Social Democracy vs. Social Liberty

There was an interesting article in the NY Times Sunday Magazine  relating the author's (Russell Shorto) experience living in the Netherlands.  Its focus wasn't on liberal drug policy, but rather how Going Dutch (or being immersed in a socialist democracy) impacted his inculcated American belief system.

His first reaction was incredulity at the tax rate.  51 percent of his salary taken by the government was unfair, wasteful, almost communist.  He gets by this emotional signpost by realizing that, when the full tax rate in the USA is calculated, federal + state + municipal, a similar number will arrive.

The difference is not in the numbers, really.  Both countries also have modern economies, firmly based (for good or bad) on Capitalism and Global Trade (though one country is much larger of course).

The main difference is in the political mindset of the two countries and their peoples.  Social Democracy vs. Social Liberty.

It is interesting how this evolved in the Netherlands.  This is a land reclaimed from the sea.  Everyone needs to pump out water to stay above the water line, to stay alive.  This is a quintessential collectivist venture.  All have to cooperate to make it work (efficiently or not, it is essential).  This spirit of collectivism has permeated the political ideology of the Dutch.  If something is worth doing, the state should be responsible.  That only makes sense to the Dutch.

In contrast, the American political ideology was borne out of a wild, frontier state.  This has fed its obsession with gun culture, as well as nurturing a constant tension between the freedom of the individual vs. the control of the government.  It has spawned philosophical movements like Ayn Rand's Objectivism and political movements such as Libertarianism.  These right-of-right ideologies hold that the proper role of government should be to provide Defense and Security.  

There is no doubt that this emphasis of individual freedom (built right into the U.S. Constitution) has helped promote a culture of entrepreneurship, innovation and productivity.  The myth of the American dream, that anyone can succeed with hard work and perseverance, has been repeated so often, it's hard to resist.  

When there is no social safety net, one has no choice but to work hard.  The fallacy of this mythology is stark and obvious, yet ignored all the same.

The reality that American society is divided between the have and the have-nots.  The rich are getting richer, the poor poorer, the divide is ever-widening - a direct consequence of an ideology applied despite its dire consequences.  

Let's list of few of these perturbed policies:

1.  Unregulate the economy, let the market rule efficiently.  

Let's review the results.  The economy heaves in waves, one bubble after another, the well-positioned take the profits, the obscene salaries, the more-obscene bonuses, then scurry away as the bubble (internet, housing, etc.) collapses.  See Enron, WorldCom, Lehman Brothers, AIG, GM, Chrysler, etc.  Notice how efficient and profitable corporations are when there are few rules.  Notice how their quick and effective decisions turn things around.  Notice how quickly they go begging for public money when those decisions go bad.

2.  Cut taxes for the rich - the famous Reaganomic trickle-down effect.

Of course, this helps creates the aforementioned bubbles, along with humongous government deficits.  Money trickles down for a while, until the crash, when it has to be regurgitated back up.  Meanwhile, the middle class and below are encouraged to rack up more debt, buy more stuff, to keep the economy humming along.

3.  Never, ever, touch that military spending.

The U.S. is the world's superpower, the benevolent policeman who brings democracy and security to the world.  At least, when its oil supply is not threatened.  Military spending is the major factor behind its incredible government deficits, which of course limit its ability to provide other services, like universal health care, to its citizens.  But the U.S. must retain its mighty military.  Certainly, one understands that the politicians want this - who wouldn't want to wield that kind of power.  But it is curious that a nation built on individual freedom is at the same time so fervently nationalistic - another kind of collectivist venture - though perhaps lacking some elements of social empathy.

In contrast, the social democracy of the Netherlands is focused on providing services to its citizens, from socialized medical services to free education to subsidized child care to mandatory vacation and vacation pay supplements for all.  

This seems absurd to the American psyche - why should I pay for someone else's vacation! 

The theory is that these government policies will allow all its citizens to be happier, well-adjusted and ultimately more productive.

Perhaps this theory is absurd, but it is more humane than the supposed American approach - work hard and stay healthy or you'll lose your job, your medical coverage and your house.

The author of the Going Dutch article concludes that the collectivist system in the Netherlands works well because of the homogenous nature of its population.  To be sure, this country has its issues with integrating immigrants.  And perhaps, as the author mentions, there are a couple of examples of creative iconoclasts that have struggled against the uniformity of this society and eventually left the country to succeed.   However, the Dutch have a thriving artistic community - somehow these artists have found a way to challenge conformity from within.

Somehow, I think the author missed the real difference between the American and Dutch socio-political systems.  The difference is empathy. 

The Dutch collectivist bent is all about providing a social network, where most people can thrive.  The economy remains market-based, capitalist in its core, but tampered by the ethics (re. regulatory bodies) of its society.  Ideology and efficiency take a back seat to fairness and equity.  It doesn’t spend an unwieldy portion of its GDP on its military.

Of course, the Netherlands will never be a superpower.  But perhaps the world’s remaining superpower could learn a little from this little state.