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More on the European Economic Model

October 29, 2008, 8:06 am

Yesterday I posted on the irony that in the name of "change" and "dynamism," the Democrats are pushing for what basically is an inherently more conservative (little-c), less dynamic economic system that mirrors that of many continental European countries.

Daniel, an American reader who does quite a bit of work in Europe, wrote me:

1) The static nature of the Euro mentality assigns a high cost to ... people ... who try to break the mold. Cost of failure is relatively high. In Italy if your small business declares bankruptcy, you forfeit the right to vote.

2) In Germany, workers are sorted at an early age into "blue collar schools" and "professional schools". I know from my youth, if I had grown up in Germany instead of America, I probably would not be a consultant but more like a janitor (not that there is anything wrong with janitors...).

3) Social services in Europe are hit and miss. In Germany, many people carry private insurance despite the availability of public insurance because of the lack of quality.

4) (this may be a good thing) Italian school children go through a less harsh puberty than American kids. Society has drilled into them that it's not cool to be different, so there are less cliques. When I share my experiences in school with most Europeans they usually make some snide remark about how growing up in a battle zone (primary school) has caused the Iraq war.

5) Highly skilled workers are in many cases no better paid than unskilled staff. In the south of Italy a senior programmer may make 2K euros per month. A secretary might make 1.5K a month. If it weren't for most Europeans fear of moving to new cities, there would be no programmers to hire.

6) Speaking of being afraid to move, many Europeans find the thought of moving to a different city complete alien concept.

7) Life in Euro is a much more comfortable than in America *if* you are European. If you are an immigrant, forget it. After two years of pitching companies in the South of Italy, I have never seen a black person be more than a street side vendor of trinkets. In Italy, there is an unsaid rule that you must be an Italian to ever be a professional.

8) Don't get me started on France.

9) It is illegal for a business to stay open more than it's quota in most European countries. It is illegal to operate a barber shop on Mondays.

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Category: Economics
  • http://pojatitkee.blogspot.com Paavo Ojala

    "It is illegal for a business to stay open more than it's quota in most European countries. It is illegal to operate a barber shop on Mondays."
    In Finland the barbershops cannot operate on sundays or other holydays. When members of parliament celebrate the independence day in a televised party at the presidents castle, they have to break the law they have passed to get their hair and make-up done on for the party. For common folk it's illegal to go to the hair stylist on independence day.

  • Yoshidad

    I'll second this post's observations with some about Asia. No, I haven't lived there, but I work with plenty of Asians, and watch Korean serial dramas for a hobby (pretty good -- Try Dae Jang Geum, or "The Jewel in the Palace").

    A constant theme of such dramas is the conflict that arises when an innovator appears. Such an innovator breaks out of the rather static social structure (Koreans ask who is the oldest so they can know the correct deference to show, Japanese bow lower to seniors, not so deeply to juniors).

    Despite the lid this social custom keeps on those who are "different" (prejudice is particularly fierce in, e.g., Japan), this has many advantages. See "Confucius Lives Next Door: What Living in the East Teaches Us About Living in the West" by T.R. Reid, a newsman who lived in Japan.

    Reid cites dramatically lower crime rates, for one thing. One story he tells is about an invitation his ten-year-old daughter received from a schoolmate to visit Tokyo Disneyland... *by themselves*...! This involved three train transfers in a very large city, and would certainly have been impermissible in, e.g., New York City. Nevertheless, it's a commonplace in Japan. No big deal.

    So crime is lower, and honesty is expected. People know their place.

    Naturally, this makes a less-innovative society. The U.S. invented the VCR and the hybrid car, for example. But then the Asians perfected and now manufacture them.

    And it's easy to find something strange about such cultures... and fascinating.

    So can we really claim we're superior (or even exceptional?)... The jury's still out on that.

  • Allen

    Doesn't seem very progressive. What's the term for this when once you're in, you're in but you have a hell of a time ever getting to that point where you're in?

  • http://elambend.com ElamBend

    Number 6 is a factor of European life that few in the US realize. It's not just rules that prevent labor mobility. It's this attitude that feeds the desire for 'safe' jobs, also. If you refuse to move to where the jobs are, then you become much more concerned about keeping the jobs you have right where they are.

  • Mark

    I have a friend from Germany who is 34 years old. He has a masters degree but still lives with is parents and works as a bus driver.

    He is very happy because the fact is that a bus driver and a person with a masters degree really do not have that big of a difference in compensation differences and it is very common for people to live with their parents. Plus, his college education was "free" and in fact, he received stipends throughout much of that period.

    AS an American I cannot understand this, but I think his situation is very common amongst people under 50 years of age in Europe.

  • Miklos Hollender

    "Speaking of being afraid to move, many Europeans find the thought of moving to a different city complete alien concept."

    I agree with most of your writings but this I find strange. Or maybe not, as Americans are similar to the British: they don't care much for family and kin, and for childhood friends.

    This I - as a Hungarian - always found strange. Family and kin is... the very thing I grew out from. This is me, the larger me.

    I've spent 2 years in Britain and now I'm am eager to move back, not because I don't like the life here - I have many things to criticize but the general outlook is OK - but two years away from family and kin, seeing them only 3-4 times a year, is getting increasingly unbearable.

    This is why we like to live and die in the same city we were born. Family, kin, childhood friends. That's what life is all about - the people, the connections that mean your life.

    How can the American and the British so easily move far away from home not for 1-2 years like I did, but for long? If you leave all behind that defines you, that are you, that mean your life, what is left of your life? I don't have much life here in Britain because I miss the people who are my life. Moving back really soon now.

    How can you do otherwise? If you leave them behind, what is your life? Your spouse and yourself, a two-person life, that's all? Or do you try to quickly make friends with, who knows, colleagues and local shopkeepers and such? It's really strange for me.

    This has nothing to do with European socialism. That I hate too. But kin is kin, kin is life. How else?

  • James

    @ elambend: Another problem with this mindset is that places like Silicon Valley simply don't happen.

    @yoshidad: many issues (like crime) get glossed over in the politically correct, "we're all the same" mindset of today. Some cultures have a much greater respect for the law than ours do, have less violent crime, etc. Some of this stems from economic issues, but some exist just based on the history and structure of that society. For this reason, it's far more difficult to compare nations on non-economic issues than it is on economic issues.

    Legalized (or decriminalized) drugs is something we often hear about in the U.S., and Amsterdam is always referenced. What is always overlooked though, is the demographic and societal makeup of the Netherlands. It's not so much to say that decriminalized drugs won't work here, but you certainly can't say that it will work and hold up the Netherlands as proof.

  • James

    @Miklos Hollender: For one, I think most of America shares Europe's distaste for moving away from their birthplace. While America is probably far more mobile than anywhere else, many people end up staying close to 'home' because of the very reasons you mention.

    As for your sentiment that 'kin is life', that is something some Americans do not share. Many do, but many others are defined not by their family, but by their professions. I think one of the reasons for this is the disgust Americans have for familial/inherited positions. The thinking is, if you are defined by your family, you can never rise above that family, an organization you had no say in joining. You can't change your family; but, you can change your job. If you are defined by your job (which is not tied to your family) than you can rise and excel based on your merit and hard work, not based on whether your father was a janitor or a prince.

  • Methinks

    When I share my experiences in school with most Europeans they usually make some snide remark about how growing up in a battle zone (primary school) has caused the Iraq war.

    That's only because they're bitter that they got themselves into two giant wars in the twentieth century that they couldn't finish without America. Bet they never mention their brutal colonial empires, eh? And what's so good about destroying individuality? Seems like a high price to pay for fewer cliques.

    Don't forget that it's illegal to price goods below cost, advertising sales in your shop is illegal and in some parts of Euroweenieland (I used to live there, I earned the privilege to be childish) it's illegal to even have a sales except for government mandated sales for all stores at certain times of the year.

  • Sol

    @Miklos, I think you aren't accounting for the fact that once moving becomes fairly common, staying put for friends and family isn't such an issue, because odds are they are moving as well. All of my close friends from high school live in other states now. Most of my new close friends from college were from out-of-state anyway. My parents still live in our ancestral town, but I have no other living relatives there that I would recognize as relatives, as my sister moved away after college, just as my uncle did a generation before, and his uncles did the generation before that. I live two hours away from there now, and I'd love to move back some day. But if I do, I'll be moving away from more friends (the ones I've made here in the last decade or so) than I will be moving back to, if you know what I mean.

  • Methinks

    Miklos,

    We are a nation of immigrants! Moving away from kin is natural to Americans. Besides, moving away from people doesn't mean you don't see them and they aren't a part of your life. It just means that your mother-in-law is too far away to meddle!

  • Hammer

    Miklos,
    Not to belabor the point, but Americans usually define themselves by themselves, not by virtue of other people. Some families are worth a great deal more than others after all. Mine is quite nice, but I have friends who would do themselves a great favor by moving far from those that share their genes.

    Yoshi,
    I know for a fact that many sorts of crime are either glossed over, or not really considered "criminal" in Asia. My wife is from Hong Kong, and the stories she can tell of the busses and subways would make you store your daughters in a steel drum before allowing them out of the house.

  • Miklos Hollender

    Well, to each his own, I guess.

    The point I want to make clear - the European attachment to kin and hometown has very little to do with the economic model. There are a lot of people - at least a lot of bloggers - who would gladly import a good amount of Reaganomics. Does Vaclav Klaus ring a bell? Sadly he is an exception, not the rule, but this approach nevertheless exists. These two things aren't quite connected.

  • Methinks

    Miklos,

    If they weren't connected, there wouldn't be 300K people escaping France to Britain alone. Sarkozy had to campaign in London to reach them! As Hammer points out, family attachments vary and they vary all over the world. I think some of what you're seeing is family attachment and some of the immobility comes from sheer lack of economic opportunity. In Russia we had city passports and government assigned housing. Everyone lived and died in the same communal apartment. When the practice was abandoned after the fall of communism, people began moving from areas with relatively less economic growth to places with more - leaving behind kin, friends, and ancestral homelands

  • Philip

    Thanks to google translate, I can spread the delicious irony

    http://translate.google.com/translate?u=http%3A%2F%2Fwww.bt.dk%2Farticle%2F20081029%2Fnyheder%2F81029033%2F&hl=en&ie=UTF-8&sl=auto&tl=en

    (The Danish Prime Ministers son, the leader of the happiest nation on earth, wants to become an American citizen)

  • Stuhlmann

    I'm an American living in Germany with a German wife, and I've been following the above discussions with interest. Many German (like my wife) are not inclined to move away from where they grew up. On the other hand, lots of Germans buy vacation/retirement homes in places like Italy, Spain, or even Florida. A popular German TV reality show features German families relocating to some other part of the world (Australia, Spain, Texas, etc), and trying to start a new life and career there. Clearly there is an interest in moving to other areas, even if the moving is done vicariously. I have a pet theory that all the Germans who were genetically inclined to leave their homes and families did so over the last few hundred years. The remaining Germans are inclined to stay put.