I’m not sure how relevant this is to the debate between Ha-Joon Chang and Jagdish Baghwati over the importance of manufacturing, but Chang’s point about Dutch agriculture is fascinating:

Take the case of the Netherlands. Unbeknown to most people, it is world’s third largest agricultural exporter, despite having little land (it has the world’s fifth highest population density). This has been possible because the Dutch have “industrialised” agriculture by, for example, deploying hydroponic agriculture (growing plants in water) that uses computer-controlled feeding of high-quality chemicals—something that would not have been possible if the Netherlands did not have some of the world’s most advanced chemical and electronics industries.

If the land area of the lower 48 United States were as densely populated as the Netherlands, the USA would need to contain about 3.1 billion people. And it seems that would conceivably leave enough land left not only to feed the country, but to actually export agricultural products. This is not a feasible policy proposal, obviously, but it underscores the extent to which rich, well-governed countries have the capacity to allow more people to come live in rich, well-governed countries.

I continue to be fascinated by the way in which the rhetoric of “freedom” is always so closely associated with authoritarian populist nationalist movements. Absolutely nothing in the imagery of the video or the policy agenda of the Republican Party is suggestive of freedom. It’s full of flags and grim-faced folks and bourgeois respectability and military jets flying in tight formation. It’s an ad from a conservative politician that’s about exactly what an ad from a conservative politician ought to be about—about preserving a way of life against Muslims, freeloaders, sexual deviants, and other threats.

Contrast Pawlenty’s video with an advertisement that’s actually about freedom:

You could totally imagine Job Cohen using that music and those images to talk about how the Netherlands is the most successful country on earth because it’s also the freest and actually meaning that Dutch people enjoy an unusually high level of personal freedom. And wouldn’t he be right?

Relatively few Americans are aware that recent years have seen a large backlash in the Netherlands against the quasi-legalization of marijuana that their country is famous for. In particular, the “legalization in one country” paradigm has helped generate a lot of drug tourism that Dutch people don’t seem to like very much. But Keith Humphreys reports that the drug tourism issue may not doom the coffee shops after all:

An EU judge has upheld the legality of Maastricht’s proposal to restrict “coffee shop” sales to Dutch citizens. This decision probably saves the coffee shops as a social experiment in the long term despite the fact that the loss of tourist business will make some of them fold. Maastricht and a number of other cities were planning to close their shops rather than continue to experience the problems that come with drug tourism.

Good news for Dutch people. Of course this won’t fly in the USA. If Michigan wants to create legal smoke shops, they’d need to put up with a stream of people from other states coming in to get high. Of course you might see that as a feature—something to draw business in from out-of-town the way Vegas did with gambling back in the day.

One interesting development over the past ten years has been the tendency of European far-right parties to migrate away from their historic commitment to anti-semitism and toward an embrace of revisionist Zionism, with Islam-bashing serving as the conduit. Take this report on Dutch far-right leader Geert Wilders’ meeting with Avigdor Lieberman:

The two politicians discussed international and party-political issues in a ‘friendly atmosphere’. Mr Wilders en Mr Lieberman, who have known each other for a long time, met at the foreign ministry. The Freedom Party leader offered his condolences for the victims of the forest fires near Mt Carmel in northern Israel. More than 40 people have been killed in the fires so far.

Mr Wilders will remain in Israel for the time being, and give a speech in Tel Aviv on Sunday. In it, he will further clarify his position that Jordan “is the only Palestinian state that ever will be”. Mr Wilders was invited to give a speech on the subject by Israeli MP Arieh Eldad, a member of the ultra-nationalist party National Union.

Birds of a feather, etc.

But I just today read Jessica Olien’s explanation that this basically amounts to very few women working full-time rather than to Dutch full-time workers taking it easy: “less than 10 percent of women here are employed full-time … [l]ess than 4 percent of women wish they had more working hours or increased responsibility in the workplace, and most refuse extended hours even when the opportunity for advancement arises.”

According to Nicole Bosch, Bas van der Klaauw, and Jan van Ours this is tied up with a number of familiar gender inequities. Women who increase their hours in the paid labor force don’t find that their share of household work responsibilities falls. Consequently, lack of full-time work is closely associated with childbirth. But while these factors are obviously important drivers of women’s labor force participation (or lack thereof), they’re also hardly unique to the Netherlands. Instead, Dutch women seem to have somewhat different subjective perceptions of their household financial needs:

Furthermore, it seems that financial need for long working hours is less severe for Dutch women than for women in other countries. In the Netherlands, less than 40% of women indicate that they do not work less because of financial constraints. In other European countries, where many more women work full-time, over 50% of women say they do not work less due to financial constraints. It should be noted that due to part-time work, about 25% of working Dutch women earn less than what would be considered the minimum income for being financially independent.

This makes me curious about Dutch family structure. Do they have a much lower proportion of single women? It’s worth noting that the Netherlands is among the richest countries in the world, with a GDP per capita a bit above America’s in exchange rate terms and a bit below in PPP terms. They also have a more equitable distribution of income and higher-quality public services, so the median Dutch household is in fact more financially secure than the median household in pretty much any country. So to return to Olien’s article, I think it would be a mistake to say that Dutch women are happy because so few of them are involved in full-time work. I would say instead that most Dutch women are happy because Dutch people enjoy an extremely high material standard of living (you should really see what passes for a slum in the Netherlands, it’s absurd) and that this reflects itself in part via women’s disinclination to toil for long hours in jobs they don’t find rewarding.

I got the sense talking to people on both sides of the Green Line that grassroots activists in Israel and Palestine haven’t totally caught up with the evolution of Israel politics in the United States. It’s still the case that if you gaze over at Capitol Hill your typical strongly pro-Israel politician is a Jewish liberal such as Henry Waxman or Anthony Weiner who may feel some dissonance between their general political views and heavily militarized Israeli nationalism. But stories like this one from Rachel Slajda reflect the shape of things to come:

A legal attempt to stop the construction of a mosque in middle Tennessee is getting expensive. The preliminary hearing has dragged on, with several days of testimony stretching over more than a month. The county has added $50,000 to its litigation budget to cover expected defense costs and is warning that that number could go up.

So who’s funding the plaintiffs — three local residents who don’t have access to taxpayer money?

Their lawsuit is being supported, in part, by a Christian Zionist group called Proclaiming Justice to the Nations. PJTN hired, and is paying, one of the two lawyers for the plaintiffs.

The point here is that PJTN’s views on Israel are just part of a larger worldview that casts Muslims and Islam as the enemy. You see a secular version of this in Dutch far-right leader Geert Wilders’ strong support of Israel. To Israel’s advantage, these are people who won’t even be nominally interested in whether or not Israel adheres to human rights norms or other dictates of humane conduct. To Israel’s disadvantage, however, these are people for whom the conflict with the Palestinians isn’t a problem to be solved. Instead, on this view the whole point of Israel is to wage war against Muslims and peace would render the state superfluous.

And now it seems that the new right-wing coalition government taking office is certain to crack down even further:

Certainly the outlook for coffee shops is bleak. Among the few policies that the three parties in the new coalition government agree on is the need to reduce their numbers. The governing agreement released last week laid out plans that will force them to become members-only clubs and shut down those shops located near schools.

The coalition is also advancing the idea of prohibiting the sale of cannabis to non-Dutch residents, which amounts to a death knell for many coffee shops.

There are various ins and outs to this, but as I understand it there are two main problems with the status quo. One is that under the old tolerance regime there’s still no way for a coffee shop to legally obtain the supply of marijuana you need to operate on the scale of a business. Consequently, de facto legalization hasn’t actually eliminated the black market and associated criminality. Secondarily, the main market for the coffee shops turns out to be drug tourists from abroad. That reduces the Dutch political constituency for keeping them open. And the two factors interact together to create a situation where there’s a strong case to be made that legal coffee shops (by bringing drug tourists from the UK and the US into shops that need to tap an illegal wholesale market to gain their supplies) increase the scale of organized crime in the Netherlands.

I think that if you’re looking for stable alternatives to prohibition you either need to more to a more robust form legalization than the Dutch had—complete with totally legitimate marijuana farmers—or else adopt the Mark Kleiman “grow your own” proposal in which growing pot, smoking pot, possessing pot, etc are all legal but commerce in marijuana would be illegal.

The debate over the Affordable Care Act was largely a debate about improving America’s morally bankrupt and economically inefficient health insurance system. But there’s more to health care than insurance payment mechanisms. A recent Commonwealth Fund report compared health systems and concluded that the Netherlands has the best performing one, which certainly makes the fact that ACA establishes a Dutch-style insurance system for non-seniors look good. But as I observed in my original post on the matter, the quality of Dutch health care likely derives from how its providers work rather than from the structure of its insurance payments.

Eric Voeten backs this up with some anecdata:

Last summer, I had to bring my daughter to a Dutch doctor. Not only did I succeed in seeing someone that same morning but the cost were less than my regular co-payment in the USA, even though I have no insurance in the Netherlands and had never seen that doctor before.

The key is that the Dutch have an extensive system of family doctors, who generally operate a practice from their homes with minimal administrative assistance. These family doctors provide basic health care, do house visits, and are the gatekeepers for (more expensive) specialized care. This keeps a lot of people out of hospitals who do not need to go to hospitals. Of course, reforming insurance is relatively easy in comparison with making the type of structural reforms that would create a similar system in the US. Yet, these may well be the types of reforms that have a broader impact on quality of life.

And there’s the rub. It’s much more feasible to provide affordable insurance to everyone if the per unit costs of medical services are lower. In America, they’re very high. In part that’s because the American consumer disproportionately subsidized medical innovation from which the whole world benefits. And in part it’s because our system is simply inefficient.

Personally, I’m an admirer of the ultra-cheap UK system that I think appropriately de-prioritizes health care services relative to other public services and achieves decent quality and enormous efficiency while doing so. But everything about that system cuts against the American grain. The Australian system, at least as I understand it, is structurally much more similar to what we do in America and probably more in line with our cultural norms and manages to do a much better job than our system. The high-performing Dutch system is broadly similar to the Affordable Care Act in its structure, but it adds a government-run social insurance component for catastrophic costs.

The Netherlands overhauled its insurance system very recently, however, and I have to believe the quality of its providers has longer-standing roots than the 2006 reforms.

Something I used to hear when I was a kid is that there’s no need to create a Palestinian state because if Jordan was turned into a democracy, then in effect that would be a Palestinian state and then Palestinians living in the West Bank and Gaza could go move there. Voluntarily, I guess. Or else maybe they could be “encouraged” to go. That’s not really a position one wants to advance in the context of international diplomacy, but with anti-Muslim sentiment on the rise in Europe, far-right Israeli political positions are suddenly finding a respectful hearing. For example, Geert Wilders, leading of the Netherlands’ Party for Freedom, sees a “Greater Israel” agenda as part of an epochal conflict between the West and Islam:

“Jordan is Palestine,” said Wilders, who heads the third-largest party in Holland. “Changing its name to Palestine will end the conflict in the Middle East and provide the Palestinians with an alternate homeland.”

Wilders added that Israel deserved a special status in the Dutch government because it was fighting for Jerusalem in its name.

“If Jerusalem falls into the hands of the Muslims, Athens and Rome will be next. Thus, Jerusalem is the main front protecting the West. It is not a conflict over territory but rather an ideological battle, between the mentality of the liberated West and the ideology of Islamic barbarism,” he said.

“There has been an independent Palestinian state since 1946, and it is the kingdom of Jordan.” Wilders also called on the Dutch government to refer to Jordan as Palestine and move its embassy to Jerusalem.

In light of the recent election results, there’s actually a fairly plausible scenario in which Wilders could become the main junior partner in a right-wing coalition with the Liberals and the Christian Democrats. That could lead to him becoming Foreign Minister and finally Avigdor Lieberman would have a buddy. For now, though, the Christian Democrats seem to have nixed that idea and the Liberals are exploring the idea of forming a coalition with three left-of-center parties, the largest of which is actually led by a secular Jewish guy named “Job Cohen.”

And the relatively strong labor market has meant that the budgetary situation in the Netherlands hasn’t deteriorated to nearly the extent that you see in most developed countries. In part that reflects good Dutch fundamentals, but it’s also a lesson about the importance of forceful countercyclical policy. Your budget stays in much better shape if you do what it takes to keep people employed than if you go down a cycle of recession and slow growth.

There’s a sort of odd ratchet effect in the Anglophone media’s coverage of anti-immigrant politics in the Netherlands. When Pim Fortuyn’s political movement broke through in 2002 that was widely reported, but when it collapsed in 2003 nobody cared. Similarly, when Geert Wilders’ new anti-immigrant party surged to first place in the public opinion polls, that got reported. When it sank back to third or fourth place, nobody reported that. And now that the election’s been held and Wilders finished third you get headlines like “Surge for Dutch anti-Islam Freedom Party”.

But the bigger story is probably about the political party that actually took first place in the election, the VVD, a center-right liberal party (the Dutch also have a left-liberal party called D66). VVD has often participated in coalition governments, but the Netherlands hasn’t had a liberal prime minister since World War One and now they almost certainly will.

What comes next is the negotiations over forming a coalition for which I’ll defer to Erik Voeten:

To say that coalition formation is going to be rough would be an understatement. Most within the VVD either want a coalition with the CDA and PvdA or with CDA and PVV. A coalition with the PVV would be a minimal one, making it dependent on whatever motley crew of individuals Wilders has managed to put together (always a problem with parties that suddenly become very large). This will make the CDA pause as they just lost half their seats. They may well think that it is not so great to be a junior partner in a coalition government: Better to sit this one out and bounce back (which is what they did the only other time they lost this bad in 1994). The PvdA has rejected any possibility to govern with the PVV and prefers a “purple coalition” with the VVD, D’66 (a centrist liberal party with 10 seats), and the Greens (left, 10 seats). This is hardly ideal for the VVD. They would be outnumbered by parties of the economic left when they campaigned so hard on economic reforms from the right. The ball is in the VVD’s court. Given that the PVV won so substantially, it would be difficult for the VVD not to at least have talks with them. Of course this puts the CDA in an odd power broker situation given how badly they were beaten up. For what it’s worth, the election markets now put the chance of a purple coalition at 60% and have the CDA/VVD/PVV coalition at 10%.

I wonder if the rules allow for the possibility of a Danish-style center-right VVD/CDA minority government that would depend on occupying the central position in parliament and the impossibility of effective collaboration between PVV and the left-wing parties in order to stay in office. You’d try to get PVV votes for your economic reforms, and then just not give them cabinet seats or policy concessions on their nuttier agenda items like banning the Koran or taxing headscarves.

When a Dutch political party says it wants lower deficits, it actually outlines an electoral programme with details about how it plans to cut spending and/or raise taxes. For example, the most economically laissez-faire Dutch party, the VVD or “Liberals”, wants to slash 34 billion euros out of the budget by 2015, and it lays out how it will do this: limiting unemployment insurance to 12 months, raising the retirement age to 67, freezing educational spending on special-needs children, and all kinds of unpopular stuff. The Labour Party wants to cut the budget by 15 billion euros, including raising the retirement age to 66 and cutting defence spending by 1.6 billion, and raise business and environmental taxes while cutting taxes in a progressive fashion on individuals, ultimately coming out with 500m euros more in revenues. The Christian Democrats want to cut spending by 21.4 billion euros and cut taxes by 2 billion euros. Most importantly, all these details I’m providing come from the Dutch Central Planning Bureau, which evaluates all the parties’ electoral programmes and assesses how much they would save compared to baseline assumptions. It would be like American parties and candidates submitting their full programmes to the CBO for an assessment before the elections, so you could decide who to vote for.

There’s a lot to admire about this. That said, it really wouldn’t make sense for American politicians to act in this way. Indeed, if anything we spend too much time debating policy specifics of this nature during our presidential campaigns. I wrote blog posts comparing the details of the Obama, Clinton, and Edwards “plans” on health care and climate change and it turns out this was all totally irrelevant. Presidents can’t compel congress to act, and generally don’t do the detail-work of policy-design. It would make much more sense for candidates to talk less about this sort of thing and instead address what presidents actually do—help set the legislative agenda, fill federal appointments, use discretionary regulatory authority, conduct foreign and national security policy, etc.

In a parliamentary system with strong party discipline, you can try to hold people to their policy commitments. In the US sense, any president or member of congress or senator, who adhered rigidly to the details of his or her policy platform would necessarily be totally ineffective.

If anything my real question is why do Dutch parties bother to do this given that the Netherlands’ political system makes coalition governments inevitable? If I were a Dutch voter, the questions I would want party leaders to answer would be about potential coalition partners, not the details of policy platforms. Maybe there’s a sense that having a detailed agenda written out in advance makes it easier to formulate a coalition agenda post-election because you can pick and choose between specific agenda items that have already been written down and evaluated.

(my photo, available under cc license)

I don’t often agree with Bryan Caplan, but this post on the Greek economy raises what I think is an underdiscussed issue that makes international comparisons difficult—when calculating a country’s GDP, the public sector counts inputs as outputs. There are sound accounting reasons for doing it this way, but it makes it difficult to do international comparisons of living standards when we talk about developed countries with relatively large public sectors.

To see the problem, consider that in a commonsense view a clean, quiet, pleasant, timely tram is more valuable than a dirty, loud oft-late, tram. But if the good tram is just better because that country’s transportation departments are better-run, then the higher tram quality doesn’t “show up” in the per capita GDP. Insofar as high-quality public services have beneficial spillover consequences for the rest of the economy, that does show up. But insofar as good services just make people’s lives better—think of Medicare treating someone in a timely and effective manner rather than let them linger ill for three months before they recover—that’s off the radar. Public spending as a percent of GDP is similar in Greece and the Netherlands but I’d wager a fair amount that the Dutch civil service is delivering more value-per-euro.

Last night, the Netherlands became one of the first European nations to commit to an extension of the Kyoto Protocol, the central issue for developing nations, especially the most vulnerable to climate change. Linda Ijmker of Friends of the Earth Netherlands explains how Holland is taking the lead in an exclusive interview with the Wonk Room. Her message to the people of the United States was simple: “don’t be scared” and “step it up”:

My message to the American people is: Act now, take leadership, commit to forty percent reductions. You can achieve it. It’s good for the economy, it creates green jobs, it creates a lot of opportunity. Don’t be scared. So, step it up.

Watch it:

The Netherlands also pledged to new short-term financing for countries already hit by the impacts of climate change, “over and above” its existing commitments to official development assistance (ODA) of 0.8% of its total gross national product.

Top historical polluter United States, which has no intention of ever joining the Kyoto Protocol, has put $1.2 billion in short-term financing in its 2010 budget, but is avoiding making formal international commitments. Sen. John Kerry (D-MA) has called for the administration to commit to $3 billion in international climate finance in the fiscal year 2011 budget, and has released a draft bill for international climate funding.

If you want to see good writing on how the Dutch health care system works and its potential applicability to the United States, you don’t need to read this blog. Check out Jon Chait. Or Ezra Klein. Or this from Ab Klink. Or this from Health Affairs.

I do, however, want to emphasize one point about this that I think sometimes gets lost in the shuffle. You tend to hear a lot of discussion of how the Dutch regulate, mandate, and subsidize health insurance policies for individuals. Among other things, that has the most direct relevance to what we’re talking about in the US. But health insurance plays only a limited—albeit extremely important—role in the Netherlands. They also have their Algemene Wet Bijzondere Ziektekosten, or “law on exceptional health care costs” which covers long-term care for the elderly, palliative care for the dying, and treatment of the permanently disabled. This operates as a straight-up social insurance system financed by taxes.

The other thing is that the current version of the Dutch system has only been in place since 2006. That’s actually not much time to evaluate how well something really works.

Bicycles in Amsterdam, The Netherlands (my photo, available under creative commons license)

Via Tyler Cowen, Marginal Revolution commenter Adam comments:

At birth, someone living in the Netherlands can expect to live 2.35 years longer than someone born in the US, but at age 65, the difference is reversed, and someone living in the US can expect to live 0.4 years longer than someone living in the Netherlands. This difference can be explained by assuming that semi-socialized health care is better for young and worse for old people, or, at least as likely, different policies are not the main cause of the difference.

Sources: CDC national vital statistics 2004, www.cdc.gov/nchs/data/nvsr/nvsr56/nvsr56_09.pdf and RIVM 2007 levensverwachting, www.rivm.nl/vtv/object_document/o2309n18838.html (in Dutch).

The hypothesis that the health policy is not driving the difference is something we should seriously entertain. But insofar as we want to examine the health care issue, both sides of this factoid support socialism. Dutch people of all ages enjoy a quasi-socialized system of health insurance provision (by European standards, there’s a lot of private sector involvement in Dutch health care). Americans under the age of 65 participate in an overwhelmingly private sector health insurance market. But Americans over the age of 65 participate in a Canadian-style national health insurance scheme known as Medicare. The data, if we want to take it seriously, indicates that the Dutch system is better than private sector medicine but worse than Medicare and tends to support a “Medicare for all” approach.

My guess is that in the real world the higher Dutch life expectancy is primarily driven by things like Americans’ much-greater tendency to get involved in car wrecks rather than anything related to health care. But the point about poor U.S. life expectancy is simply that if we’re going to be paying dramatically more than Europeans for health care services it seems that we ought to be getting demonstrably better results. We’re not. But uninsured Americans are getting demonstrably worse results.

Number 2 tram in Amsterdam (my photo)

Mitch McConnell was on the floor of the Senate the other day droning on about the nightmare of rationing and Soviet-style bread lines that are sure to result from the government guaranteeing affordable health care for everyone. Meanwhile, Jonathan Cohn actually traveled to foreign countries—specifically France and the Netherlands—to check out their health care systems. He reports that things are pretty awesome:

But in the course of a few dozen lengthy interviews, not once did I encounter an interview subject who wanted to trade places with an American. And it was easy enough to see why. People in these countries were getting precisely what most Americans say they want: Timely, quality care. Physicians felt free to practice medicine the way they wanted; companies got to concentrate on their lines of business, rather than develop expertise in managing health benefits. But, in contrast with the US, everybody had insurance. The papers weren’t filled with stories of people going bankrupt or skipping medical care because they couldn’t afford to pay their bills. And they did all this while paying substantially less, overall, than we do.

It’s also really important to just make a simple conceptual point. Right now health care is rationed by your ability to pay. And under any even remotely plausible vision of health care reform for the United States it would continue to be the case that people with the means and desire would be able to pay doctors to do pretty much whatever. Insofar as any “rationing” would take place at all it would be in terms of what the government is prepared to pay for.

He found that raising the drinking age did lead to lower alcohol consumption; the effect was modest but real. But then DiNardo hit on another analysis—comparing cannabis use in states that raised the drinking age early with those that did it later. And he found that indeed, there seemed to be a substitution effect. On average, among high school seniors, a 4.5 percent decrease in drinking produced a 2.4 percent increase in getting high.

I have smoked pot but frankly it’s just not something I enjoy very much. And anecdotally it’s definitely the case that my marijuana consumption plummeted as it got easier for me to buy alcohol. Conversely, my selfish reason for liking marijuana prohibition is that it reduces the extent to which friends want to engage in pot smoking—which I find unpleasant—as a social activity.

The Bulldog coffee shop in Amsterdam (my photo)

That said, back to the real world of public policy I think the only serious debate is over exactly how you want to manage decriminalization. If you really legalize pot and sell it in stores and such, then you can tax it. But the development of large-scale commercial enterprises dedicated to marijuana advertising would have deleterious effects. So maybe it’s better to do something Dutch-style where you’re not wasting law enforcement resources on curtailing the marijuana trade, but the technical illegality keeps things restrained.