[OUTLOOK]Can we be the ‘Dutch of Asia’?The Netherlands-style model for labor-management relation is being considered as a solution to the recent rampant strikes in South Korea. It is meaningful to study the Netherlands style that seeks solutions through dialogue and compromise instead of conflict and strife.
However, what is the deeper meaning of “Netherlands-style”? The Netherlands faced a serious economic crisis in the 1970s. Due to the oil crisis, consumption fell and high inflation raged, so high interest rate policies were used as a countermeasure, but the skyrocketing interest rate caused a series of significant bankruptcies and unemployment. To protect the working class, the government implemented wage indexation that automatically compensated workers for the losses from inflation, but the system led to additional expenses in government and thus an increase in taxation, and finally a great burden to businesses. The unemployment rate peaked at nearly 20 percent.
The point that we have to notice is what kind of solutions the Dutch found in those circumstances. The style they created in the early 1980s is the so-called the “polder style.” The famous Wassenaer agreement was the starting point of the great compromise. The leaders of labor unions and businesses held a face-to-face meeting to air their demands, and after a long discussion, they reached an agreement. Labor demanded shorter working hours to create more jobs, while the management demanded an end to strife and wage increases. Both agreed to each other’s demands.
After the agreement between management and labor, the government employed a complementary policy to indirectly increase personal disposable income by lowering taxes and social security contributions. A system was created in which labor, management, and the government closely cooperate. These policies cannot be changed arbitrarily. Every year, the three parties review and revise the policies. The system brought a great success to Netherlands; the country showed the biggest economic growth in Europe and its unemployment rate fell to the lowest on the continent.
In the 1990s, an administration that accords with that style was created. That is the so-called “purple regime.” The Labor Party in red and the Democratic Party in blue allied and created a new blended color. That is also a revolutionary change in Dutch politics and in European political history. Throughout the 20th century, the moderate Christian Democratic Party was the center of the Dutch government, and it sometimes allied with either the leftist party or the rightist party. But in 1994, surprisingly, the leftists and the rightists formed a coalition and drove out the moderates. This means that the traditional classification of political leftist and rightist are disappearing.
But is this Netherlands-style model really suitable for us? I think that we need to adopt this model, but the approach should be very careful. This model resulted from the long historical and cultural traditions of the Netherlands, so just adopting the system into South Korea is not likely to bring the same results. In fact, the Tripartite Commission of labor, management and the government created in the Kim Dae-jung administration originated from this Netherlands model, but now its operation seems to be somewhat creaky. Why did that happen?
To champion dialogue and compromise is easy, but it is doubtful whether those principles could be applied in the case of Korea. It may sound ironic, but one of the features of the Dutch culture is to express opinions without hesitation and to continuously make appeals. Anyone who has something to say speaks, and everybody listens. That is why people who attend meetings often stay up all night. Only after all the people present express all of their opinions about the subject is the meeting closed. If those conditions do not pertain here, the Netherlands-style model could not be appropriately run in South Korea.
The word “polder” means reclaimed land made by draining the sea. The Netherlands people who live with the threat of the sea recognize that if they do not cooperate, all will be drowned. But the cooperation is not forced by authoritarian rule but performed in a democratic way. That is the point of the Netherlands model. Thus, if we are to study the model, first of all, this broad frame of the history and culture of the Netherlands must be reviewed.
* The writer is a professor of Western history at Seoul National University.
by Jou Kyung-chul