The tableau of want has become common enough in vast swaths of the postrecession West: An unwashed teenager lies on the steps of a church, sleeping. A woman nearby beseeches passersby for a few coins. Across the street, a clutch of homeless men are yelling at one another, looking combustible enough that well-to-do families quicken their pace as they walk by.

It just wasn’t supposed to happen here in Denmark, the world’s favorite socialist utopia.

Long a beacon for lefties around the globe, Denmark is losing its egalitarian luster. Poverty rates have doubled over the past decade, and inequality is on the rise: Since 2013, the wealthiest Danes have become 30 percent richer, and the poorest, 10 percent poorer, according to the OECD. Perhaps more remarkable? The Danish people, whose country tends to score top rankings on quality of life, are copacetic about it. In fact, with GDP growth stagnant or worse in recent years, there’s a growing acceptance among Danes of inequality as a necessary evil, says Kristian Weise, whose think tank, Cevea, recently published an exhaustive study on national inequality. The growing gap between rich and poor is not a fluke, he says, but “a matter of policy-making.”

A hundred meters down the street from the homeless shelter sits a trendy cafe where tourists sip overpriced cappuccinos.

Denmark’s cutting of social spending could lead other countries to follow suit; its preternatural ability to combine prosperity with a strong welfare state had made it an exemplar. But it’s not the only Scandinavian country losing its egalitarian grip.

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Left-wingers call for more aggressive taxes on wealth, including real estate and inheritance. But the current government prefers cutting benefits. “Equality is important, but entitlements should not take away the private initiative and strain the public budgets,” says a spokesperson for the Conservative party. So far the focus on growth over parity seems to be paying off. The right wing recently won the elections on the promise of tax cuts, and, according to the Danish statistics office, while inequality was growing, Denmark’s economy has been recording the longest streak of growth in 10 years.

Read the article “The End of Scandinavia’s Socialist Dream?” on ozy.com.