Why America Works

Envy is a terrible thing. Not so much because it makes those whom it afflicts unhappy, or as myth has it, turn green, but because it dulls their analytical skills. At meeting after meeting, in university seminars and in think tanks around the world, envy of America distorts discussions of what accounts for the wealth of nations.

Europeans know that America’s standard of living exceeds their own by a very substantial margin. They know this not because they have pored over arcane statistics about output-per-man-hour, or investment in research and development, or other indicia on which economists rely. They know it because they have seen with their own eyes what a modest Holiday Inn at Disneyland offers by way of accommodation, service, and food; they know it because they see on television how Americans live, or hear it from relatives living in Florida, or even Detroit; they know it because their policymakers, many of them viscerally and violently anti-American, are always trying to devise programs that will enable their economies to match the performance of America’s. When EU policymakers are shielded from public view in the safety of a seminar room, they concede that the American economy is the gold standard when it comes to producing the material good things of life.

This knowledge is pervasive. Young Italian men are too poor to set up their own living quarters long after American men have graduated from their starter accommodations. Germans are more frequently out of work, and for longer, than even the least lucky Americans. Brits snack on tiny sandwiches taken out of refrigerators that barely house a small bottle of milk and a few daily necessities, while America’s housewives shop less frequently because their refrigerators are as close to walk-in size as it is possible to get. All because American working folks produce more of just about everything in any year than their European counterparts.

Ah, say Europeans, but the availability of material goods is one thing, “happiness” and “the quality of life” are something else, and very different. Start with vacations. It seems that Italians get forty-two days of paid vacation every year, the French thirty-seven, the Germans thirty-five, and the British twenty-eight. We Americans, meanwhile, take off only fourteen of the sixteen days to which they are entitled. Figures from the U.S. Government’s Bureau of Labor Statistics show that Americans also work a 49-hour-week, which adds up to 350 more hours of labor a year than the typical European worker. Woe unto the frazzled Americans.

In fact, the figures understate the difference between we Americans and the Europeans. Take the British. Anyone who has ever tried to do business in Britain in August knows that that month should be counted as vacation time. Even those trying to work find so many with whom they must interact to be away, that they might as well stay home, or leave town. Add to that the period between, say, December 15 and January 10, when many Brits down tools, pens, and copious quantities of beer and champagne, and several bank holidays, and you have far more than twenty-eight days of off-time. Throw in the time off now cascading on the work force from the fevered brains of New Labor policy wonks—maternity and paternity leave, sick days, and, soon Europe Day (May 9, as mandated in Part IV, Article IV-1 of the new constitution), and the official figure of twenty-eight days becomes, at best, a lower limit.

The fourteen-day “vacation” estimate for Americans, on the other hand, is an overstatement, at least if my Oxford English Dictionary has it right in defining that word as “release or rest from some other occupation.” The ubiquitous Blackberry enables us to read and send emails from the seas and oceans, from beaches, fields, hills, and rooftops (beloved of sun-worshipping New Yorkers who view with horror fighting traffic to get to some leafy or sandy area); call forwarding routes those who dial an office directly to the cell phone of the lawyer, consultant, or engineer who is technically on vacation; and vacation days at posh spas are often scheduled around a company or industry conference.

A good way to sum up Americans’ views of vacations is to study the habits of George W. Bush. He retreated to his ranch, where the temperature regularly exceeds 100°F, to clear brush. For relief from that vacation activity, he met with his foreign policy team, then with his economic advisers, then traveled to national parks to push his plan to reduce the incidence of forest fires, then on to California for a fund-raising tour. By contrast, Europe’s leaders disappeared from view, some to the Caribbean, others to Tuscany, still others to California and Montana. No vacatio interruptus for them.

So, say Europeans, Americans may be more “productive,” as economists measure productivity, but that is only because they work longer hours. In any given hour, European workers can produce as much or more. The fact that Europe’s economies typically produce fewer goods and services for the delectation of their citizens then becomes a matter of choice—the voluntary selection of leisure over work.

Not a bad argument, if correct. After all, perhaps the one thing the French have got right is their famous “chacun à son gout.” The problem is that although an American worker can often trade off higher income for more leisure time, it is not so easy for Europeans to do the opposite. An Italian worker who would like more income and less vacation time can show up for work in August, but his factory or office will be closed. A British worker who would like to make a few extra pounds by working in the week between Christmas and the end of that break will have a hard time being productive in an empty office or plant. About the only thing a European worker can do to improve the ratio of income-to-leisure is to emigrate to America! Which is why millions of Italians, Irish, Germans, and other Europeans have voted with their feet in favor of America’s balance between work and leisure, with no discernible flow in the opposite direction.

All of this, of course, makes one wonder just how Europe’s policymakers know, as they claim they do, that the less productive lifestyle of their citizens is, indeed, a matter of choice? The answer is simple: they know that Europeans are “happier,” in good part because incomes, although lower than in America, are more equally distributed. So The Economist cites a study of Harvard students in which those polled say they would prefer to earn $50,000 a year while others earned half that, than to earn $100,000 annually while others earned twice as much.

Europeans who cite this study in an effort to bring Americans down a peg or two provide a perfect example of the addled thinking resulting from envy. Harvard students are not famously stretched to pay the rent (parents foot dorm bills), or meet family obligations, or meet medical bills; even the neediest receive subsidies from the richest and most generous university in the world. So, to resort to the vernacular, their talk is cheap: until they earn their livings by the sweat of their own brows, they would do well not to tell pollsters that they prefer earning half as much so long as others earn less.

When Europe’s policymakers rise above envy and politically correct talk of “happiness,” “equality,” and “leisure-trumps-income,” they express real worry. Not only is the American economy more productive than Europe’s, the gap is widening—output per man-hour in the United States continues to rise, as the infrastructure left behind by busted dot.coms becomes more and more efficiently deployed. Worse still for those who want to play catch-up, America’s outlays on research and development, a harbinger of future improvements in productivity, continue to outstrip those of the EU.

The good news for the EU is that serious European policymakers understand the problem. The bad news for Europe is that they so far prefer to hide behind talk of the advantages of not working, rather than to implement policies that make work more attractive. Meanwhile, they might give a thought to the Chinese, who seem to view leisure with even greater suspicion than we do.

This article appeared in London’s Sunday Times on September 13,, 2003.