The Illusion of Movement: A Story of 1.1 Percent

Imagine standing at a railway station, watching a train that seems to move, only to realize it's your own platform slowly sliding forward, powered not by engines but by janitors, nurses, and paper-pushers. Welcome to the Dutch economy of 2024.

We "grew" by 1.1 percent. Or so the numbers tell us. But behind that polite applause of progress lies a different truth. Strip away government consumption, the salaries of civil servants, expanding healthcare expenditure, childcare subsidies, and allowances, and what’s left is a ghost of an economy: 0.2 percent growth from the private sector, and barely that. Exports, investments, and household consumption? Lethargic. The body moved because the spine, the government, twitched. Not because the legs, the market, walked.

The Real Driver: Government Consumption as Life Support

Let’s not get lost in sterile percentages. Here’s the anatomy of what happened:

• 0.9 percentage points of growth came from the government.
• Only 0.2 points came from everyone else combined.
• In plain terms: if the state had stayed still, the Dutch economy would have flatlined.

And this isn’t new. In 2023, when the broader economy shrank by -0.6 percent, government consumption still grew by +0.7 points, cushioning a deeper recession. This isn’t Keynesian fine-tuning. It’s life support.

Worse, 2024 marked the highest share of government consumption in GDP since 2012: 25.8 percent. For context, only Sweden and Finland outpaced us within the EU. Germany? 22 percent. The UK? 21 percent. The Netherlands? Proudly marching toward state-managed capitalism with a Calvinist shrug.

Where Does the Money Go?

Two key pipes feed this system:

1. Own Production (up 3.9%)
   Civil servants' salaries, municipal spending, operational costs. In essence: the state growing itself. More staff. More structure. More costs.
2. Social Benefits in Kind (up 3.2%)
   Think: rent allowance, student travel product, health insurance subsidies, long-term care. Necessary? Often. Efficient? Rarely measured. Strategic? That’s the question.

Let’s be clear: these aren't handouts. They’re purchases the government makes on your behalf. It’s a welfare-market hybrid, where the state buys from the market to maintain social calm. It’s economic Novocaine.

What Lies Beneath: The Why Behind the Numbers

Growth without productivity is not growth. It’s redistribution dressed as resilience.

• Why is household consumption stagnating? Because inflation ate disposable income, and the housing market paralyzed young families.
• Why are exports sluggish? Because the world is decoupling, and Dutch competitiveness, so reliant on logistics and tax havens, is losing its edge.
• Why are investments minimal? Because regulation chokes risk-taking, and uncertainty about green and digital transitions delays capital allocation.

In short: we’re not running faster. We’re being carried, by the very institutions we once asked to referee the game, not play it.

Is This Sustainable?

Yes, if you believe in infinite state growth.

No, if you believe that governments are meant to stabilize, not substitute markets.

The deeper risk is psychological, not fiscal: we are normalizing an economy where public expenditure isn't the counter-cyclical response, it’s the primary muscle. That’s not strategy. That’s a dependency pattern. And dependencies always come due.

What Must Be Said

This isn’t a call to cut public spending. It’s a call to remember what it’s for.

The state should insure against risk, build long-term infrastructure, protect the vulnerable. But when it becomes the sole locomotive, the private sector becomes passive, expectations ossify, and innovation erodes.

We need a reset, not of budgets, but of mindset. Growth must be earned, not subsidized. Otherwise, we’re not building an economy, we’re curating a simulation.

And simulations may comfort the political class, but they don’t feed ambition, they don’t reward merit, and they don’t inspire the next generation of builders.