Central Planning in the Netherlands

Immediately after the Liberation the Netherlands were faced with a severe shortage of all essential goods, particularly in the Western part of the country, where the period of famine had led to a complete exhaustion of all stocks, and where the Germans had deliberately destroyed the railway system. At that time there was no alternative to a policy of rigorous planning, approaching that of a war economy. After the worst damage had been repaired and the shortages partially alleviated, it became apparent that the pent-up demand (backed by abundant liquid reserves), was so much larger than production and imports together, that an allocation and rationing system would be necessary to prevent inflation. It was not a matter of principle, but the compelling nature of the circumstances which led to the continuation of a policy of detailed planning. Even now the situation in the Netherlands, as compared with that of the other North-Western European countries, makes rigorous planning more necessary than elsewhere. The combined effect of (a) war damage, (b) the loss of income from overseas investments, (c) the chaos in the German hinterland, and (d) the large increase in population, is affecting the Netherlands more seriously than any other North-Western European country. The primary object of this planning is to restore equilibrium between : (a) Imports and exports ; (b) Supply of consumers' goods and a tolerable standard of living for the mass of the population ; (c) New investment ; and (d) The increase in population. In the more remote future it is probable that the economic policy of the Netherlands will gradually tend towards an employment policy which will use more indirect methods of influencing production, consumption and prices. It is the intention of this paper to give a short account of the chief features of the present system of drawing-up the nation's economic budget.