As the chart indicates, while the richest in America make more than the richest in Europe, the poorest seem to have similar income rates. More importantly, a stronger middle class, like what has prospered in the U.S., has consistently been the hallmark of a more capable consumer-economy.
Kathleen McCaffrey, Associate Editor
Ideology: Libertarian | Writing from: Berlin, Germany
President Obama is taking his cues from European politicians. Most of his proposed legislation such as Universal Healthcare, cap and trade, “bailouts” of the auto industry, and “labor law” reform, has a distinct European influence. This is a silly place to take inspiration from if he wants to hold the title of “Leader of the Free World.”
Though it is aesthetically pleasing and has a fascinating history, the mentality of the European people is not congruent with that of Americans.
The Pew Global Attitudes Project has shed a great deal of light on the mentality of Europeans in contrast to Americans. According to Pew, “two-thirds of Americans believe that success is not outside their control… Asked why people are wealthy, 64 percent of Americans say it is because of personal drive, willingness to take risks, and hard work and initiative.” When asked why people failed, 64 percent of Americans cited a lack of thrift, and 53 percent cited a (partial) lack of effort or ability. Furthermore, 71 percent of Americans believe that the poor have a chance to escape from poverty, while only 40 percent of Europeans agree. In a majority of almost every European country, citizens believe that forces outside of a persons control are what determine success.
In Germany, many of the locals have already described a tension between the workers and the moochers. It seems pointless to many of the youth to bother with low-paying jobs when it is almost equally profitable to receive paybacks. Unlike aspiring for Aristotle’s “good life” where rights and responsibilities are balanced and respected, Europe has evolved into something else entirely. The welfare state is largely to blame for the pessimism and failures of will demonstrated by Europe. They simply cannot wean off of the government; their only security. They believe that an open economy does not present opportunity. Rather, it is a threat of unemployment and discomfort. In the past century, “the future” in large European countries has been somewhat synonymous with “decline.”
Class warfare has always been a point of contention for European politicians to deal with – likely because there is no strong belief in class mobility as the poll suggests. The European mindset, it has been speculated, has a heavy influence from the feudal societies it emerged from. (This is in stark contrast to what Nathaniel Hawthorne wrote in ‘The House of Seven Gables,’ noting that “Families are always rising and falling in America.”)
As Theodore Dalrymple so astutely observed in 2006, “most European populations experience a profound feeling of impotence in the face of their own immovable political elites. […] This feeling of impotence is not because of any lack of intelligence or astuteness on the part of the populations in question: if you wanted to know why there was so much youth unemployment in France, you would not ask the Prime Minister, but the vastly more honest and clear-headed village plumber or carpenter, who would give you many precise and convincing reasons why no employer in his right mind would readily take on a new and previously untried young employee. Indeed, it would take a certain kind of intelligence, available only to those who have undergone a lot of formal education, not to.“
The leisurely realm of the European Union may seem delightful with it’s eight-week vacations, paid pregnancy leaves, and the near impossibility of being fired. In this socialistic paradise, innovative reform will become infrequent as the government flounders in principle and neglects the inherently selfish nature of humankind. (“When the people find they can vote themselves money, that will herald the end of the republic.” – Benjamin Franklin.) One particularly repulsive example of this is the French public transportation system, which strikes at the drop of a hat. Though they receive a wealth of benefits far exceeding any measure their job could deserve, they inconvenience whole cities for their selfish measures – or, to use their phrase, in the “name of social justice.” When the government regulates all, the need for expansion and creativity is stunted. Rather, internal squabbles dominate as many people rush for the biggest slice of the pie, as seen in France through constant strikes and deliberations. There is no growth; there is no Wealth of Nations.
Of course, though, I doubt Europe will prosper much longer when looking at their abysmal birth rate. The number of youths in Europe is at its lowest ever and population growth is near zero. Some studies, like the one conducted by the Rand Corporation, have speculated that this is due to “policies designed to improve broader social and economic conditions … [affecting] fertility, indirectly.” “At the same time, low fertility is accelerating the ageing of European populations. As a region, Europe in 2000 had the highest percentage of people age 65 or older — 15 percent. According to data from the U.S. Bureau of the Census, this percentage is expected to nearly double by 2050.” America has had a strong consumer economy largely because of their replenishing birth rates and immigration.
Barack Obama can transplant these ideals and programs if he wishes. However, it will only lead America down the same path Europe has paved. Judging by the Pew Attitudes, and recent Gallup polls in reaction to the aforementioned proposals, I think it would be an ill-fitting transition.
I suppose there can be a case made for pseudo-socialism in a small, homogenous population like Norway or Ireland where both philosophy and history have led people to accept their fates in certain sectors and the government can work on a more local, effective level. However, America has neither of those traditions. I doubt the degree of both risk and success an American child is capable of is any small coincidence. Call Americans ignorant for their optimism or belief in the ideas of the Enlightenment, but I call them able because of it.
Totally agree. Sure we have a huge income gap, something every liberal economists beats to death, but the overall status of even the bottom 20% is better off in a capitalist system than a socialist one.
100% spot-on.
I’ve often said that socialism is destined for a country like Norway – where nearly the entire population lives in two cities (Bergen and Oslo).
A government run *anything* can run easily when the entire population is in two cities….the same cannot be said for the US
Dear Kathleen,
Interesting POV I must say.
You wrote – “This is a silly place [Europe] to take inspiration from if he wants to hold the title of “Leader of the Free World.””
Well then, Ms. McCaffrey, what should we do?
Not to pull a non sequitur, but I hope that you watch this first before responding: http://www.youtube.com/watch?v=MtSE4rglxbY
Like many Americans, you seem to ascribe to the notion that the affluent are prosperous because of hard work and the poor are impecunious because they’re lazy – and that luck has nothing or very little to do with it – which is a pathetic proposition. It’s funny that you dropped Aristotle’s theory of a “good life” without referencing the fact that ‘luck’ has almost everything to do with it. To wit, in Ancient Greece, in order to live the “good life,” one had to be born into the correct family, social class, gender, and be of the correct age. In addition, this person could not experience, or have experienced, any unfortunate circumstances such as illness, bereavement, or isolation. The former prerequisites, all clearly out of one’s control, and dependent purely on luck, must have been met before one was able to practice the virtues that led to the so-called “good life.” The “good life,” then, is dependent on favorable external factor outside a person’s control. Such is how the class system here in the U.S. tacitly functions and such is how the class system throughout history has functioned. Conservatives conveniently leave this essential “luck” part out.
You wrote – “Furthermore, 71 percent of Americans believe that the poor have a chance to escape from poverty, while only 40 percent of Europeans agree. In a majority of almost every European country, citizens believe that forces outside of a persons control are what determine success.”
I’ll have you know that the Europeans are correct and astute in their thinking. Whereas we Americans think that good ol’ hard work will get us out of any jam, Europeans display more acumen in depth and breadth of thought. Neuroscientists have found, and many Europeans are intelligent enough to know and consider, that many children growing up in very poor families with low social status experience unhealthy levels of stress hormones, which impair their neural development. The effect is to impair language development and memory — and hence the ability to escape poverty — for the rest of the child’s life. These are the practical considerations that the Europeans ponder, while we Americans either take for granted or ignore entirely. Don’t get me wrong, I think it’s somewhat noble (in a quasi-Nietzschean way) to think that one intrinsically has all the resources one needs to make it in this world, much less out of poverty, but, in hindsight this view is incredibly callow and dangerously hyperbolic. There is a consensus among the most prominent sociologist that your last line in the aforementioned paragraph is utterly true.
Look at Joe the Plumber – This idiot thinks that he will someday buy the company that he works for – the company that makes $250-$270k a year. He doesn’t know when, and he doesn’t know how, but someday…. oh, someday, with a little good ol’ hard work, and a little talent he’ll be living the American dream off the labor of others through his obscurely-bought plumbing company. Luck need not apply. To me, it’s of no wonder that conservatives are more prone to believe in the American dream than liberals. American liberals, like most Europeans (who are clearly liberal), have their heads grounded in reason, while conservatives, clearly with their heads up their ass, think that everything is possible with, not to sound monotonous, a little hard work. How else can you explain the existence of high-goal oriented conservative idiots, with GPA’s averaging 1.5 from the likes of Jesus Community College, expecting that they will be huge financial players? (Okay, to be fair, Ross Perot made it.)
The American concept of meritocracy, or meritocracy in general I should say, is the worst system, except all others, of social organization because it leaves out the essential elements of chance and luck. The losers, in such a system, deserve to be losers because it is of their own choosing, and vice versa with the winners. It’s just as stupid and machinating as it reads, but, I guess, there is no other way.
You wrote – “In Germany, many of the locals have already described a tension between the workers and the moochers. It seems pointless to many of the youth to bother with low-paying jobs when it is almost equally profitable to receive paybacks.”
I have family living in Dusseldorf, Germany that are, on the whole, rather opulent. I have never heard them complain about the taxation levels or of these so-called “moochers.” And what the hell are these “paybacks” you speak of? What young adults in Germany are doing in our current global economic decline is heading back to school, which, for the most part, is paid by the state. And yes, the older folks do somewhat inveigh against this; however, I would hardly call this mooching. It’s usually the foreign born, who don’t enjoy the privileges that native Germans enjoy, and who complain the most. These are the people that usually fill the low-paying work. (Migrant laborers or foreigners like the Turks)
You wrote – “Class warfare has always been a point of contention for European politicians to deal with – likely because there is no strong belief in class mobility as the poll suggests.”
This is ridiculous. Class mobility is, in fact, much higher in Europe than it is in the United States, so much so that many of our youth are flocking out and flourishing in Europe. The US clearly has the worst record for social mobility:
http://www.wsws.org/articles/2005/may2005/mobi-m25.shtml
http://www.eurekalert.org/pub_releases/2007-10/ksu-mou100107.php
http://www.wsws.org/articles/2006/may2006/mobi-m20.shtml
For the most part, the class structure in Europe has flattened because of its adherence to the idea of the welfare state. There isn’t so much of a ladder to climb – and many people are very happy with that. There is no grotesque income gap there as there is here, where our middle class is being wiped out, thanks to the conservative policies of the last quarter century.
You wrote – “The welfare state is largely to blame for the pessimism and failures of will demonstrated by Europe.”
Rightttt………. That’s why Norway, Sweden, France, The Netherlands and all those other evil ‘socialistic’ countries are the best countries to live in with, bar-none, the highest quality of life. Oh and Canada too – so there goes your idea that a mixed economy (your word, “pseudo-socialism”) could only function properly in a “small, homogenous population.”
————————————————-
Dear Om,
You have got to be f*cking kidding me when you say the bottom 20% in our capitalist system fair better then the bottom 20% in a socialist system. Read this whole thing, for I’m sick of typing:
http://wwsword.blogspot.com/2007/06/shirley-cereseto-in-her-groundbreaking.html
“The law of accumulation under capitalism increases human misery, whereas socialist arrangements improve the quality of human existence. This is because capitalism is an exploitative system in which the value produced by those who work is appropriated by those who do not work, whereas the value produced by workers under socialism is shared among all workers and their families. This claim is confirmed by the facts. From the second world war to the later 1970s, inequality increased throughout the capitalist world, and along with it misery for a large and increasing proportion of world humanity. The opposite was true for socialist countries.”
Oh yeah, and nice job about writing off the income gap. Mehhh, you’re right, it’s totally not important, like, totally.
Mr. C. (we are hardly on a first-name basis),
First and foremost, you are correct that Aristotle did say that in his original text. However, that is because everyone else had factors enabling them entirely outside their control. In Aristotle’s day, women, slaves and the lower classes were unable to lead the good life since they could not make their own decisions or choose an action for its own sake. They were unable to practice the virtues so Aristotle excluded these groups. Women in the United States and the “lower classes” have access to education and social welfare programs that entitle them to decisions and flexibility, the variables that caused Aristotle to make his original exception. Those exceptions are dated.
Yeah, about those German Universities…
http://www.economist.com/world/europe/displaystory.cfm?story_id=E1_TDJVRVPQ
http://www.economist.com/world/europe/displaystory.cfm?story_id=13914669
I’m glad that your family isn’t angry towards the people sucking off of their tax dollars by choosing not to work. As it happens, though, I had a long chat with my cleaning woman and she expressed that most of the people in her children’s generation find it pointless to work for lower-wages when the government gives comparable handouts. Thinking this could just be a fluke, I have asked every English-speaking German – from the CEO of a technology company, to my history professor, to my baker – a similar question about the future and they all agree. If your family shares in your socialist views, I’m sure they must really love working and simply do not mind doing so in great excess. Where were those stakhanovites during the 5-year plan!? Youth unemployment has reached record levels across Europe. The slight permeation of feudalism into modern German society you wrote off was written about by Ralf Dahrendorf, the son of a famous SPD member.
http://www.bls.gov/opub/ted/2009/ted_20090804.htm
http://www.spiegel.de/international/spiegel/0,1518,408418,00.html
Perhaps you should not take your citations from the World Socialist Web Site (from 2005 – no less!) next time you want me to think they are actually worth refuting. (I’m sure they’re real intent on studying class mobility…) Working hard doesnt necessarily equate to wealth, success, or status. In fact, I audited a lecture on wealth last semester and I was fairly convinced that (as their statistic showed) it’s based on luck by about 37%. Values are reflected differently, I do not equate wealth with happiness. I don’t know if there is a way to verify if Joe the Plumber wants to “own the business” – he probably wants to make enough to afford his home in Ohio and provide for his family though. I don’t want the American youth to aspire to work for the state, like three quarters of French youth, out of the obsession with security I wrote about. I am not suggesting that everyone “has what it takes” to make it in the world and become the next Bill Gates, or even Oprah. However, I do believe that a rising tide lifts all boats (like JFK), and that the people who are best equipped to make life decisions are the ones who lead them. Providing a great education and physical safety should be the first obligation of the government to its poor. In addition to this, some social welfare programs – like foodstamps, welfare, Medicare and Medicaid – are appropriate to ensure that basic needs are met. Beyond this, I believe there is a limit placed on the trajectory of any other component of personal wealth that is subject to being influenced by the quality of a persons work or, as is the case in France, the number of hours. The way someone lives should be their prerogative. European-style Socialists seem to lack that faith in people. I could care less about how Europe is governed. If anything, their policy has just led to more business coming to America. I just don’t want that to happen in America. I also don’t think that any government has run a sufficient enough system that would replace the efficiency of a private market. http://www.nytimes.com/packages/html/national/20050515_CLASS_GRAPHIC/index_03.html – this neat little study from the NYT – a bit more credible than the WSocialists – shows that Americans have more class mobility than most of Europe, even if “by a little.” If one were to compile the quality of life rankings, as made by the Economist, the EU-4 would fall short of the USA. But, then again, what does the Economist know – they are not from luxurious France! My main point, which you neglected to refute, was that America – having a wealthier middle class – holds more economic spending power and ultimately a better lifestyle than its counterparts. While you’re busy looking that up, please refute the indicators I provided that the European economy is going down the drain and their birth rate is not going to harm them.
Thank you for not copying a full article from the Washington Post this time, it made your argument look (vaguely) valid. I’d like to know what it is you do that allows you to have the time to write such long responses on the comment section of a college sophomore’s writings. Either way, I’m flattered by your outrage.
PS, Nice touch with the Alain de Botton, I actually find his non-fiction to be quite lovely. However, I think you’re trying to suggest that my argument is based on greed and materialism. I simply don’t like too many restrictions on society.
PPS, Read more Nietzsche.
It really isn’t. Winners and losers are a fact of life, but in capitalism the losers have more of a chance and incentive to become winners. We have the most mobile lower class in the world.
While this is a rather childish way of opening, this editorial reeks of axe-grinding hackery. Replete with straw men, assumption of specialist knowledge and all sorts of of un-cited opinions presented as statistical fact, this entry is full of opinion and supposition. If we’re going to talk about class mobility, myriad statistics on the issue would likely be helpful, no? Or the spread of GDP per capita by country. That also, could be useful. After all, it assesses both productivity and standard of living, albeit indirectly. Since your only statistics come from the Rand corporation, which, let’s face it, is suspect at best once you reveal your political bent, you lose a great deal of credibility. While new figures for GDP per capita aren’t necessarily available for some countries post-financial snafu, we rarely stand head and shoulders above the rest for nominal GDP/capita, attaining some prominence only when adjusted for PPP, which are spotty estimates anyway. The US does not do well by the CIA factbook’s measurements of nominal GDP per capita, which is actually quite a good estimator of activity in the global economy. All of this is available on wikipedia. Also, as Blanden et al. (2005), note, intergenerational social mobility IS in fact lower in the US than in Europe. Which is quite depressing for a country made great by immigrants. While it’s true European nations get their welfare leeches, we have massive swathes of the flyover states covered in trailer parks, succumbing hard to sunspot theory and cultural decay (to be anecdotal). The data do not necessarily support your conclusions, or even your initial arguments.
In any exogenous growth model, which is some of the most fundamental work in liberal macroeconomics, the birthrate is negatively related to consumption per capita. For every person you add as a new consumer, you add one more person to the denominator of GDP per capita. Also, the notion of a strong consumer economy as the driving force behind economic life in a macroeconomy is one of the central tenets of Keynesian economics. To posit that Europe will experience a reduced standard of living due to lower birthrate is pretty out of step. Few countries have really improved their standard of living with birth drives. There is a reason, after all, that China tries so hard to keep its birth rate low.
How a self-professed libertarian can thoroughly espouse constructivist ideals confuses me. It’s one thing to talk about the distortions caused by socialist policies. It’s largely true and probably why we, as a voting body, should consider the costs of such things when we implement them. But it’s another thing to claim policies are incompatible with a region due to shared ideology, which strikes me as disingenuous at best. After all, and I am somewhat guilty of a straw man here, but if one believes in liberal economics (the next person who uses that term in reference to American political ideology gets their economics privileges revoked) then one does believe the laws of markets are not unlike those of gravity. You don’t have to believe in them, but you’re still nailed to the floor. This is a country which has a substantial portion of the population that believes in external creation of humanity and the world, what they believe seems irrelevant to me, but that’s entirely a personal gripe.
To be frank though, this piece reads largely as a polemic against the notion of the welfare state, awkwardly framed with the political aspirations of the president. The US will likely never see the degree of handouts that Europe has in the sense of pure transfer payments given our historical record of “regressive” welfare reform. I feel like your entire argument relies on this bait-and switch. Yes, European welfare systems are largely ineffectual deadweight loss magnets, but the “never working” payments simply are not on the table, nor are they likely to be ever. Thus this topic is largely unneeded.
In short, this is a major topic, treat it with some form of academic rigor. I might argue a few points with you, or even agree, but really, there is nothing here to argue with.
PS I take issue with the notion of homogeneity in any economic discourse.
PPS Don’t use Neitzche as anything other than a critic of humanity, he rarely, if ever posits anything close to a unified framework for…well anything.
G Unit,
You’re judging this as a complete academic workup. It is not. This is a concise opinion piece from an observer of European culture. I see Europe as going down the drain and I listed why using economic indicators, the sentiment I have witnessed in the news, and by talking to people. I think the United States is not congruent with this practice and I don’t think it should try to be. Constructivist ideals? Citing an attitudes project makes me a constructivist? No, since I’m not saying it wont work because the American people are busy being “ruggedly independent.” It won’t work because it doesn’t work! The American people happen to understand that they are capable of better things in a free market, which the study shows they have more faith in. We do have traditions that other countries do not by virtue of our foundation, but our productivity in the past one hundred years was not the sole product of ideology. I think our capitalist system is ultimately better for the individual and the government Europe has grown into is not.
I saw a statistic, thought it was curious, and made other observations as to why some of the European policies may not bode over as planned. Naturally any argument towards the inferiority of a European system would be comprised of a wider range of arguments. To your credit, if I saw an article that said the opposite of what I did, with the same amount of references, I’d probably pick on that too.
I cited a NYT study, when prompted, showing there is greater economic mobility in the US. I didn’t say America was perfect, I’m suggesting that our productivity and strong economy has freedom to thank for it. Did I say Obama was a dictator or a socialist? No, I just noted that the European programs are not working out to be as whimsical as they sound.
This isn’t a term paper for a reason.
China is a communist country, their reasons for aspiring towards a certain birth rate are different than that of a capitalist country. Having a low-birth rate does not help countries like Japan, the US, France, Russia, etc. http://www.ipss.go.jp/webj-ad/WebJournal.files/population/2008_4/02mcdonald.pdf
PPS, Thanks for the Nietzsche 101. Frankly I was advising Alex C. to read further and no characterize things as Nietzsche-ian that were/are not.
Mr. Unit,
I’ve been following this dialogue with some interest. Reluctant though I am to insert myself into this dispute, I was confused by a couple of your points and would appreciate some clarification.
With respect to your focus on an exogenous growth model, I think that you are arguing that more bodies in a world with a fixed growth rate will result in less income per individual. Though I don’t disagree, I wonder if you might help me understand what would happen if, instead, the growth rate were endogenized. My own instinct is that population growth is an important variable in determining technological innovation (larger markets with more demanding resource needs require new technologies), which I think also factors into the economic model you cited. Additionally, perhaps you might explain how per capita income would increase under the coincident circumstances of (a) a declining population (not just a low birth rate, as is the case in much of Western Europe); and (b) a generous pension / welfare system that funnels resources from the (shrinking) productive population to the (expanding) retiree group.
My read on Ms. McCaffrey’s argument, rather simply, is that a growing, productive population will ultimately achieve a higher, expanding standard of living than a shrinking, increasingly unproductive one. Ultimately, it is important that we maintain policies in the United States that encourage the former and avoid the seeming sluggishness in evidence across the Atlantic.
I have to admit that I am left rather dumbfounded by your comments on Constructivism. Are you arguing that the prevailing economic discourse is completely irrelevant in the context of economic policy? If so, I actually am quite happy to cede the point, as I think most accepted economic models suggest that a free market solution with minimal government intervention generally results in the optimal allocation of resources and wealth. Popular discourse occasionally guides us away from the optimum. And, though I can’t always fault the popular will, I do find it unfortunate that the European mindset seems so far astray.
Furthermore, it is not as clear to me that the government handouts that you so quickly eschew (though perhaps yearn for?) are as far from plausible in the US as you suggest. The current Democratic administration has already passed a substantial stimulus package that, even if in the name of economic vibrancy, awarded considerable grants to favored left-wing causes. The health care plan currently under consideration represents little more than a significant redistribution of resources from those with coverage to those without. Furthermore, the administration’s embrace of tire tariffs should at least give pause that we now have a vested interest in certain “underprivileged” employee groups at the expense of the wider community. Direct welfare handouts may not be under consideration, but I fear they are becoming an increasingly vivid checkpoint along our current path.
I would appreciate your thoughts.
Great as always
Kathleen —
I’m in the middle of writing a paper so I don’t really have a lot of time to do a full response to your article, but I did want to talk about the NYTimes statistics which you cited.
If you take a look at “country by country” under “income mobility”, the NYTimes analysis says the following: “The United States…does not have significantly more mobility. In fact, it has less than Scandanavian countries like Denmark and roughly the same as Britain.” It should be pointed out that the US and the UK have had similar economic policies since the 1980s, and have followed similar political developments as well, at least in terms of economic policy (for the most part).
I would also like to point out that, if you select “overall trends”, the New York Times will note that changing social classes is not “happening as often as it used to”.
Noah,
Social Mobility happened most during the Industrial Revolution… when there was pretty much no government regulation or social programs.
Since government regulation and social programs have become more prevalent and social movement has gone down, they could thus be conjectured to be correlated to each other.
=)
All,
Look at the top billionaires of the world, most of them who became rich and experienced social movement, did so in nations where social movement was available. (remember it was much easier in Europe 20 years ago than it is now). Those in nations where social movement is restricted are those who were born into their money.
Its not whether social mobility exists, what matters is that its available. In the U.S. it is hindered (not prevented) by social standards, whereas European Nations have written laws that hinder social movement. Fighting social standards in the U.S. is much easier than fighting laws. Fighting the former will get you dirty looks, whereas the latter can send you to jail. I’d rather people dislike me for working so that I can have a better life than have laws making it more profitable to sit on my ass all day living off the work of others.
http://www.nytimes.com/interactive/2010/05/02/weekinreview/02marsh.html?ref=global – yeah, Europe is suuuuper sustainable.