What about inequality and various quality-of-life factors?
GDP-per-capita is a mean, it doesn't tell you anything about distribution. Qatar has a higher GDP-per-capita than the United States, but most of that wealth is highly concentrated.
The Republic of Ireland also beats the US. Explain that. Without doing so it's fairly meaningless.
There are certainly a lot of factor at play, and business friendliness is probably near the top. Nonetheless, an interesting potential factor is that one of the main US export has been dollars. Global demand for dollars shores up the US living standard by soaking up the supply and dampening the inflationary pressure of monetary expansion.
And more importantly: not spending the money from that oil wealth in a stupid way but setting it up to generate future revenue streams that benefit everybody. As opposed to other countries which squandered their riches on short term stuff.
To be fair, there is not really any other country to compare them to on this. No country which was already rich, stable, democratic and well-educated has ever received such a large resources windfall as Norway did from North Sea Oil.
All the more reason to use that windfall responsibly and to preserve the proceeds. NL in particular was extremely wasteful, especially with their natural gas resources which were sold for a ridiculously low amount to foreign customers, and which they now re-import at much inflated prices.
You seem to be making a political point about the Netherlands which is completely separate from the fact which I presented, and which you incorrectly contradicted.
Like selling your house, living on the street and bragging how rich you now are, a high GDP with crumbling infrastructure really begs the question: Was it really that smart of a decision in the long run?
It's also an average, someone like Bezos technically raises the average by a lot. It just doesn't make the people working in a warehouse any richer.
For the vast majority of people, living in a wealthy country, where that wealth is more equally distributed, will be much more attractive than living in country with just a high GDP.
GDP is not computed from anything that's split on individuals, GDP median over people does unfortunately not make sense. (Not in the way that median disposable income would, for example).
To be fair, if we’re talking about wealth distribution (as opposed to income distribution) many European countries have similar inequality to the US. Some, like Sweden for instance, are even worse than the US.
> A Gini coefficient of zero expresses perfect equality, where all values are the same (for example, where everyone has the same income). A Gini coefficient of one (or 100%) expresses maximal inequality among values
Was easy to spot, US and Russia are definitely not at the top when it comes to income equality as both are controlled by oligarchy
I honestly had no idea. That's pretty interesting, I wonder if it's because of a few REALLY wealthy individuals?
Generally you have a lower limit to how poor a person can be, in Scandinavia that limit is reasonably high (I sure it doesn't feel that way if you're actually poor), so I would have assumed that would level out the inequality somewhat.
Denmark in particular have also always excluded students from statistics on who's poor, because it's seen a temporary thing. So we don't see them as truly poor, even if they often are, but I suspect that they have to be included in the Gini coefficients calculation.
In many European countries you can be "poor" (i.e. have low or negative wealth) while still maintaining a relatively high standard of living. The most expensive asset most people own is their home, so if you rent all your life or have a very long mortgage that you don't necessary intend to pay off (which is not uncommon in some countries) you might have very low or negative wealth. And you might not need to save as much due to socialized healthcare, social safety nets, etc.
Looking at the median wealth (https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...), a median person in Spain is 3 times as "rich" then someone in Sweden and Germans or the Dutch are more "poor" than Slovaks or Greeks etc. But this is largely a result of relatively low home ownership rate in most North European countries.
However if we disregard average people and look just at the top 10% or even 1% Sweden is still Remarkably similar to the US:
In general, greater income tax leads to greater wealth inequality.
The reason is, higher income tax means it is more difficult to become wealthy. So in countries with high income tax, the majority of wealthy people is those that inherited their wealth. Over time some wealthy people become poor, but with high income tax, even fewer become rich. This means that wealth becomes more and more concentrated among the few, which is somewhat counter-intuitive.
So in the US, wealth-mobility is greater than Denmark for example, resulting in the list on Wikipedia, where countries that are thought of as "unequal" actually are the most equal of all when it comes to wealth.
The reasoning is pretty much the opposite, the redistribution of health helps to move children out of their parents wealth/social-class. It might be that an individual adult in the US is able to move from poor to wealthy more easily, but I sort of doubt it.
I don't think that Bezos, as an individual, has any measurable impact on the US's GDP. The headline number for Bezos is his fortune of $190B, but that's the total value of his assets, not his yearly income. Furthermore, GDP primarily measures spending, not wealth, and I would be surprised if Bezos actually spent even $1B per annum (though this might be different depending on what exactly we count as "spending", as he might make stock trades in that range). In either case, he's having a very small impact on the measured GDP of $21T, something in the range of 0.01%.
Meanwhile, the difference between the US and Europe in the article is around $10K per person--hundreds of times larger than the distortion created by the billionaires.
GDP measures income, not spending. If someone outside the US spends money on Amazon, and a portion of that money becomes part of Bezos' income, that portion is counted in the US GDP, not the foreign country's GDP.
His income last year was around $60 billion, or $200 per person (of any age) in the United States. While last year was exceptional, all of his wealth ($600 per capita) was income in the last 20 or so years, most of it in the last 10. And his ex-wife Mackenzie Scott kept 25% of their combined wealth when they separated.
So it's simply not true that his contribution to GDP looks completely trivial even when compared to total US GDP.
Every source that I can find says that US calculates its GDP based on the "expenditure" approach, meaning that it measures spending, not income. Eg: https://www.investopedia.com/terms/g/gdp.asp
Secondarily, capital gains is not really the same thing as income (at least, not in the tax code, and also not in GDP calculations), and most of his $60B "income" is increases in Amazon stock price. And even if it were actual cash income, the GDP difference between the US and Europe is still fifty times larger than that.
Look: I was an American by birth, but I moved to Europe as an adult. I get the attraction, and I'm not trying to bag on Europe. But it's simply false to suggest that America is not overall richer than Europe, or to say that America's extra riches are all concentrated at the top.
The GDP difference between the US and Europe is fifty times larger than one rich person's own income? This isn't actually a great argument dismissing the suggestion that US wealth is extremely concentrated.
Are you really counting the increase of Amazon stock price as his personal income? This is totally inaccurate. Most of that worth is extremely volatile and can quickly dissipate if the stock price falls for whatever reason. Would you count a falling stock price as spending?
Amazon aggressively reinvests its extremely large and stable earnings into the business which Bezos owns a large part of and controls actively. Both he and his ex-wife have realized extremely important liquid wealth by selling a significant part of their stakes. How would you measure his wealth?
One way might be measure his total net worth last year vs this year. You'd be subject to the vagaries of the stock market that way, but given that most of his wealth is paper wealth, that seems fair.
I read your whole comment and am very interested in seeing a source for how Bezos earned $60 billion last year as private taxable income. The fact that amazon (not even Bezos) re-invests a large part of the corporate income has nothing to do with distorting the US GDP per capita, as you claim. I would like to see a more solid argument.
Well, GDP is at least a good metric to estimate the capacity of a country to finance good public healthcare, transport, education, etc. If GDP does not grow, with time it will be more and more difficult to finance all of these services because of inflation, etc.
GDP is a measure of production and thus an indication of spending power (you need to earn before you can spend).
Whether a country chooses to use its economic output to finance these services is another question.
On the short term it may be true. On the long term you need a strong GDP to sustain quality of life.
COVID showed Europeans how dependent they are from China industry and US tech. Quality of life is still an order of magnitude better than in most countries in the world but I don't believe it will remain like this ad infinitum. Most Europeans know that Europe is declining and sinking slowly.
Oh for goodness sakes. I don't know where you're writing this from, but Europe a is a big place. And lots of it is doing reasonably well - modulo lock-downs.
I'm not convinced at all that Europe is declining, though I am convinced that China and India are rising (as they bloody well should after the horrible history Europe has given them in recent centuries) though I'm worried that this isn't accompanied by a freer, fairer society in those places, just a richer one. Being richer is a good thing of course; freedom being of limited value to a starving child.
Which leads me to ask what your basis for comparison is? Because I've lived in wealthy parts of the US - much wealthier than anywhere I've lived in Europe - and seen streets paved with metaphorical gold, but I've visited plenty of places in the US that seemed pretty backward, poor, soaked in ignorance and hopelessly broken. When 2 million people in the richest country in the world don't have indoor plumbing then something is wrong with that country's measure of wealth.
> I don't know where you're writing this from, but Europe a is a big place.
I know that Eastern Europe is "killing it" regionally by a mix of good policies, EU funding and geoarbitrage - I've lived there - but European Union as whole is slowly declining.
Yes, we are still the world leader on lifestyle and culture - I don't want to create roots anywhere else - but I don't believe this will be enough to guarantee a bright future for my children.
So far it feels like Western europe is becoming a fashion house / museum / resort / rich oligarchs clubhouse for the rest of the world. Which, while may sustain high enough living standards for them for some time, looks tragic to say the least.
10 years ago I'd have said Eastern European spirit may turn the ship around. But today I'm not so sure. It feels like too many people got comfy enough and sign off on Western's idea. The sad part is that we're still pretty poor and that comfiness will be gone even faster. Both in terms of wealth and geopolitics.
> 10 years ago I'd have said Eastern European spirit may turn the ship around. But today I'm not so sure. It feels like too many people got comfy enough and sign off on Western's idea.
Is this code for calling West Europe lazy? I surely can't make much sense of what you mean with this phrasing.
I have come to the conclusion that western Europe's next year is either the same as this year or a bit shittier. Its a bleak outlook, while my mom came from Asia, I'm actually thinking of moving back to Asia, given I'm not rooted yet. All I really see is Europe becoming hotel Europe for rich Americans and Asians.
I'm pretty sure in Asia they see next year will be better then this year.
I can see it in my own family members back in Asia. They went from generational housing to each uncle and auntie having their own house, nieces and nephews having finished college or university able to afford a better life style then my aunties and uncles could. While I see my little brother and many others struggling to afford a good enough place to buy or rent because of the fucked up housing markets back here in western Europe.
That's the general feel I get talking to older Westerner europeans. Be it 80s or 90s or 00s or nowadays... Life is good as usual, but relatively it feels worse because you're no longer that rich compared to others. And working class experience seems to be declining due to offshoring etc.
Meanwhile in Eastern europe is as you describe Asia. My parents live tremendously better than their parents. I live better than my parents. And I'm positive my kid will live better than I do. After that... Fingers crossed I'll see the trend going strong. And that's in pretty much any socioeconomic class. While wealth gap is growing since Soviet era, the poor are living better than Soviet era elite. Both in terms of necessities and leisure.
As an eastern european, it does feel like western europe is sinking. West seem to be fucking over their citizens. On the other hand, this gives a chance for East and Asia to raise faster. But ceiling is getting lower and lower. Anecdata observations is East (and Asia) is slowly rising, but difference to West is shrinking much faster.
As a non-native but naturalised Western European, I'd like to know more what you are talking about sinking and decline here. On another post [0] you state:
> "10 years ago I'd have said Eastern European spirit may turn the ship around. But today I'm not so sure. It feels like too many people got comfy enough and sign off on Western's idea."
And this is a pretty strange statement, calling on something like "Eastern European spirit" to turn something around, and getting "comfy" as a "sign off on Western's idea", both of which you don't describe what you mean with.
Eastern Europe was super hungry in 90s. Sort of like picturesque US startups? Give us a hope and we'll work 24/7 to achieve the impossible.
Meanwhile Western Europe. Feels much more.. complacent? if that's the right word. Looking from the East, West looks like smug underachievers riding on forefathers' fame.
So it's code for saying that Eastern Europeans work hard and Westerners are lazy...
Look, I came from Brazil, working 10-12h/day was common for most of my 10 years career there. It doesn't bring prosperity, it doesn't get rewarded, working hard and not taking breaks is no measure of success. As much as you think this is the way to emulate because of US's wealth I'd say to think again about this bold assumption, you are being extremely reductionist and topping it off with some xenophobia. I don't like it.
Ah yes, sorry I forgot we're not allowed to criticise anybody anymore.
And I was talking about true hard working, not butt-in-seat theatre. And we sure got rewarded here in Eastern Europe. Just look at statistics comparing east/west in 1990 and today.
You are completely allowed to criticise if you have arguments for it, calling whole nations lazy is, at minimum, a ignorant reductionism. Also, it feeds into this weird narrative of "hard-working East" vs "lazy West" nations, the same reversed argument used by xenophobes and racists on the West against the inclusion of the East in the EU, I really dislike this type of argument as it's not constructive and completely shallow, just feeding into a hateful narrative.
How much would you like to be called one of the numerous Eastern European stereotypes?
You didn't get rewarded simply by working hard, go check Latin America (Mexico, Brazil, Argentina, etc.) and see how fucking hard the people there work, which, unlike in the EU, doesn't have support from the US, the country that extracts most of the value and productivity from these nations.
There are a lot of geopolitical and economical factors for the rise of the East in Europe, one of these factors is exactly by being included in the EU and participating on the free market with richer nations, that propped up the economy of the bloc as a whole... Stop feeding into this bullshit narrative, it's dangerous.
I'm sorry I didn't write out a long essay detailing all my arguments and backing them up with all sorts of statistics. This is short dumb comments online, not academic work.
TBH a lot of Eastern european stereotypes are truth. Unfortunately we did export a lot of criminals and welfare seekers. We joke all the time how after joining EU streets became safe the next weekend. In reality it took a bit longer :)
It's funny how you want to read that I'm saying that people were working hard. No, I'm saying that people work(ed?) hard and smart. Maybe sometimes too smart skewing regulations.
It's not bullshit narrative, it's your xenophobia :) See, I can play this game too.
Now on a more serious note, sure it's not just hard/smart work. There're a lot of reasons. For example, leading up to WW2, there was no big discrepancy between east and west. When Soviet era was over, nothing was stopping East from bouncing back to where it should be.
I don't see how stating that West is more rich and people take it for granted and happy with what they have is "hateful". I'm not saying "you fools live on our hard work". I'm saying "we're catching up and fast and that's awesome. But that's partially on you, because you seem to be not trying to level up anymore". I wish all europeans would get more hungry and get ready to take on Asia.
Is wishing for people to become more active/hungry/whateveryouwanttocallit "hate"?
Resuming: Western Europe is more worried about the redistribution of the pie than creating a larger pie. Eastern Europe was vaccinated to this but its antibodies are getting weaker.
> Outside of the nationalist far right, I never hear people saying anything of the sort. How are we "declining and sinking"?
You don’t have to be a far-right nationalist in order to have an objective look at the situation in EU, although I understand your temptation to resort to such low-effort arguments, it’s fashionable after all.
As a non far-right European, the EU is falling behind by failing to drive any tech innovation, by relying on non-EU countries for vaccine production, by not importing any external tech talent by having extremely unattractive wages in the tech sector. Every major tech innovation happened outside of EU, and this is something I’m not proud about. If your only metric for success is having decent public healthcare and social benefits, then I guess EU is doing fine, but I’m skeptical this will do us any good in the long run.
A lot of tech innovation happened in the EU, the issue is that companies are acquired by the major players as a way to curb competition or acquihire a good team. The issue with tech in the EU has more to do with how different markets are across the Union, not the lack of innovation. Language barriers, cultural barriers and economical barriers are all more varied in the EU than in a market such as the US or China, it's a uniquely European issue on having such large variance in a single market.
What is the metric you are using to gauge innovation in tech in the EU?
The first COVID vaccine, Pfizer-BioNTech ... was developed within Pfizer in the EU (Germany to be exact).
The part that made it work, a lipid envelope that keeps the thing running at non cryogenic temperatures, doesn't sound very impressive (though it is), is a Belgian company (Dutch, although I believe located in the French part of the country).
This vaccine, aside from (part of) it's financing is very much European ...
> You don’t have to be a nationalist far-right in order to have an objective look at the situation in EU
Sure, but I didn't say that. I said those are the only ones I hear making unsubstantiated alarmist claims about Europe, and/or their respective home countries, "declining and sinking". I have no problem with people pointing out specific problems, like you did with wages and tech innovations. This opens up for constructive debate. Screaming that we're doomed does not.
US is very much pumped up by their FAANG stocks. It is not very representative of wealth of the country in general. If one were to take other things in into account quality of life, time spent with family/friends, is US really better off?
Well, market cap isn't GDP. Market cap is what people think a company is worth. You want to look at revenues/sales, since GDP is formed out of consumption. So that would make things a bit more comparable.
Getting back to FAANG:
Amazon: $386bn
Apple: $274bn
Google: $182bn
Netflix: $25bn
Facebook: $85bn
So that would bring the numbers up to $925bn.
Now, a lot of this revenue is global, so the US stuff is probably 50% or less. However, a big chunk of this global revenue is the thing that allows US salaries to be so high. Also, if we were in normal times, these companies would repatriate their profits and be taxed in the US, plus these profits would be reinvested in the company or invested in the US. So I'd count the US "contribution" not as strictly half ($462bn) but more likely closer to $600bn.
Also, FAANG is a catchy name but it's not a good economic representation. Netflix is big-ish, it's a household name, but it's much smaller than the others. There are also some big companies missing from it:
Microsft: $143bn
Oracle: $39bn
Adobe: $11bn
Salesforce: $17bn
IBM: $73bn
Dell: $92bn
Intel: $71bn
HP: $58bn
Cisco: $51bn
So that's another $546, using the same "formula" from above, probably another $350bn "contribution" for the US.
And that's just the absolute A tier plus the B+ tier. If we start including B (Uber, big but debt ridden; ServiceNow, etc.) and C tiers (ever heard of Axway?), I imagine we get to $1500-2000bn easily, especially since I forgot to add numbers for some big B+ tier companies up there (Broadcomm, Qualcomm, etc.).
Thanks a lot, so out of ~$20T US GDP, we get anywhere from anywhere between $1-2T from the list list above, maybe even more if we make the list "long".
I'm guessing it's even higher since the long tail is really long. There are many, many more mid-sized and small US companies and startups and even though they make a lot less individually, there's so many of them.
Personally I'd suspect that all these small companies combined probably make more than the big companies combined.
I've always assumed it is because all of the big tech companies are from the UK and tech companies are the driver of growth long-term.
Additionally, the EU is lightyears ahead of the US wrt decarbonization; if we suddenly priced carbon properly then the US would be a lot less wealth in comparision.
Could it be that European countries care less about raising GDP at any cost, and more about making sure that wealth benefits everybody to some degree? The US has far more inequality than Europe.
I think you'd get very different graphs if you compared the incomes of the lower half of the population. Or even the lower 80%.
So to what extent is that high GDP actually benefitting the US as a whole? It's not a game where GDP is your high score.
One thing that an older retired executed who has worked all around the world said to me is "in US people live to work", and in Europe, "people work to live" Really rings true to me.
> Could it be that European countries care less about raising GDP at any cost, and more about making sure that wealth benefits everybody to some degree
No european politican in power is that altruistic. Ours are in no way less crazy or corrupt than the US ones.
Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo. Europe has old corporations and the system is built to benefit them.
We also have very little VC money going around. The EU is technically a single market but in reality there are big barriers. Not anywhere close to what US or China has as a domestic market. Companies have a pretty damn tough time getting out of their country. Mostly because there is so little VC money to help them get out.
The reason for limited VC money is because there are few exit strategies. Going public in the US means getting way more money. The stock market in an EU country is not anywhere near what the US stock market is.
The reason the stock market is not as developed is simple, US dollar is the worlds reserve currency not the Euro.
> No european politican in power is that altruistic. Ours are in no way less crazy or corrupt than the US ones.
I very much believe that Dutch politicians are less corrupt than U.S.A. politicians, in no small part due to the fundamental operations of the electoral system.
Donald Trump refused to yield power and flirted with a coup d'état after losing the election; around that time, the Dutch cabinet offered it's resignation peacefully to atone for a scandal it wasn't even directly responsible for, but took responsibility for as the ultimate executive. — it's quite a difference.
I find Dutch politicians very much far less self-absorbed and egocentric, and I believe this is due to the U.S.A. system being a winner-takes-all system that thereby selects upon narcissistic risk takers, for to obtain any public office in the U.S.A., one must have taken a risk where one stands to leave with nothing after considerable investment, — such is not the Dutch system, which is not a winner-takes-all system but one where victory is a matter of degrees.
Dutch politicians are generally quite down to earth rather than surrounded by pomp and grandeur. The prime minister goes to work by bike and has a part time job as a primary school teacher and lives in a normal apartment rather than a posh official residence, and this is because the system selects upon men who have power trusted upon them, not upon those who seek power.
> Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo. Europe has old corporations and the system is built to benefit them.
In 1916, the Netherlands switched from a district-based system to a simple, proportional system. This change surely did not benefit the parties in power, but they did so anyway for the purpose of democracy, and probably because the voters wanted it.
> the Dutch cabinet offered it's resignation peacefully to atone for a scandal it wasn't even directly responsible for
I don't think that's true. Mark Rutte was prime minister during the escalation of the excessive fraud hunting, and has been directly involved with parts of it. He undeniably carries much of the real responsibility.
He's also not a great example of a politician taking that responsibility; he has a tendency to smile problems away.
That said, you're absolutely right that neither the Dutch not any other European country is anywhere near as corrupt as the US, where corruption seems to be baked deep into its political system.
> I don't think that's true. Mark Rutte was prime minister during the escalation of the excessive fraud hunting, and has been directly involved with parts of it. He undeniably carries much of the real responsibility.
What has the direct involvement been then beyond simply being the ultimate executive at the top of the chain of command?
> He's also not a great example of a politician taking that responsibility; he has a tendency to smile problems away.
Offering the resignation of one's cabinet is quite far from a mere smile.
> That said, you're absolutely right that neither the Dutch not any other European country is anywhere near as corrupt as the US, where corruption seems to be baked deep into its political system.
Any other? I daresay that there is greater corruption in many European nations.
> That said, you're absolutely right that neither the Dutch not any other European country is anywhere near as corrupt as the US, where corruption seems to be baked deep into its political system.
It's not baked, it is rotten. It started with noble intentions and designs. European countries reformed mostly in the 20th century to become what they are. US has continued it's system since the funding of the republic and the rot has set in deep until now.
I do not believe the U.S.A.'s founding to be as noble as is commonly narrated.
The so celebrated “founding fathers” were rich, white, male slaveowners that tried their hardest to keep as much power for the rich, white, male, and slaveowner at the expense of all others and transparently founded an elitocracy that favored the big man over the little man, and certainly succeeded.
That the U.S.A. electoral system gives disproportionate power to the elite already in power is not a fluke, but a deliberate design choice.
Compared to the absolute monarchy they rebelled against, it certainly did have some nobility. But I wonder if they were aware that their words pointed a lot further than they themselves were going.
The big irony of the founding of the US is that the guy who believed it was "self-evident that all men are created equal", owned men as slaves. It's important to continue in the direction they pointed, and not stop simply at the point where they ended up in their time.
> I very much believe that Dutch politicians are less corrupt than U.S.A. politicians in no small part due to the fundamental operations of the electoral system.
I believe corruption goes hand-in hand with two-party systems. This eventually results to partisan politics and loss of all accountability. The two-party system may be either de facto (e.g. USA) or emulated (e.g. Greece), but the result is still chronic corruption.
> In 1916, the Netherlands switched from a district-based system to a simple, proportional system. This change surely did not benefit the parties in power, but they did so anyway for the purpose of democracy, and probably because the voters wanted it.
Simple proportional systems all the way. The problem is that if you didn't do the switch early-on (like the Netherlands), then it's almost impossible to do later because of deeply vested interests. E.g. Greece attempted a switch to a simple proportional system in 2016, but the move was smeared with FUD articles by the mass-media. In the end, the current government restored the previous election system, which gives a ludicrous number of bonus parliament seats to the first party.
> No european politican in power is that altruistic. Ours are in no way less crazy or corrupt than the US ones.
You can't just make silly claims like this and not explain yourself. If you're just not familiar with recent US politics you're forgiven (although have you been living under a rock?), otherwise... huh?
> No european politican in power is that altruistic.
It's not about personal altruism, it's about creating the right institutions that encourages politicians to do the right thing, and to hold them accountable when they don't. In the US, these systems don't work very well. I remember when Congress had an approval rating in the single digits, yet 90% of all incumbents got re-elected. That's a pretty clear sign that the very basis of your democracy doesn't work right.
> Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo
And yet political systems change. Absolute rulers decide to share their power, write liberal constitutions and hold fair elections, politicians in district systems decide to change to proportional representation, men vote to allow women to vote.
Of course these changes often require protests by the people who used to be excluded, but those protests happened, and the people in power listened and changed the rules.
It's mostly the US where a large number of people insist that the rules of two and a half century ago are sacred and should never be changed. Few other countries hold to that sort of idiocy. (Though the UK might be as bad or worse than the US in that regard.)
> We also have very little VC money going around.
That is absolutely true. The US is great for money. It's great for rich people and for investors. And many European startups end up moving to the US.
But that doesn't change the fact that regular people aren't benefitting all that much from it. Warehouse workers for Amazon often work in atrocious circumstances that would not be allowed in the EU. How does their country's high GDP or Amazon's high market value benefit them if their job is destroying them?
> Few other countries hold to that sort of idiocy.
I disagree. Politicians change when they are forced to. People in power listening and changing the rules is in my opinion a pipe dream. They only change when their positions are threatened (i.e. being voted out of office in the civilized case).
What the EU had is two world wars fought on its soil. The old systems were cleansed out with blood and fire. So while culturally European countries are old, politically they are generally not. The US has never had this, so the old system has been kept and unfortunately has rotten to its core and will collapse in our lifetimes in my opinion.
This is why I tried to make the point that politicians are no better over here. They are selfish cunts like all politicians are and they sure as hell don't give the slightest damn about making sure "wealth benefits everybody to some degree". They are just operating in a setting that is not a rotten corpse and act more civilized.
> "They only change when their positions are threatened (i.e. being voted out of office in the civilized case)."
This is only true in some cases, not in all. The first Dutch king, Willem I, was originally made an absolute king and liked it that way, but later decided to have Thorbecke write a liberal constitution that would severely limit his power. Of course there were plenty calls in the country to do that, but he wasn't facing a revolution, and couldn't be voted out. Unless you count the Belgian independence from a couple of years earlier, but that had already happened and wasn't prevented by this decision.
There are plenty of other cases where people decided to do the right thing because they saw it was the reasonable thing to do without being forced to.
But the US refusing to change the broken electoral system from 250 years ago is also on the voters themselves, who keep voting for parties that don't want to improve the system. Keep voting out all incumbents until they fix the problem.
Is defeatism the only option here? Politicians are (almost) all selfish, and you can't blame the voters for voting for them?
I strongly disagree on both points. There are politicians who take their responsibility seriously, and voters have a responsibility to vote for better politicians. Ultimately, voters get the government they choose, and if they choose corrupt politicians, that's what they get. The corrupt politicians aren't going to change as long as people keep voting for them. But better people exist, and it's up to voters to elect them.
Society is a system not a collection of individuals. You are talking about some idealistic system that does not exist anywhere. People are easily mislead by corrupt media spreading lies and doubt about anyone.
Powerful interests can derail any threat to them. This is why things seldom change in any real way. Take US presidential candidates Andrew Yang or Tulsi Gabbard. Completely reasonable politicians who had to deal with constant lies about them being spread by the media.
Sure, but a country doesn't have to have corrupt media. Many don't. Like you say, it's a system. And as a society, you design that system to suit what you want. It's not like some impersonal outside force is forcing it upon you; it's made by you, by the people in that society. And it changes when the people want it to.
It's absolutely true that the US system is incredibly corrupt, and it may be hard to see a way out of that, but a lot of countries are different, and many countries have seen real change. The US could do that too, but the people have to want it.
When the good times are rolling corruption in the media does not reveal itself. Chomsky was writing about corruption in the US media in the 80s and pointing out the things that are plain as day now. Very few listened.
Media has always been beholden to powerful interests. Especially now when their revenue streams are drying up. Saying many don't is naive. You just don't see it, because the corruption reveals itself about what they don't print. For that to be obvious you have to be aware what they are hiding from the public.
I do not disagree that a lot of US media are corrupt, I merely disagree that that is the only way it can be. There are many countries where the media aren't that corrupt. The problem is really the toxic situation in the US, not the concept of media itself. Independent media is absolutely essential for a functioning democracy. Of course there's some tension between capitalism and the idea of independent media, because in capitalism, you sell that for which there is a demand, so many US media just say/write whatever their readers want to hear, and if those readers care more about having their own prejudices confirmed and stoking the toxic tribalism that's dominating their country, then that's what purely capitalist media will write.
But in many other countries, journalists are more idealistic than that, and have editorial independence. And when the media owner threatens that independence, journalists cry foul and leave.
Arguing that media can only be corrupt, is basically arguing that there can not be any democratic accountability. Instead of arguing it cannot be improved, it would be more constructive to demand improvement, demand editorial independence, and follow and pay for those media that offer that.
I completely agree WITH you. I think rapsey I locked in his own mind and is not tolerable enough to accept that there are countries with different characteristics and culture than the US.
Indeed. One could look at the GDP per hour worked.
France and Germany GDP per hour worked is only about 6% less than the US (while it was mostly the same until 2008) [1] [2].
Seems like most of the difference can be explained by stronger work-life balance policies chosen by European (sick days, holidays, earlier retirement and parental leave).
France/Germany can still be said to be falling behind in this graph - but super interesting to see anyway.
I think part of the explanation is that the finance and high-tech sectors are way overvalued in money, and they shift the balance massively. This "inflates" the GDP in the U.S. This has basically been a conscious policy in the U.S. - "quantitative easing".
6% is a big drop. Because it is productivity per hour worked and not overall (i.e. total of hours worked) "stronger work-life balance" policies should make no difference and furthermore nothing significant changed in that respect since 2005-2008.
I feel like this post is one-sided. It doesn't take into account any other factor except GDP, focuses only on some countries, and makes the EU the bad guy.
Keep in mind that TFA didn't choose that title. TFA is a reasonable look at just GDP, without consideration or judgement. It asks some questions, but they are not outside the scope of GDP.
The problem is that the person who submitted the article chose an inflammatory title, just like he has done on many of his past submissions. There's an agenda at play here that goes unnoticed, and it has a lot of people in this comment section worked up.
The figure you're looking for is called 'Adjusted Household Disposable Income per capita PPP' - probably the best indicator of material standards of living there is. The word adjusted refers to the fact that in-kind transfers, like healthcare, social benefits or universal education are paid by the taxpayer. PPP, Purchasing Power Parity, evens out the impact of price differences.
Several things stand out:
- Citizens in larger countries have it better than one would expect. This reflects the economies of scale, and matches well with the informal anecdotes of people who have lived there - that despite GDP and productivity figures, somehow life's better there
- Tax havens don't really benefit the citizens of their countries, outside of a narrow sliver of population. Material standard of living in Ireland is below that of Italy
Interesting that he's talking about "Europe", but only actually includes stats for three European countries. Maybe including others (e.g. Germany) wouldn't have served the point he's trying to make?
EU has anemic salaries for my profession (software engineer).
What’s the reason for this deficit? Why aren’t there any Silicon Valleys in the EU?
Salary difference is so large, I would never move. Land is dirt cheap, housing is affordable and private healthcare is fine in the US.
Before we get in a war on HN - I would move instantly if the salary is matched or even better than US since everything else is scarce in EU (housing, land). Yep, here comes the downvotes.
Silicon valley has the benefit of long term investment and also being a single centre for all of the US market. EU single market is not nearly as well integrated as the US in practical terms e.g. basic language barriers.
Decades of "infrastructure and community" is not easily copied else where and is a real advantage for the US. Europe had lot's of "Facebooks" but non grew out of the local market to be able to gain a global advantage.
Silicon valley is not easily reproduced elsewhere in the US either.
If it's about language, then why isn't London a huge tech hub (order of magnitude bigger)? They can sell to the US the same way SV exports back to the rest of the world, no?
London as a tech hub does punch above its weight, mostly because the language makes for a very deep pool of labour -- people from all of Europe plus Russia/India.
Of course that is only half the equation -- better and cheaper labour (than in Berlin or Paris, say) brings you halfway there, but the language barrier for customers in the EU as well as regulatory hurdles still make massively harder to scale to the whole of the EU than to the whole of the US.
Well based on my recent discussions with a prospective American employer the main reason they pay their staff more is the yawning disparity in healthcare costs ...
For a senior dev 90k is the low-end, not the average I would say. But this highly depends on where you are in Germany. In Munich or Hamburg salaries will be substantially higher than e.g. Ludwigshafen or Cottbus
I’m just telling you what I was told. I didn’t take the job in the end because some of the clauses in the contract - apparently normal by US standards - were simply astounding.
A US senior software engineer making that much would live in a major tech center and would probably work for a very good company, so a lot of people are excluded because of location and others just because of selection. It's hard to say, but I can't imagine more than 30-50% of US senior software engineer making that much.
And for Germany, the salary for a senior software engineer is not that low :-)) A senior software engineer in Romania or Ukraine would be making that much (while living in less developed countries with much lower cost of living). The only way their salary would be so low in Germany would be if they would be working for a crap company in a small city.
So you're not comparing apples to apples.
However the general point can be right as I'd say that the correct number for the us would be more around $150k and the correct number for Germany would be around $90k. So you'd still have a $60k gap.
> A US senior software engineer making that much would live in a major tech center and would probably work for a very good company, so a lot of people are excluded because of location and others just because of selection. It's hard to say, but I can't imagine more than 30-50% of US senior software engineer making that much.
Well, in Germany, a software engineer making that much simply does not exist..
Agreed. Also what both are missing is the cost to company difference (the 'wedge' in economics-speak). In the US that's ~15% on top of the salaries you two mention above, even with health insurance added. For FAANG, with extra perks, etc, it could go to 20%. In the EU the wedge starts at 25% and goes up from there (to 40%+ in some countries for high incomes).
So, the difference between the two countries is about ~20-25% on a cost-to-company basis (which is what employers care about). That can be easily justified by a better talent pool (attracted by the higher salaries), economies of scale in training, managing, etc. Not a massive deal. Also, helps a lot when you are a FAANG, literally the most profitable companies in the history of humanity (i.e. under-regulated as hell).
Source: software employer (not FAANG) in both the US/EU.
I don't think the differece lies in healthcare costs, but this exmple is silly, and average SSE in the US does not earn 240k USD. Silicon Valley is an outlier even in the US.
I'm sorry, I'm a senior developer in Berlin and I've never seen job openings that average 135k - 180k. Can you send me an example? Because if that's the actual range these days I might consider giving up freelancing.
What companies in berlin do pay 3-4x 45k per year?
I think 45k is for a junior dev (or some immigrant experienced dev who didn't negotiate due to lack of knowledge on local market + employee taking advantage of that), but 3-4x that is an exaggeration.
45k is what you can expect to make as a senior software engineer in countries like Italy, Spain, etc. This a pretty good salary in southern Europe but it's way below the average of countries like France and Germany.
I live next door in the Czech Republic where the salaries are generally quite a bit lower than in Germany and I'm wondering whether the 45k EUR number is accurate. Is it after taxes or before?
Because I'd say that 3750 EUR per month gross is way too low for a Czech senior dev, and 3750 EUR net would be an okay-ish compensation for an experienced developer in Prague or Brno.
I don't think you'll find job many listings with 100k+ CZK written out just like that, but you can certainly get that kind of money if you ask for it. I'm a webdev in Prague and experienced people I know do have that kind of money. I only make a bit less than that and I'm a junior.
You also need to account for student debt. In most EU countries, students do not need to go in debt to pay for university. So in the US, how much of those first salaries goes to paying back that debt? (It won't account for the complete difference obviously.) And maybe retirement savings is another thing to add.
There are many other studies like these every year in France, for many different positions in tech.
Here is a TLDR.
A junior dev (0-2 years of experience):
- Paris: 35-45k€
- Big cities: 35-40k€
- Outside of big cities: 32-38k€
A confirmed dev (3-5 years of experience):
- Paris: 45-60k€
- Big cities: 40-46k€
- Outside of big cities: 38-45k€
Senior (5 years+):
- Paris: 55k+€
- Big cities: 45-55k€
- Outside big cities: 45-50k€
Note that these salaries are "brut", meaning there are 23% of various taxes (income tax not included), unemployment taxes, social security, retirement etc.
On top of that, France as one of the highest income tax rate in the world.
The $240k is not for the USA as a whole, it's at best for very narrow geographical areas in Silicon valley and a handful of FAANGs. The vast majority of senior software engineers in the USA as a whole don't earn anywhere near that.
If you look at say here in the UK salaries in software overall are lower than in the USA sure, but a senior dev in the finance industry in London can be very competitively compensated. Industrial sector and location make a huge difference.
Finally, this all has very little to do with the E.U. or even with overall GDP growth between here and the USA. There are deep historical reasons why the tech sector particularly is concentrated in the USA. For comparison consider the prominence of the finance industry in London compared to the wider Europe, or why the car industry is concentrated in Germany. There are deep historical reasons for those too, you won't find the answers in broad economic policy in the last few decades.
It's obviously fine for those who have it or can afford it. The argument is not about whether or not Silicon Valley software engineers can live with private healthcare. The argument that we here in Europe tend to make is that every inhabitant of a country is entitled to that excellent healthcare, nomatter who they are.
> every inhabitant of a country is entitled to that excellent healthcare
This isn't always true..
In some of these free healthcare countries you can be SOL if you get cancer or a rare condition and don't have money for the latest treatments. Here in New Zealand the wait times are so long that a lot of people just pay for private surgery/screening. My father for example was out of work for almost a year waiting for a hip operation, he irrationally thought he was getting a good deal having it publicly funded.
Tell me then, please, how you fare in these other, non-free healthcare countries if you get cancer or a rare condition and don't have money for the latest treatments.
Presumably you'd have a healthcare plan of some sort, one which politicians have mandated over the years to cover practically everything. You might also keep some savings for this thanks to the fear mongering on MSM, whereas it would be rare to do so in a free healthcare country.
> if you get cancer or a rare condition and don't have money for the latest treatments.
If you haven't got the money you won't be able afford those treatments in the US either and the insurance companies have caps on how much they will pay.
So for some rare cases European national health services are not better than the US.
> In some of these free healthcare countries you can be SOL if you get cancer or a rare condition and don't have money for the latest treatments.
Translates if you want to have cutting edge treatments that haven't gone through medical processes to see if they're safe. Or if the chances of the treatment working is too low.
> In some of these free healthcare countries you can be SOL if you get cancer or a rare condition and don't have money for the latest treatments. Here in New Zealand the wait times are so long that a lot of people just pay for private surgery/screening.
That is indeed a problem. How does giving up and saying "the rich or well-insured can get these things, the poor not" help in any way shape or form?
Just showing up to gloat about all the money I made on GME this week. :) Turns out all your hot air was just ignorance. Maybe you’re not a very good judge of who is irrational and who isn’t :D
Every inhabitant is entitled to excellent healthcare doesn't always mean they also get it.
I lived in 2 European countries with amazing healthcare systems available for free or almost free but had either: amazingly long waiting times (measured in years) for anything but the most basic interventions OR an amazingly difficult process to get referred by your GP into any specialist care (GP generally recommends paracetamol and rest for everything).
So while the US has an overall broken system, as a highly-paid engineer with private employer-sponsored health insurance in the US you might be more likely to access the high quality healthcare you need.
> So while the US has an overall broken system, as a highly-paid engineer with private employer-sponsored health insurance in the US you might be more likely to access the high quality healthcare you need.
In Europe you can still pay for private treatment, if you're highly paid you can still get that fast treatment. It's just by default you don't need to worry about it. The wait times only affect those who can't or don't want to pay. That is a choice they make.
I am going to point out this is a common false narrative spread by the media in the USA and think tanks who don't want public health care. Wait times are not actually that long per the data in the UK and other regions.
Can you share specifics backing up your point please?
> I lived in 2 European countries with amazing healthcare systems available for free or almost free but had either: amazingly long waiting times (measured in years) for anything but the most basic interventions OR an amazingly difficult process to get referred by your GP into any specialist care (GP generally recommends paracetamol and rest for everything).
Sure, but we're comparing making x in salary in Europe and paying out of pocket for private healthcare if needs arise, or making 4x in US and having employer-sponsored private health insurance.
I know this is not everyone's experience, just comparing the choices of Sw Engs.
> amazingly long waiting times (measured in years) for anything but the most basic interventions
Do you have some examples? Since the vast majority of HN people (myself included) aren't medically trained, it might be very unclear what kind of interventions you're thinking about.
For example, I would hazard a guess that something that is mostly cosmetic could be considered "basic" – but my experience is that such a thing is given a low priority (rightfully so, IMHO). Yet there's lots of urgent and non-"basic" cancer interventions that happen quickly. So I'm a bit puzzled.
A lot of the time paracetamol and rest is the correct intervention. You wouldn't believe the number of people who see their GP because they have a cold, hangover or graze.
I now live in a region where there aren't really public doctors and people demand more The consequence is that doctors almost always prescribe a bag of various antibiotics and other pills to counter the side effects just to make patients feel like they got their moneys worth.
> It's obviously fine for those who have it or can afford it. The argument is not about whether or not Silicon Valley software engineers can live with private healthcare. The argument that we here in Europe tend to make is that every inhabitant of a country is entitled to that excellent healthcare, nomatter who they are.
I think I should point out that it seems like very few can afford it. This just what I seen from tv show story lines which are designed to reflect what people experience, stories on reddit/twitter, and the fact gofundme is such a large thing. Even if people have health insurance of some kind they often have deductiables that means they still need to pay for any treatment they have even if it's only a percentage, treatments can only be approved by the insurer for certain things at certain times - a company decides and not the doctor, health insurance only covers for certain things, emergencies can ruin a family, medical bankruptancy is a thing, etc.
They literally created a tv show based on the idea that a teacher with cancer needed to start selling drugs to afford it.
I'm pretty sure those with health insurance in the US pay more for theirs than I do (I live in Germany and health insurance is a legal requirement and the amount they can charge is legally limited). Yet they get less than what I do. I can just turn up at hospital and not worry about how much it's going to cost. I don't even pay attention to how much I pay for insurance and neither does anyone else I know. We just consider it another tax.
Software engineers are well paid in the EU, just not overpaid. If you compare even a Danish salary with what you could be paid in Silicon Valley, sure, you're pay less well, that doesn't make the EU salary bad.
If you read the complaints from software engineers living in the Bay area, they will tell you that housing isn't affordable. You have well paid people with roommates. The affordable housing isn't in the same areas as the jobs (for the most parts).
Honestly the startups could move much of their development to eastern Europe and pay half the salary, while still getting some of the best developers in the world.
Overpaid is really the wrong way to think about it. The wages in SV are driven by companies who are extremely profitable. Lower pay would mean more wealth for executives who are already some of the most wealthy people in the world (absent some systemic changes in the US government). FAANG employees are just getting a piece of the value of what they’re building.
That's one positive way of looking at it. I guess I'm just a little jaded by reading about Google developers who don't really do much, by their own admission, but who are still paid WAY more than they would anywhere else (Not to single Google out, it's just an example).
I’ve had friends move from working at FAANG in SV back to Poland, taking 60% salary paycut, citing better quality of life here - especially when children are involved.
If you have good public transportation (as in: you can get around faster in a bus than using Uber), good and cheap healthcare, and free public education, you just don’t need as much money to get a better lifestyle.
Also: “fine” is a good description of the US healthcare. I experienced both US and European healthcare systems and it’s amazing how much worse is one from another. Even if money is not much of an issue.
The reason is that you are comparing to the outlier: the US.
Salaries for software engineers in Europe are high, extremely high compared to the general population in terms of standard deviations.
The difference is that salaries in the US are more or less uncapped, that benefits a lot us, software engineers, but not society. For society my work as a SWE isn't worth 3x of a nurse, even though economically it makes sense as I bring 5-10x profits to the company I work for as a SWE, just due to the leverage I can be used as to produce value in monetary terms.
If the only thing you care about is the figure in your bank account, for all means the US is the best place on Earth for you to try your luck. For people like me, who want to live a happy and comfortable life instead of grinding and living with the stress of all insecurities caused by the US approach to society... It's not a pretty game to live in that kind of society.
I posted not long ago the same type of comment, I have a personal anecdote as I moved from a country that is very Americanised (Brazil) to Sweden, the American philosophy of life (individualistic, "got mine, fuck you") only works in the US, with lavish sums of cash flowing around so some of it can drip into normal society. Living in a completely different environment only showed me how sick this kind of living is, how unhappy it makes the average Joe.
Good luck as a SWE in the US, it's a cushy place to be. Personally I still prefer to take-home 1/3 of what I could manage in the US but have a much more stable and comfortable life, because the rest of society here also enjoy a stable and comfortable life together with me.
I think it's just more well-balanced over here to be honest. For Denmark:
1. We have a much more chill working situation. You work a regular work day, you're not the property of the company you work at, you do not have non-compete clauses (the company would have to pay your salary in full as long as it was valid), a lot of things that in the US come from post-tax salary is handled by the tax (education for you and your kids, healthcare, etc.)
2. Trying your luck as entrepreneur is easier and much lower risk than in the US. It's also quite easy to get "free" entrepreneurial government grants of small to medium sizes. As a result, there tends to be more, smaller startups, and bootstrapping is popular. When VCs aren't involved, salaries tend to be less astronomical.
3. Software engineer salaries in the US are blown completely out of proportions, and too market-distorting to be goal to have.
Just moving to where the salary is highest with no other consideration for anything else sounds... Short-sighted, narrow-minded and greedy (but not in a smart way).
There is a certain total of income for salary available in a country; e.g, the US is spending about 44% of GDP on salaries/compensation[1]. The difference in income for software engineers is partially (and possible mainly) because the US is very income-inequal - ie, because there are more poor people to prop you up. If you look at income inequality before taxes and transfers[2], the US is the most income-inequal of any of the OECD countries. If you look at it after taxes and transfers[3], Chile, Turkey and Mexico manage to do worse.
I can only talk about tech. Unless you work for a FAANG, there's a perpetual feeling that you are a second division player in the software industry. Some big factors are lack of investment and competitiveness. Even if you are a senior developer, if you are not too happy about your current job finding a better position can take you months. There's no such thing as "fuck you experience" here allowing you to switch jobs overnight.
Pointing out the growth of some countries while excluding others (Germany? Ireland? Finland? Sweden?) is debatable, because intra-EU GDP "exchange" might be a thing
> What the heck happened? It could happen here too. Maybe it already has, just not as bad.
Yes, it is possible. Add Japan to the graph, see what happens.
I think the bigger part of the answer is China. Some of it is PPP. Some of it is that Italy has internal problems to solve. Some of it is what I'd call "paper GDP"
It would be helpful if the title was more specific as the blog post discusses GDP specifically.
More to the point, GDP isn't everything. There are many factors at play. It is possible to cherry pick a multitude of attributes to compare Europe with the US and have either appear to be failing in a graph.
Think about how the graph would look if the following were considered: education levels, clean air/water, broadband connectivity, health care, inner city and suburban public transport.
Also when comparing Europe it would be fair to include Europe in the data rather than a select few countries, otherwise the title (and the argument) becomes more misleading.
As a European, my personal opinion is that it is because of an overfocus on regulation and underfocus on innovation.
Everybody that I know that has an idea or a business that might be worth something, is moving or trying to move to the US.
The mix of too much regulation, high taxes and difficult access to capital is just too much for most new businesses to handle. So, they are moving somewhere else.
I think, despite the talk about higher quality of life, etc., that is going to make us losers in the long run and actually erode our quality of live. Because we need a productive and innovative economy to keep our living standards.
I'd argue it's working as intended and it's the US who's the outlier.
Regulations usually pop up because systems, left on their own, tend to evolve towards a spiral of undesirable social dumping and other negative outcomes. We tend to focus on a minority of arduous regulations, ignoring the majority of them that make our lives better.
High taxes, when distributed fairly, are a good thing - talent and hard work gets you to upper-middle class, but really high incomes are mostly down to luck. Now, the move from taxing incomes to taxing wealth is long overdue, but that's a different discussion.
Difficult access to capital - can it be that Europeans are simply less exuberant, less gullible, and assess startups more realistically? Getting seed funding worth of lifetime income of a median person, for a dubious idea without any reasonable business model - that's the anomaly, not the other way around.
It'd be interesting to see more countries added, and not just UK, France, Italy, and Greece. The UK is different in that it is no longer in the EU and never was in the Eurozone. Italy and Greece suffered badly from the Eurocrisis. What about Germany, Poland, the Nordic countries? Or just an EU average?
Also, are these figures adjusted for PPP? (And can you therefore make a blanket statement such as "The average European is about a third or more worse off than the average American"?) I'm going to guess not: [1] and [2] compare the GDP per capita without and with adjustment for PPP between the US and France. The first (no PPP adjustment) shows how France plateaued after 2008, while the US kept increasing. The second shows that both kept increasing at the same rate (albeit with France's figures consistently 20% lower than the US).
By the way as a European I don't disagree that the EU's (average) economy has fared worse in the last 10 years than the American economy. But these numbers are too simplistic to find out what the underlying causes are.
One outlier mentioned here is Italy which has a high rate of youth unemployment/underemployment and huge brain drain flows to Northern EU so it makes sense that they are in a freefall but for others mentioned in the article like the UK I don't think it is a fair comparison as USA has a significant demographic advantage and a huge integrated market making it easy to scale for companies which in the EU only Germany has a comparable status not the UK or France.
> This should be profoundly unsettling for economists. Everyone thinks free trade is a good thing. The European union, one big integrated market, was supposed to ignite growth. It did not. The grand failure of the world's biggest free trade zone really is a striking fact to gnaw on.
Why try to see the single market as a failure out of the blue just by comparing GDP growth?
The single market has been a great success and has undoubtedly boosted growth.
The issue is that it is not everything. For example, the business environments in France and Italy are far from being friendly and efficient. The UK's is much friendlier but IMHO the UK has chosen a path of making London an island of prosperity based on services (with a strong emphasis on finance) while letting the rest of the country fend for itself (the UK has both the richest and poorest areas in Northern Europe)...
Can it also be that the time of Europe exploiting the rest of the world is over, the last 50 years is US exploiting the world (like forcing it to obey they rules, FAANG de facto monopolies), and the next 50 years will be the china doing exactly the same as old powers but in a Chinese way? :)
Historically, the empires exploited other countries, it used to be very brutal, now it's just who works for whom, who is the product, who control the money and information flow.
Europeans are old. This is often forgotten. Old people are slow to adapt. So Europe is old and old-fashioned. This is not great for prosperity. Same with Japan.
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[ 2.4 ms ] story [ 284 ms ] threadGDP-per-capita is a mean, it doesn't tell you anything about distribution. Qatar has a higher GDP-per-capita than the United States, but most of that wealth is highly concentrated.
The Republic of Ireland also beats the US. Explain that. Without doing so it's fairly meaningless.
This is driven by multinational profit shifting, and is in no way reflective of the actual Irish economy.
For example, good public healthcare and transport can lower the country’s GDP and improve it’s citizens wellbeing at the same time.
I’m not saying that France/Italy have it better for their citizens, but treating GDP as a main metric is terribly flawed.
I'm not saying it is more accurate than the GDP measure, it just offer a different view.
The UK has a similar share (actually slightly smaller) with over 10 times the population.
For the vast majority of people, living in a wealthy country, where that wealth is more equally distributed, will be much more attractive than living in country with just a high GDP.
1. The USA gifts itself > $6 trillion in imputed values. Or about the GDP of Japan;
2. If China measured their GDP using the formula used by India, its economy would be significantly larger;
3. Nigeria overtook South Africa literally overnight by changing (amongst other things) the value of unpaid child care.
Its largely are ruse to make public debt look sustainable.
https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_...
> A Gini coefficient of zero expresses perfect equality, where all values are the same (for example, where everyone has the same income). A Gini coefficient of one (or 100%) expresses maximal inequality among values
Was easy to spot, US and Russia are definitely not at the top when it comes to income equality as both are controlled by oligarchy
Generally you have a lower limit to how poor a person can be, in Scandinavia that limit is reasonably high (I sure it doesn't feel that way if you're actually poor), so I would have assumed that would level out the inequality somewhat.
Denmark in particular have also always excluded students from statistics on who's poor, because it's seen a temporary thing. So we don't see them as truly poor, even if they often are, but I suspect that they have to be included in the Gini coefficients calculation.
Looking at the median wealth (https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...), a median person in Spain is 3 times as "rich" then someone in Sweden and Germans or the Dutch are more "poor" than Slovaks or Greeks etc. But this is largely a result of relatively low home ownership rate in most North European countries.
However if we disregard average people and look just at the top 10% or even 1% Sweden is still Remarkably similar to the US:
Wealth Share of the top 10%/1% *
United States: 75.9% / 35.4% Sweden: 75.3% / 37.4% Netherlands: 68% / 26.6% Denmark: 66.6% / 29.3% Germany: 65.1% / 30.2% Norway: 65% / 32% United Kingdom: 59.3% / 24.5% Spain: 55% / 23.8% France: 54.6% / 22.2% ...
* according to https://www.credit-suisse.com/about-us/en/reports-research/g..., see page 168 in "Global wealth databook 2019" fro the full table
The reason is, higher income tax means it is more difficult to become wealthy. So in countries with high income tax, the majority of wealthy people is those that inherited their wealth. Over time some wealthy people become poor, but with high income tax, even fewer become rich. This means that wealth becomes more and more concentrated among the few, which is somewhat counter-intuitive.
So in the US, wealth-mobility is greater than Denmark for example, resulting in the list on Wikipedia, where countries that are thought of as "unequal" actually are the most equal of all when it comes to wealth.
Article studying the effect: https://journals.plos.org/plosone/article?id=10.1371/journal...
The reasoning is pretty much the opposite, the redistribution of health helps to move children out of their parents wealth/social-class. It might be that an individual adult in the US is able to move from poor to wealthy more easily, but I sort of doubt it.
Otherwise, I would rather be wealthy in the USA.
Meanwhile, the difference between the US and Europe in the article is around $10K per person--hundreds of times larger than the distortion created by the billionaires.
His income last year was around $60 billion, or $200 per person (of any age) in the United States. While last year was exceptional, all of his wealth ($600 per capita) was income in the last 20 or so years, most of it in the last 10. And his ex-wife Mackenzie Scott kept 25% of their combined wealth when they separated.
So it's simply not true that his contribution to GDP looks completely trivial even when compared to total US GDP.
Secondarily, capital gains is not really the same thing as income (at least, not in the tax code, and also not in GDP calculations), and most of his $60B "income" is increases in Amazon stock price. And even if it were actual cash income, the GDP difference between the US and Europe is still fifty times larger than that.
Look: I was an American by birth, but I moved to Europe as an adult. I get the attraction, and I'm not trying to bag on Europe. But it's simply false to suggest that America is not overall richer than Europe, or to say that America's extra riches are all concentrated at the top.
The GDP difference between the US and Europe is fifty times larger than one rich person's own income? This isn't actually a great argument dismissing the suggestion that US wealth is extremely concentrated.
Are you really counting the increase of Amazon stock price as his personal income? This is totally inaccurate. Most of that worth is extremely volatile and can quickly dissipate if the stock price falls for whatever reason. Would you count a falling stock price as spending?
Amazon aggressively reinvests its extremely large and stable earnings into the business which Bezos owns a large part of and controls actively. Both he and his ex-wife have realized extremely important liquid wealth by selling a significant part of their stakes. How would you measure his wealth?
Certainly Amazon revenue is not the best way.
GDP is a measure of production and thus an indication of spending power (you need to earn before you can spend).
Whether a country chooses to use its economic output to finance these services is another question.
On the short term it may be true. On the long term you need a strong GDP to sustain quality of life.
COVID showed Europeans how dependent they are from China industry and US tech. Quality of life is still an order of magnitude better than in most countries in the world but I don't believe it will remain like this ad infinitum. Most Europeans know that Europe is declining and sinking slowly.
I'm not convinced at all that Europe is declining, though I am convinced that China and India are rising (as they bloody well should after the horrible history Europe has given them in recent centuries) though I'm worried that this isn't accompanied by a freer, fairer society in those places, just a richer one. Being richer is a good thing of course; freedom being of limited value to a starving child.
Which leads me to ask what your basis for comparison is? Because I've lived in wealthy parts of the US - much wealthier than anywhere I've lived in Europe - and seen streets paved with metaphorical gold, but I've visited plenty of places in the US that seemed pretty backward, poor, soaked in ignorance and hopelessly broken. When 2 million people in the richest country in the world don't have indoor plumbing then something is wrong with that country's measure of wealth.
I know that Eastern Europe is "killing it" regionally by a mix of good policies, EU funding and geoarbitrage - I've lived there - but European Union as whole is slowly declining.
Yes, we are still the world leader on lifestyle and culture - I don't want to create roots anywhere else - but I don't believe this will be enough to guarantee a bright future for my children.
10 years ago I'd have said Eastern European spirit may turn the ship around. But today I'm not so sure. It feels like too many people got comfy enough and sign off on Western's idea. The sad part is that we're still pretty poor and that comfiness will be gone even faster. Both in terms of wealth and geopolitics.
Is this code for calling West Europe lazy? I surely can't make much sense of what you mean with this phrasing.
I'm pretty sure in Asia they see next year will be better then this year. I can see it in my own family members back in Asia. They went from generational housing to each uncle and auntie having their own house, nieces and nephews having finished college or university able to afford a better life style then my aunties and uncles could. While I see my little brother and many others struggling to afford a good enough place to buy or rent because of the fucked up housing markets back here in western Europe.
Meanwhile in Eastern europe is as you describe Asia. My parents live tremendously better than their parents. I live better than my parents. And I'm positive my kid will live better than I do. After that... Fingers crossed I'll see the trend going strong. And that's in pretty much any socioeconomic class. While wealth gap is growing since Soviet era, the poor are living better than Soviet era elite. Both in terms of necessities and leisure.
> "10 years ago I'd have said Eastern European spirit may turn the ship around. But today I'm not so sure. It feels like too many people got comfy enough and sign off on Western's idea."
And this is a pretty strange statement, calling on something like "Eastern European spirit" to turn something around, and getting "comfy" as a "sign off on Western's idea", both of which you don't describe what you mean with.
Do you care to expand on those points?
[0] https://news.ycombinator.com/item?id=26384325
Meanwhile Western Europe. Feels much more.. complacent? if that's the right word. Looking from the East, West looks like smug underachievers riding on forefathers' fame.
Look, I came from Brazil, working 10-12h/day was common for most of my 10 years career there. It doesn't bring prosperity, it doesn't get rewarded, working hard and not taking breaks is no measure of success. As much as you think this is the way to emulate because of US's wealth I'd say to think again about this bold assumption, you are being extremely reductionist and topping it off with some xenophobia. I don't like it.
And I was talking about true hard working, not butt-in-seat theatre. And we sure got rewarded here in Eastern Europe. Just look at statistics comparing east/west in 1990 and today.
How much would you like to be called one of the numerous Eastern European stereotypes?
You didn't get rewarded simply by working hard, go check Latin America (Mexico, Brazil, Argentina, etc.) and see how fucking hard the people there work, which, unlike in the EU, doesn't have support from the US, the country that extracts most of the value and productivity from these nations.
There are a lot of geopolitical and economical factors for the rise of the East in Europe, one of these factors is exactly by being included in the EU and participating on the free market with richer nations, that propped up the economy of the bloc as a whole... Stop feeding into this bullshit narrative, it's dangerous.
TBH a lot of Eastern european stereotypes are truth. Unfortunately we did export a lot of criminals and welfare seekers. We joke all the time how after joining EU streets became safe the next weekend. In reality it took a bit longer :)
It's funny how you want to read that I'm saying that people were working hard. No, I'm saying that people work(ed?) hard and smart. Maybe sometimes too smart skewing regulations.
It's not bullshit narrative, it's your xenophobia :) See, I can play this game too.
Now on a more serious note, sure it's not just hard/smart work. There're a lot of reasons. For example, leading up to WW2, there was no big discrepancy between east and west. When Soviet era was over, nothing was stopping East from bouncing back to where it should be.
I don't see how stating that West is more rich and people take it for granted and happy with what they have is "hateful". I'm not saying "you fools live on our hard work". I'm saying "we're catching up and fast and that's awesome. But that's partially on you, because you seem to be not trying to level up anymore". I wish all europeans would get more hungry and get ready to take on Asia.
Is wishing for people to become more active/hungry/whateveryouwanttocallit "hate"?
I absolutely agree with you here.
> Most Europeans know that Europe is declining and sinking slowly.
Sorry, you lost me here. Outside of the nationalist far right, I never hear people saying anything of the sort. How are we "declining and sinking"?
You don’t have to be a far-right nationalist in order to have an objective look at the situation in EU, although I understand your temptation to resort to such low-effort arguments, it’s fashionable after all.
As a non far-right European, the EU is falling behind by failing to drive any tech innovation, by relying on non-EU countries for vaccine production, by not importing any external tech talent by having extremely unattractive wages in the tech sector. Every major tech innovation happened outside of EU, and this is something I’m not proud about. If your only metric for success is having decent public healthcare and social benefits, then I guess EU is doing fine, but I’m skeptical this will do us any good in the long run.
What is the metric you are using to gauge innovation in tech in the EU?
The part that made it work, a lipid envelope that keeps the thing running at non cryogenic temperatures, doesn't sound very impressive (though it is), is a Belgian company (Dutch, although I believe located in the French part of the country).
This vaccine, aside from (part of) it's financing is very much European ...
Sure, but I didn't say that. I said those are the only ones I hear making unsubstantiated alarmist claims about Europe, and/or their respective home countries, "declining and sinking". I have no problem with people pointing out specific problems, like you did with wages and tech innovations. This opens up for constructive debate. Screaming that we're doomed does not.
FAANG market cap: US$7T
USA GDP: US$20T
Getting back to FAANG:
Amazon: $386bn
Apple: $274bn
Google: $182bn
Netflix: $25bn
Facebook: $85bn
So that would bring the numbers up to $925bn.
Now, a lot of this revenue is global, so the US stuff is probably 50% or less. However, a big chunk of this global revenue is the thing that allows US salaries to be so high. Also, if we were in normal times, these companies would repatriate their profits and be taxed in the US, plus these profits would be reinvested in the company or invested in the US. So I'd count the US "contribution" not as strictly half ($462bn) but more likely closer to $600bn.
Also, FAANG is a catchy name but it's not a good economic representation. Netflix is big-ish, it's a household name, but it's much smaller than the others. There are also some big companies missing from it:
Microsft: $143bn
Oracle: $39bn
Adobe: $11bn
Salesforce: $17bn
IBM: $73bn
Dell: $92bn
Intel: $71bn
HP: $58bn
Cisco: $51bn
So that's another $546, using the same "formula" from above, probably another $350bn "contribution" for the US.
And that's just the absolute A tier plus the B+ tier. If we start including B (Uber, big but debt ridden; ServiceNow, etc.) and C tiers (ever heard of Axway?), I imagine we get to $1500-2000bn easily, especially since I forgot to add numbers for some big B+ tier companies up there (Broadcomm, Qualcomm, etc.).
Personally I'd suspect that all these small companies combined probably make more than the big companies combined.
Additionally, the EU is lightyears ahead of the US wrt decarbonization; if we suddenly priced carbon properly then the US would be a lot less wealth in comparision.
Except of course that that isn't true at all.
I think you'd get very different graphs if you compared the incomes of the lower half of the population. Or even the lower 80%.
So to what extent is that high GDP actually benefitting the US as a whole? It's not a game where GDP is your high score.
No european politican in power is that altruistic. Ours are in no way less crazy or corrupt than the US ones.
Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo. Europe has old corporations and the system is built to benefit them.
We also have very little VC money going around. The EU is technically a single market but in reality there are big barriers. Not anywhere close to what US or China has as a domestic market. Companies have a pretty damn tough time getting out of their country. Mostly because there is so little VC money to help them get out.
The reason for limited VC money is because there are few exit strategies. Going public in the US means getting way more money. The stock market in an EU country is not anywhere near what the US stock market is.
The reason the stock market is not as developed is simple, US dollar is the worlds reserve currency not the Euro.
I very much believe that Dutch politicians are less corrupt than U.S.A. politicians, in no small part due to the fundamental operations of the electoral system.
Donald Trump refused to yield power and flirted with a coup d'état after losing the election; around that time, the Dutch cabinet offered it's resignation peacefully to atone for a scandal it wasn't even directly responsible for, but took responsibility for as the ultimate executive. — it's quite a difference.
I find Dutch politicians very much far less self-absorbed and egocentric, and I believe this is due to the U.S.A. system being a winner-takes-all system that thereby selects upon narcissistic risk takers, for to obtain any public office in the U.S.A., one must have taken a risk where one stands to leave with nothing after considerable investment, — such is not the Dutch system, which is not a winner-takes-all system but one where victory is a matter of degrees.
Dutch politicians are generally quite down to earth rather than surrounded by pomp and grandeur. The prime minister goes to work by bike and has a part time job as a primary school teacher and lives in a normal apartment rather than a posh official residence, and this is because the system selects upon men who have power trusted upon them, not upon those who seek power.
> Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo. Europe has old corporations and the system is built to benefit them.
In 1916, the Netherlands switched from a district-based system to a simple, proportional system. This change surely did not benefit the parties in power, but they did so anyway for the purpose of democracy, and probably because the voters wanted it.
I don't think that's true. Mark Rutte was prime minister during the escalation of the excessive fraud hunting, and has been directly involved with parts of it. He undeniably carries much of the real responsibility.
He's also not a great example of a politician taking that responsibility; he has a tendency to smile problems away.
That said, you're absolutely right that neither the Dutch not any other European country is anywhere near as corrupt as the US, where corruption seems to be baked deep into its political system.
What has the direct involvement been then beyond simply being the ultimate executive at the top of the chain of command?
> He's also not a great example of a politician taking that responsibility; he has a tendency to smile problems away.
Offering the resignation of one's cabinet is quite far from a mere smile.
> That said, you're absolutely right that neither the Dutch not any other European country is anywhere near as corrupt as the US, where corruption seems to be baked deep into its political system.
Any other? I daresay that there is greater corruption in many European nations.
It's not baked, it is rotten. It started with noble intentions and designs. European countries reformed mostly in the 20th century to become what they are. US has continued it's system since the funding of the republic and the rot has set in deep until now.
The so celebrated “founding fathers” were rich, white, male slaveowners that tried their hardest to keep as much power for the rich, white, male, and slaveowner at the expense of all others and transparently founded an elitocracy that favored the big man over the little man, and certainly succeeded.
That the U.S.A. electoral system gives disproportionate power to the elite already in power is not a fluke, but a deliberate design choice.
The big irony of the founding of the US is that the guy who believed it was "self-evident that all men are created equal", owned men as slaves. It's important to continue in the direction they pointed, and not stop simply at the point where they ended up in their time.
I believe corruption goes hand-in hand with two-party systems. This eventually results to partisan politics and loss of all accountability. The two-party system may be either de facto (e.g. USA) or emulated (e.g. Greece), but the result is still chronic corruption.
> In 1916, the Netherlands switched from a district-based system to a simple, proportional system. This change surely did not benefit the parties in power, but they did so anyway for the purpose of democracy, and probably because the voters wanted it.
Simple proportional systems all the way. The problem is that if you didn't do the switch early-on (like the Netherlands), then it's almost impossible to do later because of deeply vested interests. E.g. Greece attempted a switch to a simple proportional system in 2016, but the move was smeared with FUD articles by the mass-media. In the end, the current government restored the previous election system, which gives a ludicrous number of bonus parliament seats to the first party.
You can't just make silly claims like this and not explain yourself. If you're just not familiar with recent US politics you're forgiven (although have you been living under a rock?), otherwise... huh?
It's not about personal altruism, it's about creating the right institutions that encourages politicians to do the right thing, and to hold them accountable when they don't. In the US, these systems don't work very well. I remember when Congress had an approval rating in the single digits, yet 90% of all incumbents got re-elected. That's a pretty clear sign that the very basis of your democracy doesn't work right.
> Political systems are always eventually captured by the powerful and they prevent any real change because they benefit from the status quo
And yet political systems change. Absolute rulers decide to share their power, write liberal constitutions and hold fair elections, politicians in district systems decide to change to proportional representation, men vote to allow women to vote.
Of course these changes often require protests by the people who used to be excluded, but those protests happened, and the people in power listened and changed the rules.
It's mostly the US where a large number of people insist that the rules of two and a half century ago are sacred and should never be changed. Few other countries hold to that sort of idiocy. (Though the UK might be as bad or worse than the US in that regard.)
> We also have very little VC money going around.
That is absolutely true. The US is great for money. It's great for rich people and for investors. And many European startups end up moving to the US.
But that doesn't change the fact that regular people aren't benefitting all that much from it. Warehouse workers for Amazon often work in atrocious circumstances that would not be allowed in the EU. How does their country's high GDP or Amazon's high market value benefit them if their job is destroying them?
I disagree. Politicians change when they are forced to. People in power listening and changing the rules is in my opinion a pipe dream. They only change when their positions are threatened (i.e. being voted out of office in the civilized case).
What the EU had is two world wars fought on its soil. The old systems were cleansed out with blood and fire. So while culturally European countries are old, politically they are generally not. The US has never had this, so the old system has been kept and unfortunately has rotten to its core and will collapse in our lifetimes in my opinion.
This is why I tried to make the point that politicians are no better over here. They are selfish cunts like all politicians are and they sure as hell don't give the slightest damn about making sure "wealth benefits everybody to some degree". They are just operating in a setting that is not a rotten corpse and act more civilized.
This is only true in some cases, not in all. The first Dutch king, Willem I, was originally made an absolute king and liked it that way, but later decided to have Thorbecke write a liberal constitution that would severely limit his power. Of course there were plenty calls in the country to do that, but he wasn't facing a revolution, and couldn't be voted out. Unless you count the Belgian independence from a couple of years earlier, but that had already happened and wasn't prevented by this decision.
There are plenty of other cases where people decided to do the right thing because they saw it was the reasonable thing to do without being forced to.
But the US refusing to change the broken electoral system from 250 years ago is also on the voters themselves, who keep voting for parties that don't want to improve the system. Keep voting out all incumbents until they fix the problem.
As for blaming voters, that is entirely useless and simplistic.
I strongly disagree on both points. There are politicians who take their responsibility seriously, and voters have a responsibility to vote for better politicians. Ultimately, voters get the government they choose, and if they choose corrupt politicians, that's what they get. The corrupt politicians aren't going to change as long as people keep voting for them. But better people exist, and it's up to voters to elect them.
Powerful interests can derail any threat to them. This is why things seldom change in any real way. Take US presidential candidates Andrew Yang or Tulsi Gabbard. Completely reasonable politicians who had to deal with constant lies about them being spread by the media.
It's absolutely true that the US system is incredibly corrupt, and it may be hard to see a way out of that, but a lot of countries are different, and many countries have seen real change. The US could do that too, but the people have to want it.
Media has always been beholden to powerful interests. Especially now when their revenue streams are drying up. Saying many don't is naive. You just don't see it, because the corruption reveals itself about what they don't print. For that to be obvious you have to be aware what they are hiding from the public.
But in many other countries, journalists are more idealistic than that, and have editorial independence. And when the media owner threatens that independence, journalists cry foul and leave.
Arguing that media can only be corrupt, is basically arguing that there can not be any democratic accountability. Instead of arguing it cannot be improved, it would be more constructive to demand improvement, demand editorial independence, and follow and pay for those media that offer that.
France and Germany GDP per hour worked is only about 6% less than the US (while it was mostly the same until 2008) [1] [2].
Seems like most of the difference can be explained by stronger work-life balance policies chosen by European (sick days, holidays, earlier retirement and parental leave).
[1] https://i.imgur.com/zuZ4pYz.png [2] https://data.oecd.org/lprdty/gdp-per-hour-worked.htm
I think part of the explanation is that the finance and high-tech sectors are way overvalued in money, and they shift the balance massively. This "inflates" the GDP in the U.S. This has basically been a conscious policy in the U.S. - "quantitative easing".
The problem is that the person who submitted the article chose an inflammatory title, just like he has done on many of his past submissions. There's an agenda at play here that goes unnoticed, and it has a lot of people in this comment section worked up.
In my mind, these are the metrics that make people feel ‘better off’.
Several things stand out:
- Citizens in larger countries have it better than one would expect. This reflects the economies of scale, and matches well with the informal anecdotes of people who have lived there - that despite GDP and productivity figures, somehow life's better there
- Tax havens don't really benefit the citizens of their countries, outside of a narrow sliver of population. Material standard of living in Ireland is below that of Italy
Here's a report from Eurostat: https://ec.europa.eu/eurostat/databrowser/view/sdg_10_20/def...
Here's a more comprehensive set of data - builds up a very interesting argument, based on AHDI figures: https://randomcriticalanalysis.com/2018/11/19/why-everything...
https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
Private-debt-to-GDP ratio:
- Germany (154)
- Scandinavia (269-280)
- Western Europe (224-266)
- US (220)
https://tradingeconomics.com/country-list/private-debt-to-gd...
Gov-debt-to-GDP ratio:
- Germany (58)
- Scandinavia (~40)
- Western Europe (~100)
- US (108)
https://tradingeconomics.com/country-list/government-debt-to...
What’s the reason for this deficit? Why aren’t there any Silicon Valleys in the EU?
Salary difference is so large, I would never move. Land is dirt cheap, housing is affordable and private healthcare is fine in the US.
Before we get in a war on HN - I would move instantly if the salary is matched or even better than US since everything else is scarce in EU (housing, land). Yep, here comes the downvotes.
I think that EU tech hubs focus on some ~~bullshit~~ not shiny industries like banking/financials, insurance and generally those very mature.
Decades of "infrastructure and community" is not easily copied else where and is a real advantage for the US. Europe had lot's of "Facebooks" but non grew out of the local market to be able to gain a global advantage.
Silicon valley is not easily reproduced elsewhere in the US either.
And it's not bigger because there are trade barriers between countries, for services. It's far from trivial for a UK company to sell stuff in the US.
I imagine the timezone difference also doesn't help.
If a company headquartered in the UK wants to sell to the US they need to deal with a whole new set of regulations, bureacracy, marketing etc.
In the meantime, any SV startup can grow in a huge market and only then bother with crossing the ocean.
Of course that is only half the equation -- better and cheaper labour (than in Berlin or Paris, say) brings you halfway there, but the language barrier for customers in the EU as well as regulatory hurdles still make massively harder to scale to the whole of the EU than to the whole of the US.
Germany - senior software engineer - 45k eur.
US - senior software engineer - 240k usd.
Do you or the average engineer, over the course of their lifetime, save or spend around 190k usd a year on healthcare?
That's utter nonsense.
45K € is the salary of a junior software dev right out of university.
It's still a big difference to US salaries but let's not get carried away here with lowballing the EU salaries.
Update: this post [0] mentions $110K for the US average, $60K for Germany (and $95K for Switzerland, $72K for Denmark).
[0] https://www.daxx.com/blog/development-trends/it-salaries-sof...
> The average salary for a Software Engineer is $110125 per year in United States
https://www.indeed.com/career/software-engineer/salaries
A US senior software engineer making that much would live in a major tech center and would probably work for a very good company, so a lot of people are excluded because of location and others just because of selection. It's hard to say, but I can't imagine more than 30-50% of US senior software engineer making that much.
And for Germany, the salary for a senior software engineer is not that low :-)) A senior software engineer in Romania or Ukraine would be making that much (while living in less developed countries with much lower cost of living). The only way their salary would be so low in Germany would be if they would be working for a crap company in a small city.
So you're not comparing apples to apples.
However the general point can be right as I'd say that the correct number for the us would be more around $150k and the correct number for Germany would be around $90k. So you'd still have a $60k gap.
Well, in Germany, a software engineer making that much simply does not exist..
So, the difference between the two countries is about ~20-25% on a cost-to-company basis (which is what employers care about). That can be easily justified by a better talent pool (attracted by the higher salaries), economies of scale in training, managing, etc. Not a massive deal. Also, helps a lot when you are a FAANG, literally the most profitable companies in the history of humanity (i.e. under-regulated as hell).
Source: software employer (not FAANG) in both the US/EU.
You mean, in a rural town of the former DDR right?
I think 45k is for a junior dev (or some immigrant experienced dev who didn't negotiate due to lack of knowledge on local market + employee taking advantage of that), but 3-4x that is an exaggeration.
Because I'd say that 3750 EUR per month gross is way too low for a Czech senior dev, and 3750 EUR net would be an okay-ish compensation for an experienced developer in Prague or Brno.
Here is a study of 3600 anwsers: https://www.silkhom.com/barometre-des-salaires-2019-combien-...
There are many other studies like these every year in France, for many different positions in tech.
Here is a TLDR. A junior dev (0-2 years of experience): - Paris: 35-45k€ - Big cities: 35-40k€ - Outside of big cities: 32-38k€
A confirmed dev (3-5 years of experience): - Paris: 45-60k€ - Big cities: 40-46k€ - Outside of big cities: 38-45k€
Senior (5 years+): - Paris: 55k+€ - Big cities: 45-55k€ - Outside big cities: 45-50k€
Note that these salaries are "brut", meaning there are 23% of various taxes (income tax not included), unemployment taxes, social security, retirement etc.
On top of that, France as one of the highest income tax rate in the world.
If you look at say here in the UK salaries in software overall are lower than in the USA sure, but a senior dev in the finance industry in London can be very competitively compensated. Industrial sector and location make a huge difference.
Finally, this all has very little to do with the E.U. or even with overall GDP growth between here and the USA. There are deep historical reasons why the tech sector particularly is concentrated in the USA. For comparison consider the prominence of the finance industry in London compared to the wider Europe, or why the car industry is concentrated in Germany. There are deep historical reasons for those too, you won't find the answers in broad economic policy in the last few decades.
It's obviously fine for those who have it or can afford it. The argument is not about whether or not Silicon Valley software engineers can live with private healthcare. The argument that we here in Europe tend to make is that every inhabitant of a country is entitled to that excellent healthcare, nomatter who they are.
This isn't always true..
In some of these free healthcare countries you can be SOL if you get cancer or a rare condition and don't have money for the latest treatments. Here in New Zealand the wait times are so long that a lot of people just pay for private surgery/screening. My father for example was out of work for almost a year waiting for a hip operation, he irrationally thought he was getting a good deal having it publicly funded.
And if you can't afford that plan?
If you haven't got the money you won't be able afford those treatments in the US either and the insurance companies have caps on how much they will pay.
So for some rare cases European national health services are not better than the US.
Translates if you want to have cutting edge treatments that haven't gone through medical processes to see if they're safe. Or if the chances of the treatment working is too low.
That is indeed a problem. How does giving up and saying "the rich or well-insured can get these things, the poor not" help in any way shape or form?
I lived in 2 European countries with amazing healthcare systems available for free or almost free but had either: amazingly long waiting times (measured in years) for anything but the most basic interventions OR an amazingly difficult process to get referred by your GP into any specialist care (GP generally recommends paracetamol and rest for everything).
So while the US has an overall broken system, as a highly-paid engineer with private employer-sponsored health insurance in the US you might be more likely to access the high quality healthcare you need.
In Europe you can still pay for private treatment, if you're highly paid you can still get that fast treatment. It's just by default you don't need to worry about it. The wait times only affect those who can't or don't want to pay. That is a choice they make.
Can you share specifics backing up your point please?
https://www.cursor.tue.nl/en/news/2016/januari/take-a-parace...
Which countries would those be?
I imagine misuse of easily available medication is pretty universal.
I know this is not everyone's experience, just comparing the choices of Sw Engs.
Do you have some examples? Since the vast majority of HN people (myself included) aren't medically trained, it might be very unclear what kind of interventions you're thinking about.
For example, I would hazard a guess that something that is mostly cosmetic could be considered "basic" – but my experience is that such a thing is given a low priority (rightfully so, IMHO). Yet there's lots of urgent and non-"basic" cancer interventions that happen quickly. So I'm a bit puzzled.
I now live in a region where there aren't really public doctors and people demand more The consequence is that doctors almost always prescribe a bag of various antibiotics and other pills to counter the side effects just to make patients feel like they got their moneys worth.
I think I should point out that it seems like very few can afford it. This just what I seen from tv show story lines which are designed to reflect what people experience, stories on reddit/twitter, and the fact gofundme is such a large thing. Even if people have health insurance of some kind they often have deductiables that means they still need to pay for any treatment they have even if it's only a percentage, treatments can only be approved by the insurer for certain things at certain times - a company decides and not the doctor, health insurance only covers for certain things, emergencies can ruin a family, medical bankruptancy is a thing, etc.
They literally created a tv show based on the idea that a teacher with cancer needed to start selling drugs to afford it.
I'm pretty sure those with health insurance in the US pay more for theirs than I do (I live in Germany and health insurance is a legal requirement and the amount they can charge is legally limited). Yet they get less than what I do. I can just turn up at hospital and not worry about how much it's going to cost. I don't even pay attention to how much I pay for insurance and neither does anyone else I know. We just consider it another tax.
If you read the complaints from software engineers living in the Bay area, they will tell you that housing isn't affordable. You have well paid people with roommates. The affordable housing isn't in the same areas as the jobs (for the most parts).
Honestly the startups could move much of their development to eastern Europe and pay half the salary, while still getting some of the best developers in the world.
If you have good public transportation (as in: you can get around faster in a bus than using Uber), good and cheap healthcare, and free public education, you just don’t need as much money to get a better lifestyle.
Also: “fine” is a good description of the US healthcare. I experienced both US and European healthcare systems and it’s amazing how much worse is one from another. Even if money is not much of an issue.
Salaries for software engineers in Europe are high, extremely high compared to the general population in terms of standard deviations.
The difference is that salaries in the US are more or less uncapped, that benefits a lot us, software engineers, but not society. For society my work as a SWE isn't worth 3x of a nurse, even though economically it makes sense as I bring 5-10x profits to the company I work for as a SWE, just due to the leverage I can be used as to produce value in monetary terms.
If the only thing you care about is the figure in your bank account, for all means the US is the best place on Earth for you to try your luck. For people like me, who want to live a happy and comfortable life instead of grinding and living with the stress of all insecurities caused by the US approach to society... It's not a pretty game to live in that kind of society.
I posted not long ago the same type of comment, I have a personal anecdote as I moved from a country that is very Americanised (Brazil) to Sweden, the American philosophy of life (individualistic, "got mine, fuck you") only works in the US, with lavish sums of cash flowing around so some of it can drip into normal society. Living in a completely different environment only showed me how sick this kind of living is, how unhappy it makes the average Joe.
Good luck as a SWE in the US, it's a cushy place to be. Personally I still prefer to take-home 1/3 of what I could manage in the US but have a much more stable and comfortable life, because the rest of society here also enjoy a stable and comfortable life together with me.
1. We have a much more chill working situation. You work a regular work day, you're not the property of the company you work at, you do not have non-compete clauses (the company would have to pay your salary in full as long as it was valid), a lot of things that in the US come from post-tax salary is handled by the tax (education for you and your kids, healthcare, etc.)
2. Trying your luck as entrepreneur is easier and much lower risk than in the US. It's also quite easy to get "free" entrepreneurial government grants of small to medium sizes. As a result, there tends to be more, smaller startups, and bootstrapping is popular. When VCs aren't involved, salaries tend to be less astronomical.
3. Software engineer salaries in the US are blown completely out of proportions, and too market-distorting to be goal to have.
Just moving to where the salary is highest with no other consideration for anything else sounds... Short-sighted, narrow-minded and greedy (but not in a smart way).
It's not like the EU wants you to move here, in the first place...
[1] https://fred.stlouisfed.org/graph/?g=2Xa
[2] https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
[3] https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
> What the heck happened? It could happen here too. Maybe it already has, just not as bad.
Yes, it is possible. Add Japan to the graph, see what happens.
I think the bigger part of the answer is China. Some of it is PPP. Some of it is that Italy has internal problems to solve. Some of it is what I'd call "paper GDP"
No. GDP does not equal well-being. I mean, the numbers presented in the article _are_ interesting, but their interpretation seems simplistic.
More to the point, GDP isn't everything. There are many factors at play. It is possible to cherry pick a multitude of attributes to compare Europe with the US and have either appear to be failing in a graph.
Think about how the graph would look if the following were considered: education levels, clean air/water, broadband connectivity, health care, inner city and suburban public transport.
Also when comparing Europe it would be fair to include Europe in the data rather than a select few countries, otherwise the title (and the argument) becomes more misleading.
Everybody that I know that has an idea or a business that might be worth something, is moving or trying to move to the US.
The mix of too much regulation, high taxes and difficult access to capital is just too much for most new businesses to handle. So, they are moving somewhere else.
I think, despite the talk about higher quality of life, etc., that is going to make us losers in the long run and actually erode our quality of live. Because we need a productive and innovative economy to keep our living standards.
Regulations usually pop up because systems, left on their own, tend to evolve towards a spiral of undesirable social dumping and other negative outcomes. We tend to focus on a minority of arduous regulations, ignoring the majority of them that make our lives better.
High taxes, when distributed fairly, are a good thing - talent and hard work gets you to upper-middle class, but really high incomes are mostly down to luck. Now, the move from taxing incomes to taxing wealth is long overdue, but that's a different discussion.
Difficult access to capital - can it be that Europeans are simply less exuberant, less gullible, and assess startups more realistically? Getting seed funding worth of lifetime income of a median person, for a dubious idea without any reasonable business model - that's the anomaly, not the other way around.
Also, are these figures adjusted for PPP? (And can you therefore make a blanket statement such as "The average European is about a third or more worse off than the average American"?) I'm going to guess not: [1] and [2] compare the GDP per capita without and with adjustment for PPP between the US and France. The first (no PPP adjustment) shows how France plateaued after 2008, while the US kept increasing. The second shows that both kept increasing at the same rate (albeit with France's figures consistently 20% lower than the US).
By the way as a European I don't disagree that the EU's (average) economy has fared worse in the last 10 years than the American economy. But these numbers are too simplistic to find out what the underlying causes are.
[1] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
[2] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...
[3] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
[4] https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...
[3] and [4] are those same graphs for the countries in the article + Germany + EU average.
Why try to see the single market as a failure out of the blue just by comparing GDP growth?
The single market has been a great success and has undoubtedly boosted growth.
The issue is that it is not everything. For example, the business environments in France and Italy are far from being friendly and efficient. The UK's is much friendlier but IMHO the UK has chosen a path of making London an island of prosperity based on services (with a strong emphasis on finance) while letting the rest of the country fend for itself (the UK has both the richest and poorest areas in Northern Europe)...
Historically, the empires exploited other countries, it used to be very brutal, now it's just who works for whom, who is the product, who control the money and information flow.