Who wins in U.S. vs Europe contest?

By Bernd Debusmann
February 12, 2010

In these days of renewed gloom about the future of Europe, a quick test is in order. Who has the world’s biggest economy? A) The United States B) China/Asia C) Europe? Who has the most Fortune 500 companies? A) The United States B) China C) Europe. Who attracts most U.S. investment? A) Europe B) China C) Asia.

The correct answer in each case is Europe, short for the 27-member European Union (EU), a region with 500 million citizens. They produce an economy almost as large as the United States and China combined but have, so far, largely failed to make much of a dent in American perceptions that theirs is a collection of cradle-to-grave nanny states doomed to be left behind in a 21st century that will belong to China.

That China will rise to be a superpower in this century, overtaking the United States in terms of gross domestic product by 2035, is becoming conventional wisdom. But those who subscribe to that theory might do well to remember the fate of similar long-range forecasts in the past. At the turn of the 20th century, for example, eminent strategists predicted that Argentina would be a world power within 20 years. In the late 1980s, Japan was seen as the next global leader.

The latest pessimistic utterances about Europe were sparked by a debt crisis in Greece which raised concern over the health of the euro, the common currency of 16 EU members. Plus U.S. President Barack Obama’s decision to stay away from a U.S.-EU summit scheduled for May in Madrid, with a new EU leadership structure that should have made it easier to answer then U.S. Secretary of State Henry Kissinger’s famous question: “Who do I call when I want to talk to Europe?”

There are still several numbers to call in the complex set-up, giving fresh reasons to fret to those crystal-gazers who see the future dominated by the United States and China, the so-called G-2.

Pundits who see the European way of doing things as a model for the United States (and others) to follow are few and far between, not least, says one of them, Steven Hill, because most Americans are blissfully unaware of European achievements and, as he puts it, “reluctant to look elsewhere because ‘we are the best.’”

As foreigners traveling through the United States occasionally note, the phrases “we are the best” and “America is No.1″ are often uttered with deep conviction by citizens who have never set foot outside their country and therefore lack a direct way of comparison. (They are in the majority: only one in five Americans has a passport).

Hill, who heads the political reform program at the New American Foundation, a liberal Washington think tank, has just published a book whose title alone is enough to irk conservative Americans: Europe’s Promise. Why the European Way Is the Best Hope in an Insecure Future.

STUBBORN PRECONCEPTIONS
It marshals an impressive army of facts and comparative statistics to show that the United States is behind Europe in nearly every socio-economic category that can be measured and that neither America’s trickle-down, Wall Street-driven capitalism nor China’s state capitalism hold the keys to the future.

While China’s growth has been impressive, says Hill, the country remains, in essence, a sub-contractor to the West and is racked by internal contradictions.

“When I talk to American audiences,” Hill said in an interview, “many find the figures I cite hard to believe. They haven’t heard them before. U.S. businesses making more profits in Europe than anywhere else, 20 times more than in China? 179 of the world’s top companies are European compared with 140 American? That does not fit the preconceptions.”

Such preconceptions exist, in part, because U.S. media have portrayed Europe as a region in perpetual crisis, its economies sclerotic, its taxes a disincentive to personal initiative, its standards of living lower than America’s, its universal health care, guaranteed pensions, long vacations and considerably shorter working hours a recipe for low growth and stagnation. “In the transmission of news across the Atlantic, myth has been substituted for reality,” says Hill.

He is in good, though numerically small, company with such views. The economists Joseph Stiglitz and Paul Krugman, both Nobel prize winners, also have positive outlooks for Europe. In a recent column in the New York Times, Krugman said that Europe is often held up as evidence that higher taxes for the rich and benefits for the less well-off kill economic progress. Not so, he argued. The European experience demonstrates the opposite: social justice and progress can go hand in hand.

The relative rankings of countries tend to be defined by gross domestic product per capita but Hill points out that this might not be the best yardstick because it does not differentiate between transactions that add to the well-being of a country and those that diminish it. A dollar spent on sending a teenager to prison adds as much to GDP as a dollar spent on sending him to college.

On a long list of quality-of-life indexes that measure things beyond the GDP yardstick — from income inequality and access to health care to life expectancy, infant mortality and poverty levels — the United States does not rank near the top.

So where is the best place to live? For the past 30 years, a U.S.-based magazine, International Living, has compiled a quality-of-life index based on cost of living, culture and leisure, economy, environment, freedom, health, infrastructure, safety and climate. France tops the list for the fifth year running. The United States comes in 7th.

87 comments

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I am an American who moved to Barcelona, Spain, almost 3 years ago. I moved here because US Immigration will not allow American gays to sponsor their foreign partners for immigration, a fact that has embittered me against the country where I was born. That said, Europe is an interesting place to live but it is far different than the USA.

Disadvantages: Homes are very small; affordable apartments mostly lack heat or air conditioning; owning a car is very expensive (obtaining a Spanish driver’s license requires even experienced drivers to spend ~US$1500 for driving school); European drivers are mostly pretty horrible-drive too fast, follow too close, disregard posted signs; clothing prices are ridiculously high; many people are thoughtless: sidewalks often littered with dog feces/trash tossed carelessly; there is not a strong feeling of unity-pitifully few people care about the EU but seem more concerned about conserving local languages that should have died out 500 years ago e.g., Catalan/ Basque; lack of job opportunities for young people-on average, young people live with their parents until they are 29 or 30 years old; excessive government meddling (e.g., govt. stipulates who will be beneficiary of estate when you die); toll roads ridiculously expensive.

Advantages: Public transportation in cities is inexpensive, and convenient; public art is superb and plentiful; health care system works reasonably well, (though long waits for hospital care are common); long vacations for employees; gays have 100% equal rights; pedestrian walkways are plentiful.

Though they would miss the longer holidays/vacations, many Europeans admit that they would prefer to live in America. I believe a part of this desire hinges on the sense that in America, if you get a good education and work hard, you can be anything you want to be-a sense that seems to be missing in European culture.

Posted by AaronA | Report as abusive

first of all how can this guy even comapare America to the EU? the EU is 20 something different countries and the U.S is 1. It’s pathetic to even compare. California alone (1 state) has the 8th largest economy in the world! Its funny how much you people hate the fact that America is the number one country economically and militarily that you say that 25 or 27 countries combined have a bigger economy than 1 country. A perfect example of this is how everyone talks about how china is going to pass the U.S as the largest economy by 2035. the united states GDP is 14.4 TRILLION and China is 4.2 TRILLION. how can you compare. If all of you anti-american’s would leave the country you hate so much it would be an even better place. America has become the Best country in the world at everything and we have only been around as a country for 233 years. IF America didn’t exist this world would be a totally different place for the worse. look at the recent earthquake in Haiti for example. How much did the combined EU give as aid??? America has given hundreds of millions of dollars in aid. probably more than all other countries in the world combined!!! We can do that because of capitalism and because we are generous people. How much has china given? or japan? or India? how about the EU? italy? greece? Great Britan? No Country is better or more generous than the United States.

Posted by IHATELIBERALS | Report as abusive

Zacs and others… spending habits and not the level of wealth, explain your perceived different level of comfort between the two economic zones… Americans are known to spend way beyond their means, the Europeans, on the other end, have a higher propensity to save… that’s a matter of personnal preferences and not affordability. High savings habit are probalby costing job creation in Europe but have offered a more comfortable cushion in downturns. I’m not certain that the millions of Americans that lost houses and jobs in this severe downturn share your same view on comfort. For a more sustainable economic growth, I would truly like to see the American spending a little more like the Europeans and the European spending a little more like the Americans. Cheers.

Posted by Steph77 | Report as abusive

I’m a Yank who over the course of the last 40 years has lived at times in London, Austria, Denmark, and Spain. Always, everywhere I went in Europe, I took a hot shower every day without problem, and though my fridges were smaller than my current one in the U.S. they still easily held a +week of groceries. Perhaps in parts of the old Soviet empire things are what Zacs describes, but west Europe, trust me, has electricity and hot water.

The principal difference I would cite, is that Europeans tend to be more urban focused, and London, Paris, Madrid, Vienna, tend to influence the countryside more so than say Denver does Colorado, or D.C. does N. Virginia. That said, I know more than a few French farmers that would be as glad to do without Paris as any midwesterner would New York.

Posted by ARJTurgot | Report as abusive

I found quality of life in Western Europe to be good, but I found it’s better in the US.

Europeans (mainly young ones) who’d rather live in the US if they could, far outnumber Americans who’d prefer to live in Europe. The figures aren’t even comparable.
Ask these young people and you’ll know why (see comment by sebastyian293 )

And by the way, the US is one country, but you’ll be surprised how different its regions are from each other – geographically, economically and even culturally.
Even states in the same region differ from each other, as can urban areas and rural areas in the same state.
America isn’t necessarily ‘As Seen On TV’

Posted by yr2009 | Report as abusive

Haha Defacto superpower status through expanding borders…shall we say imperialism even? LMFAO I guess when you add a new country to the “superpower” every six months you’re bound to overtake real economic success in places like China, Japan, and the U.S. Interestingly enough since Europe is now a superpower, maybe they can start contributing to charitable causes around the world. Giving larger contributions to relief missions in places like Haiti and the fight against HIV in Africa. Oh and speaking of Africa, maybe Europe in all of its superpower greatness can start rebuilding the devastation that still exists all across that continent from all the misguided Colonial conquests during Europe’s last stint as a Superpower? Doubt it, European gratitude and compassion are only skin deep, if that!

Posted by CoLeo | Report as abusive

I have lived in North America (Canada & the US) Europe (Italy, France, others), Asia (China).

In Europe, we said that the Americans have a standard of living, but Europeans have a quality of life. I second that motion wholeheartedly.

It is inexperience, shortsightedness, and a bit of arrogance to make the criticisms I see here about Europe.

For example, fridges are small because most Europeans buy their groceries on a daily basis. Everything is always fresh. Each day, on the way home from the office, you stop at a few shops and buy what you need for that day. No more.

And the shopping is far superior to that of a mega-superstore. When I lived in Rome, there was not a single supermarket in the entire city. Every street consisted of shops at the street level. A cheese shop, a meat shop, a bakery, a wine store, a fruit market, a vegetable market, ad infinitum. And every few hundred meters the process repeated itself.

And in those shops, the clerks (owners) knew everything – about every kind of cheese or meat or bread or fruit, or wine. Most of the little grocery stores had wood stoves they used to roast your coffee beans for you – while you waited. The aroma was heavenly, and the clerk would choose the beans you wanted, roast them the way you wanted, and grind or not as you wished.

Nothing like that exists in the US, and I could provide hundreds of other examples where the quality of life there is far superior to that in America.

But you don’t find it living in an expat enclave. You need to be part of culture to appreciate it. Life there has a richness that is incomparable.

North Americans are astonishingly provincial, and even bigoted, in their appraisal of Europe. If it’s different, if it’s not our way, it’s no good. What a shame.

Posted by WatchingChina | Report as abusive

@Zach
Simply put, you’re an idiot. And that goes for anyone else who thinks quality of life and standard of living is measured in square feet/meters or by the amount of food they put on your plate. It’s quality not quantity that matters. It’s how much time you get to spend with your family and enjoying the simple pleasures in life not just working nonstop to get bigger cars, bigger houses, and bigger bellies.

Posted by dushenko | Report as abusive

@CoLeo

Europe has sent resources to Haiti, but the EU doesn’t make a show out of this.

It is true that most contries that make up the EU are far from perfect, but claiming that we have no compassion isn’t correct. Think about sustainable development and globlal warming. Europe did its best to implement green policies in times when the US was all about bringing the next SUV to the market. We could have done better, I’m sure, but at least we did something.

That is a sign of compassion for me. Or at least a sign of lucidity.

Posted by Kinetic | Report as abusive

And please allow me to say that absolute GDP comparison is a bit irrelevant (considering the US has a far more citizens than, say, Germany or France).

Instead, let me link here to some statistics that can offer apples-to-apples comparisons:

1) GDP per capita (purchasing power parity – this will favor the US a bit, but it’s how it should be presented):

http://en.wikipedia.org/wiki/List_of_cou ntries_by_GDP_(PPP)_per_capita

2) Human development index:

http://en.wikipedia.org/wiki/List_of_cou ntries_by_Human_Development_Index

3) Satisfacion with life:

http://en.wikipedia.org/wiki/Satisfactio n_with_Life_Index

All these paint a different table than what most people think.

Posted by Kinetic | Report as abusive

I never said that there was no hot water or electricity in the places I traveled in Europe, just that it is not as affordable, so the Europeans I met used these luxuries much more sparingly. The point is that the USA has a much higher comfort level for me, personally, and I am sure for many others. For example, everyone in my family can take a relatively long, hot shower every day of the week without blowing out my utility bill. From my experience, this is not as common in Europe because utilities are generally much higher than they are here – thus, smaller refrigerators, less showers, etcetera. Housing is generally much smaller in Europe as well. I think that someone of my relative means in many places in Europe does not enjoy the same amount of living space as I and many other Americans do. Please allow me a little license when using the term “box” to make that comparison. I like some of the comments about Europeans being much more social – I agree, and that may lead to a higher quality of life for many…just not for me. I am not ashamed to admit that I prefer frequent long hot showers, big cars, and open floor plans.

Posted by Zacs | Report as abusive

Demographically, many European countries will have Islamic majorities within the next 30 to 60 years. The Netherlands is projected to become Western Europe’s first majority-Muslim nation by 2015 and France is project next in 2040. Kind of makes the whole Jihad crowd look rather silly. With secular Western Europe’s embrace of abortion, contraception, low birth rates (well below the 2.1 needed to sustain a population), glorification of GLBTQ lifestyles, militant feminism, gay marriage and the disdain and outright contempt held for tradition marriage or for even getting married at all; all the Jihadists need to do is wait it out and allow demographics to take its course and they will win by default.

Does anyone want to venture a guess as to what the effect on trade will be between those European countries with an Islamic majority and the rest of the world? My first bet is that all trade between Israel and these countries ceases (If Israel survives that long). My next bet is that trade between these countries and the U.S. drops off significantly. On the other hand, I would bet that trade between these countries and other Islamic countries increases significantly.

Europe is sure to see an increase in its Islamic population which should in-turn cause an increase in its overall population (Not so for its non-Islamic population which will die off as a result of their failure to reproduce). This is sure to have an effect on the distribution of goods and services with the way government is structured in Europe.

There’s a brave new world coming and no one can tell for sure what it will look like down the road. I’m sure those folks who though the U.S. would be the sole superpower for an indefinite period of time after the fall of the Soviet Union have had a change of heart recently. With the recent financial crisis in Greece, it also makes one wonders how long the Euro can hold out.

Posted by skylarke1958 | Report as abusive

yr2009… quality of life is an extremely subjective and arguably comparable element. The Europeans value and cherish their virtually free and quality healthcare, education and infrastructure system… also their food (and 2 hour lunches) and relative energy independence. An American would perhaps give them a different weighting on their preference scale. As far young people are concerned, European have a habit to travel outside their own border (due probably to the relatively small size of their countries. However, after a few years spent abroad, the majority would return to their homeland. Just look around you, you’ll be surprised to see how few young Western Europeans have permanently settled in the US. There’s a sort of irony in Europe where people complain about the lack of jobs and envy the formidable US job machine (it truly is enviable)… these are probably the same people that would strike against any attempt to add fluidity the job market!!

Posted by Steph77 | Report as abusive

Without even an ounce of military might, Europe will NEVER be a superpower. It shouldn’t have delusions of grandeur.

Posted by cassieopeia | Report as abusive

I love Europe, and have visited several times, i can certainly see the differnce in life styles.
I often think that I would love to live there, but NY metro area is pretty much a close second.

Posted by jk718gp | Report as abusive

All these posts by our beloved “blind patriots”. I feel as if your comments are playing into the stereotype the author argued for. We Americans are bigoted, ignorant, and blind to the rest of the world…

Posted by cjdelgross | Report as abusive

For those who knock Europe, you are very deluded. Its ironic that one poster said Americans embrace diversity, whereas many of the commentators have intolerant, almost xenophobic views of Europe.

I have lived in France, I also traveled to Switzerland, Germany, Monaco & Italy. I am sorry, but the European quality of life is far superior compared to the USA. You have less income disparity, ie no ghettos like in US. The middle class lives very well, and the community is exceptionally supportive. There are no oppressive police chasing down every teenager in sight. There is culture, music, festivals, etc.. events that would not even be allowed to happen in the US, due to crowd control and crime concerns. While they may not have as many convenience stores and malls, that’s fine by me, cause the US has way too many of them. Except for a couple major US cities like NY, SF, Boston, DC, I find the US extremely boring, all you can do, all you are allowed to do, is shop. There is nothing else here, the USA has a mass-market culture and activities. Everything good to do here, costs way too much. In Europe, you can have a great time, for next to nothing.

Now, I will admit, that the economic potential of Europe is limited, due to some of the aforementioned benefits. They dont have as many stores, stores close early or are closed all summer for holidays, jobs are more scarce even for the educated, taxes can be high, the quality of certain foods, like steak, are subpar compared to America. But then of course they do have other foods that are magnificent.

Basically, you have a totally different mindset in Europe. It is not about money, it is about family, friends, and experiencing life. If those things sound interesting, then Europe may be the place for you. If you like dynamic economies, greed, upward mobility, selfishness, cookie cutter culture, expansive parks and nature preserves, crime, geographic mobility, ghettos, volatility, and shopping, then the USA is for you.

Btw, when I think of Europe, I think of the Continent. The UK is a different animal, it is a hybrid Euro-American society, that is cursed with terrible weather and equally terrible food. No wonder everyone wants to leave.

Posted by LucidOne | Report as abusive

Zach – please stop digging your grave :)

Posted by Go_France | Report as abusive

Having lived in London for the last 40 years, it is apparent that many changes which have come to UK from US have been damaging to the fabric of our society – in particular the damage to the social centres of our towns secondary to the development of out-of-town supermarkets and other retailers giant sheds. However, there are many towns and urban neighbourhoods where people deliberated shop locally, garden in allotments, sing in choirs (community, rather than church), cycle, walk, or use public transport where a car can be eschewed and so on. The London theatres have seen increases in their audiences in recent times, museums and art galleries likewise. Good societies have to be developed and actively maintained. It’s still a great joy to be able to partake in the richness of London, and European life. I’m sure that in any society there is delight to be found for those who both contribute to and enjoy their neighbourhoods.

Posted by fmb.bak | Report as abusive

Just talked with my Spanish partner. In his opinion, it is far better to have a career in the USA rather than Europe, because:

a) Chances for upward mobility are far better in the USA
b) Homes can be purchased at a reasonable price
c) Gasoline, clothing and utilities are cheap
d) Taxes are low
e) Investment opportunities are excellent.

Then, when you are wealthy, you can move to Europe which is more compact, has a lot of art, historic buildings, great architecture and socialized medicine. In his opinion, a career in America and retirement in Europe, provides the best that the world can offer.

Posted by AaronA | Report as abusive