Productivity and choice
It’s hard to post about the differences of living in France and in the US, endlessly fascinating though they may be to me: whenever I write something, I’m entirely preoccupied with how it’s being received by other Americans. I wish things weren’t so charged between the two countries. So I post with a disclaimer that if I seem provocative or defensive it’s not necessarily intentional, and dive right in…
Paul Krugman’s latest Op-Ed piece covers the part of living in France that fits me like a glove: that of economic choices. He reminds us that France is actually more productive than the US (this shocked me when I first heard it a few years ago), and then argues that the main difference in the economies is one of policy decisions. He mentions health care, schools, and significantly more vacation (personally this is ten weeks rather than four), but really the list is much longer. These things are expensive I guess, but I know the taxes I pay, I know the services I receive, and I’m very happy with the equation.
Krugman closes:
American conservatives despise European welfare states like France. Yet many of them stress the importance of “family values.” And whatever else you may say about French economic policies, they seem extremely supportive of the family as an institution.
So that is being provocative, and I already hear the “Yeah, but…”s, but it seems a shame that it’s impossible to imagine the current US administration even acknowledging that some of these things might work better elsewhere, let alone in France, let alone considering what might possibly translate to the American situation.
One of the American conservative complaints, I think, would be that it’s the government deciding, not the individual, and so that’s not a real choice. Referring to some recent research on differences in working hours (I think it is this study), Krugman says
[European] government regulations actually allow people to make a desirable tradeoff - to modestly lower income in return for more time with friends and family - the kind of deal an individual would find hard to negotiate.
This touches an interesting shift in attitude about governments for me over the last several years. None is perfect, certainly not the French one, but at the end of the day I have (to pick just one specific item) ten weeks of vacation with my family and friends. The research above suggests this is primarily due to regulation, and from my viewpoint it’s highly consistent with the priorities of most French people. On the other hand, I know plenty of Americans who would like to see that shift in priorities in their own lives, but it’s very hard to do. Not impossible–very little is truly impossible in America–just highly unlikely.
August 2nd, 2005 at 00:20
Although I agree with the general point that Europeans have chosen a different — and, in my opinion, healthier — choice in the division of their lives between work and everything else, I think you are understating some of the costs of European-style systems with respect to the labor markets.
Their higher productivity per hour is very likely due to their higher capital investment per worker. There are multiple factors at work here:
1. the US makes extensive use of very cheap immigrant labor which is not available elsewhere and
2. because it is so difficult to fire workers in France, hiring someone represents a big commitment that companies generally try to avoid, making mechanical automation more attractive
The drawback of this phenomenon is high unemployment, and a relatively stiff labor market where people don’t change jobs. I’m sure that some European workers are very happy and grateful to stick with the same job for a long time, but held that others would welcome greater freedom to jump to — hopefully better — other jobs.
That said, I certainly would welcome more vacation in my schedule, and I envy you for that part of your lot. And there’s no doubt that there is a profound cultural difference in this area beyond the regulatory environment. I get the sense that even if all the laws were the same, Europeans are just less competitive about their careers and lose less sleep over their relative position to their peers, with the result being a more relaxed populace and slightly less dynamic economy.
August 2nd, 2005 at 00:28
I should make clear that just because the Europeans have combined deemphasizing the rat race w/ strict labor laws and high employer taxes, this doesn’t mean that you can’t have parts of this combination w/out the others. The first is a cultural inclination, while the others are results of public policy. Of course, when public policy is made by elected officials, they are going to be influenced by the larger culture, BUT they aren’t the same thing.
I say this because I think it’s an error to look at areas where Europe is a weak performer (e.g., unemployment and labor mobility) and conclude that these are the natural results of a leisure and family oriented society.