I would like my first post on Samizdata to be something of lasting utility, and a link to a fact-packed post on a new blog might be just the thing. Super-Economy (wonderfully subtitled ‘Kurdish-Swedish perspectives on the American Economy’) kicked off with a broadside against the egregious Paul Krugman. Krugman had said in his New York Times column that the US has lessons to learn from the EU because the latter’s growth has been as good – well, almost – as that of the US recently.
He demonstrated this by comparing US GDP levels with – incredible but true – three European cities: London, Paris and Frankfurt. Tino, the blogger, comes back not just with the obvious rebuttal of a comparison between a country and three of the world’s wealthiest cities but with tables comparing the US, its individual states and the countries of the EU. You can find, for example, that the UK ranks below Missouri in terms of GDP per head – but at least we are above Alabama, which beats France. In fact the UK has a GDP per head of $35,669 as compared with $45,489 for the US. The average for the EU15 is $33,452.
Tino also tabulates GDP per head of various ethnic groups in Europe and their transplanted kin in the US. The average Brit is two-thirds as productive as the average ‘British-American’. The ethnic angle is what would have interested Steve Sailer, where I saw Tino’s blog linked (Sailer is indispensable – one of the few bloggers whom I read every day).
The differences Tino lists are huge enough to overwhelm any cavilling about definitions or methods. File the tables and use them as intellectual ammunition against anyone who argues that left-leaning Europe is better at capitalism than the US is.
Which is why I am suspicious of Steve Sailer as it is the angle that actually tells us nothing in my view.
I’d suspect that what the ‘British-American’ number reveals is the same as the ‘Chechen-American’, ‘Finno-American’ and ‘Japanese-American’ assuming you’re talking first generation.
Probably not so different from the American-British, Chechen-British, Finno-British and Japanese-British.
Migrants from developed nations to other developed nations tend to have greater employability, and greater ambition than the people who stay where they were born. All the limeys I know in the US came here as a positive choice to improve their lifestyles (by whatever criteria they judge lifestyle improvement). US Immigration law (when people deign to comply with it) discourages useless mouths, regardless of ethnicity and skintone.
Therefore, it’s unsurprising to me that there’s an upward bias on earnings for emigres compared with their stay-at-home brothers and sisters.
What Perry said.
… furthermore, to the extent that there are ‘ethnic’ dimensions to this probably says more about the typical careers of migrants than anything else.
I suspect that the vast majority of British migrants to the US for the East Coast is for positions in banking and finance. This is demand driven because employers in that sector know that any Brit with a relevant CV from an equivalent business in the UK is going to be able to integrate in the US firm; and is more likely to do than an English-fluent Belgian or Hungarian – it’s a selection bias inherent in the recruiting process. As an illustration, I’m seeing a rapid increase in mid- to senior- positions being filled by Indians, because the Indian educational model from K- thru postgrad is slot-compatible with US business, and ethnicity is completely incidental. This one of the reasons why the hedge fund world isn’t equally populated with financial analysts from Swat Province, Pakistan.
Using ethnicity as a marker, especially in this context has a more than vague whiff of ‘code language’, and I think it’s misleading; I’d propose that the source culture, rather than the source ‘ethicity’ is the reason. Indians and Pakistanis are members of the same ethnic group.
Far be it for me to put words into Uncle Milton’s mouth, but I suspect that what he may have meant, in his own code language, was that Northern European emigres typically transplant their work ethic (even more loaded code-language than ‘ethnicity’) to the US. I’d argue that the point is that the immigrants you get will be ‘somewhat like’ the people they left behind on the home country. Culture, if you like, rather than ethnicity.
Overlay that with an immigrant’s desire to succeed, and I think any measurable disparity between individuals based on their source country may well be irrelevant.
Stating that immigrants are predisposed to work hard becuase they motivated themselves to start a new life in a new country seems pretty self-evident to me.
The concept of this [GDP] statistic dates back to the work of Colin Clark (not the foot-baller) whom I had the good fortune to meet and enjoy in private discourse, many years ago.
But, perhaps we are a bit credulous as to the signifcance of a generalized GDP figure when we take a look at the commonly accepted basis for calculation:
GDP is the aggregate of:
Government Spending (wow! there’s a genyewwhine “productive” item)
PLUS
Consumer Spending
PLUS
Spending on (net?) new industrial production assets.
MINUS or PLUS
The net trade balance deficits or surpluses
Which represent spending patterns
Now, of course the logic is based on the concept that there has to be something “produced” in order to match the spending. I mean, we could not spend on cornflakes unless corn was grown, processed, distributed, etc.
However, some of you might suggest that the “product” nature of other spending deserves analysis.
Quite so, good article. Krugman is a mendacious fool but Yglesias is just a fool.
On that we can all agree, City Gent.
I thought Paris when I last visited (2007) seemed shabbier than in the Nineties – but I suppose that doesn’t have any more significance than Krugman’s strange comparisons.
This isn’t about economics but about conflicting ways of life, in any case. In the US, the financial crisis has been used by the Obama administration to undermine our Jeffersonian, small-d democratic, bottom-up ideas, and introduce a top-down, elite-driven, European model.
See “A return to first principles: the argument from morality”:
http://vulgarmorality.wordpress.com/2010/01/13/a-return-to-first-principles-the-argument-from-morality/
GDP? do brits get to enjoy life and have time off?
how many hours do americans work?
brits produce almost as much PER HOUR but of course you rt wing morons like to lie lie lie,
and they do not have people dying because of lack of health insurance!
nick,
Are the Brits not dying, since they all have health insurance?
And you ‘ve forgotten to mention that Cuba has free universal healthcare and free education for all, and hence is better than the US.
I saw somewhere (unfotunatly can’t remember where or i’d link it) that British workers in US firms based in the UK are also more productive than under British mangement.
Welcome aboard, Chris! As you can see, we get
excellent comments.
True. They just left thousands of people to die in the heat so they could enjoy all that mandatory time off.
Nick
Don’t confuse ( as MANY do ) health insurance with health care.
People do not die here because of lack of health insurance ( people are cared for whether they have insurance or not – even the illegal ones !!).
What people are being sold is ‘free health insurance’ which they believe will allow them to go to any doctor/hospital at any time anywhere for any reason.
Sorry, doesn’t work that way and never will but most are too lazy or ignorant or stupid to figure it out.
And by the way, speaking of Cuba or England, when was the last time anyone crossed 90 miles of open sea in almost anything that would float to get into your stinkin’ country ?
What Perry and Michael said (and what many, including me, have been saying for about 5 years now )
Some ignant heathen named ‘nick’:
Neither does the US.
And while we’re having this particular conversation, I suggest that you have a look at the actual patient outcomes (measured as 5-year survivorship post-diagnosis) between the two…let’s take skin cancer for example.
In the UK, where the NHS will typically only allow surgery (for a topical site or an affected lymph node-if it’s moved into the brain or liver then they send you home to die) and interferon, it’s somewhere in a loud shout of 20%. Australia and Canada, not much better. If there’s an important difference, it’s that Oz’ government health plan uses a different immune booster rather than interferon. (Interleukin?)
Better treatment than this is generally unavailable at any price. Unless you fly to the US, that is. Where, for the price of what I spent on buying about 2000 ft^2 of split-level with mature trees and a fenced backyard you can get a course of treatment that has about a 70% 5-year survivorship rate. But when a family member of mine had the treatment not so very long ago, at least one of the five drugs used was not available at all in the UK to treat any condition at all, and 2 others, the NHS would not use on a skin cancer patient.
This course of treatment followed an initial ‘eyeball’ diagnosis by a GP, followed by an oncologist later that same week, followed by CT and PET imaging, again, same week, followed by treatment beginning the following week.
An uninsured patient would probably be delayed slightly so as to arrange for financing. But this isn’t the sort of condition where a patient will typically present in an altered mental state and be delivered to a hospital ED with a need for action in the next 20 minutes.
Which is better, expensive or completely unavailable?
Let us take a more common life-threatening event. From the time you pick up the phone and dial 999 to complain about 10/10 crushing substernal chest pains radiating to the left arm, with attendant shortness of breath, in any major UK city, how long is it until your balloon angioplasty is complete?
Hell, how long is it until the first ACLS provider is on scene?
Let me backtrack further: how long to the first BLS provider?
So let me ask a followup question.
Are you, ‘nick,’ stupid or merely dishonest?
Welcome to the blog, Chris!
So Paul Krugman wishes the United States to “learn from the E.U.”
Well the largest E.U. economy (by far) is Germany – perhaps Prof Krugman would point at German government financed health care (although about half of all health spending in the United States is governmen – and the “private sector” is trapped in a spider’s web of insane government regulations that vastly increase costs – all of this about to be made even worse by the demented “Obamacare” Bill).
However, there are other aspects of the German ecomomy that Paul Krugman might not be so eager to copy.
For example, rational tort law – no vast settlements for things that are NOT the fault of negligence on the part of the companies (from hosptials to car companies) forced to pay the money.
Also RESPECT FOR THE RULE OF LAW.
Odd to praise Germany over the United States it might be thought – however….
If (for example) a German automaker had gone bankrupt there would have been no question of “secured creditors” being cheated of their money (as General Motors secured creditors were) whilst “unsecured creditors” (such as the United Auto Workers Union) are given vast sums.
Not a small point – the above means that American corporate bonds are NOT backed by the rule of law (in spite of there being so many thousands of “laws” in the United States).
Also a vast web of regulations control every aspect of American business life – with almost any business action (not just in banking but in any line of business) now being able to be deemed “criminal” if government people wish to declare it so.
That is not the case in Germany – which may be (is) over regulated (although not as much as the United States now is), but where at least THE LAW IS KNOWN – the govenment can not just MAKE IT UP AS THEY GO ALONG (as they now can in the United States).
Also there is the questions of dishonesty budgets.
Government spending both in the United States and in Britain is greater (as a proportion of the economy) than it is in Germany. This is hidden behind a maze of accounting tricks.
The accounting tricks of Gordon Brown and Barack Obama (and their creatures) would be tossed out in a heart beat in a German Administrative Court (contrary to Dicey these courts do have valid uses).
In short under German government rules the bankruptcy of the British and American government would be openly shown.
If this applied to the German government – which it does not, because the public finances are under much less bad control.
Or to use the language of Paul Krugman the “fiscal stimulus” in Germany is a tiny fraction of what it has been in Britain and the United States.
I doubt that the above is what Prof Krugman wishes to be “learned”.
I suspect the E.U. country he would prefer is Greece – which has followed an American (Krugman style) policy.
Or, of course, Britain – which (like Greece) has followed the policies that Paul Krugman would suggest.