A Conservative Accidentally Makes The Case For Social Democracy

I agree with noted conservative commentator Ezra Klein that Manzi's reply is indeed convincing. To wit, he explains why he chose at one point to discuss relative prosperity (using GDP per capita) and at another point to discuss overall GDP (which he views as measuring relative economic power), and he shows that the once you understand which measure is being employed, his statements all hold for all countries and time periods. Your post accuses him, implicitly, of measuring the wrong thing, for the wrong time period, for the wrong countries. His reply shows that he did no such thing, and that even the relative stability of the U.S. lead in relative prosperity turns out to be a surprising result (we've maintained a lead we were thought to be likely to surrender). In reality, your post shows only that Europe, being substantially behind the US in relative prosperity in 1980, only managed to keep pace in growth of same over the last twenty years, and did not catch up.
His point that pursuing the gains offered by social democracy would likely cede economic power (he does not seem to assert that it would harm relative prosperity) goes entirely unchallenged by your argument. Failing to have acknowledged why he looked at overall GDP, you missed his point entirely. (You also did not acknowledge that his original piece explained why he looked at both measures, instead implying he didn't get which was more important or why).

I fail to see how you can assert, therefore, that he doesn't address the main problems. He seems to have answered every objection by demonstrating that the answers were there in his article to begin with. If you want to dispute his point about economic power and say that we should leap for a European emphasis on relative prosperity, then you'd have to answer, at a minimum, his original point about Europe's being able to rely upon American security commitments. It won't do to simply to pretend he never made those points--they are crucial to his argument.

I would strongly challenge the "relative prosperity" argument as the provision of public goods (health, education etc) is both more comprehensive and of better quality in most western European countries and that is why the subjective sense of prosperity is higher there than in the U.S. You don't have to have a social democracy per se to have a high-level provision of public goods, but it does help to have a willingness to accept a higher rate of personal taxation in return for specific provisions that stabilize life expectency, educational equality, and the like. It's noticeable that most western European countries have been able to ride out the recession with less suffering than we have. I'm also a little curious about the political argument regarding military capability, as military capability did not prevent, but rather enhanced, Europe's destructive spiral from 1914-1945.

To add in post-communist countries in Eastern Europe and Russia and call it all "Europe" is nothing but a crude fudge, intensified by leaving out Switzerland etc by way of using the EU when it suits and then a grab-all "Europe" when it doesn't. It's not primarily that they aren't social democracies (to a larger degree Italy isn't either, nor Ireland), but that their economic record is totally skewed as they had a soviet-style system for decades. You might as well include Mexico as part of the U.S. on the grounds of geography alone. As far as I see (correct me if I'm wrong) Manzi doesn't address these points in his response either.

Ironyroad, to your second point first, Manzi replies on the collection of countries that if you use the EU-15 preferred by Chait than you get the same figures--so he doesn't appear to have been gaming the figures to fudge when it suits. I agree with you that the inconsistency of the applicability of "social democracy" is a problem for such sweeping arguments.

As to your first point, it's far from clear how to gauge relative prosperity, yes. Manzi is merely saying that he uses GDP per capita to discuss relative prosperity, and he does not dispute the figures offered by Chait. He does note that, if GDP per capita is important, then ours has been higher by 20% or more than Europe's for the relevant time period. As to the subjective sense of prosperity, well, I don't know what your measure is there, but it remains the case, I believe that more people by far wish to move to the US than to Europe.

How disappointing that three intelligent conservatives in a row -- Manzi, Douthat, and Salam -- have failed to address Jonathan's valid point about relative v. absolute prosperity. Reihan just chalks the critique up to "hyperpartisanship," Ross ignores Jonathan all together and hones in on population growth (a pretty orthogonal point), and the best Manzi can come up with is some quip about Taiwan's military.

Part of it is the start date. Several EU-15 countries had robust economic recoveries in the 1960s and 1970s that would be unaccounted for by moving the goal posts to 1980. In fact, using USDA statistics on real GDP-per-capita, a 1969 start date would have led to the conclusion that it was Europe who was the better economic performer:

Prim, one can only assume that you read neither Manzi's original article nor his reply to Chait, which addresses head on the differences between using GDP and GDP/per capita, and does not amount to a "quip about Taiwan's military." If you had, you'd note, rather than seem to deny, that the original article (which Chait has not to this point acknowledged) does indeed discuss GDP per capita, in a section about relative prosperity. How can you accuse him of ducking the point? Chait is the one who ignores this discussion in Manzi, not the reverse. Likewise, Salaam points out that, during the period in which Europe was supposed to catch up with the US in GDP per capita, it only kept on pace. That may or may not help Manzi's overall argument much, but it surely doesn't constitute "ignoring" relative prosperity.

wrd, I take your point that Manzi may have a reasonable basis for his broader comparative conclusions (my head swims when too many figures appear) but I think the question of relative prosperity absolutely requires non-income goods to be taken into account. If you live in a country (I'm exaggerating here just for the moment) in which a job loss means also a loss of medical coverage, then the component of income covered by the provision of health care, however it takes shape, in the comparison country has to be listed in the credit column for that country. Otherwise you're comparing apples and pears (or crabapples).

I think the desire to emigrate to the U.S. as against to Europe might well be something for which it would be very hard to collect a data pool. Certainly a perceived greater field of opportunity and the assumption of an immigration-friendly society have a lot to do with that, but I think it might be also easy to establish that almost nobody in Europe wants to swap their health care system for ours.

wrd - There's more than a little I like and agree with in Manzi's original article. But I find his defense of using absolute GDP measures over relative GDP/capita measures wholly unconvincing. Perhaps this just goes straight to the progressive v. conservative mindset: using aggregate GDP as a proxy for ideological success -- to say nothing of geopolitical strength -- is at some level just a numbers game. Nevertheless, a noticeable number of conservatives do just that, and point out, just as Manzi does, that among other things aggregate GDP is a better indicator of military capacity. That's fair as far as it goes, but I tend to think that the U.S. has passed the threshold where we'd ever have to face a binary choice between a strong and weak military. Otherwise, aggregate GDP doesn't tell us much about how actual people are doing. Instead, if we're going to elevate the economic performance of the U.S. and the EU-15 to a debate over ideological triumph (a debate, by the way, that Ross and to a lesser extent Manzi himself initiated), then a progressive would be inclined to hold the effects of population growth constant and look purely at each individual's share of prosperity on the ground. It amazes me when conservatives are reluctant to do this, since they often make the completely fair argument that China's urban growth is to a great extent simply due to the mobilization of rural human capital, which is unsustainable.

"...a progressive would be inclined to hold the effects of population growth constant and look purely at each individual's share of prosperity on the ground. It amazes me when conservatives are reluctant to do this..."

It amazes me that you have apparently read this sentence from Manzi: "Exactly as Mr. Chait indicates, GDP per capita would be a far better measure of prosperity – which is why I used that metric when discussing relative prosperity earlier in the piece," and yet continue to maintain that he is reluctant to do what precisely he did, and for the reasons you cite.

It is frankly hard to know how to respond to a person who won't take yes for an answer.

Your position seems to be that aggregate GDP is never an interesting fact about the world, or that one should only be permitted to discuss things for which GDP per capita is a more relevant variable than aggregate GDP, or some such. That's not really defensible.

Shifting gears to the big-picture premise, I recommend a look at Virginia Postrel's 1998 book "The Future and Its Enemies" for a broader perspective on the tension between the "dynamists" and the more stasis-minded (of both parties).

wrd - If I didn't make this clear enough in my earlier post, then the fault is mine: my objection is more with Ross and Reihan who took Jim's growth figures for absolute GDP and ran with them as some sort of clear-cut vindication of the American model without considering the very different conclusions to be drawn by the GDP-per-capita numbers. Jim I think implicitly (and unwisely) bought into this conclusion at first and has since walked back a little.

Furthermore, while I get Jim's argument about the US and the EU-15's relative shares of world GDP over time, I just don't find it nearly as interesting as he does. This is probably because he assumes away the importance of global economic dominance. But, frankly, so what? If Europeans have kept with us in terms of productivity (check... often exceeding us in fact) and prosperity (also check), then of what value is your country's historical GDP:World GDP ratio? It makes even less sense to get into a pissing match on this metric when your main developing rivals -- China and India -- have a near limitless supply of human capital to mobilize and thus grow GDP. I sincerely doubt that China's gains in world GDP share are of comfort to their persistently huge populations of urban and rural poor, populations much larger than in Europe or America. Plus, so much of this is an issue of scope and timing that it's almost meaningless: start at 1960 and you get once result, but start at 1980 and get another. Not that illuminating.

Finally, for the umpteenth time, I don't think Jim, or you for that matter, save your continued insistence that "Jim is convincing", have really addressed Jonathan's critique head on. Frankly, share of world GDP is a great chest thumping statistic, but it's an incomplete premise on which to judge social policy. Ross comes the closest in actually getting to the crux of the critique when he argues that social democracies are less capable of accommodating growing populations, but 1) that's a titanic causal leap to make and I'm pretty shocked Ross would make it, and 2) once again, Ross never illuminates us as to why slower population growth is a worthwhile measure of a societal success.

I think what it comes down to is how you might go about judging the different economic/legal/cultural paths of Europe and America in the post-war years. Jim wants us essentially to look at how each society in aggregate has kept up with Asian and to a lesser extent South American economic growth (bigger is better). Jonathan is arguing that a society ought to be judged by the prosperity and productivity of its average person. I see the value of Jim's insight, but if I had to choose in which nation I'd want to be born, my primary criterion would be how well-off I'd be rather than the size of the country's economy as a whole.

Prim, I'm not sure that on the broadest point that Manzi makes, that economic power is essential and that Europe has surrendered theirs in favor of maintaining a social welfare state while they free-ride on US economic/military power, I entirely agree with him. My point is that Chait wrote a piece accusing Manzi of using aggregate GDP while ignoring per capita GDP, without acknowledging that Manzi uses both, carefully distinguishes why, etc.. Chait was completely wrong there. Secondly, Chait implicitly (and many following him in the blogosphere) accuses Manzi of choosing countries and start times to manipulate the data--of choosing apples when apples suit his case and oranges when oranges do, and of confusing all of this for the reader--when Manzi's convincing reply shows that he did no such thing.

Chait's purported takeaway, that when we clear away the phony numbers and strip away the East European countries, you get a picture where per capita GDP growth in Europe was on a par with the US, is apparently what you think is the real critique. But Manzi (a) never denies this point, (b) in his reply, notes that even Europe's relatively equal per capita GDP growth underperformed expectations (the convergence that didn't happen point from Reihan) for the period in question, and finally explains that he thinks that Europe's surrender of aggregate GDP is not a wise course for the US to follow for the geostrategic reasons he outlines.

What is Chait's rejoinder, when you strip away, as you now must, his completely sloppy and totally rebutted points about Manzi's choice of start dates, and his choice of which European countries, and his "failure" to look at per capita GDP? Only that Chait (like you) is more interested in per capita GDP. That's not a "critique"--it's not even an argument. The arguments here are blown to smithereens, because they rested upon a sloppy or disingenuous presentation of Manzi's arguments.

If you want to make a case that military power isn't as crucial as Manzi thinks, or that Europe is not really free-riding on our choices, etc., etc., I'm all ears. But the case Chait makes amounts to nothing, and that's why Manzi's reply is convincing. His reply to Chait, that is.

I myself have been and remain ambivalent about the wisdom of America's efforts to maintain our military/geopolitical might. But nothing that Chait has written here even addresses that point.

The GDP metric is the wrong choice. It should be real disposable income adjusted for relative purchasing power.

Why?
1. Disposable income is really what matters to citizens. And this is where the US crushes the EU-15 and why the EU-15 has far less material wealth -- cars, HD TVs, living space. etc.. You know, where the average Sweden HH has about the same material wealth as Mississippi

2. GDP is a crude measure that values a dollar of Gov expenditure the same as private sector, even though the Gov dollar is likely adding far less to real economic output. You could hire every unemployed person in US to dig holes and fill them in and GDP would rise significantly.

The relative loss of GDP share is due to flat population growth in Europe, not their "social democratic" character, except insofar as that social democratic character discourages children, which needs an argument. Otherwise, Manzi isn't saying anything even plausibly bad about social democracy as such.

A discussion of the merits of European social democracy should include the human cost of the chronically high unemployment in western Europe. For simplicity I take France as an example. In France it is very expensive to hire a new worker and hard to fire a worker once he is on the job. The result is that a lot of potential workers exist on the dole and never work at all. That's millions of people who never gain the satisfaction that comes from supporting oneself and one's family and making a contribution to society. I'm not just talking about Muslim immigrants. The problem is chronic among the non-Muslim population as well.

Who is more productive, the average French worker or the average American worker?
Surprisingly it's the French worker. The reason is that because employees are so expensive French employers hire only the best workers. In the US, where it's much easier to hire and fire, the labor market comes close to clearing.

Even if you prefer European socialism to American liberalism (in the classical sense of the word) the European system is a poor bet. It simply isn’t sustainable. With birth rates below replacement and a rapidly aging population combined with a growing, increasingly aggressive Muslim population unable or unwilling to assimilate, western Europe is on a suicidal course.