Prof bug has been bee-busy posting at various economic sites, mainly libertarian (though not just them), and in large part just to get some decent fodder for the basis of some economic and political commentaries for this buggy site. Here's a fairly lengthy post, revised slightly, that prof bug left last week at the Marginal Revolution . . . a stimulating site run by Tyler Cowen, a professor of economics at George Mason University in northern Virginia, a citadel of libertarian free-market enthusiasts. Besides posting lots of stimulating commentaries, Cowen is unusual among economists for his wide-ranging literary and aesthetic interests.
There are several of these buggy posts, always fairly long and setting out (he hopes) a rigorous argument with evidence, that are found elsewhere on the web and that prof bug will be posting here, starting today.
FIRST COWEN'S COMMENTARY
Where is inequality greater? Cowen Asks
Bryan Caplan writes:
In the U.S., we have low gas taxes, low car taxes, few tolls, strict zoning that leads developers to provide lots of free parking, low speed limits, lots of traffic enforcement, and lots of congestion.
In Europe (France and Germany specifically), they have high gas taxes, high car taxes, lots of tolls, almost no free parking, high speed limits (often none at all), little traffic enforcement, and very little congestion. (The only real traffic jam I endured in Europe was trying to get into Paris during rush hour. I was delayed about 30 minutes total).
If you had to pick one of these two systems, which would you prefer? Or to make the question a little cleaner, if there were two otherwise identical countries, but one had the U.S. system and the other had the Euro system, where would you decide to live?
Much as it pains me to admit, I would choose to live in the country with the Euro system. If you're at least upper-middle class, the convenience is worth the price. Yes, this is another secret way that Europe is better for the rich, and the U.S. for everyone else.
I wonder sometimes whether inequality of status -- as opposed to wealth -- is greater in Western Europe or in the United States. In this country you can love NASCAR and be proud of it.
Millionaires won't look down on you much for that taste. In Europe you are expected to dress well and be educated and not watch too much TV. So the egalitarian left is in an odd position here. On one hand it wishes to elevate the European system over the United States. Furthermore it also wishes to claim that wealth isn't a final determinant of happiness (i.e., Europe is worthy), while at the same time circling back to emphasize inequality of wealth as a prima facie fault of the American system.
Tighter social networks, by inducing conformity, make a society more egalitarian along both political and economic dimensions. Yet those same networks place especially high "taxes" on those who don't follow the norms, thus creating another kind of inequality.
Happiness studies are highly imperfect but the inequality of measured happiness doesn't seem to be any higher in the United States than in Western Europe. Oddly that result doesn't seem to get a lot of attention.
THE BUGGY RESPONSE
Cowen Complains That The Comments Left by Others Miss His Key Point
"A few of you are attacking what you thought or wished I said instead of what I actually wrote. Consider for instance the simple sentence: "I wonder sometimes whether inequality of status -- as opposed to wealth -- is greater in Western Europe or in the United States." It's odd to call what follows an unsupported speculation or to cite Finland as Western Europe, for a start" -- Tyler Cowen
Class, Status, and Power Distinguished by Prof Bug
To judge by every one of the posts here, your complaint is justified, Tyler. Not a one has dealt with this issue. So let me begin:
For several decades now, sociologists have distinguished between three categories that differentiate and rank different groups of people within and across countries:
-- Social Class: Always proxied in contemporary surveys of aggregate data by income or wealth or both, though deeper studies find that self-rankings show that "class" is not an objective category, but rather a matter of subjective interpretation. (Actually, Marxist intellectuals in the late 19th and early 20th century, at any rate in West Europe and the USA, knew that this was the case too: they would rail at the British and even more American working "classes" and deplore the absence of self-conscious identification with the rest of the "proletariat", see the proletariat as unable to change its status without class-conflict and class-warfare, and see the class enemies as being the "bourgeoisie" --- which always seemed to include aristocrats, upper middle-classes, middle middle-classes, and lower middle class shopkeepers, say.
-- Social Status: This is what you are interested in, and for the moment let's just define this as the degree to which there is in a society respect or deference (or both) for certain groups of people. These may be the wealthy, aristocrats, or the intellectually or professionally accomplished (think of the deference given professors in pre-Nazi Germany or M.D.'s in the USA until the last three or four decades, with professors ranked 2nd or 3rd behind them in "respect). Note that deference for aristocrats, to single them out, is a matter of hereditary status, which marked noticeably all European societies down until 1914 . . . with uneven changes afterwords, and especially after WWII. By contrast, deference for respect for professionally or intellectually accomplished people, or self-made rich people, reflects a different sort of judgmental values: ascriptive as opposed to achievement.
-- Power: In the last few decades, at any rate in democratic countries, this refers strictly to political power. Traditionally, of course, Marxists saw all power as lodged in the ownership of production, and hence the state in capitalist countries was little more than a "committee of the bourgeoisie in different guise." In the 1950s and 1960s, some French and other Marxists --- desperate to make sense of the growing power of the state (including nationalization and redistributive tax and income policies) --- saw "some" independence, with the state controlled by the so-called far-sighted capitalists who wanted to defuse the revolutionary thrusts of the always exploited proletariat. Hardly anyone, even on the left these days, pays attention to such ideological fatuity.
European Societies Until Recently: A Huge Overlap on All 3 Categories
Traditionally --- which means in the Middle Ages, then on into the early modern age, and then into the 18th and the early and mid-19th centuries of the democratic, nationalist, and industrial revolutions --- all the countries of Europe, even in the more industrialized western and northern areas, were governed by elites who overlapped markedly on all three of these measures.
Generally, too, the further south and east you went into Europe, the more backward economically and democratically the countries happened to be, and the more landed aristocrats, traditional upper-class urban bourgeoisie (lawyers, accountants, top civil servants), many of the much smaller industrial middle classes, and top-dog religious leaders, whether in Catholicism or Eastern Orthodoxy, banned together to maintain traditional power, wealth, income, and status against the threats of liberal and democratic intellectuals and (some) newer middle class industrialists, then --- drawing more and more of the expanding middle classes --- banned even more tightly to stem the threats of the new industrial working classes, increasingly attracted after the 1880s and 1890s to Marxist socialism. Essentially, the power-holders and their ardent supporters in Iberia, Italy, the Austro-Hungarian Empire, the Czarist Empire, much of Germany, and the new Balkan countries adopted radically reactionary ideologies that, together with ultra-nationalism, anti-Semitsm, anti-liberalism, and anti-Marxism, polarized their societies and led most of them after 1918 to side more and more with more radical fascists and Nazis . . . doubly so in the 1930s.
-- In Czarist Russia, under the relentless pressure of WWI, the autocratic monarchy fell; the moderate conservative-liberal coalition that took power in 1917 couldn't consolidate power; the Communists took power; the civil war that followed pitted mainly diverse and weak reactionary warlords against the Red army; and the Soviet Union became a totalitarian Communist country, reverting since the collapse of the Soviet state into a new form of reactionary autocracy in the guise of relatively meaningless democratic elections.
-- In Britain and in Northern Europe, the traditional interlocking elite groups of landed-wealth, aristocratic status, and monarchical and aristocratic political power proved flexible enough in these countries to move toward constitutional democracy, compromises with the middle classes (given the vote in Britain as early as 1832), and with the organized working classes . . . given the vote in the latter decades of the 19th century. All this occurred peacefully. Yet until 1906, aristocrats continued to dominate British cabinets, and the House of Lords ruled co-equal with the Commons until 1912 . . . its last major power of stopping key legislation removed only in 1947. Essentially, these traditions of compromise and institutional flexibility allowed Scandinavia, Holland, and Britain to escape the polarizing ideological tendencies that marked all of the rest of Europe outside the Soviet Union into Communist, radical Socialism, some moderate Socialists, waning middle-of-the-road Liberal parties, and militarized and militant reactionaries and fascists . . . with each and every country except Belgium and France experiencing either reactionary, fascist, or Nazi-racist dictatorships by the end of the 1930s.
-- As for France, it emerged as a very unstable country, politically, in and after the French revolution. There have been 14 or 15 different regimes since 1789, including five since 1939: the 3rd Republic (weak and challenged by the left and right since 1875, and collapsing in the rout of the French army by the Germans in May and June 1940); the semi-fascist Vichy regime; the weak parliamentary regime of the 4th Republic (1945-1958, the latter collapsing when the French military in Algeria threatened to invade the mainland), and the much more stable and more ideologically moderate 5th Republic.
Big Changes in Europe Since World War II
Since 1945, the traditional overlap between class (wealth), social status, and political power had been drastically modified everywhere in Europe.
-- In East Europe, the triangular interconnection was destroyed by Communism, and has not survived its collapse after 1990, with democracy and new, more market-oriented capitalism leading to a more diverse kind of class-status-power nexus.
-- In West Europe, including Germany, Austria, Italy, and Spain and Portugal, democracy has solidified, prosperity has blunted class and status conflicts, and --- along with France --- these Central and Southern EU members look more or less like Britain, Holland, and Scandinavia in matters of far more diverse class-status-and-power differentiation. For that matter, even in Britain --- with its celebrity monarchy, its modified House of Lords, its aristocratic and upper-class media-hype --- the country looks much like its counterparts on the Continent these days, and even to an extent like the USA with its open celebration of respected millionaires, billionaires, and business leaders.
THE UNITED STATES
From the outset, except in the slave-holding South, there was no aristocracy and no medieval traditions of ascriptive deference. Moreover, until the arrival of large numbers of poor, illiterate Irish immigrants in the 1840s, later similar immigrants from Italy, East and Southern Europe, and Russia, the US --- as Tocqueville noted in the 1830s and recent social and economic studies show --- had the most egalitarian land distribution of any country in the world. Similarly, in the 1840s, approximately 70% of white males enjoyed full electoral suffrage, whereas in England at the time, the most advanced in parliamentary democracy, the counterpart was about 11%. Similarly, from the 17th and 18th century onward, entrepreneurship was extolled and admired. Until the frontier was closed in the 1870s, the Homestead acts allowed any immigrant or native-born American to acquire hundreds of acres of land for the taking.
Generalizing markedly, there was --- especially after the destruction of the slave-holding South by 1865 --- a marked separation between class (wealth and income), status, and political power . . . with, say, the traditional "upper class" East Coast WASPS retreating from politics and trying to monopolize the prestigious old universities like Harvard, Yale, and Princeton, brokerage houses, big banks, and prestigious law firms, plus gathering for social reasons in exclusive clubs and creating the Social Register that discriminated against new thriving entrepreneurs, industrialists, brokers, and later new media like the movies . . . many of them Jews, and almost all outsiders otherwise as well. FDR was, in effect, the last of these WASP members to become president.
And so, generalizing further, the US never really experienced, then, the full overlap of elite groups that combined class (wealth), status (respect or deference), and political power that existed even in Britain and Northern Europe, never mind the rest of Europe, right down until 1945.
How about Trans-Atlantic differences in June 2008, more specifically today with Tyler's question about social-status in Europe as opposed to the US?
Whatever differences exist across the two sides of the Atlantic aren't nearly as noticeable as they once were. That doesn't mean there aren't still differences. Entrepreneurs are found, in one survey after another, to be less highly regarded in West Europe than here, though there are differences across EU countries (the British, with more entrepreneurship than most Continental countries, the most snobbish about such pushy types; the Germans, with far less than the British, more endorsing in opinion polls). Intellectuals are more highly regarded in France than in Britain, Scandinavia, Holland, or the US (and other English-speaking countries) . . . which says a lot probably about the more pragmatic intellectual traditions of these countries than those in France, Germany, Italy, Austria, or Spain. On the other hand, professors are more highly regarded in the US than ever (right behind physicians), whereas they are not as notably respected in most of the mass university systems on the Continent, not even in Germany now. And WASP elites of the East Coast types, like their cardboard 2nd-rate imitators in localities elsewhere, have definitely been in retreat as sources of social status and influence for decades.
As for wealth-holders, they tend to dominate much of the US Senate, but that has nothing to do with hereditary wealth except in a few families (the Kennedys, say), and virtually all presidents since FDR (and in the 1920s) come from modest backgrounds or are self-made successes, the exceptions being JFK and Bush-W. (Bush Sr. was a self-made millionaire.) The same is true in state and local government.
SOME PERSONAL BUGGY OBSERVATIONS
Granted all this, I would add a few personal observations of my own . . . someone who has studied or taught in a traditional British university and in universities in France, Germany, and Switzerland.
Britain vs. France
In particular, social mingling at elite levels like Oxford or Cambridge --- never mind other British universities --- is far more inclusive than anything I noticed in France or Germany. In Oxford, for instance, one of my two best friends was a Jewish guy whose father was a (legal) bookie. He was invited by Lord James Douglas Hamilton, the son of the Duke of Hamilton, to visit the family castle for 10 days during a Christmas holiday. My friend said he was well received and mingled happily with all the Dukes, Earls, Ladies, Sirs, and what have you who were there. By contrast, at Bordeaux University where I taught in the mid-1970s, it was unthinkable for students of different social status to mingle at all. Hence no college associations, no clubs, no dances, no intramural sports, no dating across those status lines whatsoever. It was even worse, as I found out from friends, at the various campuses of the University of Paris.
The wealthy or status-clinging French have to keep a low profile, far more so than in Britain where they are celebrated openly in the media, along with the celebrity-Queen and her half-daft family, but --- as in the 18th and 19th centuries --- the French upper-class or upper-status groups refuse to mingle freely with others, whereas in Britain, as in centuries past, the upper status-groups have been far more flexible in embracing others, especially if they were or are accomplished professionally or intellectually or financially or in business.
Elite Levels in the US: Two Differences
(i.) As a general thing, students at US universities --- however prestigious --- intermingle freely too across not just class (income and wealth) lines, but these days more and more across racial/ethnic divides. That wasn't evident at, say, Harvard, Yale, Princeton, or Stanford before 1945, any more than in Britain . . . never mind the Continental West European countries. And since the 1960s, there has been fairly marked intermingling across racial/ethnic lines in the US as well.
-- Sidebar Note: Similar systematic discrimination existed in all European countries, East and West, towards Jews before 1945 . . . though far less so in Britain and Scandinavia and Holland and Italy than in France or Spain, never mind Central and Eastern Europe. A tiny minority in Europe when Hitler came to power in January 1933, Jews were 6/10ths of 1.0% of the population in Germany and Austria and about 1.5% in Czarist Russia and later the Soviet Union (only in Poland was there a larger percentage, around 10% of the total). Yet in most countries, they were systematically discriminated against in entrance to universities, and even when they did enter more freely, they were usually shunned by their elite Christian counterparts.
(ii.) American business leaders are far more openly celebrated in the mass media than they are in Europe, even now in 2008. Traditionally, moreover, self-made businessmen were shunned and stigmatized in both West and East Europe as pushy arrivistes . . . a stigma that still exists in mass public opinion, believe it or not, and repeatedly captured in public opinion surveys.
And Elites and Mass Levels in the US
(iii.) Consider this a third difference, status-wise, between the US and West Europe. With the decline of the WASP East Coast elites in class (income-wealth), status, and power --- a noticeable retreat accentuated by the huge transformation of the American economy since the early 1970s, marked by the shift toward a knowledge-based system, a near-total reshuffling of the Fortune 500, the creation of tens of thousands of new millionaires and even billionaires --- status lines have further blurred in the US compared to the pre-1945 period. This blurring has materialized all the faster with the emergence of large numbers of educated and prosperous non-whites, found in every area of American life these days --- economically, politically, and socially.
If there are still noticeable differences in status and life-styles, it is with the emergence of a socio-pathological underclass of African-Americans and Hispanic Americans in several urban areas: poorly educated and often involved in criminal activities of various sorts, accentuated by the skyrocketing levels of illegitimacy: now 70% in African-American circles and 50% among Hispanics. (There is, for instance, a statistically negligible difference in income levels between two-parent black and two-parent white families, especially when allowance is made for the younger age of average African-Americans. Similarly, as far back as the mid-1980s, whites, blacks, and Hispanics of high IQ levels --- say, 124 (100 the average of all Americans) --- were found to earn the same income. The problem here, no doubt related to the crash of the two-parent black family, is that the average IQ of African-Americans is a full standard deviation below the average for whites: 85. Hispanics fall in between.
Consider, More Concretely, US-EU Differences On This Third Score
On the whole, in dress, life-styles, cultural tastes, food, and so on, the outward signs of status-stratification are more blurred in the US still than in large parts of West Europe, at any rate across mass- and elite-levels of life-style.
That said, there remain differences on this score across West European countries . . . life-styles more homogeneous in Scandinavia and Holland than in France, Spain, Italy, Britain, or even Germany). Something else, no less important too. As non-European immigrant communities grow ever faster in number than the native European populations, these status differences in speech, dress, life-styles, food, cultural tastes, and sexual matters will undoubtedly accentuate. And it seems doubtful, what with the poor education, depressed income levels, high unemployment, and ever greater ghettoizing of the Muslim minorities everywhere in Europe, that you will find the kinds of intermingling on elite levels across ethnic/racial/religious lines that exist these days in the US.
Never mind the likelihood in this decade, or probably any to come for several decades into the future, of an equivalent of Obama Barack in political life . . . not to mention dozens of Congressmen, thousands of military officers, thousands of police chiefs and policemen, hundreds of mayors, and thousands of state-level legislators and city-level mayors who are non-white or non-European in origins.
Even so, the main general point mentioned above still stands.
Compared to European societies before 1945 --- when there was a marked overlap on all three categories of social stratification (class, status, and political power) --- the differences between the US and West Europe have noticeably faded . . . whether on the elite levels or in the gaps between elite and mass-levels of life-styles.
A QUERY THEN: WHERE DO WEST EUROPEANS AND AMERICANS DIFFER MAINLY THESE DAYS?
Above All, In Politics and the State's Role in Economic Life
If the US and West Europe --- at least the Continental EU countries --- continue to differ noticeably, it's in politics and the policies of statist regulation, taxation, and redistributive welfare policies. (Britain is much more like the US here.)
(1) Politically, for several reasons --- some set out in (4) above --- the American people have never generally taken to large state power. Our constitution is unique in setting up a separation of power, with multiple checks and balances, along with a still fairly strong federal system of states and localities. We have, moreover, been far more innovative in developing efforts to give the "people" an ongoing say in government at all levels: hence we pioneered and are still the only country with (i) the referendum initiative, (ii.) the recall election (last used in California in 2003), (iii.) the primary system for choosing all candidates for the presidency, Congress, and state and local elections, (iv.) anti-monopoly regulation that goes back to the late 19th century, and (v.) direct or indirect voting for all local, state, and federal judges . . . the latter, of course, indirect through votes in Congress. The same is true of district attorneys: whether local or on the state and federal level, they are all chosen directly or indirectly by voters. Nothing like this exists anywhere in Europe.
-- This populist thrust in politics has been underscored by the European fascination this year with the American primaries, especially in the bare-fisted fight between Clinton and Obama. The same thrust largely explains the difference in the death penalty, practiced still by about 39 of the 50 US states. The fact is, until the late 1970s, nowhere in West Europe was public opinion favorable to abolishing the death penalty. Its abolition was decided by parliaments. For that matter, with something significant about national independence at stake --- the Lisbon Treaty on strengthening the political side of European Union --- only 1 country, tiny Ireland (5 million), required a mass referendum, constitutionally speaking. And of course its voters rejection of the treaty upset all the other 26 member-state governments, none of which intended to submit the treaty to popular approval.
(2) In addition, the state was and remains far more active in economic life than it ever was here (or in Britain, except for the period from 1945 until the Margaret Thatcher reforms of the 1980s).
-- Thus, we have never had Marxist socialist traditions on the left; all the Continental countries had them, with moderate but Marxist-influenced Social-Democrats splitting from Communism after 1918 and first gaining power in Sweden in the 1930s and later everywhere in West Europe after 1945. (In France and Italy, the two biggest political parties in 1947 were Communists, subservient to Moscow: a clear sign of class hostilities). On the right, we have never had militant reactionary conservative movement dominated by pre-democratic, pre-modern capitalist elites of the sort that flourished everywhere on the Continent save in Scandinavia and Holland, never mind more radical mass Fascist movements that came to power everywhere in East Europe, Austria (the Dolfuss regime), Italy, Spain, Portugal, and --- in racist Nazi radicalism --- Germany and Austria in the 1930s. Nor has there ever been since the slave-holding South collapsed in 1865 a tradition of paternalistic moderate conservatism of the sort found in Christian Democracy or in Scandinavian and Dutch conservatism or the Tory wing of the British Conservative Party with its roots in the 17th century struggles with the absolutist-tending monarchies.
Another Difference Too
(3) For decades now, too, survey data --- not least the Pew Global Attitudes surveys started in 2002 --- find that Americans are far more patriotic or nationalist than West Europeans.
For instance, the Pew surveys ask Americans, Europeans, and others in dozens of countries whether they regard their country and its way of life as superior to others. On an average, close to 70% of Americans answer yes. The closest European people who give a similar answer, almost always until recently the British, is a good half of that, and most EU populations reply affirmatively below that level (again, on an average over this decade).
Partly this is a matter of global power, partly the outcome of a far different history on this side of the Atlantic than in Europe --- where aggressive (and often racist) nationalism led to the disasters of WWI and WWII, along with the dominance in the late 1930s and during WWII of extremist fascist, Nazi, and fascist-collaborating regimes everywhere save in neutral Switzerland and Sweden as well, of course, as in democratic Britain. And partly it is a matter of impressive European collaboration within the European Union that has further diluted nationalist feelings, without entirely undermining them.
As a result of these differences --- political innovation of a unique sort, a far more centrist ideological tradition, and a suspicion or skepticism about concentrated central state power, --- Americans continue to differ markedly from Europeans about almost all strong redistributive and welfare policies.
-- The big differences were brought out decades ago and confirmed in repeated survey data. Thus American trade union leaders in the mid-1980s expressed far less support for ambitious redistributive income policies than did, believe it or not, Swedish industrialists --- the latter all owning or managing private-owned firms. Whether or not Obama is elected next November, he and the Democrats in Congress are unlikely to do more than initiate their health plan proposals --- which will surely be modified in Congressional give-and-take --- and raise taxes back to the level of the Clinton era, though there may be some populist legislation to tax oil companies' profits as well.
Similarly, Americans continue to admire entrepreneurs and wealthy businessmen and business-women of all sorts . . . the differences here likely to persist way into the future.
Add in the other big difference --- much more marked patriotism or nationalism that European peoples show --- and Americans will no doubt continue in large number to view the world in a ways that distinguish this country from European peoples and their shared world-view.
How this latter difference will play out in Trans-Atlantic relations within NATO is the $64,000 question.
*On the one hand, it's governments, not public opinion, that decide what their general national interests amount to and, in turn, decide how to pursue these in day-to-day foreign policy, including the use or support of military policy abroad. On this, the official level, NATO unity is about as solid as it's ever been since the end of the cold war. For that matter, contrary to what most people think, Trans-Atlantic unity was repeatedly jarred and battered in the cold war period: in the 1950s (German membership and rearmament); and in the 1960s (a new nuclear strategy, France quitting NATO's integrated military structures); and in the 1970s (détente with the Soviet Union); and in the 1980s (antipathy toward the Reagan administration in West Europe; new US mid-range missiles deployed in Europe).
*On the other hand, all the governments in NATO are democratic, and there is no commonly shared perception of a specific overriding military danger or threat facing its members . . . Iran's acquisition of an explicitly discovered nuclear force with mid-range missiles the only possible candidate in sight for the time being.
The upshot? Well, over time, both growing anti-Americanism and pacifist sentiments in West Europe --- together with budgetary constraints on military spending as the growth rates of EU economies continue at a slow pace, with ever greater welfare commitments to an aging population --- are very likely to have a constraining effect on the willingness of governments there to risk outright confrontations with public opinion in the use of military force abroad , . . . especially if the US is seen in the media and by opinion-setters to be pushing for armed or coercive diplomacy against Iran or some other terrorist-supporting state.
That said, the actual behavior of European governments in such a situation will likely vary.
As a general thing, a British government will likely side with the US whether or not the Conservatives or Labour are in power, an inclination reinforced by the fact that public opinion there and in Poland, nowhere else in Europe, is shown in the most recent Pew Center's annual study of Global Attitudes to be pro-American . . . meaning the US as a country and people, irrespective of its president of the moment. Possibly, too, some other European governments will risk antagonizing popular sentiment to go along with an American-initiative. It will all likely hinge, in the crunch, on the political parties in government, the nature of the perceived military threat, and the actual heads of the governments of the day.
Whatever does happen on this score, the differences in foreign policy outlook look like persisting way into the future.