IT'S NOTHING THAT CEASING TO BE EUROPEAN WOULDN'T FIX:

Europe could bridge the economic gap with the US - but there's no way without the will: The UK is only barely catching up. The rest are not only poorer but becoming even more poor (Hamish McRae, 15 February 2007, Independent)

Most European countries are still losing ground to the US in economic terms and most of those that are closing the gap are doing so very slowly. [...]

The benchmark is the US because it remains almost the richest country in the world in terms of gross domestic product (GDP) per head and has almost the highest productivity per head. Only Luxembourg, which is tiny and has a special position within the EU, and Norway, which has oil, have higher GDP per head.

As for productivity, those two plus the Netherlands, Belgium, France and Ireland, are the only ones that have higher productivity per hour worked. Among those, Belgium and France have high unemployment (thereby excluding their less productive workers from the statistics), the Netherlands has high concealed unemployment and Ireland has benefited from massive high- productivity inward investment.

So the big picture remains that somehow or other the US is more productive than everywhere else. [...]

Most large European countries, with the exception of Spain and the UK, are not only poorer but have been losing ground - the UK is only barely catching up. The rest, including Italy, France and Germany, are not only poorer but becoming even more poor in relative terms.

This has obvious and alarming implications. If, for another generation, Europe falls further and further behind the US, its best and brightest young people are likely to want to emigrate. If the gap in wealth stays at 20-25 per cent or less maybe the social and cultural advantages of Europe are sufficient to retain talent. But if the living standards gap slips to 40 per cent or more, as it will do on present trends for Italy and Germany within a decade, then there will surely be a problem. [...]

The big point here, though, is that much of the gap can be explained. There is no magic ability or skills that Americans have that Europeans do not have. The policies that the OECD suggests to close that gap, however, are rather different from the policies that EU governments have been urged to adopt under the Lisbon Agenda. It may even be that the European establishment does not really want to close the gap. Or at least it feels that the political costs involved do not warrant the advantages that might be gained.

In short, the good news is that this is fixable; the bad news is that in much of Europe at least, it won't be fixed.

It's not about ability or skills, just Judeo-Christianity vs Reason.

Posted by Orrin Judd at February 14, 2007 8:42 PM