I always feel like it is unfair how we place different European nations in same category as the US in these rankings or whatever, and for the US, we average over all the states in the US. As homogenous the US is, different states have different economies, different laws, in some cases, some slight but important cultural differences. Is it really fair to say have the US compete on terms of "competitiveness" or in other cases, happiness, education standards, with Netherlands, Switzerland, Sweden, or is it more fair to have them compete with California, Texas, New York, etc.
I was making this point a few weeks ago and after looking into it more, I still think it's a valuable point to raise, but the truth is more nuanced than I expected.
States in the US vary in nominal GSP per capita by only 2x — from Mississippi at $35K to Delaware at $70K. In the EU, it ranges from Bulgaria at €6K to Ireland at €55K. (This excludes DC and Luxembourg, which are outliers in many ways.)
In fact, even Mississippi, the poorest US state, is wealthier than the EU average (€28K, about $31K)! Only the wealthiest EU countries are wealthier than Mississippi: Luxembourg, Ireland, Denmark, Sweden, Netherlands, United Kingdom, Austria, Finland, German, Belgium, France. And of those, only Luxembourg and Ireland have a higher GDP per capita than the US average.
So the EU member states vary economically far more than the states in the US do, and the US is more easily characterized as a uniformly "high income" region than the EU is.
Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi.
> Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi.
Remember good GDP versus bad GDP; a traffic jam increases GDP, but isn't anything particularly worth buying. Accumulated capital (like Notre Dame and the Louvre) doesn't show up in GDP either, and if anything tends to lower it. There's a lot of bad GDP and not much capital accumulation in the US...
Climate also doesn't show up in GDP, now that I think of it, and I think that has a lot to do with the Mississippi situation. Who wants to live in hundred-degree heat with hundred-percent humidity?
"Accumulated capital (like Notre Dame and the Louvre) doesn't show up in GDP either, and if anything tends to lower it."
Notre Dame and the Louvre are a couple of the things that make Paris the single biggest tourist destination in the world, from which it derives a huge amount of GDP. The French tourist officials make sure to monetize the Louvre for all they can.
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"Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi."
No, it isn't, because people wouldn't love to move to France/Italy/Spain, they don't even want to. People say they'd love to live in Spain/Italy/France, but the fact that they don't reveals it's mostly cheap talk.
There are some exceptions in professions that make well above the average for these countries (also retirees, students). Europe is really very nice if you make well above the average, but this is not (by definition) the typical life in those countries. Very few Americans are excited by a 24k take home salary in a mid-sized French town, or 15k in an Italian formerly wealthy industrial city.
The vast majority of migration flows are up the GDP gradient.
The Louvre still relies mainly on public subvention (102 M€ in 2015) tickets bring ~65M€, private subventions ~12M€.
But yes it surely brings people and has a good impact on the local economy.
"The benefits to French GDP are not mainly from the tickets, but from the tourism-related revenue (hotel stays, restaurants, flights, &c)." yes, you can infer that from the last sentence in my previous comment, but still, they do not monetize it as much as they can because they could have decided not to make the entrance free for the youngsters and they would make more money even if the number of young visitors decreases.
The difference with the google search engine is if you are not willing to pay and so do not use the search engine then google won't make money at all from you whereas few people will decide no to go to Paris just because the Louvre entrance is not free.
Perhaps I should've given less dramatic examples than Notre Dame and the Louvre: stone cities, stone bridges, houses that have been inhabited since the 16th century, that sort of thing -- things we don't have in the US.
I can't comment on the rest of the US, but I'm seriously considering emigrating to Europe at some point, for the sake of long-term stability. The US might be in a very bad situation 300 years from now; I doubt that France, Germany, or the northern parts of Spain and Italy will.
Oh man you're mixing up so many concepts. GDP is product - what value you produce during the year. Nothing is produced during a traffic jam. If you want to see accumulated wealth and climate taken into account, compare quality of life.
He's right though, a traffic jam creates a problem that must be solved, and someone solving that problem (providing gas, advertising on the radio while you helplessly listen, etc) will sell product.
Wikipedia describes three ways of modeling GDP: production, income, and expenditure. A traffic jam means more production of fuel (and vehicles, accounting for wear and tear), more income for fuel producers and mechanics, and higher expenditures (fuel, wear and tear, and radio ads); GDP rises on all three measures. Free time does not contribute to GDP; neither does use of accumulated capital.
Less free time means less demand for services catering to people's free time, and consequently less production of, income from, and expenditures on such services.
> Mississippi's GDP per capita being similar to that of France, Italy or Spain
And that's why GDP per capita is so useless.
You have a few multi billionaires running your country, and you have tens of millions of people in abject poverty, tens of millions with no health insurance, etc.
Don't look at GDP per capita, it tells you noting about life for the average person.
Mississippi's median household income is $36,919. This compares to the UK's median household income of $31,617.
Note, of course, that this doesn't count social benefits. The UK's household income is lower, but they also get the NHS, better unemployment insurance, and so on.
These are gross income values (pre-tax), so, actually they do count social benefits (at least partially, the median household may be the beneficiary of transfers).
"abject poverty" means something like "the worst poverty you can think of". For the US, that probably means some portion of the ~1.6 million homeless (not all of them though), not the tens of millions of people that are below the national poverty line.
We do have about 25 million people with no health insurance.
>Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi.
It seems to me that there are many people who say things like that about most of the less-populated states.
To be honest, I'm glad. After moving to SF from a small Midwestern city, I've realized that I couldn't be paid to live here. Even if we don't mention the extremely high cost of living in San Francisco, if we just consider the negative externalities:
- Garbage everywhere
- Constant noise
- Unbelievable homeless problem
- High crime rates
- Extreme clash of culture (I see anti-tech graffiti on my way to work every day; I regularly overhear pretentious "how could you not be in tech?" conversations)
- Infinite suburbia
- High rates of mental illness (not that mental illness is a bad thing, but I think it is at least somewhat telling about the environment)
I'd still rather live back home in the Midwest, even if we didn't talk about explicitly quantifiable costs of living. There is an entire America out there between the coasts that has absolutely none of the things I just listed.
> High rates of mental illness (not that mental illness is a bad thing, but I think it is at least somewhat telling about the environment)
I'd say that mental illness doesn't make one a bad person, (just like having pneumonia isn't a punishment for your sins), but mental illness is a bad thing---it should be avoided, mitigated where it exists, and if possible cured.
I'm guessing you might have meant something similar?
That doesn't entirely explain why revenues in the US are that much higher than revenues in Europe however. The fact that the current trade value of the € against the $ is significantly lower to what it was ten years ago (European debt crisis) also partially explain the different revenues between the two continents.
Indeed, working hours explain surprisingly little: France usually has a higher GDP per capita than the UK despite far shorter working hours. They also move pretty much in sync.
The states in the US may vary, but so do regions in Spain and other countries. And the differences are often way bigger than between any pair of states.
It would be more unfair to compare separate US states with European countries. While US states share a common fate, the same can't be said about say Germany and Greece even though they are both in the EU.
Individual US states are pretty close to sovereign. Other than ability to tax and a few other things, the US federal government doesn't have much power.
> Individual US states are pretty close to sovereign. Other than ability to tax and a few other things, the US federal government doesn't have much power.
But the idea of the geographical transfer of resources is there. While Texas may not want to refinance american banks, the FED doesn't care. Germany may not want to refinance Greece, and the European Central Bank can't enforce it. [0]
A few other things, like interstate commerce, which the supreme court interprets as so broad as to cover a whole lot of things. The amount of shared laws are staggering compared to the EU equivalent. There's also how medicare and social security are national, which makes a world of a difference when it comes to interstate mobility.
The shared taxes that you mention are also huge: how different would Europe be if Germans were really on the hook for Greek budgetary issues?
Look at this in practical terms: if the US states really resembled sovereigns, you'd have far wider differences in economic performance. Outcomes would diverge more widely if states were really doing things that were really all that different. We'd see incredibly different unemployment rates too. But in the US that can't really happen, because ultimately the federal government has everyone's back, and you don't see big, country threatening arguments about how California federal taxes are spent in other states: Those situations were possible back when the federal government was really weak, but the aftermath of the civil war took care of all of that.
Along with the legislative differences, there's also a far more unified culture across states, if just for the shared language, and thus media. I can move from Missouri to California pretty easily: Better weather, higher taxes, but most of the rest stays about the same. Moving from an EU country to another is far more traumatic in comparison, which also makes each country be far more unique than US states.
Probably he referred to Spain's situation where several regions want independence and they also happen to be wealthiest - Basque country and Catalunya. They have their own culture and own language. That happens inside (!!! ) a country in Europe .
Eh, not really. Central bank-controlled states are a reasonable grouping measure, which is why it's the US, EU, Switzerland, the UK, etc. that people compare (even though the UK is part of the EU, and Switzerland has signed on to most economic measures the EU mandates).
Maybe 'central bank control' is a reasonable grouping measure, but 'size of economy' is also reasonable. There is certainly more nuance than a simple ranking can model.
And the 'central bank' argument is muddied by the existence of the Euro and the particular economic struggles of countries like Greece.
A central bank (and thus a state that can perform monetary policy) is important, but in many of these reports and rankings they do cut across the Eurozone. For example, this competitiveness report places Eurozone nations against one another in the ranking (see page 15 for the ranking, US is #3 behind Singapore and Switzerland).
Until California, Texas, New York, etc become independent countries, the comparison will always be made against the US.
I'm sure some folks in Texas are itching to secede, but until that happens, we compare other countries with the US, not California, Texas, or New York.
Comparing European countries to California is actually fairly common. We like comparing ourselves to California in particular, apparently - it's rarer to see comparisons to other states.
Yeah this always drives me crazy. You will often see stories about how successful is the school system of, say, Finland, compared with the USA. Well Finland has about as many school children as the Bronx has, so it's kind of an odd comparison. If you threw in Estonia and Romania and enough other European countries to make an equipopulous comparison, then it would make sense.
By that logic, you would have to throw all of north and south america's population combined in order to compare anything with China or India in order to get close to an equipopulous comparison.
I try to be fair. It also drives me crazy when people compare USA or EU with much larger countries like China or India. Also driven nuts by "Chinese food". FYI.
By the same criteria we shouldn't talk about Russia but about Moscow or Sankt Petersburg or not about China but about Beijing or Shanghai.
Every countries has regions which are less well off. But most comparisons lump everything up. Otherwise madness ensues trying to create "proper" economic divisions...
Interestedly, North Dakota per capita Real Gross Domestic Product (GDP) of 66,507 while New York (not NYC) had 63,929 while Mississippi was dead last (for US States) at 31,894.
NYC itself has got to have a pretty high value given DC is 160,563.
I think its a bit problematic for a very different reason, North Dakota is mostly exporting raw materials (crops and oil) where NYC is services. I'm not sure people really get how the system fits together. To me, the friction points (borders, regulations, shipping, etc.) are the dividers. Not sure how one weighs how much those add to get regions.
If we were to create a new category including only nations of a certain area size or population then the US would probably get a high or at the top ranking. However, if the US seeks to become ever greater they, and all other nations for that matter, should aspire to rise above all nations and not seek to change the system in order to shield themselves from the truth of their issues.
It's kind of hard to do that, because it really depends. You could also go down to city levels, which again would change a lot of things. For really big cities you could probably even see the district level.
Yes, there are slightly different laws and politicians, but also different infrastructure in different districts.
The are multiple political, cultural and so on levels. Countries and states inside countries often don't work the same and the hierarchical structures might be different.
Taking only EU and US already shows the huge difference. Take really banal things. The countries in the EU are also all part of the Council of Europe, which doesn't have a lot to do with the EU other than the geographic location. But they create certain rules, such as a common view against capital punishment (they actually caused that in some countries). On the other hand in the US you have very different views.
It's not easy to compare complex political, cultural structures and economic competitiveness in itself is kind of a weird thing to measure, cause there are so many layers of that term itself. Now while it is clear that this isn't meant think about all kinds of movements, be it for money less societies, be it people that want gold or resources. Describing economies can include only the monetary part, but might include goods, infrastructure, even health. And for such a report one can come up with kind of arbitrary ways of measuring things, giving them a value.
Now, I think many here know how hard it can be to measure non-complex things, how hard it can be to get the KPIs right and for how a startup those can be different and how those KPIs can change from one day to another (and that might or might not make sense).
Now comparing countries and economies is a wholly different thing.
Also I am not saying that what was done is bad or whatever. It certainly is not. I just think that people often interpret too much in those things. Taking different, equally qualified people to create such a report could result in rather big differences, because what makes sense to put in there is rather subjective and for example influenced by culture.
If you want to take that approach, then why not compare Skåne to Staten Island, Zuid-Holland to Manhattan etc. These European countries aren't homogeneous blobs either.
You shouldn't feel competitive (pun intended) about this kind of lists anyway, it's just a score on criteria some organization called "WEF" values for reasons that are their own. You don't have to 'win' every ranking, if you "win" one, you're going to lose another that uses different criteria.
Whether talking about the US as a whole or any particular state, we don't compare to the modern European countries.
One important way we don't compare is that healthcare and retirement costs are a massive drag on our economy. Just an hour ago I received an e-mail from my employer letting me know that their 401k matching is decreasing 1% next year, but that they're cool with it because it's still "competitive". The reality is that many Americans working today will never afford to retire. And at some point in the future they will not be able to afford their healthcare either.
How can we talk about productivity and competitiveness when we can't even afford to keep ourselves alive and healthy?
Not really. "It's complicated" and there are many aspects to it.
US health care is terrible, for instance, in terms of costs/benefits. The startup I worked for in Italy dedicated all of 0 person-hours to health care or health insurance stuff because it's none of their business. Big advantage.
OTOH, the public pension system in Italy is pretty creaky and I would not trust it a lot. There are a bunch of people who got to retire at like 55 or 60, which is pretty early for a country where many people live quite long lives, and are no longer doing hard manual labor.
"At will" employment in the US is way, way more flexible than the kind of system they have in Italy where you'd pretty much have to murder someone while on the clock to get fired. Definitely a win for business.
There are all kinds of things to compare countries on, and it's not simple.
In italy there are a bunch of people retired in the early 40es, until 3-5 years ago retiring at 60 was normal for EVERYONE.
And until about 15 years ago the pension cheque was a very high fraction of the last salary earned, regardless of how much did you contribute in your entire working life.
There are stories of newly promoted generals just a couple of month before retirements so that their monthly pension would be substantially higher because of the "retributive" rule.
Politicians get a pension after 2 years and half in the parliament regardless of their age.
And this is with today rules. With the previous rules there are actually people that get a pension even if they were elected and stayed in charge for something like 3 days.
Believe me, you have absolutely no idea of what incredible huge mess is italy pension system.
>"At will" employment in the US is way, way more flexible than the kind of system they have in Italy where you'd pretty much have to murder someone while on the clock to get fired. Definitely a win for business.
I agree, it could be a win for employees as well if we changed some of the social norms. One example, change "2 weeks notice" to "give as much notice as they would pay if they laid you off" (In the majority of jobs currently, none) and employers would start offering severance packages again.
It's kind of a complex subject in its own right. One thing that happens with employees in someplace like Italy, is once they get that Permanent Position, they can be very, very reticent to let it go, even for something that is more interesting or has a better work environment or whatever. This has costs for everyone involved.
My own view is that making employers directly responsible for 'social welfare', rather than simply taxing them and providing money for the unemployed through the government, or some such, is suboptimal. If I'm not mistaken, places like Denmark take the latter approach: easy hiring/firing, high taxes, and a lot of benefits. Not everyone might like it, but it seems more efficient than making it impossible to fire people who are not really contributing much.
Not sure if you confused my comment with someone else's. I never said it wasn't complicated, I said it's a joke, for exactly the reasons you mention among others.
It only seems not to be a joke when you discount that we're taking on societal debt in the form of looming healthcare/retirement/education expenses. This will reach an end.
> One important way we don't compare is that healthcare and retirement costs are a massive drag on our economy.
By "our economy", do you mean private persons? The whole country?
Regardless, coming from one of those magic fairylands of modern Europe - health care and retirement costs are a massive drag on our economy as well, they're just not as easily seen by general people (you certainly don't see it on your pay slip).
Of course not, but the IOC is a private enterprise that engages in trying to get as much attention for their events as possible, so you get an embrace of borders instead of arguments about what would be fair.
I think there is probably room to compare economies in different ways. It's certainly notable that California has roughly the same size economy as France, but it isn't the only comparison you would want to make when trying to compare the economic situation in the US to the economic situation elsewhere. But if you were considering the availability of opportunities, you might start with the few US states with the largest economies just like you might start with the few EU countries with larger economies.
Very good point! I'd say that in one case, you are dealing with averages over a population, and averages definitely wash out differences which I think are important. An Olympics team is a different statistic, the max of the distribution, the cream of the crop. One is a sports competition and another are a set of rankings that give us insight into a population and how their culture and laws affect the performance of said population.
But I'm afraid I have no retort to the Olympic question other than that is it a completely different ranking of the best of each population rather than the average, so different rules apply? I'm not sure that is a good argument against your sentiment, though.
If anything, population size matters way more when picking out the cream of the crop than the averages. I think the point being made is less about the Olympics specifically and more that it makes little sense to divide up the US economy by state when the US is very clearly one single country.
If anything, the fact that the US has a lot of advantages for athletes (high incomes, nice facilities, etc.) means that grouping all those athletes together for the Olympics probably disadvantages individual American athletes, because there's more competition for Olympic qualification. If each US state competed separately in the Olympics, how many more medals do you suppose that would all have received in swimming, track and field, gymnastics, etc.?
Interesting question! This article says how many medals were won in Rio by people born in each state - http://www.wxyz.com/news/national/rio-olympics-medal-count-b.... It doesn't make a lot of sense to count how many medals were won by people living in each state since the facilities for some sports are focused in a single state. Way beyond me to figure out who didn't make the Olympics, whether they would have medalled, and what states they are from :)
You could approximate what would happen by summing the medals won by all EU countries, and comparing it with a hypothetical team composed of the top N (3?) EU athletes per event.
There are completely different purposes for the Olympic games and a ranking of economies. We-have-a-different-flag is perfectly fine for the purposes of friendly competition. Something with more justification is appropriate for discussing economies, especially since the boundaries of 'an economy' are naturally nebulous.
The US is basically a single market for goods and labor.
Individual banks have branches all over the country. It's one currency. There's one federal set of trade laws with minor state limits on some goods. Shipping goods across state lines or selling digital wares across state lines are covered mostly by federal law. Contracts may or may not, by their own language, invoke state laws in interstate sales with few exceptions (some states don't allow a seller to waive certain of a buyer's rights in a standard sales contract).
There's no government interference moving from one state to another for work (unless you're a felon or a sex offender or some other special case). There's one set of immigration laws. There's one set of passport requirements.
Yes, you could say each state is its own market. But then you could say the same about each city and town. For some people individual cities in the US compete directly against one another more than state vs. state. Am I likely to find work in my field in any little farm town in northern California, upstate New York, rural Georgia, Texas hill country or scrub desert, or in downstate Illinois? Not at all. In San Francisco and the Valley? In NYC? In Chicago? Houston? Dallas? Austin? LA? Atlanta? Sure.
> There are completely different purposes for the Olympic games and a ranking of economies.
Isn't success at international competition largely a factor of financial investment into a particular sport? Arguably the US being the world's biggest economy, would also give them the world's best trained athletes, the best trainers, the best training facilities and so on.
Many (most?) sports have specific checks and guards in place to minimize the effect of money on team success, but that only goes so far.
Those negative cultural attitudes that can hold back a vast country packed with resource that has oceans separating it form two world wars maybe should be fixed.
Otherwise one must wonder what is the point in remaining a single nation if the end result is always less happiness, education and "competitiveness".
There is no point. Or rather, as originally established, the Federalist intent was to allow states significantly more freedom to direct their own affairs. Sadly, this is no longer the case.
The point of keeping the US as a single nation is to further the interests of those who are aligned with FEDGOV, not for the education or happiness or prosperity of ordinary people.
With no historic federal interference, Mississippi would out do Switzerland in happiness, education, prosperity and general liberty? Somehow I doubt that.
If anything, the Federal government is overly distracted bringing the slow parts of the country kicking and screaming into the 21st century and by those same parts randomly derailing it.
But anyone ever want to secede again, I won't object.
Oh, a person with a little imagination might think of many ways MS could do better with less federal interference...
As to not complaining about a possible future secession... You also think it's a federal obligation to bring the "slow parts" of the country "into the 21st century". I'll venture that anyone who makes that sort of mental investment in pharisaic priggishness has more to lose, ego-wise, if the "slow parts" do better outside the union than inside.
My imagination isn't that good but I'm more than willing to take the risk of an ego bruise if seceding states wanted to go.
In fact, I'd be willing to pay for them to leave. Even willing to fund a wall on the Mason-Dixon line if they wanted one when the got independence.
And the first world part of the country wouldn't have to do such 'priggish' things as ending Jim Crow or endlessly fighting disenfranchisement. And those who feel oppressed by such outrageous intrusions as teaching evolution in schools, would have their own country to move to. Why they could have their war with Iran and a president who's testosterone levels are announced on the Dr Oz show while the rest of the country could move on. Everyone wins!
