Welfare development in the Netherlands: the primacy of politics
Chris Nottingham, Glasgow Caledonian Univeristy
The Dutch welfare system enjoyed its moment of international attention in the 1960s and 1970s when, with the sole exception of Sweden, it was the most generous both in terms of benefits and the conditions under which individuals could claim. It would be easy to assume that this rested on a steady upward development. However, nothing could be further from the truth for before the 1960s it had proved impossible to implement any comprehensive state system. Throughout the 19th century the dominant moral economy of poverty was similar to that elsewhere with politicians reluctant to compromise on the equation of work and worthiness. The destitute went to their church and the Jews to the synagogue. There was a rudimentary poor law and after 1912 municipalities were allowed to relieve actual starvation. In periods of high unemployment the state reluctantly subsidised voluntary schemes but on a strictly ad hoc basis. There was a widespread, ongoing recognition of the inadequacy of market and charitable provision but it took more than half a century for this to find legislative expression. The dominant confessional parties, orthodox Protestant and Catholic, insisted that it was only on the basis of paid employment that individuals could be provided for. The sole exception was an old age pension which was state funded. Even the post-Second World War period which saw welfare creativity in many states saw no major advance in the Netherlands.
The problem then with Dutch welfare is not only to explain the years of plenty but this long delay. Functional explanations don't work. There was never a lack of social needs or authoritative voices testifying to fact; what was missing was a capacity to act. What then prevented the Dutch following their European neighbours? One factor was a relatively late industrialisation which began tentatively in 1870, accelerating after 1890, which meant labour unions only achieved political significance in the early 20th century. But then labour joined an already complex political configuration in which several parties were strong enough to block the proposals of others but incapable of pushing through their own. Dutch political divisions were complex, rooted in social and religious divisions and relatively static. This system was described as verzuiling which translates as pillarisation. This was rooted in an agreement that divisions between different strata; Catholic, Protestant, liberal and finally labour; were so profound that individuals should live substantially within their own communities. Health, education and poor relief were provided on this basis. Similarly it was accepted that the pillar leaders would speak on behalf of pillar members. Political parties did not compete across pillar boundaries. None of the pillar-based parties was strong enough to operate in government without the co-operation of at least one other. The Dutch state was thus remarkably stable, but at the price of inertia on contentious issues. The law of political survival was to never challenge the relationship between stream leaders and their followers. In many polities a popular appeal to 'national interest' could be used to isolate an obstructive party but this device was not available in the Netherlands.
The 1963 General Public Assistance Act was therefore entirely out of character. It declared every citizen 'who was or was likely to fall into such circumstances, that he did not have the means to cover the basic cost of living' was entitled to 'support' from the state. (1) Again in 1963 the minister of social affairs stated that social insurance should be seen as the 'right of very human being to self improvement'. (2) The 1966 Disability Security Act went further: inability to work was defined as inability to perform the same or similar duties as before the occurrence of the disability. An employee partially unable to work did not have to undertake work that was 'less'. An employee completely unable to work would receive full wage substitution. The traditional distinction between poor relief and insurance quickly faded away. The deep issues of principle disappeared. The zenith was reached with the 1975 Public Disability Act under which every adult citizen unable to work through illness or disability was entitled to a minimum allowance, but at this point the pressures on the system became unsustainable and restraint was introduced.
Why then had a previously frugal system suddenly abandoned all safeguards? One explanation might lie in the boost to public finances represented by the discovery of huge reserves of gas in the North Sea. However, a more convincing explanation is provided by the weakening of the pillarisation which had been the brake on change before. In the aftermath of war, political leaders had stuck with the system that gave them a virtual monopoly in broadcasting to support their domination of the daily press. Hospitals and schools remained largely denominational. Change was not forced by political leaders but by changes in private life prompted by a wish to escape the constraints of life within faith communities. Politicians now had to seek issues on which to appeal across the old boundaries. This profoundly affected the two major parties in most direct electoral competition with one another, the Labour and the Catholic People's parties. Although the Labour party is often regarded as the architect of the welfare state, it was the Catholic politicians who were most active in welfare expansion. The breakdown of the Labour Catholic coalition in 1958 facilitated the new competition in generosity. The rise in expenditure was striking. Social security had accounted for 10 per cent of national income between 1948 and 1958 but reached 20 per cent in the second half of the 1960s and 24 per cent by 1974. (3)
Then came the crisis in the western economies. In the 1970s the Netherlands saw a massive decline in agricultural employment, a halving of family owned retail business and the virtual disappearance of traditional industries such as shoemaking, textiles and shipbuilding. As a result the newly relaxed welfare state ended up supporting a fundamental reconstruction of the labour market. In 1970 for every 100 in employment there were 46 on state benefit; by 1990 the figure rose to 85. By the 1982 election all parties accepted the need to cut state benefits. Trade unions, fearful of rising unemployment, and employers struck the Accord of Wassenaar. It was accepted that wages would no longer rise with inflation and labour markets would be liberalised. Effects were dramatic. Between 1985 and 2000 employment rose at 1.6 per cent per annum. Benefits were cut and the long-term sick and disabled were encouraged to re-enter the labour market. Total hours worked did not rise dramatically but work was parcelled out more evenly - children were kept longer in school, older men were pushed out of the labour market while women entered en masse. In 1994 Prime Minister Kok was invited by Clinton to explain how the 'polder-model' had achieved economic reconstruction while preserving social relationships.
And then it all fell apart. After 2000 the economy stagnated, public services became noticeably more inefficient, waiting lists for hospitals and nursing homes lengthened, the education system deteriorated and most significantly the notion that the Netherlands had successfully assimilated its immigrant populations came under scrutiny. The discontent was reflected in the meteoric rise of Pim Fortuyn, a political outsider, who ignited a new uncomfortable debate about welfare, community and citizenship. Fortuyn challenged assumptions rooted in historic habits of restraint and interminable negotiation, of avoiding fundamental questions and inching towards compromise. Had he not been murdered in 2002 his party would have undoubtedly won the election of 2002. The debate on integration, exacerbated by the murder of Theo van Gogh by a Muslim extremist, pushed the debate about social security and indeed all other issues out of the limelight.
In conclusion, while there were always Dutch politicians and administrators interested in adopting foreign models of welfare, the nature of the political system restricted what they could achieve. It was the political system with its unique form of socio-cultural pillarisation that made all but the most pragmatic changes impossible and it was the waning of that system that triggered the open competition on welfare which set off the phenomenal growth in the 1960s and 1970s. While the Dutch system should not be dealt with in isolation it is its particularity which justifies the greatest claim on our attention.