How Do We Want To Measure Up

I often come across an opinion piece that assertively proclaims something like “Not Like Europe.”  By that the author means that the US should not run its business like Europe does.  And by business they mean economic and social welfare policies, health policy and so on.  Europe, of course, has its own fair share of maladies and crises, but it is also a relatively young political entity.  Its life as a single market is just over thirty years old and its smaller version under a single currency is 25 years old. 

And yet, in spite of its young life and a much more fragmented authority across independent and sovereign states, Europe stands out as a viable alternative model in economic and social policy.  This is of particular importance now as the world stands at the crossroads of challenged national priorities, intensifying international rivalries, and the search for a new course.  If we have learned anything from recent events, it is that the model of liberal democracy loses its appeal when it fails to deliver to all citizens.  In the context of global competition for political and economic systems, the beneficiaries are the Chinese one-party rule model, and the one-man rule best exemplified by authoritarianism and crony capitalism as in Putin’s Russia.

Western liberal democracy itself is not a monolithic entity.  Although the core of political and civil liberties is basically the same, there are distinct differences in economic and social policy between the US and Europe.  If we want to summarize these differences it comes down to this: whereas the US prioritizes production over distribution of the aggregate economic output, Europe is more willing to prioritize distribution even at the expense of production.

Americans’ focus on aggregate output is usually behind our scolding of Europeans for their poorer performance in this connection.  But success in aggregate numbers can blind us from noticing failures at the level of the individual citizen.  Eventually, political systems are judged by whether they can meet the needs and aspirations of their citizens.  We have just seen in the US that a plurality of voters set aside concerns about threats to democratic rules and norms in favor of their economic anxieties.

The similarity in the political and economic organization of the US and Europe offers us the advantage of what researchers call a natural experiment.  That is, we can judge the validity of the aphorism “Not Like Europe” by checking how well we do in comparison to European nations.  To that end we can turn to a slew of international comparisons.  This approach is not without flaws but it is not worse than the one taken by those who postulate the superiority of the American model.  In fact, I would argue, raw international comparisons offer a good amount of food for thought.

This fall the OECD (Organization for Economic Cooperation and Development) issued its Better Life Report that ranks its members according to various economic, social, and human development indicators.  As expected, the US ranks very high in economic indicators, like income, jobs, and housing.  Not so high though in indicators related to social conditions and human development.  Thus, in health and quality of environment we rank 8th and 9^th.  Despite being second among OECD countries in expenditures per student at all three levels, we rank 20^th in terms of student skills and educational attainment.  In indicators related to overall quality of life, like safety, community and relationships, life satisfaction, and work-life balance, we rank 28^th, 17^th, 14^th, and 29th, respectively.

Community and work-life balance deserve special mention.  Recent studies have provided ample evidence that a significant percentage of Americans suffer from loneliness and lack of meaningful friendships and relationships.  Despite the intense engagement with social media Americans feel more isolated now than in the past.  Could this be due to an overload of work?  In fact, Americans allocate to work a lot more hours than Europeans.  Thus, in 2023 Americans worked on average 1705 hours, a lot more than the 1342 hours worked by Germans or the 1487 by French.  This significant disparity in hours worked also explains the bigger GDP produced by the US relative to the European Union.  However, despite working fewer hours, Europeans in West and North Europe are able to achieve better results in overall quality of life because of a more efficient mix of public and private markets.

Besides the OECD report there are other international comparisons that tell us how we measure against other countries.  For example, in the UN comprehensive Human Development Index we rank 20^th.   Compared to European countries we have the highest income inequality and despite our greater aggregate wealth we have inexplicably high poverty levels.  In life expectancy we are 48^th.  Our infant mortality rate is a multiple of what it is in countries like Norway, France, and the UK.  The same is true in relation to maternal mortality rate.

The above findings show that our stellar performance as measured in GDP does not buy us top health, top education, or top quality of life.  This does not mean that a large number of Americans does not enjoy the best of all things in all these categories.  But this implies that our subpar overall performance as a nation is due to the fact that an equal if not bigger number of fellow Americans enjoy so much less of the things that make life better, safer, and healthier.

The fault lines of this uneven enjoyment of quality of life run across race, class, and states.  Still to this day, Black and Latino Americans lag their fellow White Americans in education, health, employment, income, and wealth.  The two-thirds of non-college educated Americans also lag college-educated Americans in health, mortality rates, as well as jobs and income.  After all, their disillusionment with the efficacy of the political system to deliver a better life has contributed to the recent realignment of constituencies in the country. 

Of course, not all European nations compare favorably to the US.  But not all states in the US are at par with each other either.  Instead, there are stark differences.  In educational attainment, income level, quality of health and medical care, drug abuse, opioid-related deaths as well as marriage and divorce rates and births out of wed lock we do not have one but multiple Americas.

There is an interesting pattern in the outcomes we see across countries and US states when it comes to indicators that proxy for overall quality of life.  Countries and states that achieve better outcomes are more likely to have governments, and in many cases national policies, that seek to alleviate gaps in opportunities, eliminate discrimination, and achieve a better distribution of economic output.  This latter objective is achieved either through pre-distribution, that is, by ensuring better wages from work, or redistribution, that is, by providing a safety net that shields their citizens from the vagaries of life, like illness and unemployment or just bad breaks in their lives. No matter how we choose to look at the data, we realize that if there is such a thing as American exceptionalism, it is only found in the fact that the richest country of the world is not fairly delivering to all its citizens the necessities of a good life.  I don’t want to sound so naïve as to advocate that we can achieve absolute equity.  But when we see that our extraordinary wealth leaves so many of our fellow Americans behind, we owe to do better.  Which means that the path forward ought to be the reform of our zero-sum paradigm to one of a more inclusive and fairer system where success is measured at the level of the citizen not of the aggregate output.