Tuesday, December 14, 2010

WERE YOU BORN ON THE WRONG CONTINENT? by Thomas Geoghegan

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Was I born on the wrong continent? Well, if you're talking bread, I'll definitely opt for the baguette. But Geoghegan (rhymes with "Reagan") says little about food, alas, in this comparison between American and Western European - mostly German - lifestyles. Instead, he looks at work, leisure, taxes, benefits, labor, management, social policy...

Don't let your eyes glaze over just yet. Geoghegan is a delightfully quirky writer who manages to convey a lot of information while making you think you're reading a chatty and often humorous travel book. Indeed, travel writing inspires him:
For years I read the front page [of the New York Times] about European unemployment, the collapse of social democracy, etc. But then I'd flip to the travel page and get the real news, the news that they don't dare put on page one, that every year in Europe, the whole place keeps getting nicer.
Geoghegan, a Chicago labor lawyer, made several extended trips to France, Switzerland, and Germany to study European socialism. He gives his conclusion in the preface:
The cover of the February 16, 2009, Newsweek announced: "WE ARE ALL SOCIALISTS NOW." The argument is that U.S. government spending is nearly as high as Europe's. A decade ago, the U.S. government was spending 34.3 percent of GDP, compared with 48.2 percent in the "euro-zone," which is Europe without the UK. Now, while the Continent is at 47 percent, we have gone up to 40.

And, in fact, I think the U.S. will close the gap. But in a sense, the more we spend, the less socialist we become. For whether it is health care or education, we use the private market to pay for the distribution of public goods. In other words, we pay socialist-type taxes so that the private insurance companies, drug companies, and, yes, doctors can profiteer.

That's the crisis of our time: we're paying for European-type socialism, without getting the equivalent payback.
Much of the rest of the book describes the European payback (and this will be counter-intuitive to a lot of American readers): Fewer poverty-stricken seniors and children. Six weeks' vacation time plus more paid holidays. Cheaper higher education, health care, day care, concerts. Paid maternity and paternity leave. Higher old-age pensions. Nursing-home benefits. Cleaner, faster, more readily available public transportation. More efficient land-use planning. Lower unemployment. More successful small businesses.

The only area in which the U.S. outshines its European counterparts is GDP - and Geoghegan offers fascinating observations as to why that actually may be making American lives more frantic and yes, even more expensive than the lives of European socialists.

Ironically, some of the structures that make German socialism work were developed by Americans during the occupation after World War II. Rather than the authoritarian, top-down socialism of the Nazis, the occupiers insisted on a bottom-up socialism where the workers themselves would have a big influence in organizational management. As a result, German businesses are much more democratically run than American businesses, who never adopted the practices themselves.

And some of the German bureaucratic regulation that Americans love to mock, says Geoghegan, has enabled Germany to become a major exporter of durable goods - really durable ones like Mercedes and BMWs - even as the U.S. has been ramping up its trade deficit. In fact, while the U.S. is increasing its debt by $1 trillion a year, Germany has no net external debt - and in fact vies with China for first place in world exports, an amazing feat for a country that has 82 million people compared with China's 1.3 billion. And yet "Americans still seem unaware that it's not just East Asia but the socialist Europeans who have outcompeted us in global markets as we sink deeper into debt."

So was Geoghegan born on the wrong continent? I don't think so. Like T.R. Reid, author of The Healing of America (a wonderfully enlightening book comparing health-care systems in various developed nations), Geoghehan wants us Americans to stop thinking we're best at everything, to start paying attention to how other countries handle vexing problems similar to our own, and to adapt their best solutions to our situation in ways that will give us happier, healthier lives. Our house is on fire, there's a fire station across the street, yet we're trying to fight the fire with buckets of water - or oil. "I know on the right and even in the center I am dismissed as a European-style liberal," he writes. "But my question for those on the right is as follows: do they care about the sovereignty of our country? Then they better start taking seriously what the Europeans do."

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