Edmund S. Phelps, 2006 Nobel Prize Laureate in economics, takes a stab at explaining Europe’s lagging economic performance in this editorial in the Wall Street Journal.
He has some interesting things to say, albeit in bone-dry prose. He doesn’t blame European social transfer payments for the lackluster performance (let us leave to one side, for the moment, how this performance is measured, and whether it’s really all that lackluster). Rather, it’s the mentality:
The values that might impact dynamism are of special interest here. Relatively few in the Big Three [France, Germany, Italy] report that they want jobs offering opportunities for achievement (42% in France and 54% in Italy, versus an average of 73% in Canada and the U.S.); chances for initiative in the job (38% in France and 47% in Italy, as against an average of 53% in Canada and the U.S.), and even interesting work (59% in France and Italy, versus an average of 71.5% in Canada and the U.K). Relatively few are keen on taking responsibility, or freedom (57% in Germany and 58% in France as against 61% in the U.S. and 65% in Canada), and relatively few are happy about taking orders (Italy 1.03, of a possible 3.0, and Germany 1.13, as against 1.34 in Canada and 1.47 in the U.S.).
The weakness of these values on the Continent is not the only impediment to a revival of dynamism there. There is the solidarist aim of protecting the "social partners"–communities and regions, business owners, organized labor and the professions–from disruptive market forces. There is also the consensualist aim of blocking business initiatives that lack the consent of the "stakeholders"–those, such as employees, customers and rival companies, thought to have a stake besides the owners. There is an intellectual current elevating community and society over individual engagement and personal growth, which springs from antimaterialist and egalitarian strains in Western culture. There is also the "scientism" that holds that state-directed research is the key to higher productivity. Equally, there is the tradition of hierarchical organization in Continental countries. Lastly, there a strain of anti-commercialism. "A German would rather say he had inherited his fortune than say he made it himself," the economist Hans-Werner Sinn once remarked to me.
It may be that the Continentals finding, over the 19th and early 20th century, that there was little opportunity or reward to exercise freedom and responsibility, learned not to care much about those values. Similarly, it may be that Americans, having assimilated large doses of freedom and initiative for generations, take those things for granted. That appears to be what Tocqueville thought: "The greater involvement of Americans in governing themselves, their relatively broad education and their wider equality of opportunity all encourage the emergence of the ‘man of action’ with the ‘skill’ to ‘grasp the chance of the moment.’"
I don’t know where Phelps is coming from ideologically, but — as you can see by his prose — he is an academic economist, not a polemicist. Therefore, I wouldn’t call this Europe-bashing, despite the categorization.
Further, his theory is confirmed by my daily observation. There is a fundamental value difference in Europe. Especially in France. I remember being surprised to read that 76% of young French people wanted to get a job working for the government. In a highly centralized country with a strong state tradition, I could well imagine this number being perhaps 30-40%, but 76% struck me as completely off the scale. Numbers like this show a radically different value orientation than prevails in North America, where working as a clerk in a large government bureacracy is mocked as the epitome of dull, bureaucratic routine.
In Germany, there is less stress on government employment (although it’s still generally viewed as prestigious). The governing mentality is that people want to get a job — any job — as long as it’s secure. "The less work I have to do, the better," dozens of people have said to me. They don’t see this as laziness; the less time they have to spend in whatever job it is they do, the more time they have for their private life and their vacations, which are the real hub of their existence. They may not put any as many extra hours as a gung-ho American would into their their daily job of filing insurance documents in a local branch office, but they take much more care about what they eat, what they wear, and how carefully they maintain their family ties and friendships.
Of course, there are exceptions. I have met plenty of proud-to-be-hard-working, enterprising Germans as well. They’re the ones complaining non-stop about their passive, dependent countrymen, and the thousand-tentacled bureacracy that’s "strangling this country." A recent bright-yellow cover of Manager Magazin said it all: "The War Against Independent Entrepreneurs." One can also spot these people in the departure lounges of airports, waiting for flights that will take them, once and for all, to North America or Britain.
What should we do about this? I would say: nothing. Vive la différence. If you define a successful society as one that maximizes opportunities for the accumulation of private wealth, as the Wall Street Journal surely does, then you might as well fly to America tomorrow. Europeans define a successful society differently, and will always do so. The only time the difference in economic performance (once again, according to certain indicators) becomes a problem is when Europeans look across the Atlantic — or across the English Channel — with envy, rather than healthy curiosity.