Diary

Europe By The Numbers

As most of you know, your humble correspondent makes multiple business trips a year to Europe – and thus has had plenty of time and experience with which to sort fact from illusion.

What follows is based on a comment that was requested to be upgraded to a diary entry. So here goes.

We are continually pelted with various forms of goading, that somehow “Europe” is just a much better place than the United States. This runs the gamut – from murky claims that regardless of whatever there is more “social justice” in Europe, all the way to flat-out claims that the standard of living is higher over there.

But how do these claims stack up when one looks at real numbers?

More below the fold….

Lets get some numbers – some plain old numbers, apparently for 2007. According to this source, the United States logged a GDP per capita of $46,000, while Sweden is back at $36,900 and Germany is way back at around $34,400. We can compare that to the available data on U.S. states, such as that found here.

You can see that Sweden and Germany come in at about the very bottom of U.S. states – putting them at the level of West Virginia and Mississippi.

I actually had this sort of “debate” three or four years ago when I was on a conference panel discussion in Croatia with an EU Commissioner from Greece (I think he’s now the sitting EU Environment Minister). He started waxing eloquent about how rich and wonderful the EU is, particularly citing Sweden as being “very rich”; I had to take issue with that claim, and quoted the numbers above (in 2004 form since it was 2005). He was absolutely astonished, but the numbers speak for themselves. (He backed off and cited Luxembourg, forcing me to contend that Luxembourg isn’t a real country, but is actually a bank that’s large enough to have its own airport.)

Another factor just below the surface is that places like Sweden and Germany have become frightfully expensive. Some years back, after a business trip to Norway, I commented to a friend back home that “Norway is a country that is entirely at mini-bar prices.” That’s something that’s now afflicting Germany in particular very badly, and it’s a big contributor to its high unemployment and economic stagnation. Business is fleeing Germany (with Austria being a popular alternative choice); further anecdotal evidence is that last year Nokia closed its last remaining mobile phone assembly facility in “old” Europe, in Germany, and moved the production to Romania.

I personally understand Nokia’s decision. Some years back, our efforts just drifted naturally from western to eastern Europe. And that’s about a lot more than just “cost” (I’m not in a “low cost rules” business). The entire economic system in the east is geared toward growth and doing things – and people there actually want to work, not sit in cafés all day discussing how pleasant life is.

One final problem that always strikes American visitors to the “Germanic” (northern European – particularly Germany and Scandinavia) countries is the cleanliness and order. For decades now, our domestic socialists have always cooed over this (e.g. Sweden and Finland) and basically claimed that this is proof of the goodness of socialism. What they miss is that this situation is cultural rather than political or economic. The best summary I’ve ever seen of this is insightful but hilarious.

However, the final piece to note is that Estonia is also a northern European country in that regard; when I was there again back in October, the post-Soviet recovery has clearly reached the point where Estonia is as clean, modern, orderly – and technophilic – as is Finland. Yet Estonia is one of the lowest-taxed and most business-friendly jurisdictions on the planet. That’s why I’m there so regularly.

I guess the bottom line after more than a decade of multiple business trips a year to Europe is…. don’t be fooled….