[lbo-talk] The EU vs the US

Seth Ackerman sethia at speakeasy.net
Mon Jun 21 14:01:54 PDT 2004


From: "Doug Henwood" <dhenwood at panix.com> To: <lbo-talk at lbo-talk.org> Sent: Monday, June 21, 2004 4:21 PM Subject: Re: [lbo-talk] The EU vs the US


> Jordan Hayes wrote:
>
> >If the European Union were a state in the USA it would belong to the
> >poorest group of states. France, Italy, Great Britain and Germany have
> >lower GDP per capita than all but four of the states in the United
> >States. In fact, GDP per capita is lower in the vast majority of the
> >EU-countries (EU 15) than in most of the individual American states.
> >This puts Europeans at a level of prosperity on par with states such as
> >Arkansas, Mississippi and West Virginia. Only the miniscule country of
> >Luxembourg has higher per capita GDP than the average state in the USA.
> >The results of the new study represent a grave critique of European
> >economic policy.
>
> Yup, those Yurpeans live in tar paper shacks in the swamp. On recent
> visits, I found the poverty in Florence, Munich, and London to be
> excruciatingly depressing.

Timbro is the think-tank of the Swedish ("liberal") right.

Although it's true that US p/c GDP is higher than in Europe, there a a few problems with these comparisons. (1) These data come from 2000, when depreciation in the US was unprecedentedly high, meaning a chunk of GDP represented new investment that was just replacing worn-out old investment and not adding anything to current or future living standards. (2) Levels of productivity in Europe (GDP per hour worked) are much closer to US levels and exceed the US in several countries, including France. Low GDP p/c is caused by low total employment (jobs x hours). This is caused partly by a preference for leisure over work, partly by sadistic monetary policy.

Seth



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