Is the EU truly richer than the US in terms of overall quality of life?

[Economist]

Thanks for the views. Some are interesting, so I am probably wrong on some things, ok.

I think it is a question of how inequality is viewed. In the US the dominating view is that inequality between people is a kind of motor to drive yourself to prove yourself and do better and work and study for goals. You have less social protection maybe but more freedom to try other jobs, to study and work and compete against others and therefore climb a social ladder. You can move around the country and the individual "responsability" and freedom to do and choose is the strength of the system.

In the EU and most countries in the world being that they all seem to have a more socialist influence, inequality is more similar to injustice, to someone who gets more or has more while not really deserving it. The freedom the individual has (or imagines he has) in the US is not really there in the EU, you land a job if you are fortunate and just glide by, like in France with the 35 hour work week. The concept of hard work to identify yourself and show how much you are worth and get ahead is much weaker in most other countries.

So it is a cultural - ideological view of life. Are you freer in the US when you are climbing a social ladder but tied down to your job 80 hours a week, but you love your job (or maybe you are fooling yourself that you love it ?) or are you freer in the EU with less pay but you can get by with a 35 hour work week ? I don't know, which is better. You are more on your own, your personal responsability is more important in the US, in the EU you have government welfare or free health care etc, that covers you, but it is ultimately an ideological - philosophical outlook that produces the laws of both regions.

Of course capitalism and the rich and powerful corporations prefer people having the "hard work" and deserving mentality the US has, it can squeeze people more because people think they are going to get ahead although it is never gauranteed. Probably both systems generally suck and rip you off one way or another, there is no free lunch, just some random thoughts, anyways my sensations are probably all flawed so that is OK.

On the taxes, if you add in the US property taxes, you will see that it is quite close to the EU of 30% of your income. Property taxes in the US have gone up a lot in a lot of areas as a result of home prices going up. I think you are paying from 200 to 300 dollars a month in the better suburbs of the US, am I wrong ? If you compare almost free daycare for children in the Scandinavian countries while mommy goes to work compared to the US average of another 200 to 300 dollars a month you have to pay in the US for daycare centers, this also adds up to another form of "hidden" tax in the US.

Look, in my own personal opinion you have once again mentioned many things which I think are confused and incorrect. I think you should really check out these old PBS documentaries, titled "Free to Choose" by Dr. Milton Friedman. The link I am posting is a website where you can watch them for free. I'd start with the 10 episodes that aired in 1980 as they are the original series. After that you can also watch the 5 episodes that he updated in 1990. You can watch them all for free here: http://ideachannel.tv/

If you look on the right side of the screen you will see all the episodes listed. They cover many of the topics we've been discussing. I'd say it's one of the best ways for someone to get an elementary understanding of economics and economic concepts.

By the way, when you were mentioning taxes, you only brought up income taxes and property taxes. To really get to the bottom of this debate you would have to include and compare ALL taxes (sales, property, wealth, widfall profits, etc.). And when you said that a women in the US pays a "hidden" tax for daycare, that's simply not true. That is not a "tax" at all, it is a decision to purchase something. She has the choice to pay for daycare, and she can choose the daycare that's cheapest or best or whatever, or she can try to work out another arrangement, like letting her mom watch the kid, or taking turns with other parents. But it's definitely not a tax.

 

[vanesch]

Well, if you have ever taken any economics class then you have surely heard this before but this relates to the theory of maximization of utility. Basically in life you have a choice of lots of money and no free time or no money and nothing but free time. Of course you can also choose to be anywhere in between. I guess culturally maybe Americans prefer to have more money and less free time. I guess we look to our retirement as our eventual free time. By then we will have accumalated enough money, hopefully, to live nicely. It all just depends on what it is you want.

I think this is about correct: in general, in the EU, one is a bit less "eager to be rich" and a bit more desirefull of "a peaceful quiet life" - maybe the war-ridden past of Europe is responsible for this up to a point. As such, even with entirely "free choice" options (and they are being instored more and more: the European commission is working a lot towards more capitalism and free choice), the spending pattern of Europeans would probably not change that much from their taxes-imposed spending for public service: they would probably invest about as much in the same kinds of services as are provided for by public services right now. The only difference is probably that if certain services are transferred to the private sector, they might (but not always!) become more efficient with their money. So it is not clear to me how a complete privatisation of all public services might change radically the economy in Europe. In any case, the EU is evolving slowly in that direction, so we'll find out.

 

[jim mcnamara]

Recent analysis of the US Dept of Energy datasets shows that one part of deregulation privatizing, free markets (specifically: removing government controls on utility rates, allowing free markets) results in an average higher price (10% - 25%) for energy based on EIA data 1991 - 2007.

http://www.ppinet.org/PDFs/PPI-rp-INDjul07data-nov07.pdf

Large power wholesalers, of course, view this study as flawed. Power wholesalers are 100% behind the free market idea.

I'm sure conservative PF posters will find a major flaw in the study, but since I've been in the utility industry for 20+ years, everybody in the business recognizes this as pretty close to correct. And wants to get on the bandwagon, too. After all, increased profits for a utility do allow them to expand into green power, which right now is far more expensive per kWh than coal-fired generation. And the Public Utility Commissions everywhere are starting to mandate green power generation. Even for privately owned companies.

 

[russ_watters]

Is certainly correct (and I'm a conservative), but I don't see how that relates to this thread. Are you saying that in general the free market results in higher prices? Power companies are a very special case - they must be government-regulated monopolies and couldn't function any other way. Even "deregulated", they aren't deregulated and the "competition" isn't real. All the deregulation did was make it easier for the monopolies to act like monopolies.

 

[oldtobor]

Take the subprime mess. I don't know of any place in Europe or Japan where thousands of workers have been layed off from banks as in the US. Why ? I think it is a kind of cultural "superstructure" that is on top of the economy. The US has constant hire - fires, constant changes in companies, this provokes many moves, winners and losers etc. This actually contributes somewhat to the GDP. But if you look at Japan and the EU, they have a GDP that is not too far behind that of the US but without so much turmoil and stress on the individual workers as in the US. Why ? because maybe the economy is a kind of "automatic" machine, given a certain level of wealth many of the cultural artifacts that economists like to talk about do not influence the economy anymore. The idea of "hard work", of research and development etc. of "competition" seems just excuses to hose workers in the US. The economy is an automatic machine determined by its level of technology and infrastructure.

99% of work in these economies is in mostly average activities like stores, constructions, nurses, teachers etc. These are similar throughout the world.
I read that the Japanese tried to imitate the american style of meritocracy amongst workers, the better and more skilled worker gets ahead, the others are left behind etc. for some time but found it "unsatisfying". It didn't make their country richer but just created more stress and conflict between workers. They reverted back to their traditional heirarchy salary man (aka "slave") model with the guys showing their presence in the office until 10:00 pm without actually producing anything. The fact is it didn't change anything, either way. Now that is interesting, how economies reach the same level of wealth independently of the way the workers "act".

 

[Art]

Is certainly correct (and I'm a conservative), but I don't see how that relates to this thread. Are you saying that in general the free market results in higher prices? Power companies are a very special case - they must be government-regulated monopolies and couldn't function any other way. Even "deregulated", they aren't deregulated and the "competition" isn't real. All the deregulation did was make it easier for the monopolies to act like monopolies.

These days it's hard to think of any business sector that isn't dominated by a few big players and although economies of scale coupled with deregulation can lead to price reductions in the short term once a company's dominance in an area is established the desire to maximise profit becomes the prime motivator with a consequent increase in prices, less choice and less innovation.

Even in the EU with it's monopoly commissions and competition authorities the march towards ever bigger, more powerful, more dominant corporations continues inexorably as they squeeze their smaller competitors out of business and increase their market share.

 

[Dale]

Take the subprime mess. I don't know of any place in Europe or Japan where thousands of workers have been layed off from banks as in the US. Why ? I think it is a kind of cultural "superstructure" that is on top of the economy. The US has constant hire - fires, constant changes in companies, this provokes many moves, winners and losers etc.

I actually think it is the other way around. There is an economic "superstructure" that is on top of the culture. The American culture* respects hard work, ingenuity, talent, etc. and therefore the American economy rewards such. The American culture does not tolerate failure, poor-judgement, or incompetence. So the firing of the subprime lenders makes cultural sense.

*By "American culture" I am referring exclusively to so-called traditional American values. There is of course a wide variety of individual opinions and values, many sub-cultures, and gradual changes in generally-held beliefs and attitudes. The current cultural trend is away from "meritocracy" and towards "entitlement" as far as I can tell. The economic superstructure is following suit.

 

[russ_watters]

Take the subprime mess. I don't know of any place in Europe or Japan where thousands of workers have been layed off from banks as in the US. Why ? I think it is a kind of cultural "superstructure" that is on top of the economy. The US has constant hire - fires, constant changes in companies, this provokes many moves, winners and losers etc. This actually contributes somewhat to the GDP.

The subprime mess is a special case, but otherwise, yes, turnover is an economic driver in the US.

But if you look at Japan and the EU, they have a GDP that is not too far behind that of the US but without so much turmoil and stress on the individual workers as in the US. Why ?

I don't know about that - the US has a lower unemployment rate than most of the rest of the industrialized world. So that makes it easier to find another job if you choose to or have to. And turmoil? What do you call this?:

Commenting other demonstrations in Paris a few months later, the BBC summarized reasons behind the events included youth unemployment and lack of opportunities in France's poorest communities.

http://en.wikipedia.org/wiki/2005_civil_unrest_in_France

France is having rioting problems again right now and the general problem of absurdly high youth unemployment is a long-term problem.

And stress? Japan? Japan practically invented job-related stress! (and you know that as you discuss below)

I read that the Japanese tried to imitate the american style of meritocracy amongst workers, the better and more skilled worker gets ahead, the others are left behind etc. for some time but found it "unsatisfying". It didn't make their country richer but just created more stress and conflict between workers. They reverted back to their traditional heirarchy salary man (aka "slave") model with the guys showing their presence in the office until 10:00 pm without actually producing anything. The fact is it didn't change anything, either way. Now that is interesting, how economies reach the same level of wealth independently of the way the workers "act".

Japan was unable to duplicate the American workforce's culture. I don't know why it caused them so much stress, but that isn't the way it works here.

oldtobor, again, you are just making things up and saying things that sound good in your head. Virtually nothing that you have said in this entire thread, much less this post, has anything to do with reality. This isn't rocket science. If you have an idea, google it. Find out if it is a reality or if it is just something that sounds good in your head.

 

[oldtobor]

I actually think it is the other way around. There is an economic "superstructure" that is on top of the culture. The American culture* respects hard work, ingenuity, talent, etc. and therefore the American economy rewards such. The American culture does not tolerate failure, poor-judgement, or incompetence. So the firing of the subprime lenders makes cultural sense.

*By "American culture" I am referring exclusively to so-called traditional American values. There is of course a wide variety of individual opinions and values, many sub-cultures, and gradual changes in generally-held beliefs and attitudes. The current cultural trend is away from "meritocracy" and towards "entitlement" as far as I can tell. The economic superstructure is following suit.

The lenders would have been fired if they didn't follow the subprime loaning bandwagon. They were pressured and forced into doing it, and anyways a lot of workers who have nothing to do with it have been layed off because any excuse is good to have the occasional massive layoff (like after 911, anyone remember ?).

Actually the US accepts failure a lot more than EU or Japan, the US is based on try again, you have another chance, keep on trying even if you fail many times it is OK. This is one of the real great strengths of the US culture compared to EU and Japan where failure is equal to complete doom. And this probably determines why the hire - fire system is not such a problem in the US as perceived in Japan and EU. If you are fired try again in another company, open a business etc. In EU or Japan being fired is like being doomed.

So yes, the US has many cultural advantages, but the economy (both US and World) is more and more a self referential fight between each other, lawyers against hospitals against insurances etc. trying to squeeze out more and more from a pie that is not growing anymore and creates conflicts between people.

 

[Dale]

The lenders would have been fired if they didn't follow the subprime loaning bandwagon. They were pressured and forced into doing it,

You are undoubtedly correct here about the pressure from management to make bad loans and about the likelyhood of being fired otherwise, but you are not correct about being forced into doing it. As you have already mentioned job turnover is high. In the US, if you choose to stay in a company that is pressuring you into doing something then you are deliberately supporting that behavior. You cannot absolve the workers of complicity. In any case, those organizations where that is true are the ones that will probably go out of business. In a sense, the whole organization is being "fired" from top to bottom.

Actually the US accepts failure a lot more than EU or Japan, the US is based on try again, you have another chance, keep on trying even if you fail many times it is OK. This is one of the real great strengths of the US culture compared to EU and Japan where failure is equal to complete doom. And this probably determines why the hire - fire system is not such a problem in the US as perceived in Japan and EU. If you are fired try again in another company, open a business etc. In EU or Japan being fired is like being doomed.

You are correct. This is a very good point, one that I hadn't considered completely. I guess persistence and optimisim should have been on my list of rewarded behaviors. I still think we don't tolerate failure and incompetence, i.e. you easily get fired or go out of business, but your point is that in the US failure and incompetence can be somehow temporary states.

trying to squeeze out more and more from a pie that is not growing anymore

I assume that you realize that this statement is completely false. I hope you were actually trying to claim something like "the pie is not growing as fast as it once did" and just said it this way for exaggeration or dramatic effect. If you really believe it then this discussion is in trouble.