Europe has lower GDP per capita than we do. You know why?

[Kurt_and_Hunter]

Is it because socialism is so inefficient?

Is it because their taxes are so high?

No, it is because they do less work per capita. A European individual produces less output because she gets more time off work.

(And anyone who views a citizen having a greater ability to spend time pursuing her interests, spending time with family, etc. as a defect in an economic system must have no interests and a really lousy family!)

Any social system is supposed to maximize human happiness and satisfaction. A productive economy--maximizing output--is supposed to be a means to an end... being a rich enough nation that everyone can enjoy more goods, leisure and security.

Paul Krugman
April 3, 2010, 3:53 pm
European Leisure

I see that Ryan Avent has been sparring with Scott Sumner over the question of whether lower European GDP per capita compared with the United States — mainly the result of lower working hours rather than lower productivity — can be attributed to higher taxes.

Uh, guys, there’s some research on this — in particular, a compelling paper by Alesina, Glaeser, and Sacerdote arguing that it’s not about taxes, it’s about unions and government policies encouraging longer vacations and shorter work weeks.

In other words, it’s basically a social choice. One thing I really liked about the Alesina et al paper is that it gives a good hearing to both sides of the debate about whether it’s a good choice (Glaeser, at least, is fairly conservative, but also very fair-minded). Anyway, there’s no need to engage in top-of-the-head speculation on this subject.

http://krugman.blogs.nytimes.com/2010/04/03/european-leisure/

[mainer]

1. They also have a social safety net so they don't feel frantic about security

If Americans didn't have to worry about hoarding for their retirement and for potentially ruinous healthcare costs, they would feel less compelled to work all the time.

It's something that drove my workaholic dad, and it drives me, too: the knowledge that any one of us could end up homeless and hungry if we don't work, work, work.

[Arctic Dave]

3. +1

Seems that is the case with many a family.

[leveymg]

2. In many ways, the US has long been a Third-world country. Not a member of the advanced

developed nations of the world.

A nation of praetorian guards and semi-literate serfs ruled by a caste of banker-barons. No, not very socially advanced.

[kenny blankenship]

12. Think back to the beginning: forts in the wilderness and plantations

that's not really a "social system" at all. It's a resource and wealth extraction system, arranged for the benefit of absentee owners - and so it would remain.

[Turbineguy]

4. The countries

in the former Soviet Bloc contribute to the low average. But there will be 800 million people in the Euro zone. That give the Euro a good chance to supplant the US Dollar as reserve currency of choice.

[Silent3]

5. Also, how much does the typical person benefit from what they do for GDP...

...vs. how much do those at the top benefit from all of the extra GDP we individually produce?

I'm guessing we Americans largely work our extra hours to help buy second summer homes and yachts and outings at bondage-themed night clubs for the rich, rather than getting more for ourselves in exchange for less time off.

[inna]

16. excellent point.

[uponit7771]

18. Yeap

[LiberalFighter]

24. Too bad we can't have GDP computed based on 2 different social groups of people.

Of course, make sure the rich have a much much much lower GDP.

[stray cat]

6. I would be in favor of less work if the work could be more competent in some instances

fewer hours but more focused and less web surfing and facebook chats

[grace0418]

35. One thing I've realized is that when I feel like I'm being allowed to have a life outside

of work, and when I am trusted to get the job done without constant infantilizing supervision, not only do I get the job done, I get it done faster, more efficiently and more successfully.

I used to work at an office where everyone was treated like untrustworthy children who would slack off every chance they got. We had very strict hours (including lunch ONLY from 12 to 1) with very little time off. Naturally we were expected to stay late for the company's benefit if something needed to get done (with no overtime of course), but if we were caught up on work and had a personal errand or obligation, that wasn't allowed. Funny how rules like that always seem to benefit the company over the employee.

So what happened? We *did* surf the internet and do other things besides working. Why? Because (A) if it was going to be assumed that we were a bunch of slackers no matter what we did (including always getting our work done on time), then we were going to at least have some of the pleasures of slacking. And because (B) it was such a hassle to take any time off and we had so little time off to use, we all tried to do as many errands as possible during the day. That included making appointments and phone calls, shopping online, booking travel, sending emails, etc. Most doctors, contractors, repairmen, etc. are only available to speak during the day anyway so what can you do?

Now that I'm freelancing, sometimes I work for 12 hours straight or more with barely a bathroom break. Sometimes I can take an afternoon off to do something or just relax. Either way, I feel so much more in control of my workflow and my productivity. I feel like this could exist in a company as well. People who feel valued, respected and are allowed to take ownership of their work/life balance will do a better job. They'll take pride in their work and work more efficiently if they know that working late one day will mean they can come in late or leave early on another day.

I remember one time at my old job working 15 days straight, including weekends, early mornings and evenings to get a project done for a big meeting. The day I finished (late in the afternoon), my boss came into my office five fucking minutes before I was supposed to leave for the day and asked what I was working on. I said "I just finished up XYZ and I'm ready for new work, " assuming she and I would discuss new projects in the morning. I then promptly got reprimanded for not coming to her the second I finished and asking for more work. This was after I had already worked 10 hours that very day, and she was in that big meeting all afternoon! Heaven forbid I "slack off" for five minutes and actually leave on time. Oh, and of course there was NEVER any thanks or praise for the 15 days of overtime I put in the get the project done. This kind of thing happened all the time and made everyone in my department feel like there was no point in busting our butts because nothing ever worked out in our favor.

I feel like, from talking to friends and being in the working world for many years now, that this kind of behavior on the part of companies is not uncommon at all. I just don't understand why they can't see how it undermines morale and productivity to treat employees this way. Sure there are people who would take advantage of situations if given more freedom, but they'd be pretty easy to weed out if everyone else was feeling more engaged and productive.

Just my $0.02. Sorry for such a long-winded reply. :) :hi:

[many a good man]

7. A big chunk of our GDP is undesirable

Military, prisons, crime, sickness, speculation, etc. Much of our GDP is the waste product of the ills of our society. Many of these ills would be significantly lessened under social democracy.

[MindandSoul]

8. Yes, with a minimum of 3 weeks and up to 6 weeks vacation per year

and a 32 hour week, and long leave of absence for maternity. . .and double pay twice a year to allow every worker to take a vacation and still be able to pay his/her regular bills. . .It's a good life!

And, by the way, with more vacation and shorter work week. . .more workers are needed to complete the work. . .which help with creating (not necessarely more jobs but. .) need for more workers. . .a useful tool when unemployment is already high (but paid for much longer period, and with health care insurance, so it is less of a problem for the unemployed!)

[Zynx]

9. Also, we don't really have that much of an edge anymore.

The World Bank figures listed here from 2008 shows us about even with France and only slightly ahead of Germany.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

Because costs of living here are lower in a number of areas, PPP shows a bigger edge, but the point remains that our vaunted edge is not as great as it used to be even in absolute terms.

[dem mba]

10. further reading on the topic:

http://gregmankiw.blogspot.com/2010/03/taxes-per-person.html

http://www.themoneyillusion.com/?p=4626

http://yglesias.thinkprogress.org/archives/2010/03/mankiws-tortured-tax-logic.php

don't have time to comment on it all right now, but I think it's an interesting topic. enjoy.

[Warren Stupidity]

11. GDP as a measure of prosperity is nearly useless.

And is massively biased toward measuring the prosperity of the elites at the head of highly productive corporations, rather than the people working for those corporations.

http://en.wikipedia.org/wiki/Legatum_Prosperity_Index

Is one attempt to get at prosperity from a less biased perspective.

http://en.wikipedia.org/wiki/Quality-of-life_index

Is another.

In my industry - high tech - increases in productivity are almost always correlated with lay offs and stressed out tech-workers.

I guess it really comes down to what one means by "prosperity".

[Doremus]

13. There's an excellent graph that shows how much the typical US worker has shared in the

literal explosion of productivity in the last decade or so.

I don't have it handy, but if anybody knows what I'm talking about please post it.

The average worker has gotten exactly ZERO for helping produce higher and higher GDP, and actually has been slapped for it in lower salaries, fewer benefits, etc.

The oligarchs have sucked it all up including the crumbs.

[dickthegrouch]

14. The american worker does get the time off....

They just waste it at the water cooler, instead of parlaying it into usable time off for vacations. I was (and still am) appalled at how rarely I find some of my staff at their desks and rather chatting about some inconsequential thing in a break room.

[uponit7771]

20. That sounds like lack of direction via what, when, where and not results oriented. What difference..

...would it make if your staff was at their desk if they're exceeding your expectations and if they're not what have you been doing to change their behavior?

[CTyankee]

15. Here's the place with the world's highest GDP per capita:

LUXEMBOURG!

http://en.wikipedia.org/wiki/Luxembourg

It's a "duchy," doncha know...

I bet those poor folks work their fingers to the bone!:rofl:

[awoke_in_2003]

17. We work more hours a year...

then just about any industrialized nation (we overtook the Japanese not long ago)

[femrap]

30. Last I heard, South

Korea was the only country whose folks worked longer hours than us.

I like their Hyundai autos.

[BrklynLiberal]

19. At least 6 weeks paid vacation a year, plus time off for maternity leave...etc etc etc.

No wonder they are happier!!!!!!!

[DavidDvorkin]

21. We're still ahead of Europe in GDP per hours worked

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_hour_worked

[OHdem10]

22. Also Globalization has wreaked havoc on all 1st World economies

to speak nothing of 3rd World Economies.

When Businesses race to find the chespest labor thus producing
cheapest products, there is a drain from every country. Example:
Mercedes and BMW now produced here in the South. Helps workers
in the South but I am sure the loss was felt in Germany.

[Odin2005]

23. Nice find! really shows hare stupid Europe-Bashing is.

[baldguy]

25. Forcing higher productivity w/o a corrosponding increase in wages is theft.

[femrap]

31. Or slavery. nt

[Honeycombe8]

26. Europe isn't mainly socialistic, is it? Great Britain isn't socialist. nt

[CTyankee]

28. They are also mainly constitutional democracies...not dictatorships. nt

[old mark]

27. The US works its people to death, gives us more heart attacks and

cancer, less time for family and enjoyment of leisure, little social benefits or safety. We all are slaves to the US system, selling our life's time to make others more rich. And the Right tries to make you like it all, and tells you that this is god's plan and that anything else is terribly unnatural and evil.

mark

[femrap]

29. I much prefer the quality of

life that the French experience versus our dog-eat-dog competitive You Are What You Make Money Doing culture.

And now people in my state want to amend the state's Constitution so we don't have to provide HCR to the citizens. Do they want the poor dying in the streets?

The rich white greedy boyz have pretty much ruined everything around here.

[Festivito]

32. For one thing, they don't OVERPAY for health care and other things.

We overpay for healthcare by about 150%, paying 250% of what we would need to pay. That additional 1.5T$ raises our GDP, but for no good purpose, in fact it is for bad purpose, that 1.5T$ is used to deny health care and to keep Americans sick in order to continue their constant payments.

Add that we pay for insurances that cover us badly, internet that is behind in coverage, and higher priced bad coverage cell phones. We pay extra for these things, get less, but they add to GDP.

[Martin Eden]

33. Prisons and the MIC are part of our GDP

They don't add anything to quality of life (actually indicate the opposite) but nevertheless are factored into GDP.

[treestar]

34. We have this Puritanical streak

We brag about how much overtime we work.

We seem to have missed the point that the work is to provide us with a way to the good life.

[Juche]

36. Despite our longer hours we have a lower standard of living

More plutocracy, more income inequality, more predatory social/economic practices, more crime, worse public transit, worse health, less security.

Over here you work an extra 500 hours a year, but all the gains just go to corporate profits and income for the top 5%. And at the end of the year we are more insecure, sicker and more vulnerable than Europeans because of it.

[pundaint]

37. GDP is not the same as Wealth Production. Euro's make more finished goods, we make more derrivative

bets.