The Netherlands: Leaky Dikes

Hans Brinker, Holland's storybook skating whiz, needn't hock the silver skates — not yet. But the way the Dutch economy is going, the occasion may arise. Holland has a severe balance-of-payments deficit, and with wages up 36.5% in three years and living costs climbing at an annual rate of 5%, the country is suffering worse inflationary strains than any European neighbor.

Much of the difficulty is due to Dutch labor, traditionally docile (a 1959 court, decision actually-made unions liable for losses caused by a strike). Netherlands unions have recently been flexing their muscles in a big way—taking advantage of a...