browser icon
You are using an insecure version of your web browser. Please update your browser!
Using an outdated browser makes your computer unsafe. For a safer, faster, more enjoyable user experience, please update your browser today or try a newer browser.

Case Study: The Netherlands: Tiny Country Standing Tall

Tulip fields in spring

Tulip fields in spring

The Netherlands is a small, prosperous country in northern Europe that out-performs many larger countries on a variety of social and economic indicators.

Of the dozen countries in our study, the Netherlands is the smallest, about twice the size of the U.S. state of New Jersey. Its 17 million people make it the second most densely populated of our countries, after only South Korea.

With no natural resources other than water and peaty, sandy soil, the Netherlands has enough farm land and greenhouses to make it the world’s second largest agricultural exporting nation (in dollar value, not weight) behind only the U.S. For example, the Netherlands is the world’s largest flower-exporting nation; in 2003, over 1.3 billion tulip bulbs alone were flown out of Schiphol, the largest airport. The Dutch produce 4.32 billion tulip bulbs each year, some 53% of which (2.3 billion) are grown into cut flowers. Of these, 1.3 billion (or 57%) are sold in the Netherlands as cut flowers and the remainder is exported: 630 million bulbs in Europe and 370 million outside of Europe. That’s just the tulips.

Team Orange, World Cup Finalists in 2010

Team Orange, World Cup Finalists in 2010

Worldwide, only fifteen economies are larger than the Netherlands’, including four in our study. However, per capita, it ranks 9th in the world according to IMF 2011 estimates, ahead of the U.S. at 15th and well ahead of South Korea at 31st. It combines a relatively open market economy with a strong social safety net. Of the countries in our study, the very conservative Heritage Foundation’s Index of Economic Freedom ranks the Netherlands 15th most free worldwide, behind only the U.S. among our countries.

According to the Human Development Index, which combines three other indices, life expectancy, education, and wealth, the Netherlands is 4th worldwide and other than the U.S. at 3rd, the highest-ranking of our countries. For example, the Dutch are the tallest people in the world due to a combination of excellent pre-natal and infant care, a high-protein diet (aka cheese), and lots of bicycle riding and other exercise. They keep growing after people in other countries stop — the average male is 6’1″. More people reach their genetic potential than in less healthy countries. For another example, Orange, the men’s national football (soccer) team, which lost the World Cup final in 2010, is ranked 2nd in the world, up among countries that have far larger populations from which to draw their teams.

What do I mean by strong social safety net? Russell Shorto, an American living in Amsterdam, wrote about his adopted country in the 2009 N.Y.Times article Going Dutch:

In late May of last year an unexpected $4,265 arrived in my account: vakantiegeld. Vacation money. This money materializes in the bank accounts of virtually everyone in the country just before the summer holidays; you get from your employer an amount totaling 8 percent of your annual salary, which is meant to cover plane tickets, surfing lessons, tapas: vacations. And we aren’t talking about a mere “paid vacation” — this is on top of the salary you continue to receive during the weeks you’re off skydiving or snorkeling. And by law every employer is required to give a minimum of four weeks’ vacation. For that matter, even if you are unemployed you still receive a base amount of vakantiegeld from the government, the reasoning being that if you can’t go on vacation, you’ll get depressed and despondent and you’ll never get a job.

Queen's Day (Koninginnedag), Amsterdam, 2008

Queen’s Day (Koninginnedag), Amsterdam, 2008

As a result, the Netherlands’ standard of living according to the Human Poverty Index is the 3rd highest in the world, behind only Sweden and Norway. And oh, do the Dutch like to party. The photo below is from the annual celebration of the Queen’s birthday.

Lots of cheese and exercise

Lots of cheese and exercise

How do the Dutch make this work? One key is the Social and Economic Council of the Netherlands, an advisory body of employers, unions, and independent experts that help create consensus on socio-economic issues. The most important one is the balance between people and profits. The Dutch love profit and they know from centuries of experience that the best way to achieve profit is to put the health of the people first. The government keeps them healthy and they make themselves wealthy, which gives the government more resources to make them healthier, and on and on in a virtuous cycle.

coffee shop in Leiden

coffee shop in Leiden

In terms of Hofstede’s cultural dimensions, the Netherlands has an extreme score on individuality, about the same as Canada’s, fourth highest worldwide behind the United States, Australia, and the United Kingdom. The Dutch are self-reliant and proud. They value privacy and self-respect, and they show great respect for other people, leading to their reputation for tolerance in matters of lifestyle. For example, the Netherlands has a large, powerful homosexual community and soft drugs (weed, hash) are sold legally in coffee shops.

The Dutch are the tallest people on Earth

The Dutch are the tallest people on Earth

What are the Dutch so proud of? In the last five hundred years, four countries have dominated the world of commerce and have had the world’s highest standard of living: first Spain, then the Netherlands, then England, and most recently, the United States. By 1650, the Dutch Republic was the wealthiest, best educated country in the world. They invented our financial markets and the transnational corporation, creating what some historians call the first modern economy. They led the way well into the 1800’s when England finally caught up.

A second key is indicated by the extreme score on Hofstede’s dimensions for masculinity, where the Netherlands scores among the lowest of all nations, and the lowest of the countries in our study, by far. In the Netherlands, there is relatively little gender differentiation and discrimination. It is an openly nurturing society. Among the countries in our study, according to Save the Children’s 2011 Mothers Index, none exceeds the Netherlands as a good place for mothers and children.

Not all is well in the Netherlands. It is seriously over-crowded; housing is scarce and expensive. Pollution is bad, especially water and soil. They’re having a problem with foreigners, especially Muslims, who don’t seem to be integrating fast enough. They try too hard to be as important politically as they are economically, for example, sending troops to Afghanistan that they can’t afford, and it doesn’t work. For another example, they bought into the German austerity nonsense around 2010. And Dutch food is, well, ….

Stamppot, a Dutch culinary delight!

Stamppot, a Dutch culinary delight!

If I told you that we were going to eat at a Chinese restaurant, you’d know what to expect. Or a French, German, or Italian restaurant. But if I told you we were going to eat at a Dutch restaurant, what would you expect? The young lady above left thinks that cheese, bread, and a glass or two of whole milk make a great lunch. For dinner she’ll have stamppot (right), a mash of potato and kale with a side of sausage.

A third key is in their language. The Dutch use the word knap to indicate that someone is smart or clever. They use the same word to indicate that someone is good-looking. Similarly, the word schoon means both clean and beautiful. That view of people says everything about Dutch values.