> Where is that form of capitalism that is more 'efficient' than the US? In
> what, capital formation?
They're more efficient in lots of ways (they had to be, to catch up with the US in the first place). Rates of investment as a percentage of GDP are higher in Japan and Central Europe than the US, and yet they still generate enough of a surplus to invest heavily overseas. These regions run very tight, well-focused industrial policies, regularly bail out their weaker neighbors instead of bombing and terrorizing them, and managed to deliver rising real wages to their citizens during 1973-1995, precisely when US wages plummeted. They don't incarcerate 3% of their adult workforce the way the US does -- a really appalling waste of human potential. They give everyone decent health insurance and pension benefits -- hugely efficient in terms of public health policy. Ecologically, they have well-developed mass transit systems, are investing way more in renewable energy, and use much less energy per capita than the US.
-- Dennis