The raging US versus Europe debate

January 12, 2010

in Culture, Society, & Economy

There’s a whole lotta writings getting pounded out on the US versus Europe debate, here’s the rough outline of some of the more high-profile response and counter-responses on this hard-to-resolve debate.

This is where it all started, with Jim Manzi.

Supporters use the arguments to push out some of their own reform ideas, including education and pro-family tax reforms, and well, more tax cuts and deregulation.

Jonathan Chait pokes holes in Manzi’s arguments: starting by questioning his sense of geography, moving to the integrity of selected data sets, then disagreeing over data interpretation.

Justin Fox zooms in on economic performance since the Reagan era, and declares Europe the winner.

Matthew Yglesias agrees that more equality and longer vacation in Europe does not seem to impact growth rate.

Manzi, responds, then responds again to his critics.

Meanwhile, Paul Krugman defends Europe from its image of economic failures, then proceeded to prescribe some learning points from the old continent. But the day after, decided to separate his concept of Europe from the currency, possibly taking notes from A Fistful of Euros.

Ross Douthat says decline is relative, and American decline is still, as far as output is concerned, still beats Europe.

Tyler Cowen adds some more yet-to-be flushed out points to be discussion.

Readers react: It’s complicated; Europe 1; US 1.Reblog this post [with Zemanta]

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  • http://ronanlyons.com/ Ronan L

    A report along a similar theme (detailed here, http://www.metafilter.com/33829/EU-vs-USA) found a whole range of reasons why Americans are better off, each of which could easily be challenged. For example, who needs home ownership, if you can rent and enjoy security of tenure and flexibility, free from the worries of negative equity? Who needs car ownership, if public transport (sorry, mass transit!) saves you a fortune each year?

    The last point from that link – who has air conditioning – is a very interesting one. Economists such as Robert Gordon have done research on this and found that correcting for necessary 'defensive' expenditures such as air conditioning erodes a lot of the supposed income gap between US and EU. (To see the point, consider, for example, how much Australian GDP is “boosted” by expenditure fighting forest fires, expenditure that, say, cool Norway just doesn't have to do.)

    Lastly, and perhaps most importantly, is the all important leisure-labour trade off. GDP per hour worked, or more strictly per hour productivity (as measured by the Total Economy Database), was higher in Austria, Belgium and the Netherlands than in the US, while France – that bastion of Old Europe – had productivity levels that were 99% of those in the US. Many people in Europe are much happier with 4 weeks holidays a year than if they had to give up half their holidays to boost the nation's GDP per capita.

    Sure standards of living should account for that!

    RonanL

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