.

As a result, Denmark has less economic inequality than any other OECD country. Moreover, there is a fair amount to share, for Denmark has found a fine baance between, on the one hand, private capitalism, which allows people with ideas and ambition to flourish freely and, on the other, a social safety net, which catches those who cannot keep up in the race of free enterprise.

The model means that a third of the taxes is paid back to the citizens as transfer income and that the public sector is so large that it accounts for 35.4% (2007) of all employees, 68.9% of whom are women. Nonetheless, there is no spirit of revolt against the tax burden in Denmark, although it was 48.9% in 2007 and thus one of the highest in the world. The people notice that they are getting something for their money - in addition to the transfer income, also virtually free education and free medical and hospital services. Moreover, the ideological debate about whether the public sector should become smaller or larger in relation to the private sector has almost disappeared.

Nonetheless, the political parties fear that the tax burden may tempt the best people to seek jobs abroad. A lower tax pressure is also expected to produce more labour at a time with shortage of manpower. As a result, a comprehensive tax reform was initiated in 2009.

Danish workers are among the most highly organised in the world - 75% belong to a union. As the employers are equally highly organised, the labour market enters into agreements without state involvement. It also disciplines itself through a specially developed labour law system. This ensures robust agreements, which moreover cover several years, and few working days are lost due to conflicts. A unique and crucial point is that Danish employers can dismiss employees at very short notice. This allows the companies to adjust to changing market trends without suffering losses. Moreover, entrepreneurs are encouraged to try their luck, as they can easily get rid of employees if the project fails. If an idea is to be tested, Denmark is therefore the ideal place to do so.

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