August 9, 2005
Paul Krugman, lover of European welfare states, has expounded yet again on their benefits:
Americans are doing a lot of strutting these days, but a head-to-head comparison between the economies of the United States and Europe – France, in particular – shows that the big difference is in priorities, not performance. We’re talking about two highly productive societies that have made a different tradeoff between work and family time. And there’s a lot to be said for the French choice.
First things first: given all the bad-mouthing the French receive, you may be surprised that I describe their society as “productive.” Yet according to the Organization for Economic Cooperation and Development, productivity in France – G.D.P. per hour worked – is actually a bit higher than in the United States.
It’s true that France’s G.D.P. per person is well below that of the United States. But that’s because French workers spend more time with their families.
O.K., I’m oversimplifying a bit. There are several reasons why the French put in fewer hours of work per capita than we do. One is that some of the French would like to work, but can’t: France’s unemployment rate, which tends to run about four percentage points higher than the U.S. rate, is a real problem. Another is that many French citizens retire early. But the main story is that full-time French workers work shorter weeks and take more vacations than full-time American workers.
The question of productivity per hour worked is problematic, but that has been covered by Cafe Hayek and in a story in The New Libertarian by Tino Sanandaji. But beyond that, what Krugman says is true. The French pay a penalty, in GDP growth, per capita income, and economic standard of living in order to support the quasi-socialist state they’ve constructed. While those of us who are oriented towards economic liberty may look down our noses at them, it is not to say that their system “can’t work”. All that is proved by France is that they have set up a society that achieves their values. (Note, I’m deliberately leaving out the major argument that to set up that society, it necessarily requires coercion and destruction of certain liberties).
Which brings me to the true difference between “us” and “them”. I posted America: The Ideal as a first step in defining what it was that I find so alluring about “America”. Contrast, however, makes my point much more easily than trying to describe America on its own.
America was founded on the frontier ideal, a severely self-reliant streak, and a basis of big dreams. Part of the unbridled nature of the American dream causes us to strive not for comfort, but for extravagance. We don’t want to win and go home, we want to run up the score! Bigger is better, and he who has the most toys wins. Paul Krugman can disparage that set of values, and espouse how much better the French values are, but that’s what they are: values. A value system is necessarily a subjective thing, but results can be compared.
Perhaps even more important, however, the members of that French family are compensated for their lower income with much more time together. Fully employed French workers average about seven weeks of paid vacation a year. In America, that figure is less than four.
So which society has made the better choice?
I’ve been looking at a new study of international differences in working hours by Alberto Alesina and Edward Glaeser, at Harvard, and Bruce Sacerdote, at Dartmouth. The study’s main point is that differences in government regulations, rather than culture (or taxes), explain why Europeans work less than Americans.
But the study also suggests that in this case, government regulations actually allow people to make a desirable tradeoff – to modestly lower income in return for more time with friends and family – the kind of deal an individual would find hard to negotiate. The authors write: “It is hard to obtain more vacation for yourself from your employer and even harder, if you do, to coordinate with all your friends to get the same deal and go on vacation together.”
And they even offer some statistical evidence that working fewer hours makes Europeans happier, despite the loss of potential income.
That choice, and I do stress that it is a choice (although enforced by law, and the choice made by the majority at the ballot box), does have its merits. The French do enjoy a blanket of security for all, as shown in their health care system and educational system. It should be pointed out that the teacher’s unions are nowhere near as strong in France as in the US, which is one point that might show part of their advantage in education. Also, American parents buy their kids X-Boxes and Playstations, which can’t help much.
So where has this choice gotten them? What has it meant for the poor of Europe? It has mainly meant that the average Western European now has a lower standard of living (economically) than poor Americans. The poor European is thus in much worse shape than the average American, and worst than all but the poorest of our poor.
The average “poor” American lives in a larger house or apartment than does the average West European (This is the average West European, not poor West Europeans). Poor Americans eat far more meat, are more likely to own cars and dishwashers, and are more likely to have basic modern amenities such as indoor toilets than is the general West European population.
The Europeans are willing to do less and have less, if it means that they have more economic security across the board, and have more leisure time available. It is easy to see by the way life is lived. Houses are smaller, cars are smaller, and meals are smaller.
Americans, on the other hand, live by the “Go big or go home” motto. Bigger is better. Look around Texas for a minute or two if you don’t believe me. Big trucks, big houses, big T-bones. The visible evidence is simply a symptom of the underlying culture, but it is unmistakably American.
It goes much further. Americans believe in a laissez-faire economic system. In America, you can shoot for the moon with nobody in your way. If you make it, it’s yours; if you miss, that’s your problem. Capital and investment is provided privately, where the capitalists reap the profits of what they sow, and the general public enjoys the jobs provided and good produced by that capital. Europe, on the other hand, drives their economies with much more central management. If you’re allowed to shoot for the moon, and manage to survive the regulations to actually succeed, you’re expected to “give back” a major chunk for the “opportunity” that was so graciously provided for you. Capital is allocated through government bureaucracy to a much greater extent than here in the US.
How does this affect our lives? Capital allocation by government bureaucrats forces economic growth to be subject to politics. For example, in the United States, most of our medical research is privately funded. This, however, is slowly changing. Now that public funding is becoming the norm, does it not become much more important whether our President believes in stem cell research? In the US, where most of our funding is private, stem cell research is thriving, but not being funded by government. If public funding were a much bigger part of our system, one President, who is not a doctor and may not be able to accurately discern the potential benefits of stem cell research, could hold up life-saving breakthroughs on the basis of his personal religious beliefs. Centralizing such decisions only makes it more important to ensure that your politician is elected, because the decisions made in your life are made with force of law.
This will likely be just as large of an issue in the race to colonize space. If we’re ever going to get off this rock, I think we will need to privatize the matter. Much has been made of the ESA’s recent Mars Express probe, which found the picture of a frozen lake on Mars. It has caused people to disparage NASA, based on some of our own recent failures. It is important to note, however, NASA is just another bloated government bureaucracy, an indictment of government, not an expression of American ideals. I don’t think either the ESA or NASA has the ambition to credibly colonize the Moon or Mars. As happy as I am to see the Space Shuttle land safely, it was a short-sighted program to begin with. We need to raise our sights higher, and I’m not convinced government can do it. How can we achieve it? The X-prize, and other inducements which provide rewards for acheivement but not control over process. Give people a goal and a reward, and you’re going to see the sort of ingenuity and drive that will transform life as we know it. I hope that in my lifetime we have set up a colony on Mars or the Moon, because I want to live there. As I’ve said, when I tell my wife how much I want to see us colonize the solar system, she looks at me like I’m weird (I get that look a lot). When I tell her I want to be a part of actually doing it, she looks at me like I’m crazy.
People that think and dream big are going to make it off this rock, not navel-gazing Europeans. The spirit of indomitable spirit and optimism will get us there, not a politically-driven bureaucracy so scared to fail that they’ll never make an attempt. Trading a risk-averse welfare state for capitalism may provide some level of security for the whole of society, but it chops your dreamers and doers off at the knees. The amazing technological growth that has happened in my short lifetime is an inspiration to me, and I can’t wait to see what comes next. The only way to keep such progress up is to reward the innovators and the risk-takers, and that is where the Europeans have faltered.
I fear, however, that spirit is faltering on our shores as well, a fact which worries me greatly. We are being attacked on all sides by supporters of the European-style welfare state, and constantly making incremental steps in that direction. When I see these steps, it reminds me that the gift of liberty our forefathers have given us is not permanent or safe, it is only as strong as we can keep it. So I stand and fight for the hearts and minds of those Americans who are being misled by the left. I ask that they look at what Europe has become. Is that what they want for themselves? Do they see that we have become the incredible nation we are by avoiding the example of Europe? Are they willing to give up the wonderful excesses that they love, and lose the opportunity to see the wonders our future could hold, all for the mirage promised to them by the left?
Americans are sneered at from across the pond for being “cowboys”. We’re mocked for not being as “sophisticated” or “nuanced” as others. We’re called “unilateralist” because we have the balls to take an idea we think is right and run with it. All these snubs are pure, naked envy. We’re hated around the world, because in the span of 230 years, we’ve progressed from an empty frontier to become the most opulent, most powerful nation in the world. The reasons proferred by our detractors for how that happened are as numerous as they are wrong: we had tremendous natural resources, or we were isolated from the wars across Europe. Our success did not come from without, it came from within.
The reason that America has found itself at the “top of the heap”, so to speak, is a matter of the American ideal. That American ideal has given America what it takes to succeed, and the allure of a country devoted to individualism and freedom has attracted the best and brightest from all over the world. While the “average person” may love the idea of a welfare state feeding off the carcasses of the dreamers and doers, the dreamers and doers don’t appreciate it. America, for the first time, gave those people an option. Stay in your country, where you are reviled and consumed by the voracious and never-satisfied appetite of the welfare state, or come to a land that tells you that all doors are open to those willing to walk through them? The French may be happy with their long vacations and short work weeks, but they’re consigning themselves to the also-ran pool of human history. History is written by the dreamers and the doers, and they’re scrambling away from Europe at breakneck speed. America may not be perfect, but there’s no place I’d rather be. As long as the American Dream lives, I will live where it can best be acheived.
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