Dazed and Confused No More: Dutch to Consider Closing “Coffee Shops”

The incoming Dutch government is considering strict new regulation of Amsterdam’s cannabis cafes and red light district. The moves would significantly shrink the red light district and could end up putting the cannabis cafes out of business altogether.

It appears that the Dutch–world famous for their socially liberal attitudes–are becoming significantly less tolerant as the years go by. As a simple measuring gauge, the number of cannabis cafes has halved since 1995, from roughly 1,400 to 700. (see “Dutch look at weeding out cannabis cafes” in Saturday’s Financial Times.)

So, what is the story? Are the Dutch tired of being known as the world’s pimps and drug dealers?  Has the new simply worn off?  What is making Dutch society become more socially conservative?

There is no definitive answer here, but I have my own theories. One obvious answer is that the Dutch are tired of seeing American and British youths making buffoons of themselves in Amsterdam’s smoky cafes. The liberal policies regarding drugs and prostitution tend to attract the wrong kind of tourist.  But there is a larger issue at play as well.

The demographic structure of the Netherlands most assuredly plays a role, and I’m not talking about the influx of North African Muslim immigrants, which is a major issue these days in Dutch politics. No, I’m talking about the Dutch Baby Boomers.

As you can see in the chart, the Netherlands was a young country in 1975.  The Dutch Baby Boomers were teenagers and 20-somethings at that time.

Not surprisingly, the cannabis cafes became legal in 1976, when the Baby Boomers as a generation were in their prime years of misspent youth.

As the Boomers in both the United States and Europe have aged, they have maintained a fair bit of the personality of their younger years, a mixture of anti-establishment rebelliousness and wide-eyed idealism.

But in other ways, they have become their parents.  In fact, in some ways they are far more strict.  Boomer parents were notorious about coddling their children and micromanaging every aspect of their lives.  Perhaps, remembering their own wilder years, they didn’t trust their kids with the same amount of freedom that they themselves enjoyed.

The Boomers have also become wealthier as they have aged, and perhaps these bourgeois bohemians consider the seedy element associated with drugs and prostitution to be bad for property values.

In any event, the Boomers are still the dominant personality in the Western world.  As the American Boomers matured settled into family life in the 1980s, they became markedly more conservative, and this trend has continued as the decades have progressed.  The same appears to be true in the Netherlands.

As you can see in the chart, the Boomers dominate the Dutch population.  Electorally, what the Boomers says goes, whether it’s tax policy, pensions, immigration, or recreational drug use.

Charles Lewis Sizemore, CFA
Co-author of the recently-published Boom or Bust: Understanding and Profiting from a Changing Consumer Economy

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