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Sunday, May 03, 2009

A "Quite Sophisticated Mixing of Public and Private"

A convert to the European social insurance system:

Going Dutch, by Russel Shorto, NY Times Magazine: ... For 18 months now I’ve been playing the part of the American in Holland, alternately settling into or bristling against the European way of life. ... For the first few months I was haunted by a number: 52... For it represents the rate at which the income I earn ... is to be taxed. To be plain: more than half of my modest haul ... was to be swallowed by the Dutch welfare state. ... I am politically left of center in most ways, but from the time 52 entered my brain, I felt a chorus of voices rise up within my soul, none of which I knew I had internalized, each a ghostly simulacrum of a right-wing, supply-side icon: Ronald Reagan, Jack Kemp...

And yet as the months rolled along, I found the defiant anger softening... I have found myself not only giving the Dutch system a personal test drive but also wondering whether some form of it could be adopted by my country. ...

I spent my initial months in Amsterdam under the impression that I was living in a quasi-socialistic system, built upon ideas that originated in the brains of Marx and Engels. This was one of the puzzling features of the Netherlands. It is and has long been a highly capitalistic country ... and yet it has what I had been led to believe was a vast, socialistic welfare state. How can these polar-opposite value systems coexist? ...

The Dam is ... a reminder ... of its ceaseless battle with water. And that battle turns out to be the key to understanding the Netherlands’ blend of free market and social welfare. The Low Countries never developed a fully feudal system of aristocratic landowners and serfs. Rather, sailors, merchants and farmers bought shares in trading ships and in cooperatives to protect the land from the sea, a development that led to the creation of one of the world’s first stock markets and helped fuel the Dutch golden age. Today the country remains among the most free-market-oriented in Europe.

At the same time, water also played a part in the development of the welfare system. ... Everyone had to deal with water. ... But in most cases your land lies in the middle of the country, so where are you going to pump it? To someone else’s land. And then they have to do the same thing, and their neighbor does, too. So what you see in the records are these extraordinarily complicated deals. All of this had to be done together.” ...

There is another historical base to the Dutch social-welfare system, which curiously has been overlooked by American conservatives... It is rooted in religion. “These were deeply religious people, who had a real commitment to looking after the poor,” Mak said... “They built orphanages and hospitals. The churches had a system of relief, which eventually was taken over by the state. So Americans should get over ‘socialism.’ This system developed not after Karl Marx, but after Martin Luther and Francis of Assisi.” ...

The Dutch are free-marketers, but they also have a keen sense of fairness. As Hoogervorst noted, “The average Dutch person finds it completely unacceptable that people with more money would get better health care.” ...

Decent housing is another area where the Dutch are in broad agreement. ... Social housing differs from much of the public housing in the United States in that the government does not own or manage the properties. Rather, each is owned by an independent real estate cooperative. The system is not-for-profit, but it pays for itself. ...

This points up something that seems to be overlooked when Americans dismiss European-style social-welfare systems: they are not necessarily state-run or state-financed. Rather, these societies have chosen to combine the various entities that play a role in social well-being — individuals, corporations, government, nongovernmental entities like unions and churches — in different ways, in an effort to balance individual freedom and overall social security.

So here is a little epiphany I had... Maybe we Americans have set up a false dichotomy...: the old left-wing idea of vast and direct government control of social welfare, and the right-wing determination to dismantle any advances toward it, privatize the system and leave people to their own devices. In Europe, meanwhile, the postwar cradle-to-grave idea of a welfare state gave way in the past few decades to some quite sophisticated mixing of public and private. ...

So where does this get us? ...[W]hile I certainly wouldn’t wish the whole Dutch system on the United States, I think it’s worth pondering how the best bits might fit. ... [full article]

    Posted by on Sunday, May 3, 2009 at 02:19 AM in Economics, Social Insurance | Permalink  TrackBack (0)  Comments (68)

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