The Europe delusion

Just as some Catholics seek guidance from Rome, a number of the left's intellectual leading lights find inspiration in Paris, Stockholm and other European capitals where their vision of the democratic social welfare state is placed on daily display. Europe is the field test where left-wing theories are put into practice.

Mecca for the left?

Thus, it was no surprise to me when Matthew Yglesias declared "Hooray for Obama's 'Socialist' Budget." He writes:

Optimistically, a secondary effect of Republican attacks will be to get people thinking more seriously about a European-style welfare state which, despite ossified conventional wisdom, is in many ways exactly what we need. Relatively sluggish European growth in the 1990s gave the continent a reputation for economic dysfunction.

But back in January 2008—i.e., before the dawn of the current recession—Paul Krugman observed that during the most recent economic upswing, job growth in Europe was more robust than in the U.S. More recently, Russell Shorto wrote over the weekend in The New York Times Magazine about how despite his initial shock at the high tax rates in the Netherlands, he's since come to love the European welfare state.

This strikes me as rather thin gruel. Krugman's point about job growth is hard to square with the unemployment numbers -- something Krugman provides precious little of in his column -- and he even credits deregulation and "smart regulation" (whatever that is) with Europe's improved performance. As for the Russell Shorto citation, an anecdote about a self-described lefty going to Europe and enjoying the welfare state leaves me rather underwhelmed.

Moving along, Yglesias says:

Shorto saw some downsides, for example, "a cultural tendency not to stand out or excel" that he deemed "the very antithesis of the American ideal of upward mobility." But what about that ideal? There's a considerable tension, as Ezra Klein points out, between America's strong belief in social mobility and the reality that we don't have very much of it.

A recent Brookings/Pew report showed that in the U.S., 69 percent of the population agrees that "people get rewarded for intelligence and skill." That's the highest of the 25 countries they surveyed. However, the same report showed that there is less economic mobility in the U.S. than in virtually any other developed nation: "Germany is 1.5 times more mobile than the United States, Canada nearly 2.5 times more mobile, and Denmark three times more mobile." Only the U.K. clocks in with slightly less mobility than the U.S.

I would note that the Urban Institute took a look at the mobility issue and found that it the U.S. is actually pretty similar to other countries:

Although mobility in the United States is substantial, evidence indicates that it is no higher in this country than elsewhere. Indeed, the few studies that have directly compared mobility across countries have concluded that, despite significant differences in labor markets and government policies across countries, mobility rates are surprisingly similar. (Source)

Meanwhile, we are also richer than the same countries that Brookings/Pew says have more income mobility.

Ygelsias continues:

It turns out that the European welfare state isn't just a nice way to lend a helping hand. It does much more to promote intergenerational upward mobility than does an American positive attitude and a culture of achievement. The three most mobile countries in the survey were Denmark, Norway, and Finland—Scandinavian social democracies with cradle-to-grave public services. Four- and five-year-olds in Finland, for example, mostly attend high-quality publicly subsidized preschools irrespective of income, with poor children and rich children getting education that's of equal quality.

In the U.S., good center-based child care costs over $10,000 a year—beyond the reach of many parents. Consequently, we have class stratification already in place on the first day of kindergarten. The situation isn't helped by the fact that our system sends the least-experienced, least-qualified teachers to the poorest schools. Nor by the fact that to grow up in a poor neighborhood in the United States means not only to grow up with humble homes, but to grow up in a dangerous environment.

Well, I'm not sure how helpful it is to make comparisons with Finland, a small homogeneous country. But I will not that Sweden practices school choice, and I will note that violence tends to be found in government-run schools in the U.S., which is yet another excellent argument for vouchers.

Europeans can avail themselves of excellent public transportation while Americans too poor to own a car suffer from crippling social and economic disadvantages, and European citizens from all walks of life can enjoy basically similar levels of health care.

This is a bit apples and oranges. European cities and towns tend to be dense and walkable. You don't need a car to go to the grocery store or run other common errands. And yes, I think we could learn a few things here. I would add that I am not sure how widespread the problem is of Americans without cars:

Nearly three-quarters of poor households own a car; 31 percent own two or more cars.

On the health care front, I am more interested in quality than how egalitarian it is.

Yglesias concludes:

But while the U.S. remains richer than most European countries, our educational lead has slipped away and there's good reason to believe that average living standards are now higher in the Netherlands and Scandinavia. But Americans cling to the idea that inequality and sky-high child-poverty rates are the price we have to pay for the social mobility we crave. In fact, the reverse is true—those are the very things that have made the United States an unusually class-stratified society.

Right now, all these facts are obscure. But if the right wants to have this debate, people will learn more about the not-so-dark continent and I think they'll like what they see.

Yglesias is absolutely correct about the sorry state of our education, which is unsurprising given the dominant role that government plays there. The bit about inequality and child poverty, meanwhile, is just a distraction. Inequality is just a distraction, as this is simply a relative measurement of prosperity rather than an absolute one. I would submit, meanwhile, that if Sweden had a third world country like Mexico bordering on it that its poverty rates would look jut a bit different. Indeed, some limited evidence indicates that the country doesn't do so well in this department:

A study of comparable Somali groups in Sweden and Minnesota found that less than a third of working-age Somalis in Sweden had jobs, half the share in Minnesota.

One more item worth chewing on:

The result is that average U.S. per capita income is now about 55% higher than the average of the European Union's core 15 countries (it expanded to 25 in 2004). In fact, the biggest E.U. countries have per capita incomes comparable to America's poorest states.

A recent study by two Swedish economists found that if the United Kingdom, France, or Italy suddenly were admitted to the American union, any one of them would rank as the 5th poorest of the 50 states, ahead only of West Virginia, Arkansas, Mississippi, and Montana. Ireland, the second richest E.U. country, would be the 13th poorest state; Sweden the 6th poorest. The study found that 40% of all Swedish households would classify as low-income by American standards.

I'll gladly take Sweden's school choice, lack of auto bailouts for Saab or Volvo, partial social security privatization, and lower corporate taxes. They can keep the rest.