All economists know (or should know) that inter-continental comparisons are inevitably an apples vs. oranges discussion. Such comparisons require statistics from a variety of angles and should inform the reader enough to see a variety of perspectives.
This article chooses only one income standard - the so called PPP (Purchasing Power Parity) which was developed by neo-classical economists for other purposes - to support the thesis that "free markets" and "free trade" are the most efficient system (specifically that exchange rates converge to PPP's even though much of an economy is non-tradables). The World Bank then developed much of the empirical work which uses the U.S. as the world compactor. PPP is an "as if" world which doesn't actually exist - all goods and services are calculated "as if" they could be sold in the U.S. (so a haircut in Nairobi is valued "as if" the barber could offer it in New York; even though the reality of his life is that he can not). The mathematical properties of the PPP make Europe and Japan look poorer than the U.S. and closes the gap between most 3rd world countries and the US (and makes it look like the gap closes over time). Obviously, this type of PPP calculation is arbritrary - if the comparator used were the Europe then the PPP would slant things the other way. It is amazing that the article presents no other income measures and, natch, not a word about the distribution of income.
This article also choose only one non-income standard - household durables and electronics. Of course the U.S. looks good. The picture would be very different if one choose educational services, health care, 2nd homes or vacations (and costed these at U.S. prices!). I almost expected him to add that the U.S. had more baseball diamonds.
The policy conclusions? No surprise: lower taxes; especially lower taxes on the rich (lower marginal rates); increase inequality to provide more "incentives"; increase work hours without raising pay. No evidence is given linking these proposed "solutions" for the alleged "problem" - just an association that these things are present in the U.S.
Sadly this is what passes for economic research too often - little more than political propaganda. Paul
BTW Timbro describes itself (on its site) as follows:
>Timbro is part of the Swedish Free Enterprise Foundation.
>....
>Timbro is the leading free-market think tank in Scandinavia, founded in
>1978 and located in Stockholm, Sweden. For 25 years Timbro has advanced a
>positive agenda for change based on classical liberal values and the
>free-market philosophy. With a staff of 20 Timbro releases 25-30
>publications on varying topics every year.
BTW
At 01:13 PM 6/21/2004 -0700, you wrote:
>I have no idea who Timbro is or what they stand for, but this is some
>interesting reading; it's starts like this:
>
> >> IF THE EU WERE A PART of the United States of America,
> >> would it belong to the richest or the poorest group of states?
>
>http://www.timbro.se/bokhandel/pdf/9175665646.pdf
>
>[ For those who can't wait, the summary is:
>
>[2004-06-02]
>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.
>
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