Agree..... it is better to be helpful vs boastful. Two further points:
1) Culture: One of the key reasons for the difference between Europe and US growth rates is cultural around the topic of risk. The US system rewards risk and allows for creative destruction (at least away from government influenced markets). The European system/culture is more protective. It goes beyond regulation...it is deeply cultural.
2) China Manufacturing: I wonder about the accuracy of the Chinese manufacturing data. If you do final assembly, are you really manufacturing the good.. this is the case for cell phones.
Well, note that the number in my graph is manufacturing value-added. This only measures the contribution to the product's final value that happens *in the country*. :-)
I agree culture is an underrated factor. It's not just about risk. I'd argue it's also about optimism and ambition. The US suffers the least from tall poppy syndrome, although we still have some amount of it.
I recently read some Vernor Vinge based on Noah's (and others') recommendation, and although it's science fiction, one concept from it that stuck with me is the idea of older cultures basically getting exhausted. I wonder if we're seeing some of that across the developed world. There's some degree of focusing too much on negatives, feeling incapable of changing things for the better, and just throwing up one's hands and giving up. It's probably correlated with an aging population, but I wonder what else is driving it. I bet a more competitive media market, including social media, and a more adversarial political climate are big contributors.
I'm also curious whether people's feeling of agency on average is going down. Maybe we don't celebrate heroes and success stories as much as we used to, and so people feel less potential to emulate those success stories? There are pitfalls to hero worship, but maybe we threw out too much of the good parts with the bad? Or maybe too many of our reference points these days are influencers and whatnot?
Do you think that the American people are perhaps genetically more risk-tolerant than Europeans, because the very process of emigration across the Atlantic selected for risk-takers in the first place?
1) Immigration: As you point out, you are selecting the pool of folks who have a higher risk tolerance.
2) Governance: Unlike most countries, the governance structure in the US is setup as an explicit power to government...everything else to the individual. Now... there is creeping government intervention, but the philosophy is clear.
3) Size: The US is very unique in being a continent which is a country. This means that there is always a place to go for "space." This mobility and size generate a sense of space to try things.... even crazy things. This means that we have "flat-earthers" as well as the crazy people who thought computers AI could handle language. It turns out the level of innovation and progress in a country is a function of the level of Kookiness you are willing to tolerate.
Agreed. Our continental status has to be one of our great competitive advantages. And we're a long way from full-up. US density per sq. mile is about 95 people, obviously very uneven, while Western Europe is at 468.
Didn't Hitler also ascribe America's dynamism to its low population density, with Nazi policy being fundamentally a plan to turn eastern Europe into something like the 19th century American frontier (with the Slavs in the role of the American Indians)?
Of course it failed catastrophically because American Indians were super-vulnerable to disease (to the point that in large parts of America so many died that the few survivors reverted to a hunter-gatherer lifestyle) while Slavs were not.
I think another factor is the way the US was founded. I imagine the initial founding people were selected for risk taking and ambition and that selection effect continues to that day (id imagine it would partly explain why immigrants are significantly more like to start ventures). It has left a pretty deep impact on American psyche. Americans are obsessed with growth and ambition. This can at times leads to ruthless profit maximization and hustle culture but also incredible innovation.
In Europe however, there seems to be more of a culture of … stasis? (Idk a better word) for it. My family in Europe always looks at me crazy because after a week into an extended stay I’m antsy to do something, be “productive” while they have an easier time of just taking it easy and enjoying each others company
"unlike most countries, the governance structure in the US is setup as an explicit power to government...everything else to the individual"
This. I spent time in Germany (for many weeks/months each stay) on several occasions in the 1990s and 2000s for work reasons. Early on, I would complain about things like "no stores after 8 pm or on weekends", and the Germans would look at me weird and explain that a store cannot be open after the permitted hours. That is just an example. Maybe things have changed (doubtful), but they were a "nothing is allowed unless permitted" society, whereas the US is (or at least was) an "everything is allowed unless prohibited" society.
Let me give you live example of this which is playing out right now in the field of Autonomous Vehicles (my "day" job). The Germans (and EU) and Chinese are busy building regulations around this technology. The headset is.... we need to manage/control this technology. In fact, they would claim that the regulation provides the economic basis for success. Meanwhile, the US regulator (NHTSA) has taken a point-of-view of ... the technology is too immature right now... we need to understand how it will work and see actual issues before we regulate them. Basically, the US lags on regulation (often driven by the liability structure in the court system) while the rest-of-world tends to lead it...trying to anticipate issues.
Here is the natural consequence of this behavior .... new technologies tend to flourish in the US... Tesla has over a million cars with "autonomous capability" and is now years ahead of the traditional European automakers in technology, supply chain, cost, etc. Of course, there is a cost to the US headset... one need only look at the fentanyl situation to see it. Overall, in general this acceptance of risk has direct impact on economic growth.
Let me steelman for a second - I think when people bring up comparative growth rates, they are not "sneering at the Europoors"; they are presenting real-world evidence about the outcomes of different economic choices.
I agree with the central thrust of this post. The free world needs to come together to deal with the threat of authoritarianism, and the people who go out of their way to trash Europe vis-à-vis the US at every opportunity aren’t helpful.
That said, there were a lot of Europeans (and left leaning Americans) who did the reverse from around 2000 to 2022. The US was portrayed as a nation of backwards, bible-thumping lunatics who were utterly obsessed with guns and hamburgers. It was portrayed as practically a failed state for not having a robust form of socialized medicine, and the invasions of Afghanistan and especially Iraq were seen as outbursts of a limitlessly militaristic foreign policy. US warnings of Russian revanchism were thus dismissed as the US just wanting to relitigate the Cold War, and so European governments (especially France and Germany) instead opted for the old tactic of “let’s get the dictators to like us by sending them lots of money” that backfired spectacularly.
So while I think *excessive* criticism of Europe is bad, a reasonable amount is justified if only to counterbalance the decades when Europe was used to show the US as uniquely flawed. Social democracy on the Danish model looked great in 2005, but it was almost certainly unsustainable in the long run. Europe has effectively been living on its inheritance for the past few decades, but now that money is running out.
>they can taunt us with the fact that they’re more protected from the modern menace of browser cookies
I’m not sure if this is intended to be a joke or not, but it’s presented here with a completely straight face and nobody else has said anything, so I’ll make the point: almost every website uses cookies, and the fact that you have to click through a notification saying you understand they’re being used is just silly, and is a shining example of EU politicians not understanding tech policy. It’s like being forced to sign a small waiver before you enter any building, indicating that you understand there is “gaseous nitrogen” inside. It’s pure goofiness.
>Severe aging and lack of investment in education are other problems.
A lack of college education is almost never a *cause* of societal problems, as education is mostly just a zero-sum game. I’d recommend reading Bryan Caplan’s Case Against Education for more info on this. There might be some correlation, but college education really should be seen as a consumption good like wine or chocolate.
As someone who grew up with in Germany and went to college in the UK during the 2000s, I wholeheartedly agree with your statement of the US having been portrayed as "backwards", at least back then.
I still vividly remember watching Michael Moore documentaries and thinking how bad life in the US must be. I used to affiliate guns, a poor social safety net, healthcare, and rampant racism and inequality with life in America for the most part.
Only later in life, when spending time outside of Europe, I started to realize how while all these issues certainly exist, they were somewhat blown out of proportion.
I, too, wonder how much of the European lifestyle was afforded on the backs of future generations, but also thanks to America's elevated defense spending, consumerism, and pharma industry that charges American residents substantially more than those in Europe.
Having said that, there's plenty to be gained from being political and economic allies. It reminds me a bit of the European Union itself, there are certainly some weaker countries in the bloc that ”take" more than they "give", but in the grand scheme of things it still strengthens Europe as a whole.
"... and the fact that you have to click through a notification saying you understand they’re being used is just silly, and is a shining example of EU politicians not understanding tech policy. It’s like being forced to sign a small waiver before you enter any building, indicating that you understand there is “gaseous nitrogen” inside. It’s pure goofiness."
I was in Europe for a few months last year. It was super annoying and completely pointless to have to click through that on everything single on-line interaction. Now let's weigh in on the import of the Prop 65 notices (everything under the sun is KNOWN to the state of California to cause cancer." You'd think all 40 million Californians must have cancer by now.
>The US was portrayed as a nation of backwards, bible-thumping lunatics who were utterly obsessed with guns and hamburgers. It was portrayed as practically a failed state for not having a robust form of socialized medicine, and the invasions of Afghanistan and especially Iraq were seen as outbursts of a limitlessly militaristic foreign policy
Is/was it not? Those ring pretty true to me still. Doesn’t mean that appeasement of Putin was the right choice
Another unfortunate aspect of "bashing your friends" is that it makes it more difficult to adopt good policy ideas from them, such as much lower costs of building infrastructure.
I think you are going to have a difficult time communicating this message politically.
For a very significant portion of the population, thinking globally is synonymous with sending the bulk of the good jobs for the not-highly-educated to other countries. Any rhetoric that can be characterized thus by opponents is going to run into some extreme headwinds.
But that aside, I think that the Trump personality stuff has distracted from a head on national discussion as to this urge for a return to a sort of pre-WWII isolationism. Often couched as a reverence for Eisenhower as the last US president who knew the real America.
A significant portion of the country is going to think it's all the better for America to be self reliant, build itself back up to the point that it can stay out of others' business. When you recount the foolishness of German reliance on Russian natural gas, they nod and think "Exactly, you never know what some other country is going to do down the road. Rely on yourself."
That there are serious ramifications for the US reverting to this kind of isolationism, that's an argument that needs to be made post-Trump, when his TV personality is no longer tipping the scales. But it will need to be made in terms of the implications for Americans, not "make the world safe for democracy" stuff which sounds more and more propagandistic as military action to accomplish it result in horrifying social media video.
Excellent and concise analysis. And important point. One of America's greatest foreign policy and economic triumphs was helping the European and Japanese economies recover post WW2. So, you need only to think of that to understand the main point of your article.
Unfortunately, GDP per working-age person is not the best way to compare GDP.
The reason is that the percentage of working-age people who actually work is not fixed.
Over the years, Japan has been putting more and more of its working-age people to work. This has raised GDP per working age person, but it has not raised GDP per hour worked.
I think a lot of the American online “sneering at the europoors” is a reaction to poor European online behavior that constantly belittles Americans as dumb, obese, and overly complacent about our poor healthcare system and school shootings. The Europeans do not seem to think our problems are their problems, so why should we? (This doesn’t really apply to our East Asian allies)
Honestly, the question should be asked: Besides the U.K., are most of the European countries even our allies anymore? Most of them seem ambivalent at best about backing us up when it comes to China, but will gladly welcome our money and weapons when it’s going over there to handle the Russian invasion of Ukraine—which is primarily a European problem.
I think Reagan said it best: “This, I believe, is one of the most important sources of America's greatness. We lead the world because, unique among nations, we draw our people -- our strength -- from every country and every corner of the world. And by doing so we continuously renew and enrich our nation. While other countries cling to the stale past, here in America we breathe life into dreams. We create the future, and the world follows us into tomorrow. Thanks to each wave of new arrivals to this land of opportunity, we're a nation forever young, forever bursting with energy and new ideas, and always on the cutting edge, always leading the world to the next frontier. This quality is vital to our future as a nation. If we ever closed the door to new Americans, our leadership in the world would soon be lost.”
I believe that the fact that some Americans sneer at Europeans has little to do with facts and figures. It’s more likely a way of making oneself feel better about your own situation., without any real sense of reality. ‘I’m not as well off as my next door neighbor, but my house is bigger than those shabby apartments that the Europoor live in’.
I think the sudden UK change is not directly due to the financial crisis but rather immigration, something economists don't like talking about. Brexit obviously plays no part at all if you look at the actual graph, it can't even be seen. Nor is there any obvious way for the other factors to influence things, for example British banks haven't been unusually unstable since then.
It was around those years that the UK immigration numbers really exploded as the EU stumbled due to the GFC and lots of people packed up their bags. The massive population growth is not really visible in official data, which is recognised by the government to be completely wrong! But it can be inferred in other ways. Productivity is basically about investment in technology, and the usual reason to do that is some sort of upwards pressure on wages. If you allow essentially unlimited immigration for years though, wages flatline and the incentive to upgrade disappears.
A simple way to see this is to go spend time in Heathrow. The sheer number of people being pushed around on wheelchairs by the staff is astounding, you just don't see that elsewhere in other airports. One might ask why these people don't have their own motorised wheelchairs if they really need one at all, but if course with infinity cheap labour there is not a reason to have such things and thus the chair pushers drag down productivity.
The UK was especially affected by this because it was the most attractive destination for EU internal migration around that time due to lack of transitional controls on Eastern European joiner countries, and because the native language is English. So that led to an endless supply of ultra cheap labour often willing to work for less than the minimum wage in reality. The voters didn't like this but the political class decided to ally over it, the left for social engineering reasons and the right because it appeared to boost GDP (more people).
The issue isn't going to change anytime soon either. Net migration has exploded in recent years and the ruling parties have both basically decided that they will never give voters what they want, something they can do due to lack of clear alternatives. The Conservatives are essentially willing to commit suicide over the issue due to the dominance of their left wing "one nation" faction, and most right wing voters have concluded that the party must be destroyed and rebuilt if it's to ever be responsive on the issue again. Now Labour will likely win and so UK productivity will continue to go nowhere for the foreseeable future.
On unlimited immigration: yes it increases the supply of labour, but it also increases the demand for it. These people eat, they live in houses, they require healthcare, their kids go to school, and all of this creates jobs even if none of them are the go-getting entrepreneurial type. It's not at all obvious to me that immigration suppresses wages (compare Japan, they also have wage stagnation despite immigration being very low there).
On "the dominance of the one-nation Conservatives:" Boris Johnson literally expelled these people from the Tory whip. There are basically none of them left in Parliament; the closest any one-nation Conservative has to institutional power these days is a podcast with Alastair Campbell.
It only creates jobs in a free market. In the UK housing construction is throttled so heavily that migrants are being put in hotels, doctors places are strictly limited by the unions and don't respond to demand, food is only a small number of jobs and increasingly automated anyway, and that leaves school which is also largely run by the state.
So mostly, they are not creating that many jobs but rather just overflowing existing capacity and pinning wages for the few roles that do get created to the floor.
Johnson only kicked out the MPs that were openly in rebellion over Brexit and attempting to take over the business of government. The rest he didn't touch. The One Nation types are still very much in the majority there, look at the recent performance of Caroline Nokes who sounded exactly like New Labour for example. Not sure where you got that idea that there are none left. Their most recent impact was preventing the government strengthening the legislation about Rwanda deportations.
I agree with a lot of that, but the response should be to solve the underlying problems - build more houses, hire more doctors etc - rather than taking it out on the blameless new arrivals.
Isn't another reason why the Conservatives support high immigration in spite of their rhetoric, is that immigration helps to keep property prices elevated? This is very important when many core Conservative voters are close to or above retirement age, and reliant on home equity release to maintain their living standards.
And I'd regard North Sea oil and gas as another big cause of the UK's current economic predicament: from 1980 onwards they exacerbated British deindustrialization via Dutch disease, then began to run out such that in 2007 the UK became a net importer of oil again, right when the GFC was about to hit.
Tony Blair knew exactly what he was doing when he resigned as PM, with his former rival Gordon Brown replacing him to be left holding the bag...
I don't think there's any widely accepted explanation of why the conservatives are willing to suicide their own party over this, which is what polls currently suggest they are doing. My own view is that it's because the party in 2010 was selecting for politically apathetic center left types who are very easily bullied by allegations that they are mean, nasty, racist or whatever. So the left bullies them, they feel sad and wonder how they will get nice cushy jobs in marketing after their political career, and decide it feels better to betray their voters. They just don't have the courage of their convictions.
While the Tories of 2010 were certainly dominated by centrists desperate to throw off the "nasty party" label, I doubt that was at all true of the new intake of MPs elected in 2019!
I'm not even sure it's true of the 2010 intake, which includes the likes of Liz Truss, Priti Patel and Jacob Rees-Mogg, alongside Rory Stewart and their ilk.
The Europeans have been sneeringat the US and free riding for decades now. They came out of World War II and acted as if they had somehow discovered the right way to do civilization. Rainbows and sweetness from the US is not going to get them to re-evaluate their problems, they'll have to figure that out themselves.
Europe has major problems with immigration. It spent centuries separating people into religious, linguistic and ethnic nations. As Noah points out, a major benefit to the growth of US GDP is immigration and I'd bet Australia has benefitted as well. The UK did until the bloody Tories got in and now look what they've done to themselves. I'm not sure that Europe has the capacity to accept and acculturate immigrants but given birth and fertility rates they really, really need to find a way.
We're going through a rough patch with immigration just now but I imagine we'll straighten out some of the BS and move on to a much more effective system by which I do not mean only MDs and PhDs make it in. Brad De Long in Slouching ...." notes that US growth faltered somewhat from 1924 to 1955 or much because of a period of anti-immigrant laws.
Plus Europe is also disadvantaged immigration-wise by neighboring MENA: immigrants from that part of the world are uniquely problematic in a way that Latin Americans are not.
I agree that there are certain parts of industrial policy which have promoted certain US industries and which may have been neglected by other countries. But regarding the western contention with Russia and China, it is not against the countries and peoples as much as it is against 2 individuals.
Fair enough but Europe's collapsing population is cause to find a better way .... fast.
I'd focus less on source countries and more on a nation's capacity for assimilation. Assimilating MENA immigrants is likely difficult but in the US new immigrants have always been a horror to native-borns. The Irish were excoriated for their faith, a burden that followed them until JFK was elected president if you can imagine. Italians, Jews and so on. We turn out to be superb at assimilating the unfamiliar with the plenty of seeming trivialities like St. Patrick's Day parades and salsa sales larger than ketchup sales. Of course there are more meaningful assimilationist moves as well.
The problem to me is that Europe generally and individual countries more specifically are really bad at assimilation. Germany these days bleats on about its precious culture which sounds mighty dubious to me as if 'culture' is the new 'blood and soil'. The French stick their heads in the sand but never count French reactionaries out. I'm not sure of any good models out there but I'd love to find some.
BTW, I love having rational and reasonable discussions about big topics like this. Thank you for engaging.
Agree..... it is better to be helpful vs boastful. Two further points:
1) Culture: One of the key reasons for the difference between Europe and US growth rates is cultural around the topic of risk. The US system rewards risk and allows for creative destruction (at least away from government influenced markets). The European system/culture is more protective. It goes beyond regulation...it is deeply cultural.
2) China Manufacturing: I wonder about the accuracy of the Chinese manufacturing data. If you do final assembly, are you really manufacturing the good.. this is the case for cell phones.
Well, note that the number in my graph is manufacturing value-added. This only measures the contribution to the product's final value that happens *in the country*. :-)
Thanks for the clarification
I agree culture is an underrated factor. It's not just about risk. I'd argue it's also about optimism and ambition. The US suffers the least from tall poppy syndrome, although we still have some amount of it.
I recently read some Vernor Vinge based on Noah's (and others') recommendation, and although it's science fiction, one concept from it that stuck with me is the idea of older cultures basically getting exhausted. I wonder if we're seeing some of that across the developed world. There's some degree of focusing too much on negatives, feeling incapable of changing things for the better, and just throwing up one's hands and giving up. It's probably correlated with an aging population, but I wonder what else is driving it. I bet a more competitive media market, including social media, and a more adversarial political climate are big contributors.
I'm also curious whether people's feeling of agency on average is going down. Maybe we don't celebrate heroes and success stories as much as we used to, and so people feel less potential to emulate those success stories? There are pitfalls to hero worship, but maybe we threw out too much of the good parts with the bad? Or maybe too many of our reference points these days are influencers and whatnot?
Very interesting thoughts... it is interesting to me that immigrants often are the most optimistic and add that level of energy in a culture.
I suspect the very process of immigration selects for optimism in the first place.
Do you think that the American people are perhaps genetically more risk-tolerant than Europeans, because the very process of emigration across the Atlantic selected for risk-takers in the first place?
Well... I think there are three factors...
1) Immigration: As you point out, you are selecting the pool of folks who have a higher risk tolerance.
2) Governance: Unlike most countries, the governance structure in the US is setup as an explicit power to government...everything else to the individual. Now... there is creeping government intervention, but the philosophy is clear.
3) Size: The US is very unique in being a continent which is a country. This means that there is always a place to go for "space." This mobility and size generate a sense of space to try things.... even crazy things. This means that we have "flat-earthers" as well as the crazy people who thought computers AI could handle language. It turns out the level of innovation and progress in a country is a function of the level of Kookiness you are willing to tolerate.
Agreed. Our continental status has to be one of our great competitive advantages. And we're a long way from full-up. US density per sq. mile is about 95 people, obviously very uneven, while Western Europe is at 468.
Didn't Hitler also ascribe America's dynamism to its low population density, with Nazi policy being fundamentally a plan to turn eastern Europe into something like the 19th century American frontier (with the Slavs in the role of the American Indians)?
Of course it failed catastrophically because American Indians were super-vulnerable to disease (to the point that in large parts of America so many died that the few survivors reverted to a hunter-gatherer lifestyle) while Slavs were not.
I think another factor is the way the US was founded. I imagine the initial founding people were selected for risk taking and ambition and that selection effect continues to that day (id imagine it would partly explain why immigrants are significantly more like to start ventures). It has left a pretty deep impact on American psyche. Americans are obsessed with growth and ambition. This can at times leads to ruthless profit maximization and hustle culture but also incredible innovation.
In Europe however, there seems to be more of a culture of … stasis? (Idk a better word) for it. My family in Europe always looks at me crazy because after a week into an extended stay I’m antsy to do something, be “productive” while they have an easier time of just taking it easy and enjoying each others company
"unlike most countries, the governance structure in the US is setup as an explicit power to government...everything else to the individual"
This. I spent time in Germany (for many weeks/months each stay) on several occasions in the 1990s and 2000s for work reasons. Early on, I would complain about things like "no stores after 8 pm or on weekends", and the Germans would look at me weird and explain that a store cannot be open after the permitted hours. That is just an example. Maybe things have changed (doubtful), but they were a "nothing is allowed unless permitted" society, whereas the US is (or at least was) an "everything is allowed unless prohibited" society.
David,
Let me give you live example of this which is playing out right now in the field of Autonomous Vehicles (my "day" job). The Germans (and EU) and Chinese are busy building regulations around this technology. The headset is.... we need to manage/control this technology. In fact, they would claim that the regulation provides the economic basis for success. Meanwhile, the US regulator (NHTSA) has taken a point-of-view of ... the technology is too immature right now... we need to understand how it will work and see actual issues before we regulate them. Basically, the US lags on regulation (often driven by the liability structure in the court system) while the rest-of-world tends to lead it...trying to anticipate issues.
Here is the natural consequence of this behavior .... new technologies tend to flourish in the US... Tesla has over a million cars with "autonomous capability" and is now years ahead of the traditional European automakers in technology, supply chain, cost, etc. Of course, there is a cost to the US headset... one need only look at the fentanyl situation to see it. Overall, in general this acceptance of risk has direct impact on economic growth.
Let me steelman for a second - I think when people bring up comparative growth rates, they are not "sneering at the Europoors"; they are presenting real-world evidence about the outcomes of different economic choices.
I agree with the central thrust of this post. The free world needs to come together to deal with the threat of authoritarianism, and the people who go out of their way to trash Europe vis-à-vis the US at every opportunity aren’t helpful.
That said, there were a lot of Europeans (and left leaning Americans) who did the reverse from around 2000 to 2022. The US was portrayed as a nation of backwards, bible-thumping lunatics who were utterly obsessed with guns and hamburgers. It was portrayed as practically a failed state for not having a robust form of socialized medicine, and the invasions of Afghanistan and especially Iraq were seen as outbursts of a limitlessly militaristic foreign policy. US warnings of Russian revanchism were thus dismissed as the US just wanting to relitigate the Cold War, and so European governments (especially France and Germany) instead opted for the old tactic of “let’s get the dictators to like us by sending them lots of money” that backfired spectacularly.
So while I think *excessive* criticism of Europe is bad, a reasonable amount is justified if only to counterbalance the decades when Europe was used to show the US as uniquely flawed. Social democracy on the Danish model looked great in 2005, but it was almost certainly unsustainable in the long run. Europe has effectively been living on its inheritance for the past few decades, but now that money is running out.
>they can taunt us with the fact that they’re more protected from the modern menace of browser cookies
I’m not sure if this is intended to be a joke or not, but it’s presented here with a completely straight face and nobody else has said anything, so I’ll make the point: almost every website uses cookies, and the fact that you have to click through a notification saying you understand they’re being used is just silly, and is a shining example of EU politicians not understanding tech policy. It’s like being forced to sign a small waiver before you enter any building, indicating that you understand there is “gaseous nitrogen” inside. It’s pure goofiness.
>Severe aging and lack of investment in education are other problems.
A lack of college education is almost never a *cause* of societal problems, as education is mostly just a zero-sum game. I’d recommend reading Bryan Caplan’s Case Against Education for more info on this. There might be some correlation, but college education really should be seen as a consumption good like wine or chocolate.
As someone who grew up with in Germany and went to college in the UK during the 2000s, I wholeheartedly agree with your statement of the US having been portrayed as "backwards", at least back then.
I still vividly remember watching Michael Moore documentaries and thinking how bad life in the US must be. I used to affiliate guns, a poor social safety net, healthcare, and rampant racism and inequality with life in America for the most part.
Only later in life, when spending time outside of Europe, I started to realize how while all these issues certainly exist, they were somewhat blown out of proportion.
I, too, wonder how much of the European lifestyle was afforded on the backs of future generations, but also thanks to America's elevated defense spending, consumerism, and pharma industry that charges American residents substantially more than those in Europe.
Having said that, there's plenty to be gained from being political and economic allies. It reminds me a bit of the European Union itself, there are certainly some weaker countries in the bloc that ”take" more than they "give", but in the grand scheme of things it still strengthens Europe as a whole.
"... and the fact that you have to click through a notification saying you understand they’re being used is just silly, and is a shining example of EU politicians not understanding tech policy. It’s like being forced to sign a small waiver before you enter any building, indicating that you understand there is “gaseous nitrogen” inside. It’s pure goofiness."
I was in Europe for a few months last year. It was super annoying and completely pointless to have to click through that on everything single on-line interaction. Now let's weigh in on the import of the Prop 65 notices (everything under the sun is KNOWN to the state of California to cause cancer." You'd think all 40 million Californians must have cancer by now.
>The US was portrayed as a nation of backwards, bible-thumping lunatics who were utterly obsessed with guns and hamburgers. It was portrayed as practically a failed state for not having a robust form of socialized medicine, and the invasions of Afghanistan and especially Iraq were seen as outbursts of a limitlessly militaristic foreign policy
Is/was it not? Those ring pretty true to me still. Doesn’t mean that appeasement of Putin was the right choice
Another unfortunate aspect of "bashing your friends" is that it makes it more difficult to adopt good policy ideas from them, such as much lower costs of building infrastructure.
I think you are going to have a difficult time communicating this message politically.
For a very significant portion of the population, thinking globally is synonymous with sending the bulk of the good jobs for the not-highly-educated to other countries. Any rhetoric that can be characterized thus by opponents is going to run into some extreme headwinds.
But that aside, I think that the Trump personality stuff has distracted from a head on national discussion as to this urge for a return to a sort of pre-WWII isolationism. Often couched as a reverence for Eisenhower as the last US president who knew the real America.
A significant portion of the country is going to think it's all the better for America to be self reliant, build itself back up to the point that it can stay out of others' business. When you recount the foolishness of German reliance on Russian natural gas, they nod and think "Exactly, you never know what some other country is going to do down the road. Rely on yourself."
That there are serious ramifications for the US reverting to this kind of isolationism, that's an argument that needs to be made post-Trump, when his TV personality is no longer tipping the scales. But it will need to be made in terms of the implications for Americans, not "make the world safe for democracy" stuff which sounds more and more propagandistic as military action to accomplish it result in horrifying social media video.
Excellent and concise analysis. And important point. One of America's greatest foreign policy and economic triumphs was helping the European and Japanese economies recover post WW2. So, you need only to think of that to understand the main point of your article.
Well said, thank you.
Mostly It is just politics.
I thought this was a pretty good economic (rather than political take) on GDP and productivity comparisons
https://www.grumpy-economist.com/p/change-demographic-and-intellectual?
Japan comes off looking pretty good when we measure GDP per working age person.
Thanks!
Unfortunately, GDP per working-age person is not the best way to compare GDP.
The reason is that the percentage of working-age people who actually work is not fixed.
Over the years, Japan has been putting more and more of its working-age people to work. This has raised GDP per working age person, but it has not raised GDP per hour worked.
So yes, unfortunately Japan really is stagnant.
https://www.noahpinion.blog/p/at-least-five-things-for-your-thanksgiving
By that standard, the US isn’t doing as well, either
https://data.oecd.org/lprdty/gdp-per-hour-worked.htm
I think a lot of the American online “sneering at the europoors” is a reaction to poor European online behavior that constantly belittles Americans as dumb, obese, and overly complacent about our poor healthcare system and school shootings. The Europeans do not seem to think our problems are their problems, so why should we? (This doesn’t really apply to our East Asian allies)
Honestly, the question should be asked: Besides the U.K., are most of the European countries even our allies anymore? Most of them seem ambivalent at best about backing us up when it comes to China, but will gladly welcome our money and weapons when it’s going over there to handle the Russian invasion of Ukraine—which is primarily a European problem.
If you want to keep Europe onside, for God's sake re-elect Joe Biden!
I think Reagan said it best: “This, I believe, is one of the most important sources of America's greatness. We lead the world because, unique among nations, we draw our people -- our strength -- from every country and every corner of the world. And by doing so we continuously renew and enrich our nation. While other countries cling to the stale past, here in America we breathe life into dreams. We create the future, and the world follows us into tomorrow. Thanks to each wave of new arrivals to this land of opportunity, we're a nation forever young, forever bursting with energy and new ideas, and always on the cutting edge, always leading the world to the next frontier. This quality is vital to our future as a nation. If we ever closed the door to new Americans, our leadership in the world would soon be lost.”
I believe that the fact that some Americans sneer at Europeans has little to do with facts and figures. It’s more likely a way of making oneself feel better about your own situation., without any real sense of reality. ‘I’m not as well off as my next door neighbor, but my house is bigger than those shabby apartments that the Europoor live in’.
I would imagine that less than 0.25% of all Americans have traveled to both Europe and Asia.
Most Americans have no idea where the countries are located.
I think the sudden UK change is not directly due to the financial crisis but rather immigration, something economists don't like talking about. Brexit obviously plays no part at all if you look at the actual graph, it can't even be seen. Nor is there any obvious way for the other factors to influence things, for example British banks haven't been unusually unstable since then.
It was around those years that the UK immigration numbers really exploded as the EU stumbled due to the GFC and lots of people packed up their bags. The massive population growth is not really visible in official data, which is recognised by the government to be completely wrong! But it can be inferred in other ways. Productivity is basically about investment in technology, and the usual reason to do that is some sort of upwards pressure on wages. If you allow essentially unlimited immigration for years though, wages flatline and the incentive to upgrade disappears.
A simple way to see this is to go spend time in Heathrow. The sheer number of people being pushed around on wheelchairs by the staff is astounding, you just don't see that elsewhere in other airports. One might ask why these people don't have their own motorised wheelchairs if they really need one at all, but if course with infinity cheap labour there is not a reason to have such things and thus the chair pushers drag down productivity.
The UK was especially affected by this because it was the most attractive destination for EU internal migration around that time due to lack of transitional controls on Eastern European joiner countries, and because the native language is English. So that led to an endless supply of ultra cheap labour often willing to work for less than the minimum wage in reality. The voters didn't like this but the political class decided to ally over it, the left for social engineering reasons and the right because it appeared to boost GDP (more people).
The issue isn't going to change anytime soon either. Net migration has exploded in recent years and the ruling parties have both basically decided that they will never give voters what they want, something they can do due to lack of clear alternatives. The Conservatives are essentially willing to commit suicide over the issue due to the dominance of their left wing "one nation" faction, and most right wing voters have concluded that the party must be destroyed and rebuilt if it's to ever be responsive on the issue again. Now Labour will likely win and so UK productivity will continue to go nowhere for the foreseeable future.
On unlimited immigration: yes it increases the supply of labour, but it also increases the demand for it. These people eat, they live in houses, they require healthcare, their kids go to school, and all of this creates jobs even if none of them are the go-getting entrepreneurial type. It's not at all obvious to me that immigration suppresses wages (compare Japan, they also have wage stagnation despite immigration being very low there).
On "the dominance of the one-nation Conservatives:" Boris Johnson literally expelled these people from the Tory whip. There are basically none of them left in Parliament; the closest any one-nation Conservative has to institutional power these days is a podcast with Alastair Campbell.
It only creates jobs in a free market. In the UK housing construction is throttled so heavily that migrants are being put in hotels, doctors places are strictly limited by the unions and don't respond to demand, food is only a small number of jobs and increasingly automated anyway, and that leaves school which is also largely run by the state.
So mostly, they are not creating that many jobs but rather just overflowing existing capacity and pinning wages for the few roles that do get created to the floor.
Johnson only kicked out the MPs that were openly in rebellion over Brexit and attempting to take over the business of government. The rest he didn't touch. The One Nation types are still very much in the majority there, look at the recent performance of Caroline Nokes who sounded exactly like New Labour for example. Not sure where you got that idea that there are none left. Their most recent impact was preventing the government strengthening the legislation about Rwanda deportations.
I agree with a lot of that, but the response should be to solve the underlying problems - build more houses, hire more doctors etc - rather than taking it out on the blameless new arrivals.
The people most in favour of unlimited immigration are also the types most opposed to libertarianism, so such a solution is politically unworkable.
What are you talking about? Who are these people, going round saying "let them all come here, but on no account build houses for them to live in"?
This is textbook "imagining a guy, tricking yourself into believing he exists and then getting mad about it".
Isn't another reason why the Conservatives support high immigration in spite of their rhetoric, is that immigration helps to keep property prices elevated? This is very important when many core Conservative voters are close to or above retirement age, and reliant on home equity release to maintain their living standards.
And I'd regard North Sea oil and gas as another big cause of the UK's current economic predicament: from 1980 onwards they exacerbated British deindustrialization via Dutch disease, then began to run out such that in 2007 the UK became a net importer of oil again, right when the GFC was about to hit.
Tony Blair knew exactly what he was doing when he resigned as PM, with his former rival Gordon Brown replacing him to be left holding the bag...
Tbh I think you are trying too hard to find logic in the actions of a bunch of politicians who aren't especially bright.
I don't think there's any widely accepted explanation of why the conservatives are willing to suicide their own party over this, which is what polls currently suggest they are doing. My own view is that it's because the party in 2010 was selecting for politically apathetic center left types who are very easily bullied by allegations that they are mean, nasty, racist or whatever. So the left bullies them, they feel sad and wonder how they will get nice cushy jobs in marketing after their political career, and decide it feels better to betray their voters. They just don't have the courage of their convictions.
While the Tories of 2010 were certainly dominated by centrists desperate to throw off the "nasty party" label, I doubt that was at all true of the new intake of MPs elected in 2019!
I'm not even sure it's true of the 2010 intake, which includes the likes of Liz Truss, Priti Patel and Jacob Rees-Mogg, alongside Rory Stewart and their ilk.
The Europeans have been sneeringat the US and free riding for decades now. They came out of World War II and acted as if they had somehow discovered the right way to do civilization. Rainbows and sweetness from the US is not going to get them to re-evaluate their problems, they'll have to figure that out themselves.
As an American who had worked in London & Germany, THANK YOU.
Here are just two of the points that baffled me:
1) Brits strangling housing with their "Green belt"/NIMBY while gaping in amazement at "The City".
2) Germans nurturing anti-American suspicions while allowing Russia to bribe their way into controlling the German economy.
Europe has major problems with immigration. It spent centuries separating people into religious, linguistic and ethnic nations. As Noah points out, a major benefit to the growth of US GDP is immigration and I'd bet Australia has benefitted as well. The UK did until the bloody Tories got in and now look what they've done to themselves. I'm not sure that Europe has the capacity to accept and acculturate immigrants but given birth and fertility rates they really, really need to find a way.
We're going through a rough patch with immigration just now but I imagine we'll straighten out some of the BS and move on to a much more effective system by which I do not mean only MDs and PhDs make it in. Brad De Long in Slouching ...." notes that US growth faltered somewhat from 1924 to 1955 or much because of a period of anti-immigrant laws.
Plus Europe is also disadvantaged immigration-wise by neighboring MENA: immigrants from that part of the world are uniquely problematic in a way that Latin Americans are not.
I agree that there are certain parts of industrial policy which have promoted certain US industries and which may have been neglected by other countries. But regarding the western contention with Russia and China, it is not against the countries and peoples as much as it is against 2 individuals.
Fair enough but Europe's collapsing population is cause to find a better way .... fast.
I'd focus less on source countries and more on a nation's capacity for assimilation. Assimilating MENA immigrants is likely difficult but in the US new immigrants have always been a horror to native-borns. The Irish were excoriated for their faith, a burden that followed them until JFK was elected president if you can imagine. Italians, Jews and so on. We turn out to be superb at assimilating the unfamiliar with the plenty of seeming trivialities like St. Patrick's Day parades and salsa sales larger than ketchup sales. Of course there are more meaningful assimilationist moves as well.
The problem to me is that Europe generally and individual countries more specifically are really bad at assimilation. Germany these days bleats on about its precious culture which sounds mighty dubious to me as if 'culture' is the new 'blood and soil'. The French stick their heads in the sand but never count French reactionaries out. I'm not sure of any good models out there but I'd love to find some.
BTW, I love having rational and reasonable discussions about big topics like this. Thank you for engaging.