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Momma said wonk you out

DOES EUROPE REALLY HAVE LESS UPWARD MOBILITY THAN AMERICA?

Tax quibbles aside, Russell Shorto's explanation of how he stopped worrying and learned to love the European welfare state is nicely done. The answer is pretty simple: He started to like the welfare state when he began to receive its services. This, incidentally, is the sort of thing that conservatives worry about quite publicly in the United States. When Ben Nelson says he'll oppose the public plan because "at the end of the day, the public plan wins the game," he's gesturing towards this point. People, in general, like the welfare state. Conservatives have an array of complicated arguments about why they don't really like the welfare state, and are just fooled by the sense that they're getting Medicare for free, but that doesn't change the fact that Medicare is wildly popular. Indeed, it's what makes the fights over new entitlements so terribly bitter: There's a (largely correct) sense that expansions of the welfare state do not go away.

Shorto also offers some criticisms of the Netherlands. It's not very consumer-oriented. Nothing is open on Sundays.. He also argues that there's "a cultural tendency not to stand out or excel...the very antithesis of the American ideal of upward mobility." But you hear this a lot, and it's not quite true. Americans are in the odd position of fervently believing in upward mobility while not actually having very much of it. Eruopeans, conversely, don't really believe in economic mobility but have plenty of it. I don't have the precise data for the Netherlands. But a recent Brookings report examined the relative mobility in other Nordic countries. And the United States doesn't come out that well:

relativemobilityinternational.jpg

These results aren't that hard to explain. But I think you need to first see these survey results:

mobilitybeliefs.jpg

The data, in other words, shows something superficially weird: The United States believes itself to be uncommonly meritocratic. But compared to European countries who don't believe themselves very meritocratic, it actually exhibits less income mobility.

It turns out that there's a bit of a paradoxical relationship between believing your country has a lot of economic mobility and your country actually having a lot of economic mobility. If you believe that your country is extremely mobile, you're likely to believe the results of the economic competition are relatively fair. As such, you won't want to slap the rich with particularly high tax rates and you won't be terribly concerned about spreading economic opportunity. After all, anyone can make it!

On the other hand, if you don't believe your country is terribly mobile, then you're less likely to believe economic outcomes are fair. And if you don't believe the outcomes are fair, you're likely to tax the winners relatively heavily and plow those profits into things like universal health care and free college. Policies, in other words, that spread opportunity more widely and thus make your society more mobile. Put like that, it sort of makes sense. If you believe your society is already economically mobile, you don't spend a lot of time trying to solve the problem of insufficient economic mobility. if you don't believe that, then you implement policies meant to increase mobility. What's odd is that the public perceptions in Europe and America don't seem to be changing much in response to actual outcomes.



COMMENTS

My pushback on this is that the report seemed to compare intergenerational outcomes between the US and Europe.

WWII was a horrible war in Europe, and it took the better part of a generation for the continent to dig out from under it. How much of this is the fact that the US had excellent growth from 1940-1965, while the rest of Europe had far less? Or am I just screwing up the methodology here?

That said, I think the point about the split in productivity growth and income growth in the mid 70's/early 80's are extremely powerful. It really undermines the "meritocracy" argument--after all, shouldn't wages go up with productivity?

But a recent Brookings report examined the relative mobility in other Nordic countries
Umm, Ezra, you do know that Holland isn't actually Nordic, right?

No, he doesn't know that. He couldn't find the Netherlands on a map if you put a windmill on it.

This is all very puzzling. I keep searching my mind for how we got into the disparity between the US and europe on so many issues of life and well being.

One thing that recurs: we are very insular people. People in KY have a very different outlook than in OR, and very few of either have done anything like a multi-month stay anywhere outside the US. We have the weekend/short vacation view of other nations (and tend to only get the 'tourist' view at that.

More than that, however, we are not very interested in how other nation's people live. We visit to see 'attractions' (buildings, largely), not to absorb the culture (maybe food and wine excepted).

We are also fact-resistant in amazing ways. Surely part of this is a failed educational system, but it is broader than that. We don't care about the facts. While largely acting pragmatically, we denounce policy based in 'what works'.

I believe the most significant thing we could do for ourselves is to require and fund each child to spend a half-year in each of two different nations (with different cultures), free from parental influence and mixed in with local students (not clumped together in US student dorms or whatever).

I just wish it was much easier for US citizens to emigrate to another country for longish period (holding dual citizenship) and work/live. I'd probably get tired of Denmark, Netherlands or Sweden, but I'd sure like to discover that for myself. But US society has a fierce hold on us via jobs, insurance, medical care, etc.

Finally, the NYT story was just the thing for giving a short 'on the one hand and on the other hand' comparison. It was unusual in its even-handedness and even more unusual in its insights into another land from a US native's relatively fairminded attitudes.

Good stuff!

I'm interested in France vs. Canada. From what I understand France is far more socialist than Canada but has much lower mobility.

As I've said elseblog, the Netherlands isn't the kind of place where it's easy to stock up on piles of consumer retail goods, if that's your inclination. But, frankly, that doesn't seem to be people's inclination. (On Sundays? Well, the Vondelpark beats the mall.)

As for the paradox, it's a weird secular manifestation of a certain kind of Calvinistic sense of the economically and socially "elect". The kind of guff spouted about "personal responsibility" by certain visitors to this site is just a veneer for believing that certain groups of people deserve to be fucked over.

Here's a paper with some charts and links: http://home.sandiego.edu/~baber/research/freedom.pdf

It's not so much that the Netherlands have a culture of not wanting to stand out or excel, it's more that once you do stand out and excel, Dutch people simply consider it bad taste to obnoxiously flaunt it. The same counts for the 'winner's' attitude that is so important in the United Stated: Dutch people generally frown upon excessive go-getting and chest-thumping. They still want to win, but expect people to be gracious and modest about it. This sentiment probably originated from our highly calvinistic heritage the past centuries. It's actually interesting to see how the typical American attitude developed from a country that also has very strong religious roots (and currently even moreso than any other western country it seems).

All of this is very generally speaking of course, in the same vein as the original arguement presented in this blog entry. Naturally there is oodles of room for deviation, as evidenced by our own versions of executive pay and benefits dramas for example.

I general, the Netherlands have a lot of qualities that would do the United States well, but I think that most of all the US and its good and bad sides are largely a product of the country's size, which makes it hard to just go and form-fit any other western country's policies onto it.

Ezra, I see many objections to your argument:

a) public goods provision depends on how homogeneous countries are. I would like to see how the Netherlands' support for the welfare system fares if Holland had such a diverse (and larger) population as U.S. has. (Remember riots in the suburbs of Paris?)

b) there is relative and absolute mobility. The Brookings study finds that in the last 30 years there has not been absolute mobility. If you think of it though, there is probably something the statistics are not capturing. In terms of standard of living, do you think that people with a median income in U.S. in the 70's were better off than people in U.S. today with a median income?

c) this myth of the european nordic countries should really be reconsidered. In particular, how would they fare without a worldwide driver of innovation and growth such as the U.S., with its high labor market churning and, yes, consumerism too?

d) how efficiently would the welfare state be managed in the U.S.? There is another sector in U.S. that is managed by the (local) government: public education. The performance is incredibly poor. Do we expect the government to be much better at taking x-rays?

It seems to me that the debate about these issues has been poised by the fact that Republicans tend to be so intellectually dishonest that nobody on the left takes their points seriously. A sense of revenge after 8 years of GWB seems operating too ("Now we'll have it our way!"). But U.S. risks to trap itself in a behemothian welfare state without a proper debate about this. Remember that, when you set up huge government agencies, it is hard to bring them down even if they do not perform properly.

firefall, Bloix. "Nordic" is different from "Scandinavian" The Nordic is used correctly here as a denominator for a set of countries that share a comparable social security net and a similar outlook on domestic and foreign policies creating a block of comparable economies.

And indeed, the Netherlands is traditionally considered part of the "nordic block" as it shares more characteristics with those countries then it's direct neighbours, even though it's geographical location would suggest otherwise.

Ezra is correct here.

Wrong Ernst.

"Nordic" comprises Iceland, Norway, Sweden, Finland, and Denmark (Go look up the Nordic Council if you like).

"Scandinavian" is Norway, Sweden and Finland.

As to the welfare state, the Netherlands is somewhat more "northern," in the sense that it is closer to an ideal-type social democracy than other continental European countries, but it shares features common in Germany as well.

In any case, I would for no reason call the Netherlands "Nordic," because it's not and it makes people think you are mistaking it for Denmark (because people seem to confuse the two all the time: Dutch and Danish being too close to distinquish for some people.)

A well made point david,except that I'm dutch and know what I'm talking about, not only am do I have experience as a citizen, it's my job. So trust me when I say that Esza's usage is correct.

As I said, even though the geographical location makes the usage confusion when comparing economic policies with in the countries the netherlands is usually lumped with the Scandinavian countries.

Like many terms the usage of "Nordic" is dependent on context and means different thing in different circumstances.

And no, Scandinavia is not Norway, Sweden and Finland. it is Norway, Sweden and Denmark while nowadays some people argue for inclusion of Finland, it still isn't an completely excepted practise to do so. But I generally favour inclusion

And yes, The Netherlands share features with Germany as well, and so do Norway, Sweden, Finland, and Denmark as well. And also France, Poland, etc.

And as for people confusing the Netherlands for Denmark, that happens just as frequently as people mistake Denmark and Germany, Germany and Poland, Italy and Spain, etc, etc. we can't limit our discourse to the lowest common denominator.

Quite annoying is the permanent mis-use of the term socialism in the US political discussion. Socialism would be the opposite of market economy. None of the discussed countries aims to abolish the market economy. The commonly used description is social market economy - as they obviously attempt to overcome the drawbacks of both the pure market economics and the socialistic (former soviet block) systems.

As an American, Ernst, I will use my citizenship to forcefully argue that Americans do not confuse Germany and Poland etc. the same way they do Danish and Dutch. Trust me.

I realize that the Netherlands is sometimes grouped with the Nordic countries when discussing welfare models; however, I have never read of it or heard it referred to used with the adjective "Nordic." But I have often read in the welfare state literature "the Nordic countries and the Netherlands..." And again, the Netherlands only sometimes fits into that typology, sometimes, in fact, it fits better grouped in with Germany, as I stated previously, depending on what aspect you are discussing.

So, Ernst, I think you are, at a mininum, overstating your case.

I'll take your word on a special confusion regarding Denmark and the Netherlands in America. My experiences are more European oriented.


The uses of northern European, nordic countries, Northern style, model etc are quite common and commonly reverences the Netherlands as part of that. While I agree that the Nordic countries and the Netherlands is more precise, It's often dropped after the first mention for the easier short hand.

Requiring the usage in a blog post is simple pedantry akin to saying "Scandinavia and Finland", which I also find nonsense.

"sometimes, in fact, it fits better grouped in with Germany"

I really can not see where you are coming from with this, while Germany is a very important neighbour and trading party the Netherlands does not better group with Germany then it does with any other north European country. In fact even though it's the most important trading party of all it's direct neighbours I would argue the least likely to partner with as an coherent identifiable group due to it's size and central European location, The Benelux has a far more recognizable common basis for any grouping then the Netherlands and Germany.

I really have wonder on which criteria you might consider doing so.

Ezra is correct here.

No, Ezra made a very minor copy error, Ernst, and your acrobatic attempts to insist otherwise are lame.

The Brookings report uses correlations between the incomes of parents and children as evidence of a lack of meritocracy.

Of course, such relationships could be due to things like cultural values (as the report acknowledges). These in turn may be correlated with wealth, but the fact they are passed down has nothing to do with whether people, given a certain set of values, are in a society that gives them a fair shot at wealth. If a society rewards hard workers, and hard work is a value that is passed down in wealthy families and is then rewarded, that does not show society is unfairly rigid.

Other countries might in contrast simply have more homogenous sets of cultural values, and thus seem to have more "mobility" because variances in income would fall along non-familial lines.

In the German newspaper Frankfurter Allgemeine Zeitung I read last year that the comeback mobility, i.e. the mobility of those who came down from a high level to go back up with their incomes, is much higher in the U.S. than in Germany.

MPH, that's quite consistent with a view in which socially connected american elites take care of their own. a person from the upper classes who falls downwards economically may be better able to trade on his status and connections and return to his original position than someone starting out at the bottom.

Ernst:

It is one thing to initially say in an academic paper "the Nordics and the Netherlands" and then, as a shorthand, say "the Nordics," but that isn't what Ezra was doing. That being said, I'm not really complaining about Ezra's slip. This is a blog and Ezra does good work, so whatever.

As to your other point, I'm happy to admit that, following, Esping-Andersen, Germany is clearly considered to belong to the corporatist prototype and the Netherlands to the social-democratic type. But, for instance, I find it easier to understand the Netherlands healthcare system--about which I am not an expert--by comparing it to Germany's, as opposed to the French or UK system. Now that probably has to do with my ignorance regarding the healthcare model in Scandanavia (though I do understand the welfare state there conceptually.)

In any case, I think it was clearly (accidently) misleading of Ezra to say "other" Nordics, even if he was referring to the welfare state by talking about mobility.

P.S. Basically, I think you make a reasonable point as to why Ezra may have said "other Nordic" from a position of knowledge rather than ignorance, but I disagree that it wasn't a mistake. It was, and it was minor, and I agree with Ezra's main point. So not a big deal. Your response is what prompted me to respond because I think you made too strong a case. If you had merely explained the fact the welfare-state background that you thought made the mistake understanable you would have had a very strong point in my mind. But you won't convince me that it wasn't a mistake.

Arguably I should have said other "Nordic model" countries or "similar Nordic model." But Ernst is correct here, at least in context of this post. We are discussing a peculiar type of "flexicurity" welfare state that's generally considered the Nordic model, and includes, among others, Denamrk, Sweden, and Finland. That's why I used the data I did.

It's cool Ezra. Thanks for reading your comments. Nordic model would have cleared things up from my perspective.

AA makes a valid point about cultural values, although infers from it an invalid conclusion, ie; that mobility is the result of a societal or familial work ethic. It could also be something more simple and obvious; access to education and healthcare. More 'working class' people in the U.S. have to work while attending University, and this puts them at greater economic risk, as well as harming the quality of their education. I live near a University attended by many of the progeny of wealthy New Yorkers, and these young adults face none of the difficulties that lower-income students face. Unless of course you consider finding time to wash your Lexus between classes a difficulty.

As an American in Amsterdam for the past 21 years I thoroughly enjoyed both the original article and Ezra's commentary. I do want to comment on one point though. Russel Shorto, being here for only 1.5 years and perhaps not yet in touch with some of the more subtle complexities and contradictions in our society made the point, as paraphrased by Ezra: "It's not very consumer-oriented. Nothing is open on Sundays.. He also argues that there's "a cultural tendency not to stand out or excel...the very antithesis of the American ideal of upward mobility.""

I didn't mean to be so nasty toward Ezra. Somehow I thought I was reading Matt Y's blog. My apologies.

(Cont from above after problem posting)

In the first instance, from his article it is clear that Shorto lives near Amsterdam center and EVEN on Sundays is walking distance to all kinds of open retail shops, great bookstores, cafes of course and even one of the city's largest supermarkets.

The 2nd point, "a cultural tendency not to stand out or excel...the very antithesis of the American ideal of upward mobility" is totally off base. The cultural tendency he speaks about is real (getting less with the younger generation) but has nothing to do with upward mobility. First, it is more a tendency to not flaunt or behave like you excel rather than a tendency to not excel. Second, if there is a lack of upward mobility it is more related to the fact that the overwhelming majority of people lead a perfectly satisfactory middle class existence (in part due to our 'welfare state') and have no need to be 'upwardly mobile.'

I think the idea that America is upwardly mobile, and more so than most European countries, is indeed wrong.
Upward mobility is, especially in the present knowledge-based economies, the result of a good education which enables you to get a good job, good wages etc etc etc.
In the US a good education is much more expensive than a good education in Europe and therefor less accesible for the majority. The results of that good education (good job, good wages, better chances for your children) are therefor also less accesible and this will curve any upward-trend.

the NYT story was just the thing for giving a short 'on the one hand and on the other hand' comparison. It was unusual in its even-handedness and even more unusual in its insights into another land from a US native's relatively fairminded attitudes.

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Ezra Klein is an associate editor at The American Prospect. An archive of his articles for The American Prospect can be found here.

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