Perception vs. reality

Historian Peter Baldwin is writing a three-part series in Der Speigel about European misconceptions of the U.S. His take on economics:

It is universally observed that America is an economically more unequal society than Europe, with greater stratification between rich and poor. Much of this is true. Income is more disproportionately distributed in the US than it is in western Europe. In 1998, for example, the richest 1 percent of Americans took home 14 percent of total income, while in Sweden the figure was only about 6 percent.

Wealth concentration is another matter, however. The richest 1 percent of Americans owned about 21 percent of all wealth in 2000. Some European nations have higher concentrations than that. In Switzerland in 1997, the richest percent owned 35 percent, and in Sweden -- despite that nation's egalitarian reputation -- the figure is 21 percent, exactly the same as for the Americans. And if we take into account the massive moving of wealth offshore and off-book permitted by Sweden's tax authorities, the richest 1 percent of Swedes are proportionately twice as well off as their American peers.

What about poverty? Not the same thing as inequality? Because inequality is greater in America, relative poverty is by definition also higher.

But absolute poverty rates look different. If we take absolute poverty to be living on the actual cash sum equivalent to half of median income for the original six nations of the EU, we see that many western European countries in 2000 had a higher percentage of poor citizens than the US -- not only Mediterranean countries, but also Britain, Ireland, France, Belgium, the Netherlands, Finland and Sweden.

For more in this vein I would highly recommend Olaf Gersemann's book Cowboy Capitalism: European Myths, American Reality.