Actually with generative AIs we soon won't need English as a middle ground anymore. Which is quite revolutionary. Right now English kind of serves as a common ground for doing international business. There are a few other languages that are important of course. But thanks to the British, English spread the furthest. Historically, that has created an advantage for native speakers and those educated well enough to master it. The Romans used to have the same thing with Latin. Latin has been a dead language for quite some time but it's still taught in a lot of places.
This puts native speakers at and advantage. We're talking billions of people on this planet. The tech that OpenAI recently demoed, allows real time translation of pretty much any language to any other language. Babelfish just stopped being science fiction. On a side note, somebody needs to productize a fish shaped bluetooth earbud.
Anyway, that enables a whole range of people that are currently hard to interact with because they don't speak English well, or at all, to interact with quite literally anyone on the planet that speaks something that LLMs can make sense of. Even people only speaking relatively obscure dialects or languages. That's going to have an effect on international trade and other exchanges. Not speaking English is going to stop being a hurdle.
And likewise, LLMs can make it easier to navigate bureaucracy and deal with other local customs and procedures. I live in the EU.
Yes. It‘s striking what kind of benefits a large domestic market automatically brings to startups. If the EU really wants to get closer to the US and China, they really need to make the single market become true.
Not going to happen in the foreseeable future, though.
And most importantly, languages.
I find myself constantly wishing for an unified online marketplace, or unified comparison website for consumer products or reviews.
Different SKUs for each country. It's just a nightmare to try and buy something in Europe
I had to learn English to use computers. It was hard. Fallout games helped a lot. I played with a dictionary by my side. Soon we will all learn chinese to do the same (and read relevant scientific articles).
If you live in Germany or Netherlands or any other big European market, you have access to big market where you can find everything. If you live in smaller market country in the EU you'll find much less options and buying from other countries becomes a hassle and expensive.
It's not an open free flowing market like people might think it is. It makes it less competitive
Huh. My understanding based on article after article talking to the average voter is that the American economy is garbage, that milk is now $37, and the only way to reverse it is to elect a convicted felon.
There has to be some alternative besides "elect Donald Trump" (who will only accelerate inflation and the growth of inequality), and "everything is peachy, even though real wages have stagnated, asset prices are to the moon, and it's not unusual for 40% of workers' take-home to go to rent". That is what Bernie represented. Still does.
This is the result of a decades-long campaign of branding. "Democrats - socialist commie perverts who are bad for national security and the economy".
The convicted felon can schtoop a pornstar while signing an executive order exiting NATO and promising to build gulags for his enemies, it doesn't matter. All that matters is the perception, and perception is all about marketing.
I’m not in charge of Europe but if I was, I would consider being lectured by neoliberal icons like Fareed Zakaria and told that tech entrepreneurs would prefer that I stop regulating them to be a sign that I am definitely on the right track.
The measure is a poor construct. How much of GDP is Visa and Mastercard skimming 3% off the economy? Intuit charging for TurboTax. Healthcare. Collusion of institutional landlord rents using Yieldstar. Verisign. “Economic termites” as Matt Stoller coined.
US GDP, broadly speaking, is the broken window theory. Europe delivers better quality of life, cheaper, based on the objective metrics.
I’ve often had this question about GDP. Does the overpriced US healthcare system contribute to it? Not throwing shade, just genuinely curious about GDP’s value as a measure.
But that same thing can be said of the GDP in the EU, it's not different. Plenty of actors skimming money off the top, or just government regulations sucking a few percent of GDP here or there (which is likely much worse in the EU).
So you're still comparing like to like.
And your example of 3% "skimming" ignores that most of that fee gets kicked back to consumers.
The value of the dollar I guess. Compared to the rest of the world the US has insanely large salaries, but also seems to have insanely high costs of living. Comparatively for us Europeans the US is pretty outside of the price range since covid. The value of the dollar is higher than it was compared to the euro, but the exchange rate difference does not seem to be so large as to explain the difference in purchasing power.
The GDP measurements include rents. The US happens to have a massive financial operation at its core. It is not necessarily a measure of productive capability.
That, and the misconception the European countries are as a group in some sort of hunt to be the global number one, whatever that is.
Europe is not one country, nor is it just the EU, which itself is not a federation (people abroad seem to keep somewhat ignoring this important aspect). For the time being, we're not united under one flag, it's just a symbol of peace really. We're (mostly) happy neighbors, despite all the issues, despite proclamations by EU leaders on CNN.
These are the movers and shakers. Any barrier to entry for people creating businesses and selling products to the public is a innovation murderer.
Big companies are bureaucratic morasses that have very difficult time adjusting to change. They have figured out how to do something successful enough once to get big, but as time moves on the behavior that lead to profitability 20 years ago leads to bankruptcy now.
This is why they rely on buying small businesses for new products and different approaches.
If it is hard and dangerous to start new ventures and be able to find and hire the right people and fire the wrong ones then you are going to have a society with very little in the way of actual innovation.
Big governments love big corporate businesses. It is a lot easier to manipulate and regulate a handful of big businesses then it is for thousands of mostly anonymous unknown businesses that come and go on a yearly basis. But you need that unregulated chaos and competition for innovation to happen.
Who would have thought? The US pumps up its economy with the IRA and other debt based spending, China pumps up its economy with its ridiculous reserves of US dollars... and Europe's nominal head has no real power (vdL), and the countries are headed by an airhead who can talk but not act (France), buffoons (UK), incompetents wanking off on austerity (Germany) and far-right populists with a country whose economy is in shambles (Italy).
No wonder we're falling behind, progress requires investment. And our rich elites are too stingy to actually invest into progress, they more like to invest into lobbying in order to keep the status quo.
One of the major benefits of being a American is that even though our politicians are garbage and the science of central banking in the USA is to economics what mercury pills and blood letting is to medical science... Everybody else has at least slightly more incompetent leaders and policies.
Take the dollar, for instance. One of the major reasons it is still dominance reserve currency is because major contracts in other countries often peg the value of the contract to the dollar rather then local currency. Even if the contracts have nothing to do with international trade or USA. The reason for this is because the local currencies are far more likely to fluctuate in value thus putting long term projects at financial risk.
This sort of thing isn't so much because central bankers in USA are brilliant, but more to do with that central bankers in other countries are far stupider.
Since the 1970s the USA financial policy is one of exporting debt in exchange for importing goods. Bizzarely the rest of the world has allowed this to work. The upside is that this allows Americans to benefit from making foreign goods much cheaper for essentially nothing. The downside is that it has made industry in the USA much more unprofitable and thus annihilating it.
But it continues to work. China continues to use financial manipulation and central control of the economy to produce massive amounts of goods at a great loss to the wealth and well being of the Chinese people, which keeps the USA economy afloat. EU is obsessed with protectionist policies and using their economy to project "soft power" in a bid to maintain some semblance of European Empire-era policy controls over its former colonies... which makes it even less competitive then USA industry. So much so that it is fairly likely that in 50 years people will be trying to go from Europe to Africa to get jobs.
This isn't what winning looks like. The reason why USA seems like a powerhouse economy compared to EU is because its leaders don't fail as badly.
Personally I think this just shows how flawed the GPD measure is - it's really just a measure of money going around, volume of trade, not really wealth.
What do facebook and similar tech giants, which contribute significantly to US GDP, really, actually, contribute to our collective wealth, as in improved material living conditions and capacity?
Well they have many high paying jobs, and those people pay taxes. Facebook itself pay taxes. And facebook provide connectivity to billions of people which itself is very valuable.
Inflation is a thing though. My money is worth a lot less in the US than it is in Europe. Rents are higher. Restaurants are more expensive. Food and produce in the supermarkets are more expensive. And so on.
The US has created a lot of inflation through its defense budget, things like the inflation reduction act (which added a trillion $ or so to the economy, which is ironic), etc. And people commonly take loans to buy cars, houses, etc. Which all adds to inflation. It creates a lot of money but not a lot of wealth or well being.
Which is why despite being so rich, poverty levels are substantial in the US, medical care is expensive/unaffordable, and illness is a potential bankrupting event for a lot of people. Life expectancy is low and dropping (relative to other countries). Literacy and education levels are at an all time low and obesity is a national decease associate with a class of people that don't have good access to quality produce or health care.
The EU is too busy with important stuff like curb stomping fossil fuels, plastics, nuclear energy, combustion engines, farming, old buildings, old cars, entrepreneurship, free speech, meritocracy, traditionalism, memes, anything russian... We don't have time to care about petty crap like "the economy". We're gonna be climate-neutral by 2050, baby! (whatever that means, I'm sure China & co will be right behind us)
Well, it could be worse, I guess - we could be Canada.
The article misses an important part of how energy sanctions against russia affected europe. It mentions increased energy cost but it misses one of the main reasons of the big increases last years. The energy sanctions probably affected europe itself more negatively than russia. EU needed an independent foreign policy since several years ago, instead of following USA's policy blindly even in parts where it was definitely against its interests, and thus getting into such deadlock situations. Unless it defines its own geopolitical interests more clearly eu politicians cannot claim that "they know what needs to be done" because they clearly don't currently, not because they are stupid but because what needs to be done requires a different context, with better defined interests and international relationships, than the current one to plan upon.
PS The original title "Why Europe is falling way behind America’s powerhouse economy" is much better and more concise. In fact the edited title actually confused me in the beginning.
> Otherwise please use the original title, unless it is misleading or linkbait; don't editorialize.
The EU's "independent" foreign policy is what led them to ignore US advice and rely on Russia gas. They could have still been independent and made a different, better decision but blaming the US is farcical.
Why should they? When the only thing they should not have done was not shoot themselves on their foot?
They could have not consented to the eastwards NATO expansion in the first place, that does not serve anything in having peace in europe. But LNG from the US is a quite lucrative business, plus having a weaker and less competitive european economy. Their incompetence and inability to make any trace of proper foreign policy that is not just summarised just being dragged behind the US foreign policy is a major factor that fuels the far right rise last years.
59 comments
[ 4.5 ms ] story [ 122 ms ] threadAnd cultures... And this ain't gonna change any time soon...
This puts native speakers at and advantage. We're talking billions of people on this planet. The tech that OpenAI recently demoed, allows real time translation of pretty much any language to any other language. Babelfish just stopped being science fiction. On a side note, somebody needs to productize a fish shaped bluetooth earbud.
Anyway, that enables a whole range of people that are currently hard to interact with because they don't speak English well, or at all, to interact with quite literally anyone on the planet that speaks something that LLMs can make sense of. Even people only speaking relatively obscure dialects or languages. That's going to have an effect on international trade and other exchanges. Not speaking English is going to stop being a hurdle.
And likewise, LLMs can make it easier to navigate bureaucracy and deal with other local customs and procedures. I live in the EU.
Different SKUs for each country. It's just a nightmare to try and buy something in Europe
I had to learn English to use computers. It was hard. Fallout games helped a lot. I played with a dictionary by my side. Soon we will all learn chinese to do the same (and read relevant scientific articles).
It's not an open free flowing market like people might think it is. It makes it less competitive
> The wealthiest 10% of Americans own 93% of stocks even with market participation at a record high
https://markets.businessinsider.com/news/stocks/stock-market...
Europeans live better lives at the cost of being ridiculed line doesn’t go up.
https://news.ycombinator.com/item?id=40681116
The convicted felon can schtoop a pornstar while signing an executive order exiting NATO and promising to build gulags for his enemies, it doesn't matter. All that matters is the perception, and perception is all about marketing.
US GDP, broadly speaking, is the broken window theory. Europe delivers better quality of life, cheaper, based on the objective metrics.
“Price is what you pay, value is what you get.”
https://www.pgpf.org/blog/2023/07/healthcare-spending-will-b...
https://www.cms.gov/data-research/statistics-trends-and-repo...
If those things aren’t important than yeah, it’s not the right measure.
How do you think those things are paid for? Fairy dust?
And you call me uneducated?
Peak HN in this comment!
So you're still comparing like to like.
And your example of 3% "skimming" ignores that most of that fee gets kicked back to consumers.
GDP is precisely one such imagined quantities that could easily be 10x more or less depending on who's doing the valueing.
Europe is not one country, nor is it just the EU, which itself is not a federation (people abroad seem to keep somewhat ignoring this important aspect). For the time being, we're not united under one flag, it's just a symbol of peace really. We're (mostly) happy neighbors, despite all the issues, despite proclamations by EU leaders on CNN.
These are the movers and shakers. Any barrier to entry for people creating businesses and selling products to the public is a innovation murderer.
Big companies are bureaucratic morasses that have very difficult time adjusting to change. They have figured out how to do something successful enough once to get big, but as time moves on the behavior that lead to profitability 20 years ago leads to bankruptcy now.
This is why they rely on buying small businesses for new products and different approaches.
If it is hard and dangerous to start new ventures and be able to find and hire the right people and fire the wrong ones then you are going to have a society with very little in the way of actual innovation.
Big governments love big corporate businesses. It is a lot easier to manipulate and regulate a handful of big businesses then it is for thousands of mostly anonymous unknown businesses that come and go on a yearly basis. But you need that unregulated chaos and competition for innovation to happen.
No wonder we're falling behind, progress requires investment. And our rich elites are too stingy to actually invest into progress, they more like to invest into lobbying in order to keep the status quo.
Europe has its own equivalent of the IRA in the form of the European Green Deal, that should be doing something.
This is an unpopular take that will probably give me a few downd00ts but the reasoning is obvious to anyone that knows how executives think.
Businesses are like water, they will go the path of least resistance to make a buck up to and including going to low labor rights locales.
Take the dollar, for instance. One of the major reasons it is still dominance reserve currency is because major contracts in other countries often peg the value of the contract to the dollar rather then local currency. Even if the contracts have nothing to do with international trade or USA. The reason for this is because the local currencies are far more likely to fluctuate in value thus putting long term projects at financial risk.
This sort of thing isn't so much because central bankers in USA are brilliant, but more to do with that central bankers in other countries are far stupider.
Since the 1970s the USA financial policy is one of exporting debt in exchange for importing goods. Bizzarely the rest of the world has allowed this to work. The upside is that this allows Americans to benefit from making foreign goods much cheaper for essentially nothing. The downside is that it has made industry in the USA much more unprofitable and thus annihilating it.
But it continues to work. China continues to use financial manipulation and central control of the economy to produce massive amounts of goods at a great loss to the wealth and well being of the Chinese people, which keeps the USA economy afloat. EU is obsessed with protectionist policies and using their economy to project "soft power" in a bid to maintain some semblance of European Empire-era policy controls over its former colonies... which makes it even less competitive then USA industry. So much so that it is fairly likely that in 50 years people will be trying to go from Europe to Africa to get jobs.
This isn't what winning looks like. The reason why USA seems like a powerhouse economy compared to EU is because its leaders don't fail as badly.
What do facebook and similar tech giants, which contribute significantly to US GDP, really, actually, contribute to our collective wealth, as in improved material living conditions and capacity?
That was the aim. EU had started to become a nail in the back of US so US is working on it.
The US has created a lot of inflation through its defense budget, things like the inflation reduction act (which added a trillion $ or so to the economy, which is ironic), etc. And people commonly take loans to buy cars, houses, etc. Which all adds to inflation. It creates a lot of money but not a lot of wealth or well being.
Which is why despite being so rich, poverty levels are substantial in the US, medical care is expensive/unaffordable, and illness is a potential bankrupting event for a lot of people. Life expectancy is low and dropping (relative to other countries). Literacy and education levels are at an all time low and obesity is a national decease associate with a class of people that don't have good access to quality produce or health care.
Well, it could be worse, I guess - we could be Canada.
PS The original title "Why Europe is falling way behind America’s powerhouse economy" is much better and more concise. In fact the edited title actually confused me in the beginning.
> Otherwise please use the original title, unless it is misleading or linkbait; don't editorialize.
They could have not consented to the eastwards NATO expansion in the first place, that does not serve anything in having peace in europe. But LNG from the US is a quite lucrative business, plus having a weaker and less competitive european economy. Their incompetence and inability to make any trace of proper foreign policy that is not just summarised just being dragged behind the US foreign policy is a major factor that fuels the far right rise last years.