Bryan Caplan  

How Dems and Reps Differ: Clive Crook Edition

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Clive Crook's cynical view of America's liberal-conservative divide mirrors my own.  Quoth Crook:

Progressives and conservatives alike call the United States a "free-market economy": both sides have an interest in perpetuating this delusion. The idea is ridiculous - as ridiculous as calling Europe's economies "socialist". True, the blend of government and private enterprise is a bit different between the US and the European average, but the models (insofar as it makes sense to talk of a European model) are neighbors not polar opposites.

All this was true, obviously, long before 2009. Obama, I agree, does want to narrow the gap a bit more - but it just was not that wide to begin with. Public spending is lower in the US, but not vastly lower once you remember to add state and local spending to federal outlays; the US healthcare anomaly accounts for a lot of the remaining difference.

In most respects (labor protections are the main exception) the US regulatory state is at least as comprehensive and intrusive as those in Europe. As for the constant tyranny of petty bureaucracy, let me say as somebody who has lived in Britain and now in the US that it seems even worse here. One's interaction with officials of one sort or another is endless. Admittedly, I am an immigrant living in DC, which demands additional oversight. Who knows what I might get up to? Still, these days, I wince every time I hear, "It's a free country." No, it isn't.

Sad but true.  I would say, though, that the lower level of U.S. labor regulation is a massive advantage that has kept the average U.S. unemployment rate far below Europe's for decades.


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COMMENTS (5 to date)
Steve Roth writes:

Yet another argument for greatly expanding the EITC in lieu of other support programs and labor regulations, and also making it more salient by delivering it via weekly paychecks.

chipotle writes:

If I were explaining the difference between the US and EU economies, in broad strokes, to a Martian visitor, I would say these things

    • The US a giant military; Europe free-rides off of that but spends even more on the welfare state.

    • Our welfare state developed differently due only to sequencing and different structures. Federalism and the Westminster system meant that the US welfare state developed differently and a little slower. For instance, German had Bismarck in the 1880s, UK had the Beveridge report in 1945 but the US only got its real service-delivering Welfare State in 1968(LBJ) and completed it in 2010(Barry Obama).

    • The US used to have the advantage of just being one gigantic free-trade zone with the competition of states facilitating downward pressure on economic regulation. The development of European integration was meant to replicate the advantage of gigantic market while suppressing "harmful" regulatory competition via "harmonization."

    • The hyper-local structure of American federalism also means that there are a lot of revenue streams tied to government contracts which, in turn, means contributing to politicians for access to their revenue streams is consistently profitable.

Mark Brady writes:

"The US a giant military; Europe free-rides off of that but spends even more on the welfare state."

The U.S. certainly has a giant military. But like most "public goods" Europeans, like everyone else, would be better off without it!

Steve Sailer writes:

Welfare payments are lower in the U.S., and, since the 1996 reforms, immigrants have had a harder time getting welfare. So, the U.S. has much harder working immigrants than Europe, where many immigrants are on the dole.

dieter writes:
"The US a giant military; Europe free-rides off of that but spends even more on the welfare state."

The U.S. certainly has a giant military. But like most "public goods" Europeans, like everyone else, would be better off without it!

The Germans and the Japanese are too afraid to ask the US to leave. The same Neocons who scold European Nations for being insufficiently self-reliant and ungrateful for the protection the US offers would go absolutely ballistic if these Nations would politely decline said protection.
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