Wednesday, November 17, 2004
The EU vs. America
After adding 10 new Eastern and Central European nations last May, the European Union now has a much larger population than the United States, and a slightly bigger economy. As Jeremy Rifkin argues in his dense and contentious new research-driven tome "The European Dream," the United States remains ahead in per-capita GDP, but the difference is not as significant as it looks.
Much of American "productivity," Rifkin suggests, is accounted for by economic activity that might be better described as wasteful: military spending; the endlessly expanding police and prison bureaucracies; the spiraling cost of healthcare; suburban sprawl; the fast-food industry and its inevitable corollary, the weight-loss craze. Meaningful comparisons of living standards, he says, consistently favor the Europeans. In France, for instance, the work week is 35 hours and most employees take 10 to 12 weeks off every year, factors that clearly depress GDP. Yet it takes a John Locke heart of stone to say that France is worse off as a nation for all that time people spend in the countryside downing du vin rouge et du Camembert with friends and family.
European children are consistently better educated; the United States would rank ninth in the EU in reading, ninth in scientific literacy, and 13th in math. Twenty-two percent of American children grow up in poverty, which means that our country ranks 22nd out of the 23 industrialized nations, ahead of only Mexico and behind all 15 of the pre-2004 EU countries. What's more horrifying: the statistic itself or the fact that no American politician to the right of Dennis Kucinich would ever address it?
Perhaps more surprisingly, European business has not been strangled by the EU welfare state; in fact, quite the opposite is true. Europe has surpassed the United States in several high-tech and financial sectors, including wireless technology, grid computing and the insurance industry. The EU has a higher proportion of small businesses than the U.S., and their success rate is higher. American capitalists have begun to pay attention to all this. In Reid's book, Ford Motor Co. chairman Bill Ford explains that the company's Volvo subsidiary is more profitable than its U.S. manufacturing operation, even though wages and benefits are significantly higher in Sweden. Government-subsidized healthcare, child care, pensions and other social supports, Ford says, more than make up for the difference.
The new EU constitution, currently being considered by the member states, is an unwieldy, jargon-laden document that runs to 265 pages in English (and even more in Spanish and French). It should also serve as an inspiration to progressives around the world. It bars capital punishment in all 25 nations and defines such things as universal healthcare, child care, paid annual leave, parental leave, housing for the poor, and equal treatment for gays and lesbians as fundamental human rights. Most of these are still hotly contested questions in the United States; as Rifkin says, this document all by itself makes the European Union the world leader in the human rights debate. It is the first governing document that aspires to universality, "with rights and responsibilities that encompass the totality of human existence on Earth."
...For all the grandeur of its new vision, Europe still has relatively high unemployment and relatively sluggish economic growth. The continent faces major structural problems, most notably a declining birth rate and a long-standing hostility to immigration, which has led to a population that is aging much faster than America's. While the European welfare state is certain to remain generous by American standards, significant renegotiation of rights and benefits will be necessary unless this demographic time bomb can somehow be defused.
Despite its deepening inequality, the United States remains to a large extent a more dynamic and less class-bound society, and it still offers individuals that opportunity for constant reinvention that lies at the heart of our national dream. Rifkin in particular believes that the new cold war with Europe will be good for America in the long run and may help rejuvenate the American left (even if the next four years are likely to get pretty ugly). Americans may need to be taught, by example, that unfettered corporate capitalism, regressive taxation and a bare-minimum social safety net are not the only way to guarantee prosperity -- and perhaps that our definition of what constitutes prosperity could stand some scrutiny.
More.
posted by chris at 1:35 PM
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