Matt Yglesias

Going Dutch

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.

Life Expectancy Facts

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.

The Truth About Foreign Health Care

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.

The Square’s Case for Marijuana Decriminalization

Kevin Drum’s not much of a pothead (”I’ve never smoked a joint in my life. I’ve only seen one once, and that was 30 years ago. I barely drink, I don’t smoke, and I don’t like coffee.”) but he’s come to the conclusion that we should decriminalize marijuana and wrote a great piece in Mother Jones about it. This isn’t really the key to the argument, but I was interested in this research on marijuana-alcohol substitutability:

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.

Learning to Love the European Welfare State

Russell Shorto has an excellent article in The New York Times Magazine about how he found himself living in the Netherlands and after at first rebelling against the high tax rate he learned to love the European welfare state:

In fairness to Europe’s critics, the Netherlands is one of the highest performing countries and things don’t look as great in Italy or Spain. Still, it’s a crucial point. The average standard of living enjoyed in the top European countries is better than the average standard of living in the United States and while we almost certainly can’t just copy Dutch practices, we can certainly learn from them and stop telling moronic scare stories.

I might add that one thing that tends to give a distorted picture of the situation is that the kind of Americans likely to travel to the Netherlands and other European countries are hardly socioeconomically representative. Shorto is writing from the perspective of a college educated professional, but the biggest contrast is probably found in the standard of living enjoyed by people in the bottom 25 percent of the wealth/income distribution.

The Cultural Contradictions of Capitalism

I’ve heard it speculated, and even done some speculating myself, that the reason “socialism” is growing in popularity is that you have so many hideously unpopular right-wingers saying the broadly popular Barack Obama is a socialist.

An alternative hypothesis is that this Amstel Light ad is leading some to conclude that socialist Europe is not quite the dystopia Mitch McConnell’s been warning about:

I’m not really an Amstel fan, but there’s no denying that Amsterdam is great. Beyond the obvious, they’ve got some very interesting early childhood policies there and delicious Indonesian food.

The Horrors of Nordic Socialism Exposed

The Daily Show did a nice segment the other day exposing the horrors of socialism as practiced in Sweden. Basically, most people are better off than most Americans, but rich Swedish people aren’t nearly as rich as rich Americans:

My sense of things is that, all joking aside, Sweden really has gone too far and if I were Swedish I’d be looking to recalibrate to something more like the model of social democracy on display in Denmark or Finland or the Netherlands which all, like Sweden, are ahead of us in the Human Development Index and would be regarded by Glenn Beck as little better than life in a gulag.

The Dutch “Gentleman’s Agreement” on Executive Compensation

I’ve only ever met one finance minister, the Netherlands’ Wouter Bos, but fortunately he seems to be doing a good job, cleverly striking a gentleman’s agreement with bailed-out Dutch banks to ensure the political sustainability of the Dutch government’s approach to the financial crisis. You can see the herenakoord here, but you almost certainly don’t read Dutch. Fortunately, Justin Fox translated some key points:

* During the credit crisis, salary increases at the top of a company can’t be any bigger than those for the rest of the personnel.

* At companies getting government support, the managing board [the top 5-10 executives, usually] won’t get any variable pay [a.k.a. bonuses] for 2009.

* At government-supported companies, there should also be the greatest possible reticence regarding variable pay for other senior managers in 2009 and until a new compensation policy has been determined.

* As part of a more durable and moderate compensation policy, golden parachutes will not exceed one year’s salary and long-term variable compensation will play a greater role relative to short-term variable pay.

Apparently Bos discussed this with Tim Geithner to some extent. But Geithner doesn’t quite seem to have been able to pull anything equivalent off. Instead, as Fox points out, we’re engaged in a tawdry cycle of congress getting into a populist dudgeon, but then loopholes are left everyplace and at least some elements of the executive branch are helping firms find ways to exploit the loopholes. In theory the upside of things like Larry Summers on such good terms with key financial firms would be the ability to do something like this. In practice, that doesn’t really seem to be the case thus far.

Commercial Republics and Public Policy

“In short,” writes David Brooks, “the United States will never be Europe. It was born as a commercial republic. It’s addicted to the pace of commercial enterprise. After periodic pauses, the country inevitably returns to its elemental nature.”

And it’s true, the United States will never be Europe. Among other things, I find it doubtful that we’re going to build any Gothic cathedrals or Versailles-style palaces over here. But at the same time, before the United States was born as a commercial republic, the Netherlands (pictured above) was a commercial republic. For that matter, Venice was a commercial republic even before that. These days, the Netherlands is a constitutional monarchy. But it’s still pretty commercial in nature. Which doesn’t stop the Netherlands from having universal health care, a robust public transit network, and relatively strong labor unions. For that matter, I don’t think anyone could deny that Dutch-derived New York City has a pretty commercial nature. And yet New York has a “European-style” brand of walkable urbanism, relatively strong labor unions, and if federal policy where made by New York’s elected officials you can bet we’d have universal health care.

Now I doubt Brooks would deny any of that. But the point is that “Europe” is a very strange and shifting signifier in the discourse of the American right.

The American Way

Barack Obama aside, nothing makes me feel patriotic quite like a good European hate speech prosecution:

A Dutch court has ordered prosecutors to put a right-wing politician on trial for making anti-Islamic statements.

Freedom Party leader Geert Wilders made a controversial film last year equating Islam with violence and has likened the Koran to Adolf Hitler’s Mein Kampf.

“In a democratic system, hate speech is considered so serious that it is in the general interest to… draw a clear line,” the court in Amsterdam said.

Wilders is a boor and a bit of an idiot, but while I understand that this sort of thing happens on the continent it invariably strikes me as incredibly stupid. This isn’t going to end anti-Muslim sentiment in the Netherlands, and it’s not going to help Dutch Muslims assimilate into European society. What’s more, this actually fuels the notion that the existence of a substantial Muslim population in your country is an intolerable threat to liberty. There are a lot of dimensions of social policy along which I think we can learn a lot from northern Europe, but the robust tradition of free speech in the United States is something we can and should be very proud of.

Don’t Tell Andy McCarthy

I almost hesitate to bring this up, for fear of throwing more kindling on the right-wing fire, but yesterday’s post on my ties to radicalism including the Working Families Party, Todd Gitlin, and PvdA led someone to draw my attention to JS We Can! which is both a clever multilingual pun, and an insidious plot to bring America to its knees.

You see, PvdA has a youth arm. And it’s called Jongen Socialisten, or young socialists. And in Dutch “JS” is pronounced sort of like “yes” in English. Hence, “JS we can!” a website that is, quite literally, an effort by foreign young socialists to elect Barack Obama. It seems they’ve got Dutch exchange students canvassing for Obama in Pennsylvania and everything. Personally, I love Dutch socialists (and it should be noted that PvdA took a “third way” turn like UK Labour in the nineties and isn’t really a socialist party anymore) but I’m not sure how well this kind of thing would play in middle America.

The Biking Contrast

Reader V.S. recommends this brief article contrasting the bike-commuting experience in the Netherlands from the much-inferior one here in the United States. I’m largely in agreement with the sentiments expressed therein, though I do think things are changing in many American jurisdictions. I will note, however, that geography is a real factor here — Amsterdam is a lot flatter than Washington, DC which makes it a more appealing cycling venue.