The Long Council

Should the Netherlands cut regulations to build housing faster?

Policy brief · 29 October 2026 · Friedrich Hayek, Albert O. Hirschman, Elinor Ostrom, John Rawls, Deng Xiaoping
Verdict

The Netherlands should cut permitting rules, but test them in pilot cities before scaling nationwide. Jetten should write a rule into the cuts: lower rents and open access count as success, luxury towers do not.

Hayek and Hirschman back the article's claim directly: Dutch zoning boards cannot match the knowledge builders and buyers hold, and scarcity itself can force faster building. Deng's 1979 Shenzhen model gives the mechanism for testing that claim safely: open a few municipalities, measure results, expand only what works. Ostrom complicates it: Dutch land and water rules are a commons problem, so blanket national cuts risk handing control to developers instead of residents. Rawls sets the test for the whole policy: deregulation is only justified if it lowers rent for the currently priced-out, not if it mainly enriches landowners.

The split is over speed, not direction. Hayek would cut now and trust the market to sort it out, while Deng and Ostrom insist on staged, locally measured reform before any national rollout.


Confidence summary: The council converges on the diagnosis (Dutch permitting blocks buildable housing) with high confidence, but splits on remedy design in ways that reflect genuine, unresolved value and evidentiary disagreements.

1. The core argument

Thompson and Klein's "Abundance" thesis lands on the council as a diagnosis more than a prescription, and the distinction matters more than the article allows. Every member agrees Dutch permitting rules exceed what any planner can rationally administer. None agrees that cutting them is itself the policy. The real argument is about what fills the gap once rules fall away: markets, as Hayek insists; tested pilots, as Deng demands; renegotiated commons governance, as Ostrom requires; or simply whoever already owns the land. Jetten's embrace of abundance politics, and Mamdani's parallel enthusiasm in New York, both treat deregulation as self-evidently pro-tenant. The council's sharpest contribution is refusing that equivalence. Scarcity can provoke building, as Hirschman argues, but it can equally excuse negligence dressed up as productive tension. The brief's governing question becomes not "should rules fall" but "who answers for the result, and on what timetable."

2. How each member frames it

Friedrich Hayek treats the Dutch case as a textbook instance of the knowledge problem he laid out in 1945, but his position has a candid limit: he never claimed markets distribute gains fairly, only that they allocate information better than committees do. He would accept Jetten moving fast nationally, rejecting Deng's staged caution as itself a planner's conceit, the fatal pretense that officials can know in advance which pilot succeeded for the right reasons.

What Friedrich Hayek would do
→Cut discretionary permitting powers held by Dutch zoning boards immediately, without waiting for pilot results.
→Transfer siting and density decisions to builders, buyers, and local markets rather than planning officials.
→Reject calls to stage or test deregulation first, since dispersed knowledge cannot be centrally verified anyway.

Albert O. Hirschman complicates his own card's optimism. The "hiding hand" he described in 1958, where unacknowledged difficulty forces inventive solutions, was a concept he later partially recanted, worried it romanticised projects that simply failed and left communities worse off. His position here is genuinely double-edged: scarcity built dams and now might build housing, but only if someone distinguishes productive pressure from a landlord's excuse to ignore tenants.

What Albert O. Hirschman would do
→Let the Dutch housing shortfall operate as deliberate pressure that forces builders into action.
→Track whether bottlenecks produce new construction or simply broken promises to tenants and neighbourhoods.
→Flag reformers who invoke scarcity to excuse negligence rather than to spur genuine building.

Elinor Ostrom rejects the article's binary entirely. Her decades studying irrigation networks and fisheries found neither privatised land markets nor centralised zoning reliably govern shared resources like Dutch polders and waterways. Her sharpest break from Hayek: dispersed knowledge does not mean market knowledge. Local commons arrangements hold information markets cannot price, and national deregulation risks erasing exactly that layer.

What Elinor Ostrom would do
→Convene residents, municipalities, and builders to jointly redesign permitting rules rather than cutting them unilaterally.
→Map Dutch land and water management as a commons problem before treating it as pure housing policy.
→Block blanket national permitting cuts that transfer control from communities to developers by default.

John Rawls supplies the test the other three lack: an outcome measure. His difference principle, built for inequality generally, applies cleanly here: faster building only passes if it improves the position of the housing-poor specifically, not aggregate housing stock. He would reject any Dutch reform that cannot show rent falling for those currently excluded, regardless of how many units get built.

What John Rawls would do
→Write a benefit test into any deregulation: approve it only if rent falls for the currently priced-out.
→Measure outcomes against the least-advantaged renter's position, not aggregate construction volume, before endorsing the policy.

Deng Xiaoping offers the mechanism Rawls's test needs: Shenzhen's 1979 opening before national rollout. His limit is candidly tactical rather than moral: he cared about results, not rights, and would not object to Hayek's deregulation in principle, only to doing it everywhere at once without measurement.

What Deng Xiaoping would do
→Open permitting cuts in a handful of pilot municipalities before any national rollout.
→Measure pilot results against Ostrom's local-control standard and Rawls's distributive test before expanding.
→Scale only the specific reforms that demonstrably built homes for people who need them.

3. Where the council agrees

The least obvious agreement: none of the five members treats "build more housing" as sufficient justification on its own, a position that puts real distance between the council and the article's framing. All five accept that current Dutch permitting genuinely obstructs construction that markets or communities would otherwise complete, which forecloses the alternative view that Dutch scarcity reflects land limits rather than rules. And all five, including Hayek, accept that deregulation redistributes power over land use, not merely speed of construction, meaning the debate was never really about bureaucratic efficiency. This matters because it means the council rejects both horns of the article's implicit choice: neither "deregulate and trust the market" nor "protect every existing rule" survives scrutiny intact.

4. Where the council splits

The real fault line is sequencing, not direction. Hayek stands essentially alone in arguing that national, immediate deregulation beats staged testing, on the logic that any pilot-selection process is itself a planner's judgment call dressed up as caution. Deng and Ostrom stand opposite him: Shenzhen worked because failure stayed contained, and Dutch commons arrangements vary enough across municipalities that a single national cut could not possibly suit all of them. Rawls and Hirschman occupy a third position, neither about speed nor locality but about proof of benefit: Rawls wants evidence rents fall for the excluded before scaling anything, while Hirschman is willing to tolerate some negligence as the price of forcing action, a tolerance Rawls explicitly would not share.

5. For a policymaker to decide on

Jetten faces one concrete choice: legislate national permitting cuts now, betting that market allocation outpaces any measurement delay, or run deregulation as pilots in several municipalities first, measuring rent and access outcomes before statutory national rollout. The first option risks Ostrom's warning: that cuts simply transfer control to developers before communities adapt. The second risks losing the urgency that makes scarcity, per Hirschman, productive rather than merely painful. No member can resolve this for him; it turns on how much delay the Dutch housing crisis can tolerate.