not the Europe we had in mind

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Erik Kain

Erik writes about video games at Forbes and politics at Mother Jones. He's the contributor of The League though he hasn't written much here lately. He can be found occasionally composing 140 character cultural analysis on Twitter.

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12 Responses

  1. Avatar James
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    says:

    You are aware that causation is not the same thing as correlation, aren’t you?Report

  2. Avatar Mark Thompson
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    says:

    Time for me to make my standard tweak to posts comparing Europe to the US…

    I think this is basically right, except for one important element that just about everyone routinely fails to recognize (partly because it’s to no one’s ideologic advantage in our political environment, partly because we usually only hear these comparisons from ideologues): France is a poor representative of Europe.

    Indeed, there are a number of measures of economic freedom (using the Heritage Foundation’s index: http://www.heritage.org/index/explore.aspx) where various European countries are less regulated than the US. The only reason why the US is, on the whole, considered (barely) more economically “free” by conservative/libertarian standards than most Western European countries save Ireland is because those governments spend a higher percentage of their GDP than do we – in other words, solely because they have more robust safety nets. But in just about every other area, numerous Western European countries not named France are as or more liberalized than the US. Compare, especially, Denmark’s scores in the above-linked chart to the US. Then take a look at Denmark’s unemployment numbers over the last few decades. Ditto Austria, Norway, Sweden, and the UK.

    My point here is this: if liberals are serious about using Europe as a model for the US, then they should be combining the push for stronger safety nets with a push for less government intervention in the economy outside of those safety nets. Meanwhile, if conservatives are serious about painting Europe as Hell on Earth whose model should in no way be followed, then they should drop the anti-regulation shtick. If, on the other hand, they’re serious about improving things in the US, then they’ll just stop trying to paint Europe as their ideal dream/living nightmare.Report

    • Avatar Katherine in reply to Mark Thompson
      Ignored
      says:

      What kind of economic interventions are you thinking of? Do you mean along the lines of government subsidies; or health and safety regulations; or both, or something else?Report

      • Avatar Mark Thompson in reply to Katherine
        Ignored
        says:

        It’s a whole host of things if you look at the Heritage Foundation scores (which are even more remarkable when you consider that the Heritage Foundation isn’t exactly known for making Europe look good on economic issues): licensing regulations, how easy is it to start and run a business, how liberalized is trade policy, corruption levels, inflation levels, enforcement of property rights, etc.Report

    • Avatar E.D. Kain in reply to Mark Thompson
      Ignored
      says:

      Well actually that was sort of my point – that the Europe we had in mind, the highly regulated, socialist supposedly progressive Utopia was in fact on the move toward liberalizing economies, loosening govt. control etc. Hence my comparison of the Netherlands to France. I guess I didn’t make that clear enough.Report

    • Avatar James in reply to Mark Thompson
      Ignored
      says:

      That’s hugely interesting Mark. I have to say, I hadn’t encountered that description of contrasting inter-continental economic conditions before. Do you know anywhere I could read more?Report

      • Avatar Mark Thompson in reply to James
        Ignored
        says:

        Isn’t it? I’ve never really seen it explored in all that much depth, although I’ve referenced it on several occasions both here and elsewhere for the last two years, and I know I’ve seen Will Wilkinson discuss it on occasion as well. That’s not to say that there aren’t more in-depth discussions of it elsewhere – I’m quite certain that there are; just that it’s not a contrast I’ve seen discussed at much length in the political realm, which of course is usually pretty hung up on scoring cheap political points by portraying Europe as some sort of haven for big and intrusive governments on economic issues.Report

  3. Avatar Bruce Smith
    Ignored
    says:

    Although job creation may be better in the States the social dysfunction statistics are very bad not just because of the high number of poorly paid jobs but also because of the massive inequality in wealth and incomes. This is a political issue since capital really is used as power here to generate this inequality gap. A book covering all of this with plenty of graphs and charts illustrating the dysfunctions from country to country will be published here this December 22nd. The book is called “The Spirit Level”. The medical scientist author’s thesis is that it is largely the psychological effects created by inequality that cause so much dysfunction. Meanwhile you can check the book’s spin-off website at:-

    http://www.equalitytrust.org.uk/aboutReport

  4. Avatar mike farmer
    Ignored
    says:

    Until we strengthen the free market by loosening regulations, cutting government spending and lowering taxes, we will have stagnation and high unemployment and underemployment. I really think it’s that simple. But then I’m a simpleton/libertarian/capitalist/monkey.Report

  5. Avatar Creon Critic
    Ignored
    says:

    I’d like to offer two criticisms, and you’ll have to forgive me if I fumble them as I’ll read a lot more about econ than I’ll ever write about it.

    1. America’s unemployment numbers are artificially low because they’re being masked by the huge prison population. Prison amounts to America’s social welfare provision (with all sorts of negative knock-on consequences for the society). (See John Quiggin at Crooked Timber)

    2. Let’s say we agreed that America does have genuinely lower levels of unemployment, even so, compared to OECD peers America has the undesirable combination of relatively high income inequality and low intergenerational income mobility. I understand this as, it’s more likely that my income and my fellow citizens’ income will be far apart in America, and the consequences of that difference will be more keenly felt by our children in America. OECD ungated offers incomplete data, and unfortunately I can’t get into SourceOECD.org or OECD iLibrary ungated – “Growing Unequal?: Income Distribution and Poverty in OECD Countries” particularly “Intergenerational Mobility: Does it Offset or Reinforce Income Inequality?” (gated) could probably clear things up some. The best free secondary source data I could find was this Australian Treasury report – worth glancing at the charts on “intergenerational earnings elasticities estimates” and “income inequality and intergenerational income elasticity”. You get what you pay for – from postnatal nurse home visits to investing in early childhood education, more social welfare provision, not just safety nets, would do America good on so many levels – not least of which is intergenerational poverty..Report

  6. Avatar PGeorge
    Ignored
    says:

    I want to point out an error in your data that may change the way you think about things.

    Your unemployment numbers are all from the same source. But that source (the IMF) shows that each country’s number comes from different sources. For instance, the US numbers are the “official” US data — the U-3. France’s numbers come from another source. The result: the US will always appear to have lower unemployment than just about any European country. If you use the U-6 number, however, the US suddenly looks like a country with very high unemployment.

    This is always the problem with comparing national unemployment numbers. Even when using a supposedly neutral third party like the UN or the IMF, they end up getting their data from internal sources within each country or region.Report

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