European Stagnation Is Real(siliconcontinent.com) |
European Stagnation Is Real(siliconcontinent.com) |
As such, variables for productivity can be identified via back-of-the-napkin math, and in America's case is largely due to the rise of the tech and biotech industry along with Obama and Biden era protection for core industrial sectors like automotive, semiconductors, and renewables.
> How much heavy lifting is done by oil, by currency, by historical happenstance, versus by deliberate policy?
The productivity and GDP gap between the EU and US only began after the Great Recession and Eurozone Crisis.
The US decided to invest in subsidizes and simplified financing. Much of the EU decided to concentrate on austerity and reduce financing.
You can point to a sector with high GDP, sure. But US tech ascendancy has its roots in DARPA spending around the bay area, which was enabled by US economic and military supremacy, which was in turn driven by the US having a lot of oil and staying out of WW2 and a host of other factors.
I agree with the point that investment vs austerity looks more impactful than the history of DARPA spending, but I just find economic analysis an overwhelming problem to even think about.
And let's not discuss the recent changes.
1. Create competitive low tax regimes for EU based tech companies, both for investors and employees.
2. Forbid buyouts by US tech companies.
3. Become more protective of tech markets in general. For example why the fuck does AirBnB or Uber get to operate in Europe? What is there to gain? We have our own alternatives.
4. Give preferential treatment to EU based tech companies. For example for government related contracts, why the fuck are EU governments depending on Microsoft/Google/Amazon?
5. Prioritize tech over other lower growth industries. Yes selling petrol cars was good business 30 years ago.Any tech focus won't make a dent unless europe gets out of the US grip. And to do that would require huge changes in politics. So far we are seeing turn to far right which is even more tied to US (and US tech) than the current center right heading europe.
We will see. The digital tech moat US might be quite shallow. Maybe in hardware but software in europe is pretty great and most of the moat are network effects. Network effects can be dissolved much easier and faster than hard tech. But it's never been a fair fight.
FYI the Nordic states and Netherlands tend to have the highest household debt rates amongst European OECD states [0].
[0] - https://www.oecd.org/en/data/indicators/household-debt.html
easy to take on a lil more debt if you know you have healthcare and employment protections.
We've had a lot of change in the past hundred years, and we've reached a point where we can clothe, feed, and house everyone in the world. Once that's done, moving forward more thoughtfully makes a lot of sense.
Who cares if we reach Mars in 2100 or 2200?
On the other hand, I care a lot about avoiding the nuclear / bio / chemical / environmental / and now AI apocalypse.
Life’s motto is to grow. asking it to not grow or to greatly hamper it? its outrageous really, especially without a genius respectable path to get there. i don’t mind aspiration because dreaming is good but this one is a bit tired and uncontested. and just so i’m not just complaining, i’ll suggest that people stop trying to be dubious global citizens in problem space that outstrips their capabilities and work to be better stewards of one’s self, family, friends. support /relatively/ steady growth.
See everything from ancient Egypt to Soviet-style Communism. Periods of time in Ancient Rome would fit in too. The problem with those -- except for a repressive political system -- was that we could not produce enough to satisfy everyone's basic needs.
Today, we can.
Much of the US-style growth is driven precisely by instability. The system feeds on debt. That forces stress. That forces growth. That also means one cannot be "better stewards of one’s self, family, friends."
And so far, no one has explained how "we don’t foolishly bully human nature with policy." Legal and economic frameworks guide what humans do; that's either something we think through and engineer, or it gets engineered for us by market forces, but it's there anyway.
The most freedom-preserving policy isn't a command system, but it's not a pure market system either. And for stability, we can contrast stable economies to boom-and-bust cycles and successful democracies to the very many failed market-economy democracies across e.g. Africa and South America.
If there is an academic you want to listen to in order to understand how to better reform the EU's institutions, it's definitely Luis.
Anecdotally, the (EU+UK)-to-America pipeline of founders remains red hot, and that brain drain hasn't reduced in spite of Trump.
The EU can remediate this, but the window is increasingly closing as a number of traditional industries that EU states dominated such as automotive, steel, instrumentation, etc are increasingly being pressured by competition from China, Japan, South Korea, and others which pushes early stage capital out of Europe to other markets.
> Europe looks great to Americans because Europe is great for people with American incomes to buy the nicest it has to offer. But the nicest it has to offer is not available to (young) people in Europe today.
This is something everyone needs to remember in comparisons.
[0] - https://www.europarl.europa.eu/meps/en/197554/LUIS_GARICANO/...
What?
> Europeans now work at all, and fewer Americans do. (In the authors’ view, the American decline is driven mainly by the expansion of government health benefits for the non-employed, especially Medicaid, which raised the value of not working.
Um, other than the confusing “now work at all” which I interpret “are all employed”, this is a strange coincidence that the author thinks hair cutters are writing code and a vast population aren’t working at all.
I have lived and traveled throughout Europe, I have to say despite the “grateful” comments there truly are deeper cultural issues than software pays good so Europeans should write more software.
Besides, American VC pumps enormous cash into those salaries, most of which FAIL (20% success is the ideal VC margin isn’t it? I’m an outsider looking in on this one.)
So huge segments of American software developer payouts are actually failed investments (how much did Meta blow on “metaverse”? How much did Twitter hemorrhage before the Elon buy out? Etc.)
VC cash transfusion life support is not exactly the healthy economic float that saves civilization.
And really, vanishingly few benefit from this dynamic, which I think the deteriorating tech roles due to AI infiltration exhibits.
American vitality is a bubble trend without societal stability.
> What?
The context is clear is you read the whole paragraph instead of that one sentence:
> Once a good is non-tradable, the wage is not set globally but in local markets. Newly productive American technology companies bid workers away from haircutting and waiting tables to write code. Since Americans still need haircuts and cannot import them, the wages of hairdressers increase, without it affecting wages for hairdressers in Germany. American software wages rise and so do American non-software wages. In Europe this does not happen, because there is no growing software sector to start with.
And the author is correct (while the phrasing is a bit weird.) American hairdressers aren't not better at haircutting than European or African hairdressers. But they still (mostly) earn more than their counterparts in other continents, because their customers, or the customers of their customers, are richer.
> So huge segments of American software developer payouts are actually failed investments (how much did Meta blow on “metaverse”? How much did Twitter hemorrhage before the Elon buy out? Etc.)
In other words, capital pays laborers. It takes a huge amount of mental gymnastic to frame this as a bad thing.
Right, that's just a description of the https://en.wikipedia.org/wiki/Baumol_effect
* it must be an unused natural fiber hat.
HN, anyone among you who once cut hair and waited tables? Pizza delivery does not count!
As such, it is important to dig into how the US and the EU approached these crises, as both took entirely different approaches.
The crux of the EU's laggard performance arose during that period.
And even if the person doesn't move from waiting tables to coding, they are probably switching jobs because a position opened in a better field, and that position opened because somebody else switched to a better job - maybe coding?
It's a waterfall effect when salaries increase and employers have to compete for talent. It is the ideal state of things, and the entire purpose of having a free market economy.
you'd think so, but a lot of HN went to places like MIT and then straight into FAANG. Or Perdue and then into MechEng jobs, etc. etc.
Is one of the reasons why you see some of the hot takes at HN -- homeboy never had to pay his rent waiting tables or cutting grass.