The negotiating parties in the Catshuis want to make agreements to kick-start the Dutch economy. While doing so, however, they are only interested in reducing the national debt and in economic growth, according to Bert Scholtens, professor of economics and sustainability at the University of Groningen. ‘That is a very one-sided view. Prime Minister Rutte is obsessed with the growth and national debt figures. There’s a big chance he’s going to mess things up.’
Implementing economic policy can be compared with driving a car, claims professor of economics Bert Scholtens. ‘There’s more to driving a car than watching the speedometer and making sure you keep within the speed limit. You look carefully through the windscreen and in your mirrors and you keep an eye on all the lamps and dials on your dashboard. That’s what you need to do with economic policy too. Growth and national debt are certainly important, but job opportunities, inflation, income distribution and numerous other factors are just as important. And these issues are all closely interrelated. Prime Minister Rutte says he wants to implement economic policy, but like many others in The Hague, he’s obsessed with growth and the national debt. There’s a big chance he’s going to mess things up.’
Scholtens explains that this simplistic view of economics is nothing new. ‘Until the 1940s and 1950s, politicians understood that economic policy needed to be multifaceted, that the economy was not a mechanical but a social system. You could say that simplification began under Kennedy and Khrushchev. They were battling against each other like little boys – who could put the first man on the moon, who won the most Olympic medals, and whose economic growth was the strongest. That schematic view has become more and more dominant.’
No other European country is as obsessed by this simplification as the Netherlands, in Scholtens’s opinion. ‘The new strict EU budget rules were created under heavy Dutch pressure. And our politicians are the most panicky about observing them. It looks like they haven’t realised that we are part of a world economy, and that it revolves around more than just earning money. The high numbers of Poles who come to the Netherlands, for example, resulting in the PVV feeling the need to set up a Poland hotline, is to a significant degree because our labour market policy is not working properly. That’s a problem the current minority government supported by the PVV is ignoring.’
Scholtens thinks that the secret negotiations in the Catshuis that Rutte has been conducting for weeks exemplify the lack of economic vision in The Hague politics. ‘They are frantically looking for majorities to support cuts. If the prime minister had a wider perspective, a clearer view of economic policy, this kind of spectacle would be unnecessary. Incidentally, this vision is also conspicuous by its absence in the press. Journalists are parroting the stories about growth and the national debt. They are trailing after the prime minister, forgetting that economic prosperity is something other than increasing GDP.’
Scholtens will say nothing about what the negotiators in the Catshuis should decide. ‘They are political choices, and as an economist that’s not my business. However, I would like to point out that there is a political responsibility to outline a wide view of economic development. Not only growth and debt, but also job opportunities, balance of payments, income distribution and external effects should be on the economic agenda. The current policy intentions will eat away at prosperity. The negotiators in the Catshuis should let themselves be advised by people with a wider view, and not just surround themselves with yes-men. The state may well not be a happiness generator, as Rutte states, but it shouldn’t be a calculator either.’
Bert Scholtens (Loppersum, 1959) studied Economics at the University of Groningen and gained a PhD from the University of Amsterdam in 1994 with a thesis entitled ‘Towards a theory of international financial intermediation’. He has lectured at the University of Groningen since 1999, and became professor of Sustainability and Financial Institutions in 2004. In 2010 he became professor by special appointment in The Economics of Sustainability to the J.L. Bouma Chair. Scholtens is director of the Energy and Sustainability Centre.
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