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How Europe crushes innovation

economist.com

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Re: How Europe crushes innovation

#121

Post by senordevnyc »

onraglanroad wrote: post #109
naldb wrote: post #102

Earlier quoted context omitted.

Actually it’s everybody’s problem, since job inflexibility is one of the reasons why Europe is so poor compared to other first world countries. Who exactly benefits from a business going under? Its bigger competitors? The less well off are the ones that suffer the most from oligarchic sectors and cartels.

> Europe is so poor compared to other first world countries. By GDP per capita, 7 of the top 10 countries in the world are European. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... Given this fact, will you now question your priors, or try to find a new justification for them?

Many of those countries have smaller populations and economies than American cities. The EU as a whole has less than half the GDP per capita than the USA.

Re: How Europe crushes innovation

#122

Post by Akranazon »

latexr wrote: post #80
Akranazon wrote: post #72

Earlier quoted context omitted.

> In what ways, specifically? Median wages https://en.wikipedia.org/wiki/Median_income?useskin=vector Average work hours Purchasing power parity https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)... Despite average work hours https://en.wikipedia.org/wiki/List_of_countries_by_average_a... Better youth unemployment than Europe https://en.wikipedia.org/wiki/List_of_countries_by_unemploym... > And which types…

Thank you for providing sources. Though you’re focused solely on money, which I think is a pretty poor measure for how “better off” one is (and was my original criticism of the article). Especially when you’re ignoring the percentage of people living in poverty and massive income inequality. https://en.wikipedia.org/wiki/List_of_countries_by_percentag... https://en.wikipedia.org/wiki/List_of_countries_by_income_in...…

I would argue that unemployment isn't solely about "money", but fair enough. I'm not sure how to respond overall. Because every time I debate this topic (which isn't a lot), a Europe defender will basically diminish the importance income numbers. Because "money is a poor measure of being better-off". In fact, money is quite a good measure of being better-off, and there is a lot of evidence for this. Europe has better public transportation, Europe has better healthcare, people are happier in Europe, etc etc... There is always more things. But the original discussion was specifically in the context of labor economics. Whether or not the US has single-player healthcare, that has a different topic. Average self-reported happiness numbers is obviously subjective and influenced by an infinitude of different things that are going on in one's life, which may or may not be related to labor. I also didn't find the other wikipedia articles very convincing. They show that ~2.0% of the US population is living below even the most generous measure of absolute poverty. I only see income inequality numbers as useful insofar as they give to average income number. I had cited median income so that the typical worker could be represented.

I don't consider "who is better off" to be a very good question. The answer is, the average worker is better off. My answer is therefore going to be vague. Of course, there are differences by industry, but do you have a point about that? Also, I am really arguing that with the current state of the USA, immigrants make higher incomes than immigrants to other countries. Saying that immigrants are treated poorly in other ways is just bringing up a political issue unrelated to labor economics.

Re: How Europe crushes innovation

#123

Post by gwbas1c »

latexr wrote: post #112
gwbas1c wrote: post #111

Earlier quoted context omitted.

> You’re also ignoring the argument of the article. No I'm not. I've spent most of my career in the 4/ths of startups that aren't wildly successful. I've also walked away from situations where I wouldn't get paid because I'm not financially independent. I'm not "rolling in dough," but I've done pretty well for myself. Of course I want more, but I'm well past the point of "enough."

> I've spent most of my career in the 4/ths of startups that aren't wildly successful. That has nothing to do with the point. And again, you’re only focusing on one type of job which is not the only one which exists . There are other people in the world. > I've done pretty well for myself. Of course I want more, but I'm well past the point of "enough." And therein lies the issue. No, it’s not “of course”, that idea o…

This one quote summarizes the whole point of the article:

> Rather, the sheer difficulty of shedding staff en masse—a reality of corporate life—steers Europe’s biggest companies away from making risky bets in innovative fields.

And then the article goes on to defend that point. It explains the difference in cost here:

> An American firm shedding workers will incur costs equivalent to paying those sacked for seven months and be done with it. In Germany costs amount to 31 months of wages for each employee let go; in France 38 months. Beyond severance pay and sops to keep unions happy, the biggest expense is firms keeping unproductive workers on their books they would rather be rid of. New investments are delayed for years as dismissed employees are gradually replaced. American firms quickly pivot to new moon-shot opportunities; Europeans ones are stuck in the same old mire as they haggle with unions, due often to laws devised nearly a century ago.

There's no economically feasible way to hire someone to build a product that may not succeed in the marketplace and guarantee them lifetime employment. That requires a certain about of clairvoyance about the market and many other variables that go into product development that no one has.

Re: How Europe crushes innovation

#124

Post by surgical_fire »

senordevnyc wrote: post #121
onraglanroad wrote: post #109

Earlier quoted context omitted.

> Europe is so poor compared to other first world countries. By GDP per capita, 7 of the top 10 countries in the world are European. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... Given this fact, will you now question your priors, or try to find a new justification for them?

Many of those countries have smaller populations and economies than American cities. The EU as a whole has less than half the GDP per capita than the USA.

So what?

GDP is a measurement of market value of goods and services. This hyperfocus on GDP is a societal disease, and all sorts of terrible policy derives from this hyperfocus.

There's a nice public park on my neighborhood. It's a very scenic place, with a river going through it, with trees along its course, there's also a playground for kids with a large lawn area where people do picnics and relax around. Very pleasant place.

That park generates 0 GDP. From a GDP standpoint, it would make more sense to remove the public park and turn it into a concrete hellscape for people to park their cars. Large cars preferably - huge SUVs or pickup trucks for that matter, no weakass economic cheap hybrids. GDP has to grow after all.

And if that came to pass, the lives of everyone here would be miserable. But GDP would be higher, so that wins.

Re: How Europe crushes innovation

#126

Post by senordevnyc »

surgical_fire wrote: post #124
senordevnyc wrote: post #121

Earlier quoted context omitted.

Many of those countries have smaller populations and economies than American cities. The EU as a whole has less than half the GDP per capita than the USA.

So what? GDP is a measurement of market value of goods and services. This hyperfocus on GDP is a societal disease, and all sorts of terrible policy derives from this hyperfocus. There's a nice public park on my neighborhood. It's a very scenic place, with a river going through it, with trees along its course, there's also a playground for kids with a large lawn area where people do picnics and relax around. Very plea…

Hey, I didn’t pick the metric, I was just responding to someone who had.

I’ve lived in both Europe and America, and if my personal situation allowed for it right now, I’d prefer to be in Europe. But I also do think GDP can be a useful metric, especially in the long run. I think Europe has great QoL, but I think it’s naive to not look at the growth rates of the major countries in the world and not be concerned about the long-term future of the European economy.

Edit: you’re also wrong about the park. Someone paid to create it, and someone pays to maintain it. Both of those numbers show up in GDP.

Re: How Europe crushes innovation

#127

Post by senordevnyc »

knowledge-clay wrote: post #70
jstummbillig wrote: post #20

Earlier quoted context omitted.

Do you really? Or do you actually want to sustain your standard of living as safely as you can? Because then the question arises: What if the current way of handling labor protection in the EU (as one of many components) leads to destroying yours and everyone elses standard of living, simply because it's unaffordable? Would you still argue that this is the way to go? Everyone going down with the ship together? I don'…

> Because then the question arises: What if the current way of handling labor protection in the EU (as one of many components) leads to destroying yours and everyone elses standard of living, simply because it's unaffordable? The GDP/capita of e.g. France is 10x what it was in the 1970s. There is nothing "unaffordable" about the European social safety net, except that there are political pressures to dismantle it (ri…

It’s about twice what it was 50 years ago when you adjust for inflation: https://fred.stlouisfed.org/series/NYGDPPCAPKDFRA

Your overall point might still be correct though.

Re: How Europe crushes innovation

#128

Post by senordevnyc »

latexr wrote: post #80
Akranazon wrote: post #72

Earlier quoted context omitted.

> In what ways, specifically? Median wages https://en.wikipedia.org/wiki/Median_income?useskin=vector Average work hours Purchasing power parity https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)... Despite average work hours https://en.wikipedia.org/wiki/List_of_countries_by_average_a... Better youth unemployment than Europe https://en.wikipedia.org/wiki/List_of_countries_by_unemploym... > And which types…

Thank you for providing sources. Though you’re focused solely on money, which I think is a pretty poor measure for how “better off” one is (and was my original criticism of the article). Especially when you’re ignoring the percentage of people living in poverty and massive income inequality. https://en.wikipedia.org/wiki/List_of_countries_by_percentag... https://en.wikipedia.org/wiki/List_of_countries_by_income_in...…

To be fair, while Europe dominates the top ten happiness scores, those countries at the top of the list are mostly all some of the richest countries in the world.

And there are 20+ European countries with lower happiness scores than the US, including France, Spain, and Italy. So living in Europe means you’re about as happy as Americans but also poorer…

I don’t think it’s as clear cut as you’re indicating.

Re: How Europe crushes innovation

#129

Post by Muromec »

senordevnyc wrote: post #121
onraglanroad wrote: post #109

Earlier quoted context omitted.

> Europe is so poor compared to other first world countries. By GDP per capita, 7 of the top 10 countries in the world are European. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi... Given this fact, will you now question your priors, or try to find a new justification for them?

Many of those countries have smaller populations and economies than American cities. The EU as a whole has less than half the GDP per capita than the USA.

>Many of those countries have smaller populations and economies than American cities

We can take NY (the state) and the Netherlands for example. Comparable populations (18-19 million), but GDP is 2.17 vs 1.27 trillion in favor of NY.

What it translates to in practice -- what kind of nice things New Yorkers have twice as much? Could is as well mean that Dutch do half the work compare to New Yorkers?

Re: How Europe crushes innovation

#130

Post by Akranazon »

piva00 wrote: post #77
Akranazon wrote: post #72

Earlier quoted context omitted.

> In what ways, specifically? Median wages https://en.wikipedia.org/wiki/Median_income?useskin=vector Average work hours Purchasing power parity https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)... Despite average work hours https://en.wikipedia.org/wiki/List_of_countries_by_average_a... Better youth unemployment than Europe https://en.wikipedia.org/wiki/List_of_countries_by_unemploym... > And which types…

Median wages while prices are higher doesn't mean much, Americans earn more but also pay quite a bit more in most products and services needed for living: housing, healthy food, transportation, healthcare, etc. After experiencing the American work life I'd never trade my life in Sweden to earn 2-3x more in California, I'm sorry to say but it wasn't better to earn more in the USA, I could buy more trinkets but daily l…

I'm not interested in debating the grab-bag of ways life is better in Sweden than in California.

I've said this before, but every "US vs Europe work" debate ends with the European patronizingly scolding the American for thinking money is the most important thing in life. I'm also not interested in that.

I am only interested in the labor market.

You can say the numbers don't matter, but then you've adopted essentially an unfalsifiable position.

Another factor to consider is the ease of quitting your job. In the US (at least, I have found), it is quite easy to quite your job and find a new one.

This matches the logic under which it's easy to fire in the US. Every cost of a regulation has a side-effect. If it's easy to fire, it's easy to hire. The article explains how American companies are more willing to hire for positions which wouldn't otherwise exist.

If you are not interested in that, then quit your job and don't work in a position which involves innovation. Which in America, is easy to do.

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