What the US and Europe can learn from each other

There are surprisingly few tradeoffs between each continent's biggest successes

The United States of America is a lot richer, on average, than even the wealthier countries of Europe.

This reflects, among other things, the fact that Americans work considerably more hours per year than Europeans. In fact, if you go back 15 years or so, the difference in hours worked accounted for essentially the entire gap in GDP per capita between the US and places like Denmark or the Netherlands (though not Italy or Spain).

Whatever you make of that difference, it’s clearly a tradeoff: It’s nice to have more time off, but it’s also nice to have more money. Reasonable people can disagree about which is nicer, and even those with a considered preference for one model can acknowledge the genuine upside to the other.

Similarly, when I went to Denmark with progressive writers in 2009, many of them were scandalized by how expensive random low-end consumer goods were, thanks to the 25 percent VAT Denmark uses to finance its generous welfare state. As a visitor, you pay the high tax on your random purchases, but you don’t get the upside of free health care. As a resident, you would face a tradeoff — Danish people consume fewer heavily taxed goods, but get access to more subsidized goods.

But over the past 15 years, America and Europe have further diverged.

The United States, which started out richer, has seen faster productivity growth and opened up a GDP per capita gap with even the top Northern European countries that isn’t just explained by hours worked.

At the same time, a lot of things are better in Europe. Notably, Americans are dying at much higher rates than Europeans, and if offered the chance, I feel confident most of us would be willing to spend a lot of money in order to not die.

And what I think is interesting and important about this is that unlike money versus leisure, there doesn’t seem to be a tradeoff.