It's not that the American economy overall is much more productive. It's more like *100 individual firms globally are claiming ALL of the productivity increases,* many of them American.
And it really boiled down to about 44 firms (5% of the total sampled) which account for 78% of the productivity effect, the names of which you are well-familiar, including the consumer-tech stars Apple and Amazon, but also big box retailers like Home Depot).
In other words, it's not really a system-wide or country-level phenomenon. The overwhelming majority of American companies, like their European counterparts, are laggards or worse in productivity growth. And so its hard to surface lessons from this when it's all being driven by a few outliers.
Let's dig deeper into some of these Standout firms to show you have having a marginal superstar or two can totally swing the national situation: little Sweden can punch way above its weight because of the likes of Spotify and Klarna. Denmark is in the news without you even knowing about it because of fluke success of the weight loss drugs pioneered by Novo Nordisk. You could say that both countries (who have a combined population of <20M people) together are productivity stars. And they are... technically. But strip out Novo Nordisk and you've literally cut Denmark's paper GDP in half!
So the contingency of having a few breakout firms is very high. Remember that for a while the best VoIP company in the world (Skype) was from... Estonia. Does that mean that Estonia is a productivity superstar? And Finland's Nokia dominated mobile telephony... until it didn't.
This also isn't to say that smaller European countries can't produce "Standout" firms even outside of the fussy, scalable world of tech. Spain has its Zara and Sweden has IKEA, both of which dominate American competitors. Europe may struggle to compete with Chinese green-tech companies in batteries and solar panels, but the global leader in wind turbines by a mile (Vestas) is Danish.
This even applies to more traditional industries like shipping: Tiny Denmark dominates global shipping via Maersk. And even real dogs of productivity like Greece can punch way above their weight at the firm-level in that industry, with half a dozen of the top shipping companies. The United States can't create a shipping industry to save its life (literally) and so what would they even learn from Greece and Denmark here? Be a peninsular archipelago with millennia of seafaring experience?
The Pareto Principle Productivity effect here is also profoundly sub-national: Could we say that Sweden and Denmark are "special" in productivity terms? Yes. But so are California, New York, and Massachusetts, then. The only "Red State" that really outperforms in productivity is Texas, and only because of its "Blue Cities." Conversely, you could strip almost the entirely of the Southeastern United States and the average national productivity would go up. Ditto with the Mediterranean and much of Eastern Europe in the EU. Hell, if you un-did German Unification the story in West Germany would look a lot more positive than Germany, overall! So maybe it's more useful to compare Standout Regions in the US an Europe to... everywhere else. Amsterdam has much more in common with New York City than New York has with Upstate New York.
One interesting difference here between North America and Europe, though, is that it's much easier for a Standout firm in a "Standout State" (say Amazon in Washington State) to scale nationally across the American (or even Canadian) states than it is for a Standout firm in Switzerland or Ireland to scale to Italy, Germany, Poland, et al. This is one of the hidden "cheat codes" that American firms have that no other country's firms have (outside of maybe China) access to a HUGE domestic market with totally consistent and frictionless hyper-scaling.
What I would say that the MGI report clarifies is that you can't necessarily "create luck" to grow yourself the national champions that will become Standout firms that drive 70-80% of productivity growth, but you can be better than others (esp. Germany) at letting the laggards die off and be reconstituted. Germany's economy is less productive today largely because the Standouts and Laggards cancel each other out, productivity-wise. And that's for structural and political reasons. The German auto industry is still extremely profitable and globally competitive (more so than the American one, certainly), but it's also missing the boat on the next paradigm in transport (as are the Americans). The dilemmas of letting your stragglers die off are well-familiar to Americans over the last few years: Obama "saved" the American auto industry (which continues to underperform in innovation) and Trump is using his authority to protect the American coal and steel industries, even though they're a massive drag on overall productivity and competitiveness.
“… it's not really a system-wide or country-level phenomenon….”
This whole comment is excellent. Meaningful comparison depends on getting the units of aggregation scaled to the right size. If you look at the average household wealth of two households, mine and Jeff Bezos’, you’re not going to learn anything interesting. The same is true to a lesser extent about California and Louisiana, or the former East & West Germany, or the EU as a whole. Those analytical units don’t carve at the natural joints.
I think it kinda cuts both ways. Anyone can make kalishnakovs but not everyone can make nuclear sub marines. All things being (un)equal you'd rather be the society/economy with a handful of superstars and capable of every once in awhile producing another one, even if large sectors have maxed out on productivity under current technology and other constraints. It's then the role of the state to make sure the big gains of the few are distributed to some minimal degree necessary to maintain social cohesion. Everyone can live with Jeff Bezos being a billionaire a-hole if the benefits of Amazon logistics and data capacity is broadly raising quality of life.
This is part of the reason btw that knee capping our own clean energy 'thumb on the scale' is so counter productive and short sighted.
Interestingly everyone agrees that American-made AK-47s are garbage, and the only good ones are manufactured in Central & Eastern Europe. Even American gun nuts/gun Youtubers etc. agree on this sad fact. So even there specialized manufacturing knowledge rules.
It's quite ironic how much better the Europeans are at building high-quality guns. Glock, Bennelli, FN, Heckler & Koch, Beretta, Sig Sauer..... superior to their American counterparts. The US military like the SEALs and the Marines all use Heckler & Koch rifles- no Buy American rules when the stakes are for real! Glock displacing Smith & Wesson in the 80s for American cops was one of the pivotal moments in firearms history
It reminds me of the way people talk about China as if all of China is Shanghai, Shenzhen and Hong Kong.
Sure, if you fly into Shanghai, you're gonna be amazed at how future-y everything is. Considering it's very difficult to even get a tourist visa to travel outside of Beijing and Shanghai, you might assume that that's the representative experience in a country of over a billion people. But, surprise, it's not: China also has its Mississippis and Arkansas. They also have low-productivity "Rust Belts" like the Northwest, un-dynamic rural areas like Yunnan, or extractive post-colonial, majority-indigenous minority areas like Xinjiang or Inner Mongolia. Most people outside of China haven't heard of dynamic Hangzhou (the HQ of Alibaba) but they also haven't heard of Heilongjiang in Manchuria, which makes West Virginia look like paradise. And, just like in the US/EU (as demonstrated in that MGI Study), likely 0.001% of firms account for the 80/20 of productivity in China.
And, just like most Americans don't live like the wealthier, better-employed urban-professional class of star cities, the median Chinese person lives nothing like what you see in Shanghai. Because of the hukou system, most Chinese citizens aren't even allowed to move there, either. (In the US the effect is not dissimilar: the restriction that prevents people from moving to low-productivity to high-productivity areas is mostly housing/cost-of-living). Most Americans, Europeans, or Chinese, alike, don't live in a high-productivity zone, don't work in high-productivity jobs, or enjoy high-productivity compensation and quality-of-life.
This generalization of the outlier to the general also occurs in other ways we talk about China's daunting progress on other HDI indicators like education: Every year the OECD releases PISA test scores comparing pupils from superstar cities in coastal China very unfavorably with American students. But that's not the same unit of measurement! China only reports pupils' results from Beijing, Shanghai, Jiangsu and Zhejiang (B-S-J-Z). Which is like the US reporting only students from the Boston Metro, Northern Virginia, and the San Fransisco Bay Area.
But, when it comes to Americans critically talking about Europe, it's often the opposite framing: the middling average drowns out the impressive outliers. So, every place in Europe is a mess and hopelessly behind because Southern Italy and Eastern Germany are. The existence of world-class, high-productivity zones in Northern and Central Europe (not to mention metro-regions in Italy like Milan and Berlin in Eastern Germany) are the outliers. And even the incredible wealth, growth, and full-spectrum success of individual whole European countries like Switzerland, Norway, Denmark, and Ireland are explained away with caveats. Why don't we explain away the unusual success of Silicon Valley with such caveats, instead of generalizing it broadly to some broader American genius?
Huh? I was just in China a few months ago. It’s very easy to get a tourist visa to China and a regular tourist visa lets you go anywhere in the country except for Tibet and a couple counties in border areas. Yunnan is a popular tourist area.
The gap between Shanghai and poorer parts of China has closed a lot in recent years. Smaller cities in China are still poor by American standards but not inhumanely so. For that matter, Shanghai is also poor by American standards if you look income or at private consumption like house size, car ownership or appliance ownership. But China as a whole is really second-world now; even the smaller areas are not really third-world any more.
It’s a constant struggle to keep updating your worldview. Like, I used to hear all the time about what a dynamic city Peking was, and now you don’t hear a word about it.
The country’s standard of living is insanely low compared to the sophistication and embodied investment of its transportation and manufacturing infrastructure.
That fact is muchhhhh clearer when you either leave BJ/SH/SZ/GZ or you start looking at the conditions the underclass within those cities face.
"This is one of the hidden "cheat codes" that American firms have that no other country's firms have (outside of maybe China) access to a HUGE domestic market with totally consistent and frictionless hyper-scaling."
This, of course, was supposed to be part of the appeal of the EU, and a part of why EU skepticism has died out or at least been muted among the European far-right: after seeing Britain kneecap itself, they realized that if you're a small ethnostate (as all countries in Europe are), your choices for economic prosperity are 1) do a bunch of conquest to seize access to a large market or 2) give up sovereignty to have access to a large market.
There was 3) gain access to a global market via free trade, but, um, about that.
edit: And, of course, option 4) which is "have benefited from decades of free trade that you orchestrated largely on your terms and then petuantly turn your back on it, confident that it'll be your political enemies who have to deal with the fallout from your dumbass decisions and anyway being poor is "based," but that's, shall we say, only available via a historically contingent set of factors.
The problem with the EU, which honestly may be an irreconcilable dilemma, is the same issue the American Colonies had when they tried to federate via the Articles of Confederation (a fascinating period from 1781–1789 that we've just memory-holed to our detriment).
If you have 13 (or in Europe's case, 27, or 30 if you count the EEA) sovereign states who all agree voluntarily to unify in a loose confederation, but retain most of their "national" sovereignty, encode veto-points and unanimous decision-making, don't enter into a true fiscal union, don't endow the executive with sufficient power, don't enshrine sufficient popular sovereignty in national institutions to retain legitimacy, and don't have even supra-national institutions like a standing army you get *exactly* the issue Americans did in the 1780s, up to and including existential risks from foreign powers like France and potentially ruinous insurrections (like the Whisky Rebellion).
Hence why, under duress, the new United States were forced to give it another try with the (current) U.S. Constitution in 1789. We take this constitutional state for granted now, but it was hugely controversial and contested at the time. The U.S. Constitution was a last-resort. And even (and increasingly) now, the tensions remain, with Red and Blue America fighting over who gets to push whom around.
The EU is very far from a true "United States of Europe" because the EU wasn't formed in the ferment of war and national formation. It was designed as a gradualist instrument of peace and prosperity emerging over whole generations. There's been no "come to Jesus" moment for Germans to stop using the Euro to make their exports more competitive (at the expense of all of Southern Europe) or for France to stop wanting its cake and to eat it to when it comes to national vs. European interests. The UK famously couldn't get over itself since the era of Margaret Thatcher and had maybe the most sweetheart relationship with their EU membership as was possible, but even that wasn't enough to prevent them from taking their marbles home (to ruinous effect). And it's not just the big countries: small spoilers like the Netherlands and Denmark Sweden have long opposed EU funding for everything from economic stabilization to military procurement. And, of course, the likes of illiberal Hungary are the fly in the ointment when it comes to common cause against Russia or for human rights. It only takes one to say "no" to anything in Europe and the easiest thing for national politicians to do when they're only accountable to their own national public is to press their short-term national interest over the collective long-term European interest.
So, as usual, people don't sacrifice for their collective good until they have to. And that requires a painful crisis. I don't discount that Europeans will find themselves against the wall the same was the new Americans were 250 years ago. But until then there is absolutely no incentive for nation-states in the EU to give up the level of sovereignty and reorient toward the collective good of the entire continent in the ways that would be needed to really hang with the likes of China and the United States, economically, geopolitically, and militarily.
Isn't the replacement of the Articles of Confederation with the Constitution the most amazing event in US history? As you say, it happened "under duress." Indeed, there were significant problems with the Articles. But could the states have trudged on despite those problems? I'm sure they probably could have.* But various members of the elite got together and decided to do a do-over, despite the nation as a whole not on the verge of economic collapse, anarchy, civil war or widescale rebellion.
When else has that happened?
* Ladies and gentlemen, may I introduce our current government?
It really is an unheralded “killer app” of American democracy.
Unfortunately, the Constitution, as great as it was, has also been very difficult/impossible to evolve. And I think that’s become a liability in the last generation or two, especially. Many of the massive distortions away from the one-man-one-vote principle of representation are pretty new, for example, now that populations are so clustered in cities. I’d argue that we really really need to reform the way Congress is set up, then, but can’t. And that’s just one example.
For better or for worse, I saw much more fluid constitutions in Europe, with both Ireland and Sweden having pretty fundamentally updated their constitutions within years of my living there in ways that were objectively positive. I worry than the American constitutional structure is so ossified and increasingly illegitimate in the eyes of the people that it threatens to just snap or erode.
Yep, Novo Nordisk gets 60% of its revenue from the US and you can just see its stock price since Trump got elected, which will take the whole Danish economy down with it. The world being created by ethnonationalists is one where small countries are at the mercy of large ones and increasingly it’ll be harder, not easier, to have the kind of homogenous sovereign ethnostate they dream of.
It's absolutely true that small countries are at the mercy of large countries in that way, not to mention the vagaries of world-wide political-economy and geopolitical shifts. Export-oriented, globalized, intermediary countries like Denmark, Ireland, et al are both the primary beneficiaries when it comes to economic conditions and also the fastest to wilt when things go off.
But the same is true of Top Tier cities anywhere, from San Fransisco to Singapore. The good news about living in a bleeding-edge high-productivity zone is that the upside is huge, even if the downside risks can be equally precipitous. The good news about living in a un-dynamic, flat-productivity zone is that your life can't get so much more difficult than it already is, whether times are good or bad.
When the (Western) Roman Empire collapsed, Roman peasants living at subsistence level... were still (non-Roman) peasants living at subsistence level. But what happened to those Roman-founded cities and the "temporarily embarrassed" merchant and aristocratic classes when the Dark Ages began to lighten by the 6th and 7th Centuries? You know... places like Mediolanum (Milan), Neapolis (Naples), Lugdunum (Lyon), or even, a little later, Londinium (London)? They were already thriving again by the Merovingian, Carolingian, or Frankish times. Some, like Byzantine Constantinople, famously, and Gaulish Arles kept on thriving right through the Fall.
So your average life outcomes are still going to be better in such a small, high-productivity country or city or city-state than a large, powerful, but low-productivity country like Russia. Trump is having his day, but the high-productivity nodes of the world will long outlast him and his deleterious legacy.
Aren't most (all?) countries in the world ethnonationalist, apart from imperial and former imperial powers? How do you mean that term? Explicit, formal privileges for one or more ethnic groups?
I'm a little skeptical of the McK framing (and also your description of it).
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First, they aren't saying that "almost all" gains are from the top 100. They're saying that 2/3s of gains are from slightly under 100 firms.
Second, this doesn't seem hugely different from an overall measure of size. The top 100 US companies by market cap account for 61% of all public US equity value - that's not too far from their concentration numbers. While productivity is not directly comparable to market cap (they define it as value added per worker (presumably multiplied by number of workers to get the overall contribution to the economy?)), you'd still expect there to be a strong correlation.
Thirdly, assuming they are using "number of employees" as a denominator, this is going to be pretty sensitive to the definition of employee. Outsource your janitors to a third-party cleaning service and your value-added-per-employee presumably increases, but you're not actually more productive in a meaningful way. Expand internally to a developing country and value-added per employee likely drops, even if the new employees are doing just as good work.
Very nice. Honestly, I just wish this degree of skepticism and rigor were consistently applied to all the social science claims, not just economics.
Empirical observations are critical to keep us grounded, but when you dilate the conceptual lens, rescale, or shift focus even a little bit like this, it shows how rarely those observations lead to useful predictions or actionable plans.
Even in the "hard sciences" (as we're increasingly seeing with the Reproducibility Crisis of the last decade), there are all sorts of incentives not to apply skepticism and rigor and instead to produce a result that is interesting and engaging more than true. Nobody wants to read the paper about a cancer treatment that doesn't work or that kind of works a little. They want "Revolution in Cancer Immunotherapy."
And ditto for commentary: Like, who wants to read the essay entitled "Which is Better: Europe or America? Answer: Both Kinda and Also It Depends!"
My role as the resident American Abroad in these Comments is to try and push back against the stereotypical and overly-simplistic when it comes to American commentary about Europe (which reeks of Big Brother/Little Brother energy, distorting perceptions).
But if I wanted to package my own dispatched as a Substack niche, the structural incentives would be to do fan service to the American Euro-philes and tell them all about why Europe is LIKE SO MUCH BETTER IN EVERY WAY. Or maybe throw some meat at the right-wing Euro-haters with EUROPE BAD, ACTUALLY. When, sorry, but it's neither. The boring truth is that Europe, like America, is a mixed bag. And that nuance really matters. You can't even say that much that's useful about the entire United States or the entirety of Europe when they're both continent-sized collections of very diverse human experiences.
And, if you get frustrated with that nuance and just want perceptible truths about a bewildering world, fine, but then dig into the details to find the actual mechanisms, if possible.
As you say, I'm skeptical that you can find much there of prescriptive use, but if there is something, it's going to be pretty specific: Much more so than "Americans work longer hours" or "Step 2: Increase Productivity" or "Stop Being Weird About Fracking" or "Stop Paying People To Do Nothing for Inexplicable Reasons." And, yeah, I'm being facetious, but people really do explain the world in terms that boil down to "Everyone Else is Dumb but Me!" Maybe there are *reasons* why Europeans didn't do the fracking thing... starting with how little actual fracking potential the continent has and how close to dense population centers the little likely reserves are? Maybe the lack of an Amazon or an Apple is as much to do with the lack of an actual single-market of 340 million wealthy people rather than issues on the margins of financing? Etc.
If this were a one-off about the concentrated advantage of some American firms, it would be more compelling. But it keeps being repeated decade after decade, even as technologies change. A long time ago, American car manufacturing firms were the largest in the world,* then American oil industrial firms rose to the top, then American financial firms rose to the top, then American software firms took their place on top of the list. (For a brief period in the late 1980s/early 1990s, Japanese firms dominated the market cap lists.)
Obviously, in each of those periods, it was a couple firms that dominated. But no one cares about Ford, GM, IBM (and maybe Exxon) much anymore. The only common identifying feature about these leading firms across the span of time is that they were and are American.
Happy 4th of July. U-S-A!
* It didn't hurt US rankings that so many European firms took a step back during that bit of unpleasantness 1939-45.
Well, Matt's whole point is that something diverged in the 21st Century after a convergence between Europe and the US in the 1990s.
But, to your point, I agree that the US is a really blessed country long-term ...and for very structural reasons. I mentioned the massive advantage of having a huge, wealthy consumer market that is truly a single-market. *Nobody else has this.* Europe is a collection of 30 countries in the EEA and even if you wanted to be general, you'd have to divide it into 8-10 zones of language, regulation, etc. As soon as the United States became a country of truly united states in every material way, their economic rise and eventual dominance was unstoppable, something that even early observers like De Tocqueville had already noted 200 years ago.
Another factor: the incredible geographic luck of America. I think we all well-appreciate the geo-strategic value of having two oceans in between any of your enemies and your homeland. But what about having only two neighbors, both of whom are allies? What about having basically everything you need right at home, from some of the most fertile agricultural lands to some of the world's premier fossil energy reserves! Even though Trump hates renewables, the US is even preternaturally gifted there: with some of the best solar and wind energy potential on the planet, ready to be harvested when Americans want! Then there's the other stuff that's maybe less well-known except by geography geeks: there is no other country on the planet with as much of its interior navigable by inland waterways. That gives American logistics a massive structural advantage that remains profound even in the era of trucking, when bulk water-transport is still cheaper than any truck or rail could be.
Europe was/is rich because it was also gifted with some extremely lucky geological endowments. But a lot of them (including the unusually high surface area and port potential of its landmass) were more crucial in centuries past than today. Europe is, like Japan and Korea, very energy poor. Even if they wanted to "drill baby drill," there's almost nothing there. And all the renewable investment? Well, it's paying off, but it's collecting electrons from a pretty poor geographic endowment. Europe also can't feed itself as easily as the US can, especially when you strip out the best lands in southern Russia and Ukraine. Europe is far away from the global economic center of gravity in East Asia, too, whereas the US has the frictionless Pacific Ocean and Port of Los Angeles as its key. And Europe is very vulnerable to its closest antagonist, Russia. There is no physical boundary between Russia and its prey in Finland, the Baltics, or Eastern Europe. Russians can roll right in, just like the Mongols of centuries past. Granted, this has historically cut both ways, but Europeans aren't in the business of running Napoleonic or Nazi Empires anymore, so the threat is unidirectional (except on Russian state TV).
For all these reasons, the US can just f*ck around a lot more than other countries and still fail upwards. I have no doubt that the American economy will be just fine, even after the awful stewardship of this current administration. America is the kid with a trust fund who often makes it but gets another dozen chances even if it doesn't.
You make a lot of excellent points and I'm in general agreement with you that the US has many natural advantages over Europe. (One could, of course, discuss many of the natural advantages Europe has over the US, including a much longer history of educational, scientific, and engineering excellence, extending over centuries.)
But some of our advantages aren't really "luck." We have a unified nation with a single market and great transportation advantages because we won a war that otherwise would have torn the country into two eternally competing parts, rendering us more like Europe of the 19th and 20th centuries. That was a hard-won achievement!* (Even if granted it was partly very lucky. Had Sherman not taken Atlanta before the 1864 election, Lincoln would have lost, McClellan would have likely sued for peace, and the Confederacy probably would not have come back to the Union.)
* Likewise, one could argue that the FDR administration prevented us from falling for the turmoil and fascism that afflicted Europe during the Great Depression. We had far superior government in the 1930s than the Europeans. Great choice, voters.
That’s fair. The US made a lot of the right calls along the way. Some of them weren’t exactly made for future-oriented reasons, but turned out to be wise in retrospect.
But I’d also caution about how much *contingency* was involved in leadership and democratic choice. Who was the immediate predecessor to FDR who was also democratically elected? FDR maybe wouldn’t have had to go so big to clean things up (and maybe wouldn’t have been so great) had Hoover not been so terrible at managing the initial crisis. And what about leadership in the previous recurring economic crises in the US during the Gilded Age going back to the 1870s? More recently, might we have had better leadership during that Bush/Obama transition that would have saved us from arguably still today suffering the aftereffects?
This is my point about the US being able to “fail upwards.” Trump is trying his hardest to ruin everything but the ballast of American structural strength was such that Americans were still able to thrive through his first term (and so far his second). Now maybe it’s another story of everything being fine until suddenly it isn’t, but it’s still stunning that he can just take a bat to everything and the stock market and economy hums right along.
Or if Giuseppe Zagara hadn't had his arm jostled when he tried to shoot FDR in Feb. 1933 and killed the mayor of Chicago instead. Think how different things would have been had John Nance Garner taken the oath as President in March 1933.
"God protects fools and the United States" probably wasn't said by Otto von Bismarck but was still worth saying.
As to your last point, I'm very depressed about the markets. That despicable bill passes by the thinnest of margins and the stock and bond markets just shrug. Either they're right and the bill is a nothingburger for the short and longer term of the economy, or they are very very wrong. It's hard to see the former. And if we don't have the disciplining force of a market judging these destructive policies, then we are lost indeed.
If this bill turns out to be a nothing burger then I’m going to have to go back to the drawing board AGAIN on fundamental assumptions I had about politics and governance. I just can’t see having a 140% debt-to-GDP ratio and spending 20% of the federal budget on just servicing said debt as a recipe for future success.
And that’s even without getting into kicking 11M Americans off health insurance. That was the pre-ACA/ObamaCare situation, so maybe the massive suffering and waste gets shrugged off, but I don’t know how you pull the rug out from a whole ecosystem formed around a new paradigm like that without structural harm. Let’s just talk about how much the HUGE healthcare industry that grew around the assumption of those millions of customers just gets withered away? Even if you don’t care about the poor, that’s a lot of economic damage. And what of the hospitals who will—once again—have to treat the worst cases that have gone from chronic to acute in the ER very expensively and without getting paid?
Agree with most of this but 1. Is Europe's clean energy potential really so bad? You have solar power in the south, hydro power in the north and wind power in a lot of places. 2. Russia as a threat to Europe is very overrated imo, especially nowadays. They can't even beat Ukraine and Europe is 30 times richer. Money matters in an age of drone wars. Norway alone can buy one billion drones, using money in their oil fund, and send towards Moscow. Also it's much more difficult to be the offensive party nowadays, as the advantage of defensive positions have increased with drones and other technology. Russia has lost a generation or two of their best soldiers as well as most willing recruits. Finally, Europe could strangle the Russian economy by forcing China and other countries to stop trading with them (EU is a much more important market so one presumes China would listen).
I’m not saying that Russia is a clear and present danger to most of Europe. But they absolutely are a threat to the former USSR as a revanchist power that’s looking to claw back some of their “near abroad” in Georgia, Ukraine, Moldova, and the Baltics.
And any threat to those are at least an indirect threat to the rest of Europe (not the least when it involved a NATO member). For example, almost any feasible war plan for a Russian invasion of Estonia or the other Baltics goes through Gotland—which means war with Sweden.
Whether Russia “has the juice” to take on another large European country (like Ukraine), that’s the wrong question. Because even Ukraine, though it has held its own (with NATO support) for three years, is still a state under constant invasion and existential threat. Soon, they will have experienced the ravages of war for longer than the United States was involved in WWII! And even if they don’t lose, they’ll have lost a huge chunk of territory and also have been economically and demographically devastated by war.
Let’s say the same would happen to Poland. My money would be on Poland also holding its own. But it would be a bloody and devastating grind along the way. Could Russia invade Finland or Sweden? Maybe not successfully, ultimately, but it would ruin a lot of lives along the way and maybe do permanent damage even to the victor.
I agree with most of this, but 'what about having only two neighbors, both of whom are allies' is only really true of the lower 48. Alaska is quite close to Russia, and Russian warplanes regularly buzz it. I'd imagine Chinese warplanes will be joining them soon. Hawaii (and Guam and Samoa) is very far out there in the ocean. And it's famously open to attack..... By the 2030s Chinese warships could be patrolling near it
Well, Hawaii is literally the place with the least neighbors, since it’s one of the most isolated inhabited islands on the planet. And Guam isn’t an integral part of the Continental United States. So I mean the core of the country. The US also has military bases in 200 extraterritorial locations which increases the attack surface exponentially, but that’s not the same thing as China being ringed by adversaries and American allies who are ambivalent if not hostile to its regional hegemony and the same situation in Russia. It’s also very different from all of Europe, historically.
Just think about GE's ~ 50 year run and now ... while still > $200B market cap it's no longer dominate in any industry. Competition is fierce. Moats are only so wide. Every top stop is only temporary.
Good comment. I think Europe needs to do a ton more in making their big cities great places to scale a startup. Having been on the board of a company that scaled across six European countries, I can say the labor laws and company regulations were an absolute nightmare.
I don’t disagree. I think, ideally, you’d have a kind of menu of options that roughly fit the context of different places. It would be one thing if you could get the Nordic countries to agree on policies and DACH to align and UKI, etc. Obviously, that isn’t happening because of these countries has a very specific historical and political context.
Even neighboring states like Belgium and the Netherlands can be *completely* different culturally, religiously, governance-wise, labor-regulations-wise, legally, etc… and by design going back to their very beginnings.
And in some cases, there’s a little regulatory arbitrage that countries do to attract business, which isn’t unheard of in the United States (*cough* South Dakota *cough* Delaware).
But even if countries did rationalize their rules EU-wide, you’d still have material friction. I can’t hire a Swede to sell to Norway, even though the two languages are mutually intelligible. And German-speaking Swiss are so fussy about how they speak *Swiss* German thankyouverymuch and the Germans consider the Swiss’ garbled version of their High German an assault to the senses. Everyone involved could speak English, but not as comfortably as their mother tongue and that matters in business.
In summation, these states have weaker productivity drivers (e.g. fewer high-value sectors like tech, finance, or biotech), lower educational attainment, and limited capital investment per worker.
But that's also nothing new. You could say that this was one of the structural factors even leading to the American Civil War: the largely rural Confederate States were stuck on a low-productivity, primitive-accumulation, slave-labor-input plantation economy while the more industrializing North was leaving it behind in Total Factor Productivity and had structural as well as moral reason for leaving slavery behind.
There are major counter-examples: Virginia and Georgia, generally, but specifically the metro-regions of Atlanta and the Washington, DC suburbs. The "Golden Triangle" in North Carolina. But, in general, the American Southeast isn't a Standout, in MicKinsey terms.
De jure Jim Crow and its de facto continuance to greater and lesser extents in the area is a big contributing factor. When you for no good reason refuse to educate or allow full opportunity and employment to something like 25% of your population for several generations you are just wasting human capital and potential. It also means you're over investing in the terror campaign needed to maintain that system, and driving away and/or keeping out people, institutions, corporations, and their capital who don't want to participate in that system.
I think part of that notion comes from thinking, who the hell needs food? Agriculture is not fun like technology, you can’t just create something from nothing the way you can with software.
Well, most of the food that we eat doesn’t come from the Southeast. Maybe it’s 10-20%.
All our carbs and mostcome from the Midwest (producing 40%+ of what we eat) and the vegetables (and a lot of other stuff) comes from the single state of California, which alone almost equals the output of the entire Southeast and has an unprecedented range of produce.
Perhaps of interest: The UK's Resolution Foundation think tank recently wrote a report on the productivity growth gap between the US and UK (with the singularly great title of "Yanked Away"), and one of the the main drivers of the gap that they pointed to was the much higher rates of new technology adoption in the US non-tech sector (eg professional, scientific, and technical services), along with the oil/gas boom and high-profile tech companies.
I'm glad you pointed to the labour market though: I agree that the loose labour market regulations of the US are probably one huge and underrated reason why its companies have grown so much faster. There's just much lower downside to taking a risk. PS I say that as someone who has been unemployed twice in the past two years (though ironically in the UK, where their unemployment insurance is much worse than the US) so very familiar with the downsides of a dynamic labour market! The UK has sort of a hybrid labour market system -- much lower costs to employers than a lot of Euro countries, but higher than the US. And at-will employment exists, but only for the first two years of one's employment.
When I was visiting friends in the UK in May, they (we all love language and usage) all found this extremely annoying, as did I after a couple of stops on the train.
The labor market reforms in Sweden in recent decades (largely under the influence of the pro-business Conservative Moderates and the neoliberalized Social Democrats) after the recessionary crises of the early 1990s are a very good model I think:
1/ There is no minimum wage in Sweden. In practice, nobody gets paid as terribly as a low-level retail worker in the United States because human capital/labor productivity is higher and the labor market is tighter, but there are also programs to even subsidize the wages of lower-potential workers like young people, refugees, and those with various disabilities in order to encourage fuller employment and labor participation. So, it's not a race to the bottom with low-wages substituting for productivity-enhancing investment. But it's also feasible for businesses to find labor at fair market value.
2/ Almost everyone in Sweden has unemployment insurance managed not by the government, but by labor unions. If you get laid off, no biggie. For about five months, you collect a wage that's livable (and up to 80% of your compensation if you sprung for extra insurance). This is enough time to get most people off the rolls and back into work. For the tougher cases, there is a Public Employment Department that helps to place people. There are a lot of long-term unemployed people, but the Swedish workers also work some of the longest careers in the world, on average, and when you strip out the people who aren't studying, new-parents, retired, disabled, or newly-arrived refugees (who aren't even legally allowed work often for years while they're in processing), there's basically zero unemployment.
3/ There is a 6-month probation period for all FTE roles in Sweden. If you aren't working out, you can be sh*t-canned immediately no questions asked. And as a people manager in Sweden, I can assure you that this happens often. That period massively de-risks the hire. It's only after you've been formally employed at a firm for 2+ years you start to really get any rights. And, in practice, those rights are restricted to companies not being able to just fire you without any cause or documentation and might have to pay 1-2 month severance. I have been laid off myself and conversely fired others within this system and I find it super-disingenuous when people claim this makes the labor market "inflexible." It's easy to hire and fire! Even at workplaces that are unionized (a fast-diminishing minority), unions are very accomodationalist and basically just try to make sure that there isn't total arbitrariness and that longer-term employees get some severance. Also, like in the UK and US, a lot of Swedish labor is contract labor who have none of these rights at all. That includes everything from your Uber East driver to a head of HR operations or VP of Marketing that's hired as a Sole Proprietor.
When I compare this with the US, where people either don't have or find it very difficult to qualify for unemployment insurance, have their healthcare tied to their employer, and can be fired not just flexibly but for any reason at all (including getting pregnant or being the victim of sexual harassment that they reported to HR and then got shown the door for), I think there's a case to be made that you can design an employment market that's both decent and dynamic.
Very interesting comment. A correction, though: it is illegal in the US to fire someone for getting pregnant or reporting sexual harassment to HR. See: Pregnancy Discrimination Act, Pregnant Workers Fairness Act, and Title VII. That doesn’t mean some employers don’t try, usually by employing a pretext. And it can be costly and time-consuming to hold them accountable.
It’s illegal to do a lot of things which happen in practice. And especially when it comes to workplace law, it’s down to how much capacity and will the regulator has. It’s also illegal to do wage theft, which happens as a matter of course—I was a victim of it myself as a much younger restaurant worker. I have personally seen a pregnant coworker be fired for trumped-up reasons at an American workplace. And I’ve definitely seen plenty of examples of pretty blatant sexual harassment, racial discrimination, etc. in workplaces, all of which are explicitly illegal.
Frankly, a lot of this still happens in European workplaces, where the regulations are tighter and more enforced and where workers also have more protection from unionization. Rights on paper get messier in practice.
I don't mean to be argumentative given how informative and interesting your post is, but I want to ask about this line:
> In practice, nobody gets paid as terribly as a low-level retail worker in the United States because human capital/labor productivity is higher and the labor market is tighter,
The unemployment rate for Sweden is more than 2x that of the US - nearly 10% now. What explains the difference in your view?
Massive immigration of people with less than six years of schooling who can't read or write and have fundamentalist Islamic beliefs and values. Put them in suburbs with 5% Swedish speakers where 2% of kids in some pre-schools, and 0% of teachers, speak Swedish. Add an extremely neo-liberal education system where you can use vouchers to attend Islamic schools (formally they must be secular but it has been shown, and is well-known, that this is not the case in practice). Á voila.
A previous Prime Minister once said that there is no unemployment for "ethnic Swedes" and he was accused of being racist for saying this.
Unemployment rate metrics are really squirrelly, for one thing. Look up how they’re actually measured, and you’ll likely come away a little shocked by the lack of precision. For example, how does one reconcile the official unemployment rate in the United States of ~4% with the Labor Participation Rate of only 62%, a near historical low and far lower than other wealthy, industrialized countries, including Sweden?
It’s how you measure things!
The American Unemployment Rate from the Current Population Survey only includes people *actively seeking work.* So it doesn’t include anyone long-term unemployed, newly discouraged from the job search, disabled, occupied as a housewife, early retired (whether voluntarily or not), studying, etc.
The Swedish unemployment rate includes a lot of that same group of non-employed persons. The unemployment rate is more than 9%, but the Labor Participation Rate… is 76%! So many more Swedes of working age are working or looking for work than equivalent Americans, something disguised in the methodology and commonly misinterpreted.
So which is the “accurate figure?” Probably somewhere in the middle. A lot more Americans who are of working age aren’t in working shape or have given up looking for work at all. That’s not as common in Sweden, but there are more able-bodied and eager people without jobs.
Fair point! Just to note, for the labor force participation rate, the US number you cite includes seniors so the decline is almost certainly compositional in large part. The US number for men 25-54 is ~89%.
The gender divide I think also shows a few things about the Swedish economy: a lot of men here work in the trades, which are very cyclical. Tradies often work as sole proprietors and contractors or sub-contractors taken on for projects and have feast and famine cycles, depending on economic or even seasonal cycles. Men also suffer higher rates of workplace-related disability.
Women’s jobs can be more often in the caring sectors and more stable, but often lower-paid. So they suffer higher rates of pension poverty than men, even if they work longer and more steadily over the decades.
That’s for working-class Swedes (who are the majority but often invisible in these types of discussions). When it comes to professional class workers, you see the same gendered divide in education attainment. So more women get higher education. Again, this doesn’t always translate to higher earnings, but it does mean that women can be more employable in the higher-skilled service sector.
Right, I recall reading that it's very hard for immigrants there in particular to find entry level work - even when they have work permits or are granted exception to work permits due to their asylum status - contributing to really severe unemployment among them. That's not what I'd expect to see in a very flexible labor market.
Your answer 1 underestimates the role of unions in de facto setting a minimum wage. Most workplaces are unionized, whether or not the people working there are union members. Unions have been fierce in forcing employers to sign so-called "collective agreements" with unions, which includes a certain wage spectrum. Your answer 2 I'm also not sure about. This used to be the case, I think, but nowadays you can be sign up for unemployment insurance/benefits (a-kassa) even if you're not a member of a union and the unemployment money comes from the a-kassa, which is run by the state. I'm not sure what role the unions play here anymore, I think they add some extra money on top for their members. But since you work with this professionally you probably know more than I do, as a native Swede.
A-kassa are private economic organizations run by unions, mostly, but regulated and subsidized to some degree by the state. They’re a good example of how much of the Swedish welfare state is “bottom-up” rather than top-down and state-driven.
Another example is the unique ubiquity of housing co-ops, which were the original and most common form of scalable housing project in Sweden. Also, the de facto “regulation” of the labor industry not by law, in many cases, but instead of industrial collective agreements driven by unions.
Taking a break from my break before my subscription lapses…
I am in Japan these two weeks and finding that my recollections of how shiny the public goods are to be correct, but offset by an increasing realization of how moribund the private sector is, and how constrained the consumptive power of the typical household is.
Ten years ago when I was here as a young adult I was too taken by the shiny lights to see the exhausted salaryfolk shambling to and from work, the dearth of children, the overly rigorous cultural norms around the use of public space and presentation therein…
There are very few, arguably no, places in the world which have struck as functional a balance as the United States between taxation to pay for public goods and private and personal consumption, as well as between regulation for the public good and business-friendly dynamism that allows and rewards risk and thus increases the speed at which best practice and technology disseminate.
There’s quite a bit to be learned from European and Japanese public sector performance, but relatively little to see in their governance of their private sectors, and much to avoid in their cultures…
Japan is an extreme place, in ways both good and bad, and it's probably not very useful to generalize from their experience.
For one thing, it's underrated how unusually sexist Developed Asia is for otherwise highly-industrialized, wealthy countries and how that artificially depresses the birth rate. Japanese and Korean women (quite rightly) don't want the raw deal anymore of having a husband who works all the time, doesn't help out with anything household related, goes off drinking with coworkers at all hours, and maybe even indulges in a *little extra recreation* on the side while they, the women, are pressured not to work, look forward to elderly poverty from an insufficient pension, must be the perfect wife/mother alone, suffer loneliness and emotional neglect, and look the other way at marital indiscretions. It wouldn't go for it, either!
Japan also committed a lot of the same sins of the Chinese economy at its worst (real estate hyper-speculation) and the Germany economy at its most moribund (staid reluctance to continue to innovate after settling on a winning model Post-War). It's largely recovered from its "Lost Decade" but these structural problems persist. And, paired with a total demographic collapse, it's hard to see them really reversing it so that everyone's scared to death of the global dominance of the unstoppable Japanese economy again.
"There are very few, arguably no, places in the world which have struck as functional a balance between taxation to pay for public goods and private and personal consumption, as well as between regulation for the public good and business-friendly dynamism that allows and rewards risk and thus increases the speed at which best practice and technology disseminate."
Is the US the point of reference here?
"the overly rigorous cultural norms around the use of public space and presentation therein…much to avoid in their cultures"
Depends what you mean, I guess. I've become pretty intolerant of public disorder and just plain inconsiderateness in the US / Europe, so I wouldn't mind a bit of public shaming now and then.
2. Japan’s norms force people to backpack around typical amounts of garbage for a whole day because it won’t provide public trash cans and shame parents for infants “acting out” in public. And then the country wonders why the birth rate hovers a hair over half of replacement.
My overwhelming experience of parenting in Europe vs. the United States is that the US is not just hostile to parenting in terms of policy, social programs (the lack thereof), and cost-of-living, but also just culturally: Children are not allowed to exist in public in the US in a way that is really hard for Americans (like me) to even notice until you see the European alternative.
For example, in Ireland families all go to the pub on Sundays. Grandparents, children, infants... all of 'em. It's a wholesome, laid-back, intergenerational thing. By contrast, at least when I was a kid in the 1980s and 1990s, American bars were an adults-only zone. You can, in fairness, find family-friendly restaurants, bars, beer gardens, etc. in hipper cities and suburbs in the US, but this is a new and not universally-distributed phenomenon at all. This costs nothing, but it makes a huge difference when your "life isn't over" just because you had kids.
The experience of flying on an American vs. European airline with a child (especially an infant) is night and day. Americans are SO BOTHERED that you would DARE bring a person under the age of 18 on a flight. Or that *gasp* a baby might cry when their ears are painfully depressurized. American parents must grovel and even pass of f*cking goodie bags to their fellow passengers as penance. It's comically absurd. And the ultimate irony is because American children aren't allowed to exist in public, they never learn to! And so they act feral. And that makes people, in turn, less tolerant of them, so parent banish the whole family to the confines of their house until legal age. When I travel with my Swedish-born son to the US, everyone was like, "Woooow, he's so well-mannered...." I think he's great, mind you, but he's just like all the other Swedish kids who have been navigating an adult world since birth and learn how to deal.
Another more structural example: In Stockholm or Copenhagen, you will walk down the street in the most urban areas and hear the ambient sound of children's laughter. They're tucked in public preschools. Or in playgrounds. You see tiny feet emerging from medium-rise apartment buildings. There are dads as well as moms walking with strollers everywhere. When I contrast this with my experience as a longtime resident of Washington, DC and often-visiter to other American cities what haunts me still is how desolately child-free the cities are. It's just too expensive. Or there's no child-friendly infrastructure. They are cities given over entirely to the young professional. You don't even really see old people, either. Unless you are a "productive member of society," this place isn't for you. Off to the suburbs with your child, shunted behind fence and bush!
Even in European countries with catastrophically-lower birthrates like Germany or Italy, I am much more likely to see children in public in Milan or Munich than in the United States. Parenting is private and privatized in America, whereas it's public and subsidized in Europe.
“Americans are SO BOTHERED that you would DARE bring a person under the age of 18 on a flight. Or that *gasp* a baby might cry when their ears are painfully depressurized. American parents must grovel and even pass of f*cking goodie bags to their fellow passengers as penance.”
This isn’t true at all, and makes it sound like you’re basing your cultural observations off viral tweets.
"American parents must grovel and even pass of f*cking goodie bags to their fellow passengers as penance."
Just registering that I've never seen this happen and I have status on UA, AA, and Southwest. Chicago parks and beaches are packed with kids. The riverwalk is packed with kids and strollers every day. Something feels very off with this comment.
Don't agree with the points about children in public/on airlines or child behavior. And you can find child friendly restaurants pretty much anywhere in the US. Bars are a different story to be fair, mainly due to alcohol laws.
I do agree about the lack of children living in American cities, but that one's easy to explain by costs and crime rather than any deep cultural attitude towards children.
You can find child friendly restaurants in every town in the US. But the point is that these aren’t the default. It’s very rare for me to see children in restaurants.
I really don’t think people even notice the absence because what you experience is “normal.” Visiting Japan, I’m sure most Americans would marvel at how child-less the public areas are, too, even if it’s unremarkable to Japanese people.
I know this can seem like a cop out, but a lot of the intangible quality of why Europe is different is hard to communicate to Americans who haven’t visited these places, much less lived there. But then you’re in it and you’re like, “Wow, this is distinctive and why isn’t this a thing back home?” But even when I lived in DC 20 years ago and hadn’t traveled much, I still was struck by the absence of children in public spaces.
I had an experience at a Biergarten in Munich where I suddenly realized that I was seeing more children than I had everywhere in the US outside airports in the previous six months.
My overwhelming experience of your posting on matters like this is that it is generally a flight of sheerest fantasy, so I’m going to decline to engage any further.
You’ve posted this same rant three dozen times over the years. No amount of constructivity shifts you off your views.
You enjoy European cultural norms and have an increasingly narrow and distant window into American ones, believe your enjoyment to reflect some sort of objective truth instead of personal preference, and allow it to drive deeply unempirical views on the topic of child-rearing and fertility.
You are within your rights to do it but I know better than to waste time on a thorough reply.
The thing about places like Japan and Taiwan is that the cultural expectation that people should be responsible for their own waste is as important as having waste infrastructure. How many times have you seen trash strewn all about RIGHT NEXT TO a trashcan? And you can't really police that practically, so the social pressure is the primary lever of compliance.
Here in Sweden, people aren't as well-behaved at the Japanese, but they are much better at leaving no trace than Americans. And a minority (like me) will even retain their recyclables to dispose of in the less-universal dedicated recycling bins.
It's also not as common in Sweden to need "convenience" all the time instead of, like, drinking coffee in a ceramic cup like a human being. Italians, especially, think this practice of sipping tepid coffee out of plastic-lined cardboard is barbarous. It shouldn't require such a leap of imagination to recall that before the 1950s, even Americans didn't have all this single-use plastic "to-go" stuff. I'm still just dumbfounded that it's culturally normative for people to drink water out of plastic bottles in their own homes or use disposable cutlery instead of just washing dishes.
Europe's failure to adopt air conditioning en masse is looking less and less like noble, climate-friendly stoicism and more and more like stubborn eccentricity. And no, "Europoor" isn't an excuse: Europe's a lot richer than China!
The more I live in different places, the more I'm convinced that "stubborn eccentricity" is the most parsimonious explanation for a lot of things.
Why doesn't the UK understand what "insulation" and "ventilation" are? Stubborn eccentricity. Why doesn't Finland understand that a year is not a long enough prison sentence for first-degree murder? Stubborn eccentricity. Why does France not understand that it gets hot, like, every single putain de summer in Paris and you might want to buy a fan or something, bordel de merde? Stubborn eccentricity.
(I might have personal experience with that last one).
I was, admittedly, exaggerating. But only slightly (a 2 1/2 year sentence for "aggravated assault" for a man beating his wife to death with his bare hands), and as it turns out I was unaware that the sentence had been upgraded on appeal: https://yle.fi/a/74-20148098
Edit: not with his bare hands, with a weightlifting bar.
Thank you for the link. Yeah I think the sentence was too light. But what confused me was when you said "first-degree murder" because I think the sentence for that is life(not in practice but still a lot longer than couple of years)
Having experienced temps in the 90s without AC for a few days recently in the Northeast (was staying somewhere without AC in a locale where in decades past you didn’t need it) I’m increasingly of the view that AC’s contribution to alarming indifference to climate change among Republicans (particularly in Red States that tend to be hotter) is underrated and a genuine source of moral hazard. People have just forgotten how awful being hot is.
I’m not sure you can reasonably argue—from a strict perspective of how pleasant outdoor temps are—that climate change has made the US less pleasant rather than more
Winter is still worse in the Northeast than Summer—and winter is dramatically better than it used to be.
I would say that for all practical purposes winter is dramatically worse than it used to be. Snow is great. New Jersey’s brand of dead trees, overcast skies, and damp drizzle with nothing on the ground but dead grass is immiserating and precludes fhe joys of snowball fights, sledding, skiing, and general winter wonderland-ness. Additionally, maintaining a comfortable temperature—particularly outdoors—is dramatically easier for winters (move around and wear layers) than it is for summer (shit outta luck.)
Disagree, for the same reasons as EG below, and also, the winter of my youth in New Hampshire was generally predictable.
These days, it’s all over the place. It’s not “pleasant” in the slightest when it goes from 60 to -5 in the space of two days. I want my winters back. Hell, I want my autumn back, which as a New Englander you call pry from my cold, dead fingers.
People just have this ingrained bias that air conditioning is bad for the environment, when in fact living in a hot climate and using an efficient heat pump to keep your house 10-30º degrees cooler than outside, can be much more green than living in a cold climate and burning gas/oil to keep your house 40-80º warmer than outside!
In the past this was negated by the hotter parts of the US getting all their electricity from coal, which wiped out the environmental benefits of air conditioners consuming less energy than gas furnaces, but this has now changed.
What I find most crazy is the people arguing against air conditioning in France of all places, with their 85% nuclear power!
It is "bad" for the environment in the sense that producing the electricity needed to run AC contributes to climate change, given that more than half of global electricity is generated by burning fossil fuels. We could add flying on jets and refrigerating our food to the list. And every other thing that requires burning coal, gas or oil.
I guess my response is: let's take away the "bad" by producing gigantic quantities of green electricity. True abundance in this area is the only path that leads to beating AGW. Humans plainly don't like to suffer. And in many cases, proper cooling in the summer isn't just a matter of comfort, but a matter of life and death.
That is true in the sense that every use of energy is bad for the environment, but I don’t think people fully appreciate how relatively energy efficient A/C is. It takes less electricity to cool a home than heat it; yet A/C is seen as indulgent and first world and heating is taken for granted.
To put a finer point on it—it is more environmentally friendly to live in the Phoenix suburbs and cool your house than to live in the Minneapolis suburbs and cool your house, though the popular perception is likely the opposite.
Yeah this is what I was trying to say. Not that AC has no environmental impacts. Though in places that get all their power from nuclear/hydro the latter is pretty much true.
Well, because my apartment is so badly ventilated, my landlord wants me to open the window every time I shower or boil water, including in winter, which is a bit of the opposite problem.
Stubborn eccentricity is the fact that, according to your link, Saudi Arabia somehow has proportionally fewer air-conditioned homes than Korea, Japan, or the US.
I thought that was weird, too, but still, 63% isn't terrible like France, and I have to guess that, unlike Europe (where in much of the continent, extended periods of sweltering weather really are a new phenomenon), the Arabian Peninsula figured out millennia ago how to manage scorching heat without air conditioning. Also, in all seriousness, dry heat really is easier to manage.
I'm amazed at these comparisons, when NYC politicians talk about air conditioning (in housing projects, mainly, but also in other rental units) as a human right.
Another interesting comparison between Europe and the USA is how much more successful we are with immigration. Europe's prisons are comparatively full of the foreigners:
The USA is roughly 15% foreign-born an about 6-7% of our prisoners are non-citizens.
Compare that to Germany: 20% and 40%(!). Or Italy: 11% to 32%! Immigrants really are "committing the crimes" and "not sending their best" over there, whereas meanwhile it's opposite if anything here.
Btw the large fraction of foreigners in prison in Norway (28%) is one of several reasons that the Nordic rehabilitation statistics are largely a myth. Can't reoffend if you're deported!
You are more successful to be sure, but you also benefit from an easier demographic to work with, more middle class Indians and less MENA men with four years of education and fundamentalist Islamic beliefs and values.
Also Norway measures recidivism very differently - you have to go back to prison within 2 years. Whereas in the US you only have to be rearrested for *any crime* within 5 years. I'm tired of seeing these misleading comparisons in the media.
Another interesting stat about US incarceration rates - the former Confederate states have the lowest black-white incarceration rate gaps. That to me just confirms incarceration rates have much more to do with actual crime rates than racism or whatever. The white crime rate is much higher in the South than the rest of the country, and the black crime rate there is likely lower than midwestern states where the black population tends to be more concentrated in poor/disadvantaged areas of cities.
Huh. I thought that it was that black crime rates were about the same nationwide and that white Southerners were uniquely crime prone among white people.
Re: White Southerners: might be true in mississippi and louisiana and the worst parts of kentucky. But overall white homicide rates in the South are low, and only about double those of New England the Midwest.
Black incarceration rates in the southern states seem to be about average for the country - around 1000 per 100,000. There are certainly places where it's lower, like some northeast states. But then you have states like Wisconsin and Iowa where the black incarceration rate is double - around 2000 per 100,000, despite their overall incarceration rates being similar to the rest of the country.
White southerners do indeed have a very high crime rate, that's true too and probably the main cause of the smaller racial gap in those states. The white incarceration rate in many southern states is higher than the black incarceration rate in Massachusetts.
Fwiw I think approximating these things with homicide victim rates is even better than approximating with incarceration. Or at least it's a solid "second opinion". Because most murders are still within-race , victim rates tend to be fairly well correlated with offender rates.
For White, the NorthEast has a homicide victim of 1.6, 2.5 in the Midwest, 3.0 in the West and 3.9 in the South.
For Black, the numbers are 20.9, 42.6, 25.1 and 27.7.
So Midewestern Black rates are super high. I think on the East Coast many more of the black people are immigrants, who tend to have much lower crime rates. The white violent crime is probably highest in the South, but not so high in absolute terms.
Wonder if that’s a difference in immigrants or in the country population. If a bunch of average Americans immigrated to Germany they would probably also commit more crimes than the average German
There's something to that. We have such a high crime rate by First World standards, that bringing in the average immigrant lowers crime rates.
The common response you'll get on racist Twitter is that "yeah but that's just because Black people," which is partially true, Black Americans do have higher incarceration rates than White Americans by a lot, but almost every legal immigrant group gets incarcerated less than native born White Americans, the only exceptions being Hondurans and Haitians, and only by a little.
So it's both/and. We're a bunch of rambunctious hillbillies to begin with, and the immigrants we receive are relatively well-behaved anyways.
I don't think there are many ethno-nationalist types in the SB comment section, so I'll play one for a minute for the sake of keeping you on your toes.
I think they would say that Hispanic immigrants may commit lower rates of crime themselves than native-born whites, but then go onto have children who commit much higher rates of crime, leading the overall "Hispanic" incarceration rate to be 70% higher than whites in that chart. They would also say that chart includes the majority of Hispanics in the white category too - just looking at non-Hispanic whites would be lower.
Yes, that's true I think. 2nd generation commits the most crime.
My response to that is that if broken down by education, those with the lowest education levels commit the most crime, and most likely this is true of their kids as well. Immigrants to the US from most of the world skew highly educated. The only exception is immigrants from nearby countries; Mexico, Central America, and the Caribbean. My guess is that a lot of these people came on family visas after one relatively low education family member got here one way or another. So if we had an immigration policy that was consistently enforced and selective for education, that would mostly solve that problem.
Yeah that's what I've always thought is the best way forward for an immigration system that both maximizes the economic benefits and is politically sustainable.
Unfortunately, it's never going to happen, because Republicans have no interest in more legal immigration - illegal immigrants are easier for their big business donors to exploit in their farms and factories. Democrats have no interest in shifting the immigrant balance to be more educated (even if it could allow for an increase in immigration), because they care more about how immigration policy helps the world's tired/poor than how it benefits the US. And for "elites" in general, high skilled immigration means more competition for their own labor and less cheap staff to drive down their restaurant and landscaping bills.
We'll see. Right now they're making their big deportation push. I think it's going to be a bunch of bluster that results in the same number of illegals being deported as usual. Because if they actually follow through with deporting several million people, it will crash the economy. Americans, like most people, are change averse. The economy is used to a certain number of migrants per year. If that's disrupted, people will notice, even if they don't understand why. So, over time, we may find ourselves blindly ambling towards smarter immigration policy.
"but almost every legal immigrant group gets incarcerated less than native born White Americans, the only exceptions being Hondurans and Haitians, and only by a little."
Where do you find this data? It seems like it would be hard for government sources to put together, because both the numerator and denominator would be measured or guestimated in different ways by different agencies
It's consistent with data I've seen from CATO but I can't find it right now. Pretty consistently, the data I've seen is that the immigrants from nearby countries commit the most crime, as well as refugees. And then the lowest pretty consistently is Indian Americans. Almost zero crime.
I'll try to find the exact source later. Currently lighting fireworks.
Interesting thought and it might be true. You generally have to do a lot more to be incarcerated here for any serious length of time. In Norway they can throw you in jail for traffic violations.
I like rereading this as I have different background perspectives each time. Labor market regulation is clearly a big drag on innovative start-ups.
Some things to consider:
1. Private university endowments and private pension funds created a large pool of capital willing to take risk in long-duration, illiquid investments. So the scale of the venture capital ecosistem is just so much bigger in the US
2. English as the native language gives much easier access to cross-border markets, employees and capital
3. The scale of the US military budget (and space program) is an order of magnitude beyond any European country. Silicon Valley (still) gets a lot of funding and custom from US military programs, to which much of its origin story can be traced (semiconductors, internet, gps/mapping).
Trump lies all the time to protect his ego, so his assessments are worthless. The Iranian regime has a domestic interest in pretending they were less pathetic than they were, but a foreign interest in pretending that their program for building a bomb has been set back further than it is.
I’d listen to the what Israel says on this. They have an interest in knowing the truth. (Of course, they will probably not publicly contradict Trump, because they too have to flatter his ego.)
I read an article years ago that shaped my thinking on US intelligence- it argued that we Americans are just bad at human intel. Most European countries had spying operations before the US was even a country. Meanwhile, America didn't really set up a genuine foreign intelligence department until post-WW2.
The article argued that where America shines is in digital surveillance & technological spying, but when it comes to the human side of intelligence we're just..... literally bad. American parochialism, not knowing or being interested in other cultures, also can't help
The fact that a Mossad fake phone call got 20+ IRGC leaders gather in one building for a fake meeting that the IDF then destroyed with a missile is one great example. Also, Iran has broken American intelligence networks within the country at least twice in the past 20 years.
I'm not saying that Israel doesn't have great intelligence in Iran; I'm just wondering how you would know it's better than that of the US, given that the US hasn't had nearly as many high-profile operations targeting Iran as Israel has.
I don't know what you mean by "has broken American intelligence networks within the country," though.
Thanks for that. I'm not sure this is a dispute that's worth pursuing, but that article is from 2005 and reports how American agents in Iran in the 80s and 90s were exposed.
Also Iran just recently (after the Israeli and American attacks) rounded up a ton of purported Israeli agents.
Also, the opponents of the war have an interest in presenting the strikes as ineffectual. They’ve pivoted from “there’s no evidence Iran is close to nukes” to “strikes ineffective; Iran will have nukes by Halloween.”
Reading the article, it strikes me that America’s problems ("let’s be less unhealthy and violent") are a lot more intractable than Europe’s ("let’s not have terrible energy policies and make it difficult to fire incompetent employees").
I don't know - there's no real silver bullet strategy for Europe to follow to develop an equivalent to a Silicon Valley - which is the main source of the productivity gap. More flexible labor markets might help but I doubt would do it.
As for America's problems, healthcare costs, bad public transit in dense cities could be fixed pretty easily by just copying other countries. A lot of the life expectancy gap is stuff that could be relatively easily closed by policy too, like guns and road deaths. Obesity is tougher but that may be changing with drugs. Meth/opioids seem the hardest to me, not an easy solution for that.
Ntpick, but it feels strange for you to include Nvidia and Tesla and not include SAP and ASML (both >$300bn companies over twice as big as spotify by market cap and more by economic significance) on the Europe side of the ledger.
A quick scan of their historical market cap graphs suggests that Spotify was never bigger than either company. Both other companies are also significantly older than Spotify.
I pointed out this same error in the comments on the original. SAP is super boring so nobody cares, but it's bigger than IBM and three times bigger than Intel at this point.
When comparing untimely deaths here to Europe, it's important to remember that averages can obscure an enormous amount of regional and demographic variation.
So I put together a web app to specifically look at where in the US and who in the US is impacted by Drugs / Homicide / Suicide / Road Deaths / Alcohol deaths.
Looking through it, it seems like Traffic Deaths might be connected to rural driving, which Europe probably has less of. Homicide, alcohol and suicide have interesting regional and demographic patterns, too, that aren't necessarily comparable - Europe doesn't really have anywhere geographically or demographically comparable to New Mexico, for example.
"Making cities like Chicago, Baltimore, and Philadelphia safer would unlock large amounts of affordable housing and improve economic dynamism."
Matt has made this point several times recently, and it strikes me as a promising candidate for coalition building. In San Francisco, YIMBY-ism is partially aligned with the affluent moderation of GrowSF, which in turn draws electoral support from those who desire safe streets and "good" / normie governance generally. I wonder if YIMBY politics should lean into "partisan centrism" in cities and small / north eastern states: "our great cities should be safe and affordable, and generative of good construction jobs" etc.
One factor might be America’s willingness to reward very productive people with very high wages. At the very highest level Zuckerberg was patching OpenAI staff with offering of $100 million signing bonuses. That’s inconceivable in Europe.
At a much lower level you have good engineers and you have good managers but a really good engineer who is also a really good managers - that’s big bucks. An American company would happily pay $800k while a European company would balk at anything over $200k.
Keeping in mid a very good engineering who is also a very good managers can generate millions in revenue. But no one is going to battle all that inertia and cope with all that drama of producing or not producing only leads to short money.
I believe that about 1/3 of American car crash deaths involve drunk drivers. I know in many European countries the cultural norms regarding alcohol are quite different from much of America. But what I don't know is how much of a difference in levels of public intoxication there is between America and Europe? I feel like if American policy-makers and police took drunk driving more seriously our number car crash deaths would decrease and roads would be safer.
There are very different alcohol cultures. The US also just drives more. The culture of getting “hammered” and then driving is pretty specific to the US.
Thomas Pueyo did a nice series of articles on Iran's geography. I've been hearing the drumbeat that we were 'about to invade Iran' for decades now and Thomas' articles explain why we haven't: it's a nightmare of mountainous terrain for military logistics to put anything on the ground there except for the southern tip. It's what Iraq found out in it's war with them. And we know how endless bombing campaigns work from Vietnam, North Korea, and Afghanistan (and Iran' is much bigger than those countries). So posturing, strategic air strikes, and internal strife are probably the main strategies.
As written in yesterday's piece (as well as earlier), politically the outlier is the GOP.
Would it be fair to say that there would be no fracking, higher taxes and more state services, tighter labor policies, more stringent environment regulations if one did not have the GOP?
Across the board the US has had a much more generous immigration system, in that way both the left and right are outliers compared to other OECD countries.
The US immigration system being more generous than other countries hasn’t been true for decades. Based on the percent of residents born abroad, the US now ranks between the Netherlands and Estonia; it’s below all the larger European countries, only about 2/3rds of Canada, and 1/2 of New Zealand or Australia: https://en.wikipedia.org/wiki/List_of_sovereign_states_by_immigrant_and_emigrant_population
What is true is that the US still gets the lion’s share of top immigrants but that’s not because of our policies but because our top companies will pay them way higher salaries than anywhere else in the world.
In absolute numbers the EU as a whole takeas in about the same number of naturalized citizens and a higher number of "first resident permits" (which is not the same as the US green card, but let's use it anyway)
70% of the first resident permits and 35% of naturalizations are from other non-EU- European or other EU countries.
Any my perception was more skewed towards South Asia/China/SE Asia than Middle East/North Africa/Eastern Europe.
On aggregate the US is wealthier but that wealth is highly concentrated and unequally distributed. The European focus on better state funded welfare alleviates the disturbing levels of poverty seen is parts of the US. I find the US (particularly through the GOP lens) tendency to demonise the poor as lazy and undeserving of support as quite disturbing. Describing any effort to create a fairer society as ‘Socialism and Communism’ has become a mantra for many disingenuous politicians and used a the boogeyman to scare people into highly reactionary behaviour.
There certainly are due to extremely high levels of disfunction. Similar in anybody ways to the urban homeless.
Edit: Think of it this way. Matt talks a lot about how the homeless problem in MS is a lot smaller than the homeless problem in CA. That’s largely thanks to folks who would be homeless in CA being able eke out a living in a trailer in MS. The substance abuse and mental illness is still there but we call a dilapidated trailer housing in a way that a tent in an encampment isn’t.
I think this "competitiveness" and productivity argument is missing something important that this McKinsey Global Institute Report from a few days back (https://www.mckinsey.com/mgi/our-research/the-power-of-one-how-standout-firms-grow-national-productivity) clarifies:
It's not that the American economy overall is much more productive. It's more like *100 individual firms globally are claiming ALL of the productivity increases,* many of them American.
And it really boiled down to about 44 firms (5% of the total sampled) which account for 78% of the productivity effect, the names of which you are well-familiar, including the consumer-tech stars Apple and Amazon, but also big box retailers like Home Depot).
In other words, it's not really a system-wide or country-level phenomenon. The overwhelming majority of American companies, like their European counterparts, are laggards or worse in productivity growth. And so its hard to surface lessons from this when it's all being driven by a few outliers.
Let's dig deeper into some of these Standout firms to show you have having a marginal superstar or two can totally swing the national situation: little Sweden can punch way above its weight because of the likes of Spotify and Klarna. Denmark is in the news without you even knowing about it because of fluke success of the weight loss drugs pioneered by Novo Nordisk. You could say that both countries (who have a combined population of <20M people) together are productivity stars. And they are... technically. But strip out Novo Nordisk and you've literally cut Denmark's paper GDP in half!
So the contingency of having a few breakout firms is very high. Remember that for a while the best VoIP company in the world (Skype) was from... Estonia. Does that mean that Estonia is a productivity superstar? And Finland's Nokia dominated mobile telephony... until it didn't.
This also isn't to say that smaller European countries can't produce "Standout" firms even outside of the fussy, scalable world of tech. Spain has its Zara and Sweden has IKEA, both of which dominate American competitors. Europe may struggle to compete with Chinese green-tech companies in batteries and solar panels, but the global leader in wind turbines by a mile (Vestas) is Danish.
This even applies to more traditional industries like shipping: Tiny Denmark dominates global shipping via Maersk. And even real dogs of productivity like Greece can punch way above their weight at the firm-level in that industry, with half a dozen of the top shipping companies. The United States can't create a shipping industry to save its life (literally) and so what would they even learn from Greece and Denmark here? Be a peninsular archipelago with millennia of seafaring experience?
The Pareto Principle Productivity effect here is also profoundly sub-national: Could we say that Sweden and Denmark are "special" in productivity terms? Yes. But so are California, New York, and Massachusetts, then. The only "Red State" that really outperforms in productivity is Texas, and only because of its "Blue Cities." Conversely, you could strip almost the entirely of the Southeastern United States and the average national productivity would go up. Ditto with the Mediterranean and much of Eastern Europe in the EU. Hell, if you un-did German Unification the story in West Germany would look a lot more positive than Germany, overall! So maybe it's more useful to compare Standout Regions in the US an Europe to... everywhere else. Amsterdam has much more in common with New York City than New York has with Upstate New York.
One interesting difference here between North America and Europe, though, is that it's much easier for a Standout firm in a "Standout State" (say Amazon in Washington State) to scale nationally across the American (or even Canadian) states than it is for a Standout firm in Switzerland or Ireland to scale to Italy, Germany, Poland, et al. This is one of the hidden "cheat codes" that American firms have that no other country's firms have (outside of maybe China) access to a HUGE domestic market with totally consistent and frictionless hyper-scaling.
What I would say that the MGI report clarifies is that you can't necessarily "create luck" to grow yourself the national champions that will become Standout firms that drive 70-80% of productivity growth, but you can be better than others (esp. Germany) at letting the laggards die off and be reconstituted. Germany's economy is less productive today largely because the Standouts and Laggards cancel each other out, productivity-wise. And that's for structural and political reasons. The German auto industry is still extremely profitable and globally competitive (more so than the American one, certainly), but it's also missing the boat on the next paradigm in transport (as are the Americans). The dilemmas of letting your stragglers die off are well-familiar to Americans over the last few years: Obama "saved" the American auto industry (which continues to underperform in innovation) and Trump is using his authority to protect the American coal and steel industries, even though they're a massive drag on overall productivity and competitiveness.
“… it's not really a system-wide or country-level phenomenon….”
This whole comment is excellent. Meaningful comparison depends on getting the units of aggregation scaled to the right size. If you look at the average household wealth of two households, mine and Jeff Bezos’, you’re not going to learn anything interesting. The same is true to a lesser extent about California and Louisiana, or the former East & West Germany, or the EU as a whole. Those analytical units don’t carve at the natural joints.
I think it kinda cuts both ways. Anyone can make kalishnakovs but not everyone can make nuclear sub marines. All things being (un)equal you'd rather be the society/economy with a handful of superstars and capable of every once in awhile producing another one, even if large sectors have maxed out on productivity under current technology and other constraints. It's then the role of the state to make sure the big gains of the few are distributed to some minimal degree necessary to maintain social cohesion. Everyone can live with Jeff Bezos being a billionaire a-hole if the benefits of Amazon logistics and data capacity is broadly raising quality of life.
This is part of the reason btw that knee capping our own clean energy 'thumb on the scale' is so counter productive and short sighted.
>Anyone can make kalishnakovs
Interestingly everyone agrees that American-made AK-47s are garbage, and the only good ones are manufactured in Central & Eastern Europe. Even American gun nuts/gun Youtubers etc. agree on this sad fact. So even there specialized manufacturing knowledge rules.
It's quite ironic how much better the Europeans are at building high-quality guns. Glock, Bennelli, FN, Heckler & Koch, Beretta, Sig Sauer..... superior to their American counterparts. The US military like the SEALs and the Marines all use Heckler & Koch rifles- no Buy American rules when the stakes are for real! Glock displacing Smith & Wesson in the 80s for American cops was one of the pivotal moments in firearms history
“… the Europeans are at building high-quality guns….”
The Browning .50 cal. is still a competitive player, but it dates from the 1930s.
Heh I take your point though I think people who prefer Glocks are missing a chromosome or something.
I'm personally a Sig Sauer guy, and while my favorite one was made in W. Germany they've been making them in New Hampshire for a good while now.
"Steyr AUG's a bad mf. Expensive too, man. Made in Austria." https://www.youtube.com/watch?v=Gr6eFXNq5Wc
It reminds me of the way people talk about China as if all of China is Shanghai, Shenzhen and Hong Kong.
Sure, if you fly into Shanghai, you're gonna be amazed at how future-y everything is. Considering it's very difficult to even get a tourist visa to travel outside of Beijing and Shanghai, you might assume that that's the representative experience in a country of over a billion people. But, surprise, it's not: China also has its Mississippis and Arkansas. They also have low-productivity "Rust Belts" like the Northwest, un-dynamic rural areas like Yunnan, or extractive post-colonial, majority-indigenous minority areas like Xinjiang or Inner Mongolia. Most people outside of China haven't heard of dynamic Hangzhou (the HQ of Alibaba) but they also haven't heard of Heilongjiang in Manchuria, which makes West Virginia look like paradise. And, just like in the US/EU (as demonstrated in that MGI Study), likely 0.001% of firms account for the 80/20 of productivity in China.
And, just like most Americans don't live like the wealthier, better-employed urban-professional class of star cities, the median Chinese person lives nothing like what you see in Shanghai. Because of the hukou system, most Chinese citizens aren't even allowed to move there, either. (In the US the effect is not dissimilar: the restriction that prevents people from moving to low-productivity to high-productivity areas is mostly housing/cost-of-living). Most Americans, Europeans, or Chinese, alike, don't live in a high-productivity zone, don't work in high-productivity jobs, or enjoy high-productivity compensation and quality-of-life.
This generalization of the outlier to the general also occurs in other ways we talk about China's daunting progress on other HDI indicators like education: Every year the OECD releases PISA test scores comparing pupils from superstar cities in coastal China very unfavorably with American students. But that's not the same unit of measurement! China only reports pupils' results from Beijing, Shanghai, Jiangsu and Zhejiang (B-S-J-Z). Which is like the US reporting only students from the Boston Metro, Northern Virginia, and the San Fransisco Bay Area.
But, when it comes to Americans critically talking about Europe, it's often the opposite framing: the middling average drowns out the impressive outliers. So, every place in Europe is a mess and hopelessly behind because Southern Italy and Eastern Germany are. The existence of world-class, high-productivity zones in Northern and Central Europe (not to mention metro-regions in Italy like Milan and Berlin in Eastern Germany) are the outliers. And even the incredible wealth, growth, and full-spectrum success of individual whole European countries like Switzerland, Norway, Denmark, and Ireland are explained away with caveats. Why don't we explain away the unusual success of Silicon Valley with such caveats, instead of generalizing it broadly to some broader American genius?
Huh? I was just in China a few months ago. It’s very easy to get a tourist visa to China and a regular tourist visa lets you go anywhere in the country except for Tibet and a couple counties in border areas. Yunnan is a popular tourist area.
The gap between Shanghai and poorer parts of China has closed a lot in recent years. Smaller cities in China are still poor by American standards but not inhumanely so. For that matter, Shanghai is also poor by American standards if you look income or at private consumption like house size, car ownership or appliance ownership. But China as a whole is really second-world now; even the smaller areas are not really third-world any more.
It’s a constant struggle to keep updating your worldview. Like, I used to hear all the time about what a dynamic city Peking was, and now you don’t hear a word about it.
The country’s standard of living is insanely low compared to the sophistication and embodied investment of its transportation and manufacturing infrastructure.
That fact is muchhhhh clearer when you either leave BJ/SH/SZ/GZ or you start looking at the conditions the underclass within those cities face.
"This is one of the hidden "cheat codes" that American firms have that no other country's firms have (outside of maybe China) access to a HUGE domestic market with totally consistent and frictionless hyper-scaling."
This, of course, was supposed to be part of the appeal of the EU, and a part of why EU skepticism has died out or at least been muted among the European far-right: after seeing Britain kneecap itself, they realized that if you're a small ethnostate (as all countries in Europe are), your choices for economic prosperity are 1) do a bunch of conquest to seize access to a large market or 2) give up sovereignty to have access to a large market.
There was 3) gain access to a global market via free trade, but, um, about that.
edit: And, of course, option 4) which is "have benefited from decades of free trade that you orchestrated largely on your terms and then petuantly turn your back on it, confident that it'll be your political enemies who have to deal with the fallout from your dumbass decisions and anyway being poor is "based," but that's, shall we say, only available via a historically contingent set of factors.
The problem with the EU, which honestly may be an irreconcilable dilemma, is the same issue the American Colonies had when they tried to federate via the Articles of Confederation (a fascinating period from 1781–1789 that we've just memory-holed to our detriment).
If you have 13 (or in Europe's case, 27, or 30 if you count the EEA) sovereign states who all agree voluntarily to unify in a loose confederation, but retain most of their "national" sovereignty, encode veto-points and unanimous decision-making, don't enter into a true fiscal union, don't endow the executive with sufficient power, don't enshrine sufficient popular sovereignty in national institutions to retain legitimacy, and don't have even supra-national institutions like a standing army you get *exactly* the issue Americans did in the 1780s, up to and including existential risks from foreign powers like France and potentially ruinous insurrections (like the Whisky Rebellion).
Hence why, under duress, the new United States were forced to give it another try with the (current) U.S. Constitution in 1789. We take this constitutional state for granted now, but it was hugely controversial and contested at the time. The U.S. Constitution was a last-resort. And even (and increasingly) now, the tensions remain, with Red and Blue America fighting over who gets to push whom around.
The EU is very far from a true "United States of Europe" because the EU wasn't formed in the ferment of war and national formation. It was designed as a gradualist instrument of peace and prosperity emerging over whole generations. There's been no "come to Jesus" moment for Germans to stop using the Euro to make their exports more competitive (at the expense of all of Southern Europe) or for France to stop wanting its cake and to eat it to when it comes to national vs. European interests. The UK famously couldn't get over itself since the era of Margaret Thatcher and had maybe the most sweetheart relationship with their EU membership as was possible, but even that wasn't enough to prevent them from taking their marbles home (to ruinous effect). And it's not just the big countries: small spoilers like the Netherlands and Denmark Sweden have long opposed EU funding for everything from economic stabilization to military procurement. And, of course, the likes of illiberal Hungary are the fly in the ointment when it comes to common cause against Russia or for human rights. It only takes one to say "no" to anything in Europe and the easiest thing for national politicians to do when they're only accountable to their own national public is to press their short-term national interest over the collective long-term European interest.
So, as usual, people don't sacrifice for their collective good until they have to. And that requires a painful crisis. I don't discount that Europeans will find themselves against the wall the same was the new Americans were 250 years ago. But until then there is absolutely no incentive for nation-states in the EU to give up the level of sovereignty and reorient toward the collective good of the entire continent in the ways that would be needed to really hang with the likes of China and the United States, economically, geopolitically, and militarily.
Isn't the replacement of the Articles of Confederation with the Constitution the most amazing event in US history? As you say, it happened "under duress." Indeed, there were significant problems with the Articles. But could the states have trudged on despite those problems? I'm sure they probably could have.* But various members of the elite got together and decided to do a do-over, despite the nation as a whole not on the verge of economic collapse, anarchy, civil war or widescale rebellion.
When else has that happened?
* Ladies and gentlemen, may I introduce our current government?
It really is an unheralded “killer app” of American democracy.
Unfortunately, the Constitution, as great as it was, has also been very difficult/impossible to evolve. And I think that’s become a liability in the last generation or two, especially. Many of the massive distortions away from the one-man-one-vote principle of representation are pretty new, for example, now that populations are so clustered in cities. I’d argue that we really really need to reform the way Congress is set up, then, but can’t. And that’s just one example.
For better or for worse, I saw much more fluid constitutions in Europe, with both Ireland and Sweden having pretty fundamentally updated their constitutions within years of my living there in ways that were objectively positive. I worry than the American constitutional structure is so ossified and increasingly illegitimate in the eyes of the people that it threatens to just snap or erode.
Yep, Novo Nordisk gets 60% of its revenue from the US and you can just see its stock price since Trump got elected, which will take the whole Danish economy down with it. The world being created by ethnonationalists is one where small countries are at the mercy of large ones and increasingly it’ll be harder, not easier, to have the kind of homogenous sovereign ethnostate they dream of.
It's absolutely true that small countries are at the mercy of large countries in that way, not to mention the vagaries of world-wide political-economy and geopolitical shifts. Export-oriented, globalized, intermediary countries like Denmark, Ireland, et al are both the primary beneficiaries when it comes to economic conditions and also the fastest to wilt when things go off.
But the same is true of Top Tier cities anywhere, from San Fransisco to Singapore. The good news about living in a bleeding-edge high-productivity zone is that the upside is huge, even if the downside risks can be equally precipitous. The good news about living in a un-dynamic, flat-productivity zone is that your life can't get so much more difficult than it already is, whether times are good or bad.
When the (Western) Roman Empire collapsed, Roman peasants living at subsistence level... were still (non-Roman) peasants living at subsistence level. But what happened to those Roman-founded cities and the "temporarily embarrassed" merchant and aristocratic classes when the Dark Ages began to lighten by the 6th and 7th Centuries? You know... places like Mediolanum (Milan), Neapolis (Naples), Lugdunum (Lyon), or even, a little later, Londinium (London)? They were already thriving again by the Merovingian, Carolingian, or Frankish times. Some, like Byzantine Constantinople, famously, and Gaulish Arles kept on thriving right through the Fall.
So your average life outcomes are still going to be better in such a small, high-productivity country or city or city-state than a large, powerful, but low-productivity country like Russia. Trump is having his day, but the high-productivity nodes of the world will long outlast him and his deleterious legacy.
Aren't most (all?) countries in the world ethnonationalist, apart from imperial and former imperial powers? How do you mean that term? Explicit, formal privileges for one or more ethnic groups?
I'm a little skeptical of the McK framing (and also your description of it).
'
First, they aren't saying that "almost all" gains are from the top 100. They're saying that 2/3s of gains are from slightly under 100 firms.
Second, this doesn't seem hugely different from an overall measure of size. The top 100 US companies by market cap account for 61% of all public US equity value - that's not too far from their concentration numbers. While productivity is not directly comparable to market cap (they define it as value added per worker (presumably multiplied by number of workers to get the overall contribution to the economy?)), you'd still expect there to be a strong correlation.
Thirdly, assuming they are using "number of employees" as a denominator, this is going to be pretty sensitive to the definition of employee. Outsource your janitors to a third-party cleaning service and your value-added-per-employee presumably increases, but you're not actually more productive in a meaningful way. Expand internally to a developing country and value-added per employee likely drops, even if the new employees are doing just as good work.
Plz fix
Very nice. Honestly, I just wish this degree of skepticism and rigor were consistently applied to all the social science claims, not just economics.
Empirical observations are critical to keep us grounded, but when you dilate the conceptual lens, rescale, or shift focus even a little bit like this, it shows how rarely those observations lead to useful predictions or actionable plans.
Even in the "hard sciences" (as we're increasingly seeing with the Reproducibility Crisis of the last decade), there are all sorts of incentives not to apply skepticism and rigor and instead to produce a result that is interesting and engaging more than true. Nobody wants to read the paper about a cancer treatment that doesn't work or that kind of works a little. They want "Revolution in Cancer Immunotherapy."
And ditto for commentary: Like, who wants to read the essay entitled "Which is Better: Europe or America? Answer: Both Kinda and Also It Depends!"
My role as the resident American Abroad in these Comments is to try and push back against the stereotypical and overly-simplistic when it comes to American commentary about Europe (which reeks of Big Brother/Little Brother energy, distorting perceptions).
But if I wanted to package my own dispatched as a Substack niche, the structural incentives would be to do fan service to the American Euro-philes and tell them all about why Europe is LIKE SO MUCH BETTER IN EVERY WAY. Or maybe throw some meat at the right-wing Euro-haters with EUROPE BAD, ACTUALLY. When, sorry, but it's neither. The boring truth is that Europe, like America, is a mixed bag. And that nuance really matters. You can't even say that much that's useful about the entire United States or the entirety of Europe when they're both continent-sized collections of very diverse human experiences.
And, if you get frustrated with that nuance and just want perceptible truths about a bewildering world, fine, but then dig into the details to find the actual mechanisms, if possible.
As you say, I'm skeptical that you can find much there of prescriptive use, but if there is something, it's going to be pretty specific: Much more so than "Americans work longer hours" or "Step 2: Increase Productivity" or "Stop Being Weird About Fracking" or "Stop Paying People To Do Nothing for Inexplicable Reasons." And, yeah, I'm being facetious, but people really do explain the world in terms that boil down to "Everyone Else is Dumb but Me!" Maybe there are *reasons* why Europeans didn't do the fracking thing... starting with how little actual fracking potential the continent has and how close to dense population centers the little likely reserves are? Maybe the lack of an Amazon or an Apple is as much to do with the lack of an actual single-market of 340 million wealthy people rather than issues on the margins of financing? Etc.
If this were a one-off about the concentrated advantage of some American firms, it would be more compelling. But it keeps being repeated decade after decade, even as technologies change. A long time ago, American car manufacturing firms were the largest in the world,* then American oil industrial firms rose to the top, then American financial firms rose to the top, then American software firms took their place on top of the list. (For a brief period in the late 1980s/early 1990s, Japanese firms dominated the market cap lists.)
Obviously, in each of those periods, it was a couple firms that dominated. But no one cares about Ford, GM, IBM (and maybe Exxon) much anymore. The only common identifying feature about these leading firms across the span of time is that they were and are American.
Happy 4th of July. U-S-A!
* It didn't hurt US rankings that so many European firms took a step back during that bit of unpleasantness 1939-45.
Well, Matt's whole point is that something diverged in the 21st Century after a convergence between Europe and the US in the 1990s.
But, to your point, I agree that the US is a really blessed country long-term ...and for very structural reasons. I mentioned the massive advantage of having a huge, wealthy consumer market that is truly a single-market. *Nobody else has this.* Europe is a collection of 30 countries in the EEA and even if you wanted to be general, you'd have to divide it into 8-10 zones of language, regulation, etc. As soon as the United States became a country of truly united states in every material way, their economic rise and eventual dominance was unstoppable, something that even early observers like De Tocqueville had already noted 200 years ago.
Another factor: the incredible geographic luck of America. I think we all well-appreciate the geo-strategic value of having two oceans in between any of your enemies and your homeland. But what about having only two neighbors, both of whom are allies? What about having basically everything you need right at home, from some of the most fertile agricultural lands to some of the world's premier fossil energy reserves! Even though Trump hates renewables, the US is even preternaturally gifted there: with some of the best solar and wind energy potential on the planet, ready to be harvested when Americans want! Then there's the other stuff that's maybe less well-known except by geography geeks: there is no other country on the planet with as much of its interior navigable by inland waterways. That gives American logistics a massive structural advantage that remains profound even in the era of trucking, when bulk water-transport is still cheaper than any truck or rail could be.
Europe was/is rich because it was also gifted with some extremely lucky geological endowments. But a lot of them (including the unusually high surface area and port potential of its landmass) were more crucial in centuries past than today. Europe is, like Japan and Korea, very energy poor. Even if they wanted to "drill baby drill," there's almost nothing there. And all the renewable investment? Well, it's paying off, but it's collecting electrons from a pretty poor geographic endowment. Europe also can't feed itself as easily as the US can, especially when you strip out the best lands in southern Russia and Ukraine. Europe is far away from the global economic center of gravity in East Asia, too, whereas the US has the frictionless Pacific Ocean and Port of Los Angeles as its key. And Europe is very vulnerable to its closest antagonist, Russia. There is no physical boundary between Russia and its prey in Finland, the Baltics, or Eastern Europe. Russians can roll right in, just like the Mongols of centuries past. Granted, this has historically cut both ways, but Europeans aren't in the business of running Napoleonic or Nazi Empires anymore, so the threat is unidirectional (except on Russian state TV).
For all these reasons, the US can just f*ck around a lot more than other countries and still fail upwards. I have no doubt that the American economy will be just fine, even after the awful stewardship of this current administration. America is the kid with a trust fund who often makes it but gets another dozen chances even if it doesn't.
You make a lot of excellent points and I'm in general agreement with you that the US has many natural advantages over Europe. (One could, of course, discuss many of the natural advantages Europe has over the US, including a much longer history of educational, scientific, and engineering excellence, extending over centuries.)
But some of our advantages aren't really "luck." We have a unified nation with a single market and great transportation advantages because we won a war that otherwise would have torn the country into two eternally competing parts, rendering us more like Europe of the 19th and 20th centuries. That was a hard-won achievement!* (Even if granted it was partly very lucky. Had Sherman not taken Atlanta before the 1864 election, Lincoln would have lost, McClellan would have likely sued for peace, and the Confederacy probably would not have come back to the Union.)
* Likewise, one could argue that the FDR administration prevented us from falling for the turmoil and fascism that afflicted Europe during the Great Depression. We had far superior government in the 1930s than the Europeans. Great choice, voters.
That’s fair. The US made a lot of the right calls along the way. Some of them weren’t exactly made for future-oriented reasons, but turned out to be wise in retrospect.
But I’d also caution about how much *contingency* was involved in leadership and democratic choice. Who was the immediate predecessor to FDR who was also democratically elected? FDR maybe wouldn’t have had to go so big to clean things up (and maybe wouldn’t have been so great) had Hoover not been so terrible at managing the initial crisis. And what about leadership in the previous recurring economic crises in the US during the Gilded Age going back to the 1870s? More recently, might we have had better leadership during that Bush/Obama transition that would have saved us from arguably still today suffering the aftereffects?
This is my point about the US being able to “fail upwards.” Trump is trying his hardest to ruin everything but the ballast of American structural strength was such that Americans were still able to thrive through his first term (and so far his second). Now maybe it’s another story of everything being fine until suddenly it isn’t, but it’s still stunning that he can just take a bat to everything and the stock market and economy hums right along.
Or if Giuseppe Zagara hadn't had his arm jostled when he tried to shoot FDR in Feb. 1933 and killed the mayor of Chicago instead. Think how different things would have been had John Nance Garner taken the oath as President in March 1933.
"God protects fools and the United States" probably wasn't said by Otto von Bismarck but was still worth saying.
As to your last point, I'm very depressed about the markets. That despicable bill passes by the thinnest of margins and the stock and bond markets just shrug. Either they're right and the bill is a nothingburger for the short and longer term of the economy, or they are very very wrong. It's hard to see the former. And if we don't have the disciplining force of a market judging these destructive policies, then we are lost indeed.
If this bill turns out to be a nothing burger then I’m going to have to go back to the drawing board AGAIN on fundamental assumptions I had about politics and governance. I just can’t see having a 140% debt-to-GDP ratio and spending 20% of the federal budget on just servicing said debt as a recipe for future success.
And that’s even without getting into kicking 11M Americans off health insurance. That was the pre-ACA/ObamaCare situation, so maybe the massive suffering and waste gets shrugged off, but I don’t know how you pull the rug out from a whole ecosystem formed around a new paradigm like that without structural harm. Let’s just talk about how much the HUGE healthcare industry that grew around the assumption of those millions of customers just gets withered away? Even if you don’t care about the poor, that’s a lot of economic damage. And what of the hospitals who will—once again—have to treat the worst cases that have gone from chronic to acute in the ER very expensively and without getting paid?
Agree with most of this but 1. Is Europe's clean energy potential really so bad? You have solar power in the south, hydro power in the north and wind power in a lot of places. 2. Russia as a threat to Europe is very overrated imo, especially nowadays. They can't even beat Ukraine and Europe is 30 times richer. Money matters in an age of drone wars. Norway alone can buy one billion drones, using money in their oil fund, and send towards Moscow. Also it's much more difficult to be the offensive party nowadays, as the advantage of defensive positions have increased with drones and other technology. Russia has lost a generation or two of their best soldiers as well as most willing recruits. Finally, Europe could strangle the Russian economy by forcing China and other countries to stop trading with them (EU is a much more important market so one presumes China would listen).
I’m not saying that Russia is a clear and present danger to most of Europe. But they absolutely are a threat to the former USSR as a revanchist power that’s looking to claw back some of their “near abroad” in Georgia, Ukraine, Moldova, and the Baltics.
And any threat to those are at least an indirect threat to the rest of Europe (not the least when it involved a NATO member). For example, almost any feasible war plan for a Russian invasion of Estonia or the other Baltics goes through Gotland—which means war with Sweden.
Whether Russia “has the juice” to take on another large European country (like Ukraine), that’s the wrong question. Because even Ukraine, though it has held its own (with NATO support) for three years, is still a state under constant invasion and existential threat. Soon, they will have experienced the ravages of war for longer than the United States was involved in WWII! And even if they don’t lose, they’ll have lost a huge chunk of territory and also have been economically and demographically devastated by war.
Let’s say the same would happen to Poland. My money would be on Poland also holding its own. But it would be a bloody and devastating grind along the way. Could Russia invade Finland or Sweden? Maybe not successfully, ultimately, but it would ruin a lot of lives along the way and maybe do permanent damage even to the victor.
I agree with most of this, but 'what about having only two neighbors, both of whom are allies' is only really true of the lower 48. Alaska is quite close to Russia, and Russian warplanes regularly buzz it. I'd imagine Chinese warplanes will be joining them soon. Hawaii (and Guam and Samoa) is very far out there in the ocean. And it's famously open to attack..... By the 2030s Chinese warships could be patrolling near it
Well, Hawaii is literally the place with the least neighbors, since it’s one of the most isolated inhabited islands on the planet. And Guam isn’t an integral part of the Continental United States. So I mean the core of the country. The US also has military bases in 200 extraterritorial locations which increases the attack surface exponentially, but that’s not the same thing as China being ringed by adversaries and American allies who are ambivalent if not hostile to its regional hegemony and the same situation in Russia. It’s also very different from all of Europe, historically.
Just think about GE's ~ 50 year run and now ... while still > $200B market cap it's no longer dominate in any industry. Competition is fierce. Moats are only so wide. Every top stop is only temporary.
This is great, Geoff.
Good comment. I think Europe needs to do a ton more in making their big cities great places to scale a startup. Having been on the board of a company that scaled across six European countries, I can say the labor laws and company regulations were an absolute nightmare.
I don’t disagree. I think, ideally, you’d have a kind of menu of options that roughly fit the context of different places. It would be one thing if you could get the Nordic countries to agree on policies and DACH to align and UKI, etc. Obviously, that isn’t happening because of these countries has a very specific historical and political context.
Even neighboring states like Belgium and the Netherlands can be *completely* different culturally, religiously, governance-wise, labor-regulations-wise, legally, etc… and by design going back to their very beginnings.
And in some cases, there’s a little regulatory arbitrage that countries do to attract business, which isn’t unheard of in the United States (*cough* South Dakota *cough* Delaware).
But even if countries did rationalize their rules EU-wide, you’d still have material friction. I can’t hire a Swede to sell to Norway, even though the two languages are mutually intelligible. And German-speaking Swiss are so fussy about how they speak *Swiss* German thankyouverymuch and the Germans consider the Swiss’ garbled version of their High German an assault to the senses. Everyone involved could speak English, but not as comfortably as their mother tongue and that matters in business.
And that’s just the language issue.
"Conversely, you could strip almost the entirely of the Southeastern United States and the average national productivity would go up."
Can someone point this novice to a primer on what's wrong (and anything that's right) with the US Southeast?
It’s hard to be productive and innovative when it’s really hot out.
In summation, these states have weaker productivity drivers (e.g. fewer high-value sectors like tech, finance, or biotech), lower educational attainment, and limited capital investment per worker.
But that's also nothing new. You could say that this was one of the structural factors even leading to the American Civil War: the largely rural Confederate States were stuck on a low-productivity, primitive-accumulation, slave-labor-input plantation economy while the more industrializing North was leaving it behind in Total Factor Productivity and had structural as well as moral reason for leaving slavery behind.
There are major counter-examples: Virginia and Georgia, generally, but specifically the metro-regions of Atlanta and the Washington, DC suburbs. The "Golden Triangle" in North Carolina. But, in general, the American Southeast isn't a Standout, in MicKinsey terms.
De jure Jim Crow and its de facto continuance to greater and lesser extents in the area is a big contributing factor. When you for no good reason refuse to educate or allow full opportunity and employment to something like 25% of your population for several generations you are just wasting human capital and potential. It also means you're over investing in the terror campaign needed to maintain that system, and driving away and/or keeping out people, institutions, corporations, and their capital who don't want to participate in that system.
I think part of that notion comes from thinking, who the hell needs food? Agriculture is not fun like technology, you can’t just create something from nothing the way you can with software.
Well, most of the food that we eat doesn’t come from the Southeast. Maybe it’s 10-20%.
All our carbs and mostcome from the Midwest (producing 40%+ of what we eat) and the vegetables (and a lot of other stuff) comes from the single state of California, which alone almost equals the output of the entire Southeast and has an unprecedented range of produce.
“ Agriculture is not fun like technology”
American agriculture is incredibly high tech and hyper productive.
https://www.cnet.com/tech/mobile/john-deere-breaks-new-ground-with-self-driving-tractors-you-can-control-from-a-phone/
That doesn’t make it “cool.” (Note: “cool” is pretty much an adolescent notion and not a measure of actual value)
A self driving tractor you can control with your phone isn’t cool? My God woman - what more could a man ask for?
It's not cool if John Deere is making it. Fuck them.
Perhaps of interest: The UK's Resolution Foundation think tank recently wrote a report on the productivity growth gap between the US and UK (with the singularly great title of "Yanked Away"), and one of the the main drivers of the gap that they pointed to was the much higher rates of new technology adoption in the US non-tech sector (eg professional, scientific, and technical services), along with the oil/gas boom and high-profile tech companies.
I'm glad you pointed to the labour market though: I agree that the loose labour market regulations of the US are probably one huge and underrated reason why its companies have grown so much faster. There's just much lower downside to taking a risk. PS I say that as someone who has been unemployed twice in the past two years (though ironically in the UK, where their unemployment insurance is much worse than the US) so very familiar with the downsides of a dynamic labour market! The UK has sort of a hybrid labour market system -- much lower costs to employers than a lot of Euro countries, but higher than the US. And at-will employment exists, but only for the first two years of one's employment.
Aforementioned report here: https://www.resolutionfoundation.org/publications/yanked-away/
"with the singularly great title of "Yanked Away""
As long as they didn't call it "mind the gap," which I would like to see banned in academic paper titles, white papers, policy reports, etc.
"See it, Say it, Sorted!"
When I was visiting friends in the UK in May, they (we all love language and usage) all found this extremely annoying, as did I after a couple of stops on the train.
Personally, I just found it a charming UK-centricy
The labor market reforms in Sweden in recent decades (largely under the influence of the pro-business Conservative Moderates and the neoliberalized Social Democrats) after the recessionary crises of the early 1990s are a very good model I think:
1/ There is no minimum wage in Sweden. In practice, nobody gets paid as terribly as a low-level retail worker in the United States because human capital/labor productivity is higher and the labor market is tighter, but there are also programs to even subsidize the wages of lower-potential workers like young people, refugees, and those with various disabilities in order to encourage fuller employment and labor participation. So, it's not a race to the bottom with low-wages substituting for productivity-enhancing investment. But it's also feasible for businesses to find labor at fair market value.
2/ Almost everyone in Sweden has unemployment insurance managed not by the government, but by labor unions. If you get laid off, no biggie. For about five months, you collect a wage that's livable (and up to 80% of your compensation if you sprung for extra insurance). This is enough time to get most people off the rolls and back into work. For the tougher cases, there is a Public Employment Department that helps to place people. There are a lot of long-term unemployed people, but the Swedish workers also work some of the longest careers in the world, on average, and when you strip out the people who aren't studying, new-parents, retired, disabled, or newly-arrived refugees (who aren't even legally allowed work often for years while they're in processing), there's basically zero unemployment.
3/ There is a 6-month probation period for all FTE roles in Sweden. If you aren't working out, you can be sh*t-canned immediately no questions asked. And as a people manager in Sweden, I can assure you that this happens often. That period massively de-risks the hire. It's only after you've been formally employed at a firm for 2+ years you start to really get any rights. And, in practice, those rights are restricted to companies not being able to just fire you without any cause or documentation and might have to pay 1-2 month severance. I have been laid off myself and conversely fired others within this system and I find it super-disingenuous when people claim this makes the labor market "inflexible." It's easy to hire and fire! Even at workplaces that are unionized (a fast-diminishing minority), unions are very accomodationalist and basically just try to make sure that there isn't total arbitrariness and that longer-term employees get some severance. Also, like in the UK and US, a lot of Swedish labor is contract labor who have none of these rights at all. That includes everything from your Uber East driver to a head of HR operations or VP of Marketing that's hired as a Sole Proprietor.
When I compare this with the US, where people either don't have or find it very difficult to qualify for unemployment insurance, have their healthcare tied to their employer, and can be fired not just flexibly but for any reason at all (including getting pregnant or being the victim of sexual harassment that they reported to HR and then got shown the door for), I think there's a case to be made that you can design an employment market that's both decent and dynamic.
Very interesting comment. A correction, though: it is illegal in the US to fire someone for getting pregnant or reporting sexual harassment to HR. See: Pregnancy Discrimination Act, Pregnant Workers Fairness Act, and Title VII. That doesn’t mean some employers don’t try, usually by employing a pretext. And it can be costly and time-consuming to hold them accountable.
It’s illegal to do a lot of things which happen in practice. And especially when it comes to workplace law, it’s down to how much capacity and will the regulator has. It’s also illegal to do wage theft, which happens as a matter of course—I was a victim of it myself as a much younger restaurant worker. I have personally seen a pregnant coworker be fired for trumped-up reasons at an American workplace. And I’ve definitely seen plenty of examples of pretty blatant sexual harassment, racial discrimination, etc. in workplaces, all of which are explicitly illegal.
Frankly, a lot of this still happens in European workplaces, where the regulations are tighter and more enforced and where workers also have more protection from unionization. Rights on paper get messier in practice.
I don't mean to be argumentative given how informative and interesting your post is, but I want to ask about this line:
> In practice, nobody gets paid as terribly as a low-level retail worker in the United States because human capital/labor productivity is higher and the labor market is tighter,
The unemployment rate for Sweden is more than 2x that of the US - nearly 10% now. What explains the difference in your view?
Massive immigration of people with less than six years of schooling who can't read or write and have fundamentalist Islamic beliefs and values. Put them in suburbs with 5% Swedish speakers where 2% of kids in some pre-schools, and 0% of teachers, speak Swedish. Add an extremely neo-liberal education system where you can use vouchers to attend Islamic schools (formally they must be secular but it has been shown, and is well-known, that this is not the case in practice). Á voila.
A previous Prime Minister once said that there is no unemployment for "ethnic Swedes" and he was accused of being racist for saying this.
Unemployment rate metrics are really squirrelly, for one thing. Look up how they’re actually measured, and you’ll likely come away a little shocked by the lack of precision. For example, how does one reconcile the official unemployment rate in the United States of ~4% with the Labor Participation Rate of only 62%, a near historical low and far lower than other wealthy, industrialized countries, including Sweden?
It’s how you measure things!
The American Unemployment Rate from the Current Population Survey only includes people *actively seeking work.* So it doesn’t include anyone long-term unemployed, newly discouraged from the job search, disabled, occupied as a housewife, early retired (whether voluntarily or not), studying, etc.
The Swedish unemployment rate includes a lot of that same group of non-employed persons. The unemployment rate is more than 9%, but the Labor Participation Rate… is 76%! So many more Swedes of working age are working or looking for work than equivalent Americans, something disguised in the methodology and commonly misinterpreted.
So which is the “accurate figure?” Probably somewhere in the middle. A lot more Americans who are of working age aren’t in working shape or have given up looking for work at all. That’s not as common in Sweden, but there are more able-bodied and eager people without jobs.
Fair point! Just to note, for the labor force participation rate, the US number you cite includes seniors so the decline is almost certainly compositional in large part. The US number for men 25-54 is ~89%.
https://fred.stlouisfed.org/series/LRAC25MAUSM156S
For Sweden, it's ~94%.
https://fred.stlouisfed.org/series/LRAC25MASEA156S
Interestingly, there's a much bigger difference for women; in the US it's around 78% for the same cohort and in Sweden, it's ~90%.
https://fred.stlouisfed.org/series/LRAC25FEUSM156S
https://fred.stlouisfed.org/series/LRAC25FESEA156N
Yeah, that’s really interesting!
The gender divide I think also shows a few things about the Swedish economy: a lot of men here work in the trades, which are very cyclical. Tradies often work as sole proprietors and contractors or sub-contractors taken on for projects and have feast and famine cycles, depending on economic or even seasonal cycles. Men also suffer higher rates of workplace-related disability.
Women’s jobs can be more often in the caring sectors and more stable, but often lower-paid. So they suffer higher rates of pension poverty than men, even if they work longer and more steadily over the decades.
That’s for working-class Swedes (who are the majority but often invisible in these types of discussions). When it comes to professional class workers, you see the same gendered divide in education attainment. So more women get higher education. Again, this doesn’t always translate to higher earnings, but it does mean that women can be more employable in the higher-skilled service sector.
Right, I recall reading that it's very hard for immigrants there in particular to find entry level work - even when they have work permits or are granted exception to work permits due to their asylum status - contributing to really severe unemployment among them. That's not what I'd expect to see in a very flexible labor market.
These comments are fascinating. Geoffrey, I think I’ve said this before but I would read your substack if you ever start one.
Your answer 1 underestimates the role of unions in de facto setting a minimum wage. Most workplaces are unionized, whether or not the people working there are union members. Unions have been fierce in forcing employers to sign so-called "collective agreements" with unions, which includes a certain wage spectrum. Your answer 2 I'm also not sure about. This used to be the case, I think, but nowadays you can be sign up for unemployment insurance/benefits (a-kassa) even if you're not a member of a union and the unemployment money comes from the a-kassa, which is run by the state. I'm not sure what role the unions play here anymore, I think they add some extra money on top for their members. But since you work with this professionally you probably know more than I do, as a native Swede.
A-kassa are private economic organizations run by unions, mostly, but regulated and subsidized to some degree by the state. They’re a good example of how much of the Swedish welfare state is “bottom-up” rather than top-down and state-driven.
Another example is the unique ubiquity of housing co-ops, which were the original and most common form of scalable housing project in Sweden. Also, the de facto “regulation” of the labor industry not by law, in many cases, but instead of industrial collective agreements driven by unions.
Taking a break from my break before my subscription lapses…
I am in Japan these two weeks and finding that my recollections of how shiny the public goods are to be correct, but offset by an increasing realization of how moribund the private sector is, and how constrained the consumptive power of the typical household is.
Ten years ago when I was here as a young adult I was too taken by the shiny lights to see the exhausted salaryfolk shambling to and from work, the dearth of children, the overly rigorous cultural norms around the use of public space and presentation therein…
There are very few, arguably no, places in the world which have struck as functional a balance as the United States between taxation to pay for public goods and private and personal consumption, as well as between regulation for the public good and business-friendly dynamism that allows and rewards risk and thus increases the speed at which best practice and technology disseminate.
There’s quite a bit to be learned from European and Japanese public sector performance, but relatively little to see in their governance of their private sectors, and much to avoid in their cultures…
Japan is an extreme place, in ways both good and bad, and it's probably not very useful to generalize from their experience.
For one thing, it's underrated how unusually sexist Developed Asia is for otherwise highly-industrialized, wealthy countries and how that artificially depresses the birth rate. Japanese and Korean women (quite rightly) don't want the raw deal anymore of having a husband who works all the time, doesn't help out with anything household related, goes off drinking with coworkers at all hours, and maybe even indulges in a *little extra recreation* on the side while they, the women, are pressured not to work, look forward to elderly poverty from an insufficient pension, must be the perfect wife/mother alone, suffer loneliness and emotional neglect, and look the other way at marital indiscretions. It wouldn't go for it, either!
Japan also committed a lot of the same sins of the Chinese economy at its worst (real estate hyper-speculation) and the Germany economy at its most moribund (staid reluctance to continue to innovate after settling on a winning model Post-War). It's largely recovered from its "Lost Decade" but these structural problems persist. And, paired with a total demographic collapse, it's hard to see them really reversing it so that everyone's scared to death of the global dominance of the unstoppable Japanese economy again.
"There are very few, arguably no, places in the world which have struck as functional a balance between taxation to pay for public goods and private and personal consumption, as well as between regulation for the public good and business-friendly dynamism that allows and rewards risk and thus increases the speed at which best practice and technology disseminate."
Is the US the point of reference here?
"the overly rigorous cultural norms around the use of public space and presentation therein…much to avoid in their cultures"
Depends what you mean, I guess. I've become pretty intolerant of public disorder and just plain inconsiderateness in the US / Europe, so I wouldn't mind a bit of public shaming now and then.
1. Indeed, edited accordingly.
2. Japan’s norms force people to backpack around typical amounts of garbage for a whole day because it won’t provide public trash cans and shame parents for infants “acting out” in public. And then the country wonders why the birth rate hovers a hair over half of replacement.
My overwhelming experience of parenting in Europe vs. the United States is that the US is not just hostile to parenting in terms of policy, social programs (the lack thereof), and cost-of-living, but also just culturally: Children are not allowed to exist in public in the US in a way that is really hard for Americans (like me) to even notice until you see the European alternative.
For example, in Ireland families all go to the pub on Sundays. Grandparents, children, infants... all of 'em. It's a wholesome, laid-back, intergenerational thing. By contrast, at least when I was a kid in the 1980s and 1990s, American bars were an adults-only zone. You can, in fairness, find family-friendly restaurants, bars, beer gardens, etc. in hipper cities and suburbs in the US, but this is a new and not universally-distributed phenomenon at all. This costs nothing, but it makes a huge difference when your "life isn't over" just because you had kids.
The experience of flying on an American vs. European airline with a child (especially an infant) is night and day. Americans are SO BOTHERED that you would DARE bring a person under the age of 18 on a flight. Or that *gasp* a baby might cry when their ears are painfully depressurized. American parents must grovel and even pass of f*cking goodie bags to their fellow passengers as penance. It's comically absurd. And the ultimate irony is because American children aren't allowed to exist in public, they never learn to! And so they act feral. And that makes people, in turn, less tolerant of them, so parent banish the whole family to the confines of their house until legal age. When I travel with my Swedish-born son to the US, everyone was like, "Woooow, he's so well-mannered...." I think he's great, mind you, but he's just like all the other Swedish kids who have been navigating an adult world since birth and learn how to deal.
Another more structural example: In Stockholm or Copenhagen, you will walk down the street in the most urban areas and hear the ambient sound of children's laughter. They're tucked in public preschools. Or in playgrounds. You see tiny feet emerging from medium-rise apartment buildings. There are dads as well as moms walking with strollers everywhere. When I contrast this with my experience as a longtime resident of Washington, DC and often-visiter to other American cities what haunts me still is how desolately child-free the cities are. It's just too expensive. Or there's no child-friendly infrastructure. They are cities given over entirely to the young professional. You don't even really see old people, either. Unless you are a "productive member of society," this place isn't for you. Off to the suburbs with your child, shunted behind fence and bush!
Even in European countries with catastrophically-lower birthrates like Germany or Italy, I am much more likely to see children in public in Milan or Munich than in the United States. Parenting is private and privatized in America, whereas it's public and subsidized in Europe.
“Americans are SO BOTHERED that you would DARE bring a person under the age of 18 on a flight. Or that *gasp* a baby might cry when their ears are painfully depressurized. American parents must grovel and even pass of f*cking goodie bags to their fellow passengers as penance.”
This isn’t true at all, and makes it sound like you’re basing your cultural observations off viral tweets.
Have two children, one ten, one six, have flown with them every year of their lives, and have never been given any guff about it.
"American parents must grovel and even pass of f*cking goodie bags to their fellow passengers as penance."
Just registering that I've never seen this happen and I have status on UA, AA, and Southwest. Chicago parks and beaches are packed with kids. The riverwalk is packed with kids and strollers every day. Something feels very off with this comment.
Don't agree with the points about children in public/on airlines or child behavior. And you can find child friendly restaurants pretty much anywhere in the US. Bars are a different story to be fair, mainly due to alcohol laws.
I do agree about the lack of children living in American cities, but that one's easy to explain by costs and crime rather than any deep cultural attitude towards children.
You can find child friendly restaurants in every town in the US. But the point is that these aren’t the default. It’s very rare for me to see children in restaurants.
I really don’t think people even notice the absence because what you experience is “normal.” Visiting Japan, I’m sure most Americans would marvel at how child-less the public areas are, too, even if it’s unremarkable to Japanese people.
I know this can seem like a cop out, but a lot of the intangible quality of why Europe is different is hard to communicate to Americans who haven’t visited these places, much less lived there. But then you’re in it and you’re like, “Wow, this is distinctive and why isn’t this a thing back home?” But even when I lived in DC 20 years ago and hadn’t traveled much, I still was struck by the absence of children in public spaces.
Rare in nice restaurants, very common in basic/chain restaurants in my experience.
I had an experience at a Biergarten in Munich where I suddenly realized that I was seeing more children than I had everywhere in the US outside airports in the previous six months.
My overwhelming experience of your posting on matters like this is that it is generally a flight of sheerest fantasy, so I’m going to decline to engage any further.
OK, thank you for your constructive reply.
You’ve posted this same rant three dozen times over the years. No amount of constructivity shifts you off your views.
You enjoy European cultural norms and have an increasingly narrow and distant window into American ones, believe your enjoyment to reflect some sort of objective truth instead of personal preference, and allow it to drive deeply unempirical views on the topic of child-rearing and fertility.
You are within your rights to do it but I know better than to waste time on a thorough reply.
I agree that providing trash cans doesn't seem like an unreasonable measure.
The thing about places like Japan and Taiwan is that the cultural expectation that people should be responsible for their own waste is as important as having waste infrastructure. How many times have you seen trash strewn all about RIGHT NEXT TO a trashcan? And you can't really police that practically, so the social pressure is the primary lever of compliance.
Here in Sweden, people aren't as well-behaved at the Japanese, but they are much better at leaving no trace than Americans. And a minority (like me) will even retain their recyclables to dispose of in the less-universal dedicated recycling bins.
It's also not as common in Sweden to need "convenience" all the time instead of, like, drinking coffee in a ceramic cup like a human being. Italians, especially, think this practice of sipping tepid coffee out of plastic-lined cardboard is barbarous. It shouldn't require such a leap of imagination to recall that before the 1950s, even Americans didn't have all this single-use plastic "to-go" stuff. I'm still just dumbfounded that it's culturally normative for people to drink water out of plastic bottles in their own homes or use disposable cutlery instead of just washing dishes.
Europe's failure to adopt air conditioning en masse is looking less and less like noble, climate-friendly stoicism and more and more like stubborn eccentricity. And no, "Europoor" isn't an excuse: Europe's a lot richer than China!
https://apolloacademy.com/air-conditioning-across-countries/#:~:text=For%20China%2C%20the%20number%20is%2060%25.&text=This%20presentation%20may%20not%20be,subsidiaries%2C%20%E2%80%9CApollo%E2%80%9D).
The more I live in different places, the more I'm convinced that "stubborn eccentricity" is the most parsimonious explanation for a lot of things.
Why doesn't the UK understand what "insulation" and "ventilation" are? Stubborn eccentricity. Why doesn't Finland understand that a year is not a long enough prison sentence for first-degree murder? Stubborn eccentricity. Why does France not understand that it gets hot, like, every single putain de summer in Paris and you might want to buy a fan or something, bordel de merde? Stubborn eccentricity.
(I might have personal experience with that last one).
“…bordel de merde….”
Not a promising business model.
Best not to think too hard about it.
A good impromptu obscene rant does not need to observe les règles des trois unités.
Better to have personal experience with the last one than the second to last one.
Yeah, one of those things was not like the others!
Is that Finland stat correct? ChatGPT tells me it's not.
See below.
Source for the "Why doesn't Finland understand that a year is not a long enough prison sentence for first-degree murder?" please.
I was, admittedly, exaggerating. But only slightly (a 2 1/2 year sentence for "aggravated assault" for a man beating his wife to death with his bare hands), and as it turns out I was unaware that the sentence had been upgraded on appeal: https://yle.fi/a/74-20148098
Edit: not with his bare hands, with a weightlifting bar.
Sorry, this is actually the case I was thinking of: https://www.is.fi/tv-ja-elokuvat/art-2000010468568.html
One year and eight months for "manslaughter."
Thank you for the link. Yeah I think the sentence was too light. But what confused me was when you said "first-degree murder" because I think the sentence for that is life(not in practice but still a lot longer than couple of years)
Yeah, I was exaggerating on that, too - or rather, commenting on how things that should really be classified as murder have been classified as tappo.
Having experienced temps in the 90s without AC for a few days recently in the Northeast (was staying somewhere without AC in a locale where in decades past you didn’t need it) I’m increasingly of the view that AC’s contribution to alarming indifference to climate change among Republicans (particularly in Red States that tend to be hotter) is underrated and a genuine source of moral hazard. People have just forgotten how awful being hot is.
I’m not sure you can reasonably argue—from a strict perspective of how pleasant outdoor temps are—that climate change has made the US less pleasant rather than more
Winter is still worse in the Northeast than Summer—and winter is dramatically better than it used to be.
I would say that for all practical purposes winter is dramatically worse than it used to be. Snow is great. New Jersey’s brand of dead trees, overcast skies, and damp drizzle with nothing on the ground but dead grass is immiserating and precludes fhe joys of snowball fights, sledding, skiing, and general winter wonderland-ness. Additionally, maintaining a comfortable temperature—particularly outdoors—is dramatically easier for winters (move around and wear layers) than it is for summer (shit outta luck.)
Disagree, for the same reasons as EG below, and also, the winter of my youth in New Hampshire was generally predictable.
These days, it’s all over the place. It’s not “pleasant” in the slightest when it goes from 60 to -5 in the space of two days. I want my winters back. Hell, I want my autumn back, which as a New Englander you call pry from my cold, dead fingers.
People just have this ingrained bias that air conditioning is bad for the environment, when in fact living in a hot climate and using an efficient heat pump to keep your house 10-30º degrees cooler than outside, can be much more green than living in a cold climate and burning gas/oil to keep your house 40-80º warmer than outside!
In the past this was negated by the hotter parts of the US getting all their electricity from coal, which wiped out the environmental benefits of air conditioners consuming less energy than gas furnaces, but this has now changed.
What I find most crazy is the people arguing against air conditioning in France of all places, with their 85% nuclear power!
It is "bad" for the environment in the sense that producing the electricity needed to run AC contributes to climate change, given that more than half of global electricity is generated by burning fossil fuels. We could add flying on jets and refrigerating our food to the list. And every other thing that requires burning coal, gas or oil.
I guess my response is: let's take away the "bad" by producing gigantic quantities of green electricity. True abundance in this area is the only path that leads to beating AGW. Humans plainly don't like to suffer. And in many cases, proper cooling in the summer isn't just a matter of comfort, but a matter of life and death.
That is true in the sense that every use of energy is bad for the environment, but I don’t think people fully appreciate how relatively energy efficient A/C is. It takes less electricity to cool a home than heat it; yet A/C is seen as indulgent and first world and heating is taken for granted.
To put a finer point on it—it is more environmentally friendly to live in the Phoenix suburbs and cool your house than to live in the Minneapolis suburbs and cool your house, though the popular perception is likely the opposite.
Yeah this is what I was trying to say. Not that AC has no environmental impacts. Though in places that get all their power from nuclear/hydro the latter is pretty much true.
Also, the UK should let its people open their windows.
Well, because my apartment is so badly ventilated, my landlord wants me to open the window every time I shower or boil water, including in winter, which is a bit of the opposite problem.
America solved this with fan vents in bathrooms. But I know the UK is also weird about electricity in bathrooms.
Yeah - illegal to have outlets in bathrooms. I'm not sure about extractor fans - it could just be that my apartment is kind of shitty.
“…not sure about extractor fans…”
Ventilation is required, not an extractor fan. That being said, I’ve never been in a bathroom in the uk without them.
Stubborn eccentricity is the fact that, according to your link, Saudi Arabia somehow has proportionally fewer air-conditioned homes than Korea, Japan, or the US.
It's a "dry heat." :-)
120 in the shade. Luckily, there's no shade.
I thought that was weird, too, but still, 63% isn't terrible like France, and I have to guess that, unlike Europe (where in much of the continent, extended periods of sweltering weather really are a new phenomenon), the Arabian Peninsula figured out millennia ago how to manage scorching heat without air conditioning. Also, in all seriousness, dry heat really is easier to manage.
I'm amazed at these comparisons, when NYC politicians talk about air conditioning (in housing projects, mainly, but also in other rental units) as a human right.
Another interesting comparison between Europe and the USA is how much more successful we are with immigration. Europe's prisons are comparatively full of the foreigners:
https://theusaindata.pythonanywhere.com/immigrant_crime
The USA is roughly 15% foreign-born an about 6-7% of our prisoners are non-citizens.
Compare that to Germany: 20% and 40%(!). Or Italy: 11% to 32%! Immigrants really are "committing the crimes" and "not sending their best" over there, whereas meanwhile it's opposite if anything here.
Btw the large fraction of foreigners in prison in Norway (28%) is one of several reasons that the Nordic rehabilitation statistics are largely a myth. Can't reoffend if you're deported!
You are more successful to be sure, but you also benefit from an easier demographic to work with, more middle class Indians and less MENA men with four years of education and fundamentalist Islamic beliefs and values.
Also Norway measures recidivism very differently - you have to go back to prison within 2 years. Whereas in the US you only have to be rearrested for *any crime* within 5 years. I'm tired of seeing these misleading comparisons in the media.
Another interesting stat about US incarceration rates - the former Confederate states have the lowest black-white incarceration rate gaps. That to me just confirms incarceration rates have much more to do with actual crime rates than racism or whatever. The white crime rate is much higher in the South than the rest of the country, and the black crime rate there is likely lower than midwestern states where the black population tends to be more concentrated in poor/disadvantaged areas of cities.
Huh. I thought that it was that black crime rates were about the same nationwide and that white Southerners were uniquely crime prone among white people.
Re: White Southerners: might be true in mississippi and louisiana and the worst parts of kentucky. But overall white homicide rates in the South are low, and only about double those of New England the Midwest.
Yeah, just higher than other parts of the country. That checks out with what else I've seen.
Black incarceration rates in the southern states seem to be about average for the country - around 1000 per 100,000. There are certainly places where it's lower, like some northeast states. But then you have states like Wisconsin and Iowa where the black incarceration rate is double - around 2000 per 100,000, despite their overall incarceration rates being similar to the rest of the country.
White southerners do indeed have a very high crime rate, that's true too and probably the main cause of the smaller racial gap in those states. The white incarceration rate in many southern states is higher than the black incarceration rate in Massachusetts.
I'm sorry, but going to jail in Iowa is funny to me. What even happens?
"Yes officer, him right there. I saw him stealing my corn."
Fwiw I think approximating these things with homicide victim rates is even better than approximating with incarceration. Or at least it's a solid "second opinion". Because most murders are still within-race , victim rates tend to be fairly well correlated with offender rates.
For White, the NorthEast has a homicide victim of 1.6, 2.5 in the Midwest, 3.0 in the West and 3.9 in the South.
For Black, the numbers are 20.9, 42.6, 25.1 and 27.7.
So Midewestern Black rates are super high. I think on the East Coast many more of the black people are immigrants, who tend to have much lower crime rates. The white violent crime is probably highest in the South, but not so high in absolute terms.
Wonder if that’s a difference in immigrants or in the country population. If a bunch of average Americans immigrated to Germany they would probably also commit more crimes than the average German
https://www.reddit.com/r/Infographics/comments/1k9c2b3/incarceration_rates_of_immigrants_by_country_of/
There's something to that. We have such a high crime rate by First World standards, that bringing in the average immigrant lowers crime rates.
The common response you'll get on racist Twitter is that "yeah but that's just because Black people," which is partially true, Black Americans do have higher incarceration rates than White Americans by a lot, but almost every legal immigrant group gets incarcerated less than native born White Americans, the only exceptions being Hondurans and Haitians, and only by a little.
So it's both/and. We're a bunch of rambunctious hillbillies to begin with, and the immigrants we receive are relatively well-behaved anyways.
I don't think there are many ethno-nationalist types in the SB comment section, so I'll play one for a minute for the sake of keeping you on your toes.
I think they would say that Hispanic immigrants may commit lower rates of crime themselves than native-born whites, but then go onto have children who commit much higher rates of crime, leading the overall "Hispanic" incarceration rate to be 70% higher than whites in that chart. They would also say that chart includes the majority of Hispanics in the white category too - just looking at non-Hispanic whites would be lower.
Yes, that's true I think. 2nd generation commits the most crime.
My response to that is that if broken down by education, those with the lowest education levels commit the most crime, and most likely this is true of their kids as well. Immigrants to the US from most of the world skew highly educated. The only exception is immigrants from nearby countries; Mexico, Central America, and the Caribbean. My guess is that a lot of these people came on family visas after one relatively low education family member got here one way or another. So if we had an immigration policy that was consistently enforced and selective for education, that would mostly solve that problem.
Yeah that's what I've always thought is the best way forward for an immigration system that both maximizes the economic benefits and is politically sustainable.
Unfortunately, it's never going to happen, because Republicans have no interest in more legal immigration - illegal immigrants are easier for their big business donors to exploit in their farms and factories. Democrats have no interest in shifting the immigrant balance to be more educated (even if it could allow for an increase in immigration), because they care more about how immigration policy helps the world's tired/poor than how it benefits the US. And for "elites" in general, high skilled immigration means more competition for their own labor and less cheap staff to drive down their restaurant and landscaping bills.
We'll see. Right now they're making their big deportation push. I think it's going to be a bunch of bluster that results in the same number of illegals being deported as usual. Because if they actually follow through with deporting several million people, it will crash the economy. Americans, like most people, are change averse. The economy is used to a certain number of migrants per year. If that's disrupted, people will notice, even if they don't understand why. So, over time, we may find ourselves blindly ambling towards smarter immigration policy.
"but almost every legal immigrant group gets incarcerated less than native born White Americans, the only exceptions being Hondurans and Haitians, and only by a little."
Where do you find this data? It seems like it would be hard for government sources to put together, because both the numerator and denominator would be measured or guestimated in different ways by different agencies
It's consistent with data I've seen from CATO but I can't find it right now. Pretty consistently, the data I've seen is that the immigrants from nearby countries commit the most crime, as well as refugees. And then the lowest pretty consistently is Indian Americans. Almost zero crime.
I'll try to find the exact source later. Currently lighting fireworks.
Interesting thought and it might be true. You generally have to do a lot more to be incarcerated here for any serious length of time. In Norway they can throw you in jail for traffic violations.
I like rereading this as I have different background perspectives each time. Labor market regulation is clearly a big drag on innovative start-ups.
Some things to consider:
1. Private university endowments and private pension funds created a large pool of capital willing to take risk in long-duration, illiquid investments. So the scale of the venture capital ecosistem is just so much bigger in the US
2. English as the native language gives much easier access to cross-border markets, employees and capital
3. The scale of the US military budget (and space program) is an order of magnitude beyond any European country. Silicon Valley (still) gets a lot of funding and custom from US military programs, to which much of its origin story can be traced (semiconductors, internet, gps/mapping).
Trump lies all the time to protect his ego, so his assessments are worthless. The Iranian regime has a domestic interest in pretending they were less pathetic than they were, but a foreign interest in pretending that their program for building a bomb has been set back further than it is.
I’d listen to the what Israel says on this. They have an interest in knowing the truth. (Of course, they will probably not publicly contradict Trump, because they too have to flatter his ego.)
Mossad also seems to have better intelligence operations in Iran than America does.
I read an article years ago that shaped my thinking on US intelligence- it argued that we Americans are just bad at human intel. Most European countries had spying operations before the US was even a country. Meanwhile, America didn't really set up a genuine foreign intelligence department until post-WW2.
The article argued that where America shines is in digital surveillance & technological spying, but when it comes to the human side of intelligence we're just..... literally bad. American parochialism, not knowing or being interested in other cultures, also can't help
How would you know?
The fact that a Mossad fake phone call got 20+ IRGC leaders gather in one building for a fake meeting that the IDF then destroyed with a missile is one great example. Also, Iran has broken American intelligence networks within the country at least twice in the past 20 years.
I'm not saying that Israel doesn't have great intelligence in Iran; I'm just wondering how you would know it's better than that of the US, given that the US hasn't had nearly as many high-profile operations targeting Iran as Israel has.
I don't know what you mean by "has broken American intelligence networks within the country," though.
https://www.latimes.com/archives/la-xpm-2005-feb-12-fg-cia12-story.html
Thanks for that. I'm not sure this is a dispute that's worth pursuing, but that article is from 2005 and reports how American agents in Iran in the 80s and 90s were exposed.
Also Iran just recently (after the Israeli and American attacks) rounded up a ton of purported Israeli agents.
The Iranian resistance
Also, the opponents of the war have an interest in presenting the strikes as ineffectual. They’ve pivoted from “there’s no evidence Iran is close to nukes” to “strikes ineffective; Iran will have nukes by Halloween.”
Reading the article, it strikes me that America’s problems ("let’s be less unhealthy and violent") are a lot more intractable than Europe’s ("let’s not have terrible energy policies and make it difficult to fire incompetent employees").
I don't know - there's no real silver bullet strategy for Europe to follow to develop an equivalent to a Silicon Valley - which is the main source of the productivity gap. More flexible labor markets might help but I doubt would do it.
As for America's problems, healthcare costs, bad public transit in dense cities could be fixed pretty easily by just copying other countries. A lot of the life expectancy gap is stuff that could be relatively easily closed by policy too, like guns and road deaths. Obesity is tougher but that may be changing with drugs. Meth/opioids seem the hardest to me, not an easy solution for that.
Ntpick, but it feels strange for you to include Nvidia and Tesla and not include SAP and ASML (both >$300bn companies over twice as big as spotify by market cap and more by economic significance) on the Europe side of the ledger.
“…companies over twice as big as spotify….”
Does MY say when this repost ran originally? The mistakes about firm size might reflect accurate claims from an earlier era.
A quick scan of their historical market cap graphs suggests that Spotify was never bigger than either company. Both other companies are also significantly older than Spotify.
I pointed out this same error in the comments on the original. SAP is super boring so nobody cares, but it's bigger than IBM and three times bigger than Intel at this point.
Fair point. That said, ASML's star product is based on American technology that they're licensing.
I seem to recall from looking at this that LVMH and Novo Nordisk are weirdly similar in market cap to ASML.
When comparing untimely deaths here to Europe, it's important to remember that averages can obscure an enormous amount of regional and demographic variation.
So I put together a web app to specifically look at where in the US and who in the US is impacted by Drugs / Homicide / Suicide / Road Deaths / Alcohol deaths.
https://theusaindata.pythonanywhere.com/avoidable_deaths_after2020
Looking through it, it seems like Traffic Deaths might be connected to rural driving, which Europe probably has less of. Homicide, alcohol and suicide have interesting regional and demographic patterns, too, that aren't necessarily comparable - Europe doesn't really have anywhere geographically or demographically comparable to New Mexico, for example.
There's an NHTSA report comparing safety between different countries and road types that would seem to back this up:
https://crashstats.nhtsa.dot.gov/Api/Public/Publication/812340
Seat belt use and DUI also appear to be significant factors.
"Making cities like Chicago, Baltimore, and Philadelphia safer would unlock large amounts of affordable housing and improve economic dynamism."
Matt has made this point several times recently, and it strikes me as a promising candidate for coalition building. In San Francisco, YIMBY-ism is partially aligned with the affluent moderation of GrowSF, which in turn draws electoral support from those who desire safe streets and "good" / normie governance generally. I wonder if YIMBY politics should lean into "partisan centrism" in cities and small / north eastern states: "our great cities should be safe and affordable, and generative of good construction jobs" etc.
One factor might be America’s willingness to reward very productive people with very high wages. At the very highest level Zuckerberg was patching OpenAI staff with offering of $100 million signing bonuses. That’s inconceivable in Europe.
At a much lower level you have good engineers and you have good managers but a really good engineer who is also a really good managers - that’s big bucks. An American company would happily pay $800k while a European company would balk at anything over $200k.
Keeping in mid a very good engineering who is also a very good managers can generate millions in revenue. But no one is going to battle all that inertia and cope with all that drama of producing or not producing only leads to short money.
I believe that about 1/3 of American car crash deaths involve drunk drivers. I know in many European countries the cultural norms regarding alcohol are quite different from much of America. But what I don't know is how much of a difference in levels of public intoxication there is between America and Europe? I feel like if American policy-makers and police took drunk driving more seriously our number car crash deaths would decrease and roads would be safer.
There are very different alcohol cultures. The US also just drives more. The culture of getting “hammered” and then driving is pretty specific to the US.
It's regional in the US, too: https://theusaindata.pythonanywhere.com/avoidable_deaths_after2020
(You have to select Transportation Deaths from the dropdown. Could also select Alcohol to compare )
But the point is it's mostly the Deep South and Mountain West that have really bad road fatalities.
Thomas Pueyo did a nice series of articles on Iran's geography. I've been hearing the drumbeat that we were 'about to invade Iran' for decades now and Thomas' articles explain why we haven't: it's a nightmare of mountainous terrain for military logistics to put anything on the ground there except for the southern tip. It's what Iraq found out in it's war with them. And we know how endless bombing campaigns work from Vietnam, North Korea, and Afghanistan (and Iran' is much bigger than those countries). So posturing, strategic air strikes, and internal strife are probably the main strategies.
As written in yesterday's piece (as well as earlier), politically the outlier is the GOP.
Would it be fair to say that there would be no fracking, higher taxes and more state services, tighter labor policies, more stringent environment regulations if one did not have the GOP?
Across the board the US has had a much more generous immigration system, in that way both the left and right are outliers compared to other OECD countries.
The US immigration system being more generous than other countries hasn’t been true for decades. Based on the percent of residents born abroad, the US now ranks between the Netherlands and Estonia; it’s below all the larger European countries, only about 2/3rds of Canada, and 1/2 of New Zealand or Australia: https://en.wikipedia.org/wiki/List_of_sovereign_states_by_immigrant_and_emigrant_population
What is true is that the US still gets the lion’s share of top immigrants but that’s not because of our policies but because our top companies will pay them way higher salaries than anywhere else in the world.
Do you have any insight into why the rest of the world is so resistant to paying highly productive people?
That should be a Mailbag question.
I stand corrected!
In absolute numbers the EU as a whole takeas in about the same number of naturalized citizens and a higher number of "first resident permits" (which is not the same as the US green card, but let's use it anyway)
70% of the first resident permits and 35% of naturalizations are from other non-EU- European or other EU countries.
Any my perception was more skewed towards South Asia/China/SE Asia than Middle East/North Africa/Eastern Europe.
On aggregate the US is wealthier but that wealth is highly concentrated and unequally distributed. The European focus on better state funded welfare alleviates the disturbing levels of poverty seen is parts of the US. I find the US (particularly through the GOP lens) tendency to demonise the poor as lazy and undeserving of support as quite disturbing. Describing any effort to create a fairer society as ‘Socialism and Communism’ has become a mantra for many disingenuous politicians and used a the boogeyman to scare people into highly reactionary behaviour.
“ disturbing levels of poverty seen is parts of the US”
Yes, it might be a trailer, but with multiple vehicles, air conditioning, a giant TV….
In some sense, the high obesity rate among the poorest 20% is a testament to American abundance.
Starvation isn't a problem here; calories are ridiculously cheap. Poor diet and nutrition are a different problem.
Or houses with no running water, cardboard on the windows, etc. C'mon, you know there are genuinely poor people living in squalor.
There certainly are due to extremely high levels of disfunction. Similar in anybody ways to the urban homeless.
Edit: Think of it this way. Matt talks a lot about how the homeless problem in MS is a lot smaller than the homeless problem in CA. That’s largely thanks to folks who would be homeless in CA being able eke out a living in a trailer in MS. The substance abuse and mental illness is still there but we call a dilapidated trailer housing in a way that a tent in an encampment isn’t.