Europe -- Repressed Socialist State or Burgeoning Democratic Empire?

[Pangloss]

I'm curious what some of our European friends here think of the idea, popular in some circles in the US (particularly the right side of our political spectrum) that Europe's economic woes are fundamentally based on its more socialistic economy. Or as today's editorial on the Wall Street Journal's "Opinion Journal" puts it, "a product of the welfare state". Is that a fair statement?

 

http://www.opinionjournal.com/editorial/feature.html?id=110006768

 

Some points that they make:

- Much higher unemployment

- Much lower growth rate

- Half of Europe's new jobs '80s & '90s are in the public sector

- State ownership and subsidy of key industries

- Rules that make it difficult to hire and fire workers

- Prohibitions against closing down plants

- Heavy protections of labor unions against competitive forces

- Mandatory worker benefits including health, child care, paid parental leave, & 4-6 weeks vacation

- Shortened work weeks

- And of course, vastly higher taxation to pay for all of this.

 

Their point being that they suggest (or actually come right out and state) that the US's "allegedly cruel and "laissez-faire" [state] has done much better both by economic growth and worker opportunity".

 

They go on, of course, to talk about how the US should not go in that direction. As I mentioned above, this is a common perception in the US, and I have to admit they defend their point well. But of course the US is not alien to the concept of safety nets, and there are obviously other factors at work here as well. Europe has had to incorporate a vast amount of third-world infrastructure over the last 15 years, for example, such as a highly pollutive, coal-based Eastern German power grid.

 

Could these factors be more relevent than the taxation situation? Is it better to think of Europe as being more like America in the 1940s, using public employment to climb out of the great depression, perhaps? Are there not signs of success and achievement on the horizon, like the impressive new Airbus A380 project?

 

So I'm curious what you all think.

[Aardvark]

Their point being that they suggest (or actually come right out and state) that the US's "allegedly cruel and "laissez-faire" [state] has done much better both by economic growth and worker opportunity".

 

They go on' date=' of course, to talk about how the US should not go in that direction. As I mentioned above, this is a common perception in the US, and I have to admit they defend their point well. [/quote']

 

On the one hand European nations tend to have higher unemployment rates than the USA and higher overall taxation. On the other hand general standards of living are higher in some European nations than the USA. Taxes may be higher, but those taxes do provide better education and healthcare.

 

Europe is burdened with red tape and higher taxes, but far better to be poor or an unskilled worker in Europe than the USA. Far better to be sick in Europe than the USA.

 

According to the New York Times social and economic mobility has actually declined in the USA over the last 50 years, that much of the talk of 'worker opportunity' is myth.

 

American economic freedom has its positive sides but it also means completely uncontrolled concreting of beautiful natural landscapes, of endless low density housing and lax pollution standards. A lot of this development is highly short-termist.

 

European nations do tend to over burden themselves with regulations and controls but conversely the lack of regulations and controls in the USA is severely damaging to long term economic development, environment protection and drives down living standards. In European nations living standards are consistently rising. In the USA 'blue collar' living standards are stagnating at best with wages actually falling in some industries, esp as so much of American business now openly depends on the exploitation of illegal Mexican workers to drive down wages.

 

European nations may have their economic difficulties but the USA is too complacent about its own serious economic problems.

[Pangloss]

Whoa, hang on, I've got to sit down, I'm dizzy from all that spin! ;-)

 

Please remember that we're talking about Europe, here, not the US. A comparison is not a valid argument (i.e. two wrongs don't make a right). Tell me why you think Europe has been *successful* in this implementation, when all evidence appears to be to the contrary.

 

For example, if "worker opportunity is a myth", why not just go ahead and lay off everyone in Europe, then, and just have everyone live off the welfare of the state? The important thing is that everyone is taken care of, right? In their zeal for the socialist ideal, have they stopped to consider what might happen if there's nobody left to tax? How will they pay for all those welfare programs then?

 

Obviously that won't work. So the real question becomes how will Europe compete for business in the global economy, when its workers are taxed to the gills, work far fewer hours, and have massive benefits that the company has to cover? Heck, they'd be foolish not to opt for *American* labor over that madness.

 

But hey, at least everyone has good health care, right?

[Skye]

Please remember that we're talking about Europe, here, not the US. A comparison is not a valid argument (i.e. two wrongs don't make a right). Tell me why you think Europe has been *successful* in this implementation, when all evidence appears to be to the contrary.

The article is comparing the US and Europe, all the arguments hinge on the comparison. Read your own opening post and notice this: Their point being that they suggest (or actually come right out and state) that the US's "allegedly cruel and "laissez-faire" [state] has done much better both by economic growth and worker opportunity". There's no point discussing the relevence of statistics, as indicators of the outcome of polcies, without something to compare them to.

[atinymonkey]

For example' date=' if "worker opportunity is a myth", why not just go ahead and lay off everyone in Europe, then, and just have everyone live off the welfare of the state? The important thing is that everyone is taken care of, right? In their zeal for the socialist ideal, have they stopped to consider what might happen if there's nobody left to tax? How will they pay for all those welfare programs then?

[/quote']

 

Well, as with most Economic polices, the balance takes decades to achieve. For the citizens, it's not as simple as sitting back, refusing to work and watching the money pour in. Without a valid reason for not working, the income achieved would be well below the poverty line. This, of course, fosters certain sections of society to create reasons to not work. For instance, single parent mothers have increased solely because they will be given a grant, housing and supplements. However the grants are only available while the mother is single, the addition of a partner reduces the mothers income. This sort of policy means you have to become a social outcast in order to live off the state indefinitely.

 

Creating this trade off for 'free money' and maintaining it is what makes the system work. It may not be fully effective, but each year it exists it is refined.

 

I don't think that the comparison with America is valid, with the huge poverty issues in America making Europe and the US too different. America just could not implement such a policy, it's demonstrated that the economy is not stable enough and the polices change so rapidly that the likelihood of a sustained attempt is low. America is trapped by it's past economic mistakes, for instance it cannot even hope to break away from private Healthcare.

 

Obviously that won't work. So the real question becomes how will Europe compete for business in the global economy' date=' when its workers are taxed to the gills, work far fewer hours, and have massive benefits that the company has to cover? Heck, they'd be foolish not to opt for *American* labor over that madness.

[/quote']

There is no future in manufacture. As Japan quite clearly demonstrated to the US with colour televisions, the American manufacturing industry is easily undermined. Outsourcing is the key. Even patriotism in America has not stopped outsourcing of jobs to other countries (something you seem to be ignoring in your economic critique of the European system) who can do physical manufacturing cheaper and more effectively.

 

The reason Britain, for instance, is still in the top 5 economies in the world is because the GNP is not based in manufacturing. It's based in blue collar work, IT, insurance and banking. Every major shipping line in the world is underwritten by the British, even the Chinese governments fleet. Every large company in the world is insured by Lloyds of London, and audited by PriceWaterHouseCoopers. 30% of the highest grossing games of the past decade were made in the UK (GTA, Laura Croft and Goldeneye to name some of the biggest). That's how we compete. It's got nothing to do with what we charge for our work, it's about how good that work is. You don't buy a Aston Martin because it's cheap, or a Lotus because it's fuel efficient.

 

That's why we invest in society, because it's the protection of the society that produces the individuals needed to sustain the economy. We don't need thousands of metalworkers, we don't need miners, we don't need oilworkers, we don't need much manual labour at all. We need people who want to be more than that.

[Pangloss]

I'm familiar with the thread, Skye. I wasn't saying it's not valid to say Europe is better or worse than the US, I was saying that it's poor reasoning to say that Europe's system is okay *because* the US system sucks (which was what Aardvark was doing). Two wrongs don't make a right.

 

 

Well, as with most Economic polices, the balance takes decades to achieve.

 

I agree with that.

 

 

The reason Britain' date=' for instance, is still in the top 5 economies in the world is because the GNP is not based in manufacturing. It's based in blue collar work, IT, insurance and banking. Every major shipping line in the world is underwritten by the British, even the Chinese governments fleet. Every large company in the world is insured by Lloyds of London, and audited by PriceWaterHouseCoopers. 30% of the highest grossing games of the past decade were made in the UK (GTA, Laura Croft and Goldeneye to name some of the biggest). That's how we compete. It's got nothing to do with what we charge for our work, it's about how good that work is. You don't buy a Aston Martin because it's cheap, or a Lotus because it's fuel efficient.

 

That's why we invest in society, because it's the protection of the society that produces the individuals needed to sustain the economy. We don't need thousands of metalworkers, we don't need miners, we don't need oilworkers, we don't need much manual labour at all. We need people who want to be more than that.[/quote']

 

Very interesting points, and thanks, that's the sort of thing I was looking for.

 

I saw an interesting statistic over the weekend (unfortunately on television) that basically showed that American and most European countries have recent polls showing that the majority of the population has a negative feeling about their government right now (ranging from around 51% in the US to as much as 80% in Germany).

 

What strikes me about that is that once a balance is struck, people's expectations become rather set, and, right or wrong, they're going to continue to have those expectations even if the economic conditions change. High unemployment and high gas prices have always had a greater impact on public opinion than foreign policy, but perhaps even more so once expectations and comfort levels are raised.

[Aardvark]

, I was saying that it's poor reasoning to say that Europe's system is okay *because* the US system sucks (which was what Aardvark was doing).

 

That is not what i said at all.

 

I stated that Europe has some problems but also some strong points. I also pointed out that whilst the USA has some strong points it also has some problems.

 

That is a perfectly valid response to your opening which explictly compared the economic performance of Europe and the USA.

 

Incidentially your understanding of the European nations economies seems highly simplistic. European nations are not pursing any 'socialist ideal' and they are perfectly aware that money needs to be earnt before it can provide taxes. The idea that everyone in Europe is 'taxed to the gills' is absurd and you seem to be disproving your own argument when you ask why companies haven't been closing and moving to America.

 

Is is unfortunate that you are arguing from a position of ill informed sterotype rather than informed reason. I had expected better from you.

[Pangloss]

That is not what i said at all.

 

(shrug) I simply refer you to your earlier post:

 

According to the New York Times social and economic mobility has actually declined in the USA over the last 50 years, that much of the talk of 'worker opportunity' is myth.

 

American economic freedom has its positive sides but it also means completely uncontrolled concreting of beautiful natural landscapes, of endless low density housing and lax pollution standards. A lot of this development is highly short-termist.

 

You're obviously more interested in making two wrongs a right than in focusing on what Europe might be doing right or wrong. It's an open board, and you can rant all you like, I'm just pointing out that you didn't answer my question in a logically sound manner. (shrug)

 

Still, I appreciate the feedback, such as I got once I weeded out the ideological nonsense.

 

 

Incidentially your understanding of the European nations economies seems highly simplistic.

 

I'm not making an argument, I'm asking for opinions. Are you familiar with the concept? Pursuant to that goal, I'm putting forth a few of the arguments that that side seems to have. I think I've been pretty clear on this point, but I can endeaver to use smaller words if you like.

 

 

The idea that everyone in Europe is 'taxed to the gills' is absurd and you seem to be disproving your own argument when you ask why companies haven't been closing and moving to America.

 

Is is unfortunate that you are arguing from a position of ill informed sterotype rather than informed reason. I had expected better from you.

 

Yes, it's called "considering both sides of an argument". You should try it some time. I've found it to be highly enlightening over the years.

 

It's always interesting to me how extremist positions always resort to demonization of any opposing view. How's that approach working out for you?

[Aardvark]

(You're obviously more interested in making two wrongs a right than in focusing on what Europe might be doing right or wrong. It's an open board, and you can rant all you like, I'm just pointing out that you didn't answer my question in a logically sound manner. (shrug)

 

If you bothered to read my post you will see that i did not rant or try and make out that the US system sucks. You will see that i wrote that the American system has its strong points but also weaknesses. Conversely i acknowledged that Europe has economic weaknesses but also it has strengths.

 

That's called considering all the aspects of a situation. The opposite of ranting or leaping to simplisitic conclusions.

 

(It's always interesting to me how extremist positions always resort to demonization of any opposing view.

 

As nothing in my position can reasonably be called extremist and i haven't attempted to demonise any other views that is a peculiar comment.

 

Rather than leaping to incorrect judgements without bothering to actually consider what has been posted you might want to actually read and try to understand other posts. Who knows, you might actually learn something.