Don't Get Uppity

I have always wondered how people could describe European countries as more egalitarian than the US.  Yeah, I know the income distribution tends to be flatter, but that is almost entirely because the rich are richer in the US rather than the poor being poorer.  But pure income distribution has always seemed like a terrible way to make comparisons.  My perception has always been that class lines in Europe are much harder than they are in the US.  The elites in Europe have made a sort of arrangement in which they pay off the masses with an income floor and low work expectations in turn for making sure that none of the masses can in turn challenge their elite status or join their ranks.  The government protects large corporations form competition, foreign or domestic.  The government protects existing laborers against new entrants into the labor market.  The government makes it virtually impossible for the average guy to start a business.  The result is a lower and middle class who won't or can't aspire to breaking out of their class.  Elites are protected, and no one seems to care very much when political elites enrich themselves through public office and then entrench themselves and their families in the power system.  This, presumably, is why the American political class thinks so much of the European model.

Bryan Caplan writes via Marginal Revolution:

In the U.S., we have low gas taxes, low car taxes, few tolls, strict zoning that leads developers to provide lots of free parking, low speed limits, lots of traffic enforcement, and lots of congestion.

In Europe (France and Germany specifically), they have high gas
taxes, high car taxes, lots of tolls, almost no free parking, high
speed limits (often none at all), little traffic enforcement, and very
little congestion. (The only real traffic jam I endured in Europe was
trying to get into Paris during rush hour. I was delayed about 30
minutes total).

If you had to pick one of these two systems, which would you prefer?
Or to make the question a little cleaner, if there were two otherwise
identical countries, but one had the U.S. system and the other had the
Euro system, where would you decide to live?

Much as it pains me to admit, I would choose to live in the country
with the Euro system. If you're at least upper-middle class, the
convenience is worth the price. Yes, this is another secret way that
Europe is better for the rich, and the U.S. for everyone else.

  • http://socialismforlaughs.blogspot.com/ Richard

    The guy's a total idiot. Driving in Europe is a nightmare compared to the US. Trying driving in the UK - constant monitoring by ticket-in-the-mail cameras. Nowhere to park. COngestion so bad it takes 3 hours to drive 5 miles. No new expressways built since 1991. And drivers pay 40 BILLION pounds in road taxes and charges every year. He can keep it!

  • diz

    I would prefer a system where you could only use the roads if you drove a Ferrari and were with a supermodel. Assuming I'm going to be one of the people with a Ferrari and a supermodel.

  • Mike

    Richard:

    I agree. I've had plenty of friends who have lived abroad in Europe and not a single one of them has had anything kind to say about what the driving is like over there.

    On a related note, I wonder where your 40 billion is going every year...

  • yoshidad

    Income inequality may be a "bad" way to compare societies, but the U.S. fails even its comparisons to itself.

    "According to estimates by the economists Thomas Piketty and Emmanuel Saez--confirmed by data from the Congressional Budget Office--between 1973 and 2000 the average real income of the bottom 90 percent of American taxpayers actually fell by 7 percent. Meanwhile, the income of the top 1 percent rose by 148 percent, the income of the top 0.1 percent rose by 343 percent and the income of the top 0.01 percent rose 599 percent. (Those numbers exclude capital gains, so they're not an artifact of the stock-market bubble.) The distribution of income in the United States has gone right back to Gilded Age levels of inequality." (from http://www.thenation.com/doc/20040105/krugman)

    You're right about the restrictions on opening new businesses in Europe, but I think there's really something to the class comparisons.

    Then there's this: "Alan Krueger wrote a column for The Times surveying statistical studies that debunk the mythology of American social mobility. 'If the United States stands out in comparison with other countries,' he wrote, 'it is in having a more static distribution of income across generations with fewer opportunities for advancement.' And [former Nixon adviser] Kevin Phillips, in his book 'Wealth and Democracy,' shows that robber-baron fortunes have been far more persistent than legend would have it." (http://query.nytimes.com/gst/fullpage.html?res=9501e1db1539f931a15752c1a9649c8b63)

  • http://socialismforlaughs.blogspot.com Richard

    Mike-- that 40 billion is going where all the rest of the tax money goes -- hiring an army of useless fuckwits and maintaining a large crowd of layabouts - over 5 million at the last count and more all the time.

  • Scott Wiggins

    Starting a business being nearly impossible...Just changing career fields can be difficult to impossible. I spent a couple of years in Germany. I had many discussions with Germans who expressed in good english how they are locked into career paths. For instance, hotel clerks and wait-staff require years of apprenticeship. And, once you are apprenticed in the hospitality industry there is very little chance you will be able to move to another industry. Americans have no concept of this. We consider hospitality jobs to be a right of passage for many young persons of college age who are waiting to jump start their careers. Our people have no limits in terms of moving from waiting tables to an engineering or white collar job provided they get the education and can pass the interview. It does not happen in Germany. In fact, if you are not selected for Gymasium out of middle/grammer school then you are almost certainly not going to college and will be educated for vocational/trade type jobs in which you will remain for life. The europhiles among us don't really understand how different life is for europeans...

  • Doug

    Yoshidad: what do you expect when government spent the last 20+ years doing its best to import as much poverty as possible? This simple recipe makes it very easy to reduce ANY low number. Wanna lower a bracket from $20k/year down to $15k/year? Simple: allow 20 million illegals into the country with zero income and add them to that bracket.

    Works every time.

  • Mesa Econoguy

    Scott is absolutely correct (I saw the same thing), and yoshidad’s references are left-wing statistically debunked tripe.

    Europe has nowhere near the economic mobility we do in the US, because Europe has nowhere near the economic freedom we do.

    We fought a war about that some time ago...