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>> the entire EU economy grew at the same speed than the US one but not its 500 bigger companies > This is literally the article’s point. Europe and the U.S. g

>> the entire EU economy grew at the same speed than the US one but not its 500 bigger companies > This is literally the article’s point. Europe and the U.S. grew similarly. The U.S. and China produced more large companies. (The Continent’s larger companies also being older than the other two’s.) So Europe did a better job in distributing wealth more equally, while in the US and China you got a massive concentration of wealth? So ... fuck yeah, Europe FTW.

ChuckNorris89 5y ago
>So Europe did a better job in distributing wealth more equally False. Europe did a better job at distributing income due to high taxes but not wealth. Most Europeans are rich due to accumulation of wealth (specifically old business and real estate) inherited across generations. Due to that, statistically, Europe does worse than the US wealth inequality as wealth has pooled to the people whose families have been here the longest, the newcomers are just burdened with high income taxes and high property prices, that's why skilled immigrants in STEM who have options and can afford to "shop around" usually avoid Europe in favor of North America.
- dukeyukey 5y ago
  > Due to that, statistically, Europe does worse than the US wealth inequality I had a quick look at Wikipedia's wealth Gini figures and this isn't the case. Places like the Netherlands and Sweden score atrociously, but the three big European economies (France, Germany, and the UK) all have less wealth inequality than the US (significantly so for the first two), as do a whole host of other European countries.
  - sokoloff 5y ago
    It doesn’t look to me like Germany has significantly better score than the US. (0.818 Germany vs 0.852 US. 0.867 Sweden and 0.906 for Netherlands [with 0.736 the very year prior, making me suspicious of the stability of those data points as I can’t comprehend that wealth distribution across a country that large could change that much in a single year].) * - https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_inequality https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_...
    - tchalla 5y ago
      Is the GINI scale linear? In other words, what does a difference of 0.81 vs 0.85 mean?
    - withinboredom 5y ago
      The Netherlands is quite small (about the size of LA + suburbs). I didn’t look at the data, but there was a major shift in 0-hour contracts in the last year due to COVID-19 which would probably impact those calculations[citation needed].
      - sokoloff 5y ago
        The figures in the table are 2018 to 2019, so predate CV-19. Even with that, those would seem like that could shift income inequality measures but not wealth inequality measures by such a wide range.
- throw0101a 5y ago
  > Due to that, statistically, Europe does worse than the US wealth inequality […] Do you have a source for the statistic that show this? Another comment mentioned Gini. Piketty uses the share of the top percentile (1%) or decile (10%): * https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts https://www.newyorker.com/news/john-cassidy/pikettys-inequal... * https://news.harvard.edu/gazette/story/2020/03/pikettys-new-book-explores-how-economic-inequality-is-perpetuated/ https://news.harvard.edu/gazette/story/2020/03/pikettys-new-... The US isn't the worst in the world, but it is certainly more unequal than Europe as a whole, and most (all?) EU countries.
  - sokoloff 5y ago
    Both of those citations appear to be looking at income inequality measures rather than wealth inequality measures.
    - AstralStorm 5y ago
      What is wealth but income accumulated over time? (Or wealth stolen from others. Oops?)
      - sokoloff 5y ago
        Wealth is the integral of income minus expenses plus net unrealized gains over time. The latter two terms are pretty significant in the overall calculus, if you’ll pardon the (partial?) pun.
    - j_wtf_all_taken 5y ago
      Yeah but what pays for rent and food? Income.
    - throw0101a 5y ago
      There are several chapters on wealth inequality in Piketty's book: * https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce... Wealth is harder to measure because it's not as reported in most countries. You get an 'income slip' for tax purposes (e.g., US Form W-2), but there's no official 'wealth slip'. That's one of the things that Piketty suggests: declaring of credits and debts in an official way, which could then be used for a (net) wealth tax. Starting as little 0.1% if you're just over (e.g.) $US 10M, and having a top rate of (e.g.) 2% for those that are worth more than (say) US$ 1B.
- 2a0c40 5y ago
  Americans overestimate social mobility in their country https://www.economist.com/graphic-detail/2018/02/14/americans-overestimate-social-mobility-in-their-country https://www.economist.com/graphic-detail/2018/02/14/american...
JumpCrisscross 5y ago
> Europe did a better job in distributing wealth more equally This assumes ex ante a similar quantity of wealth. Europe’s GDP per capita is lower than America’s. Where it’s higher, the growth is slower. The more-even distribution comes at the expense of quality of life or economic power. (Though not for Europe’s well-entrenched multi-generational and often legally-entitled wealthy.) To be clear, I don’t believe in moralising this spectrum of tolerance of scale and creative destruction versus social stability and economic equality. There are multiple equilibria, and Europe and America’s are mutually compatible. The relationship does, however, require Europe take a backseat to the U.S. and China in certain matters. The Economist is protesting that arrangement. (I, as an American, am not.)
- j_wtf_all_taken 5y ago
  > The more-even distribution thus comes at the expense of quality of life. What are you talking about? We have fairer elections, better infrastructure, more social security, everyone's got health insurance, we're not getting shot in school, and also we're not on the way to be ruled by a fascist so ... how exactly are you measuring the quality of life?
  - ChuckNorris89 5y ago
    >we're not getting shot in school, and also we're not on the way to be ruled by a fascist I downvoted you since you're going massively off-topic with your generalizations about the US that have no place on HN.
    - j_wtf_all_taken 5y ago
      Thank you for your thoughtful downvote. However I don't really follow. The discussion is clearly about politics here, so it probably does not count as off-topic. Also, fascism has a massive influence on the economy, making it relevant. If you merely dispute my view that there's fascist tendencies in the US, that is fair, but no reason for a downvote, I'd argue.
fnord123 5y ago
It's bad for business journalists who want to cover the celebs of the business world.
simonh 5y ago
That's about the distribution of economic activity between large and small businesses. It's got nothing to do with wealth distribution between individuals. All that the Economist is pointing out is that there are some businesses in which you have to have massive scale to be competitive. In those specific businesses, you either scale up or you can't compete at all. Europe is giving up competing in those areas.
- Applejinx 5y ago
  Competitive is not the same thing as innovative. Innovative is the real disruptor. We forget this at our peril.
  - j_wtf_all_taken 5y ago
    Comletition leads to innovation for all while monopolies lead to stagnation or degeneration with a few benificiaries.
  - simonh 5y ago
    Oh sure, but as you say they're not the same thing. To disrupt at scale you need to be able to grow to that scale. There are too many barriers to doing this in Europe. I do think Europe has many advantages the US and China don't have, it's not like being able to develop massive scale enterprises is the be-all and end-all of economics, but it is self-limiting in some important ways.
- j_wtf_all_taken 5y ago
  Sounds like a really unhealthy market so maybe we should regulate that so this massive upscaling is not required? Like enforcing interoperability between platforms, privacy rules etc.?
  - simonh 5y ago
    You can't legislate away practical constraints like economies of scale or basic economics. The Soviets and Maoists tried that and it doesn't work. Also at this sort of scale, of big international business, they are, well, international. Europe can legislate itself into an artificially divided, segregated, politically engineered economic corner as much as it likes but that won't help it's companies compete in America, or China, or anywhere else.
csomar 5y ago
Only if you assume that these big companies are owned by a few people. They could be as equally distributed as small businesses nullifying the effect. Though since the USA is quite unequal comparing to Europe, it probably is not.

ChuckNorris89 5y ago

>So Europe did a better job in distributing wealth more equally False. Europe did a better job at distributing income due to high taxes but not wealth. Most Europeans are rich due to accumulation of wealth (specifically old business and real estate) inherited across generations. Due to that, statistically, Europe does worse than the US wealth inequality as wealth has pooled to the people whose families have been here the longest, the newcomers are just burdened with high income taxes and high property prices, that's why skilled immigrants in STEM who have options and can afford to "shop around" usually avoid Europe in favor of North America.

dukeyukey 5y ago
> Due to that, statistically, Europe does worse than the US wealth inequality I had a quick look at Wikipedia's wealth Gini figures and this isn't the case. Places like the Netherlands and Sweden score atrociously, but the three big European economies (France, Germany, and the UK) all have less wealth inequality than the US (significantly so for the first two), as do a whole host of other European countries.
- sokoloff 5y ago
  It doesn’t look to me like Germany has significantly better score than the US. (0.818 Germany vs 0.852 US. 0.867 Sweden and 0.906 for Netherlands [with 0.736 the very year prior, making me suspicious of the stability of those data points as I can’t comprehend that wealth distribution across a country that large could change that much in a single year].) * - https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_inequality https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_...
  - tchalla 5y ago
    Is the GINI scale linear? In other words, what does a difference of 0.81 vs 0.85 mean?
  - withinboredom 5y ago
    The Netherlands is quite small (about the size of LA + suburbs). I didn’t look at the data, but there was a major shift in 0-hour contracts in the last year due to COVID-19 which would probably impact those calculations[citation needed].
    - sokoloff 5y ago
      The figures in the table are 2018 to 2019, so predate CV-19. Even with that, those would seem like that could shift income inequality measures but not wealth inequality measures by such a wide range.
throw0101a 5y ago
> Due to that, statistically, Europe does worse than the US wealth inequality […] Do you have a source for the statistic that show this? Another comment mentioned Gini. Piketty uses the share of the top percentile (1%) or decile (10%): * https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts https://www.newyorker.com/news/john-cassidy/pikettys-inequal... * https://news.harvard.edu/gazette/story/2020/03/pikettys-new-book-explores-how-economic-inequality-is-perpetuated/ https://news.harvard.edu/gazette/story/2020/03/pikettys-new-... The US isn't the worst in the world, but it is certainly more unequal than Europe as a whole, and most (all?) EU countries.
- sokoloff 5y ago
  Both of those citations appear to be looking at income inequality measures rather than wealth inequality measures.
  - AstralStorm 5y ago
    What is wealth but income accumulated over time? (Or wealth stolen from others. Oops?)
    - sokoloff 5y ago
      Wealth is the integral of income minus expenses plus net unrealized gains over time. The latter two terms are pretty significant in the overall calculus, if you’ll pardon the (partial?) pun.
  - j_wtf_all_taken 5y ago
    Yeah but what pays for rent and food? Income.
  - throw0101a 5y ago
    There are several chapters on wealth inequality in Piketty's book: * https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce... Wealth is harder to measure because it's not as reported in most countries. You get an 'income slip' for tax purposes (e.g., US Form W-2), but there's no official 'wealth slip'. That's one of the things that Piketty suggests: declaring of credits and debts in an official way, which could then be used for a (net) wealth tax. Starting as little 0.1% if you're just over (e.g.) $US 10M, and having a top rate of (e.g.) 2% for those that are worth more than (say) US$ 1B.
2a0c40 5y ago
Americans overestimate social mobility in their country https://www.economist.com/graphic-detail/2018/02/14/americans-overestimate-social-mobility-in-their-country https://www.economist.com/graphic-detail/2018/02/14/american...

JumpCrisscross 5y ago

> Europe did a better job in distributing wealth more equally This assumes ex ante a similar quantity of wealth. Europe’s GDP per capita is lower than America’s. Where it’s higher, the growth is slower. The more-even distribution comes at the expense of quality of life or economic power. (Though not for Europe’s well-entrenched multi-generational and often legally-entitled wealthy.) To be clear, I don’t believe in moralising this spectrum of tolerance of scale and creative destruction versus social stability and economic equality. There are multiple equilibria, and Europe and America’s are mutually compatible. The relationship does, however, require Europe take a backseat to the U.S. and China in certain matters. The Economist is protesting that arrangement. (I, as an American, am not.)

j_wtf_all_taken 5y ago
> The more-even distribution thus comes at the expense of quality of life. What are you talking about? We have fairer elections, better infrastructure, more social security, everyone's got health insurance, we're not getting shot in school, and also we're not on the way to be ruled by a fascist so ... how exactly are you measuring the quality of life?
- ChuckNorris89 5y ago
  >we're not getting shot in school, and also we're not on the way to be ruled by a fascist I downvoted you since you're going massively off-topic with your generalizations about the US that have no place on HN.
  - j_wtf_all_taken 5y ago
    Thank you for your thoughtful downvote. However I don't really follow. The discussion is clearly about politics here, so it probably does not count as off-topic. Also, fascism has a massive influence on the economy, making it relevant. If you merely dispute my view that there's fascist tendencies in the US, that is fair, but no reason for a downvote, I'd argue.

fnord123 5y ago

It's bad for business journalists who want to cover the celebs of the business world.

simonh 5y ago

That's about the distribution of economic activity between large and small businesses. It's got nothing to do with wealth distribution between individuals. All that the Economist is pointing out is that there are some businesses in which you have to have massive scale to be competitive. In those specific businesses, you either scale up or you can't compete at all. Europe is giving up competing in those areas.

Applejinx 5y ago
Competitive is not the same thing as innovative. Innovative is the real disruptor. We forget this at our peril.
- j_wtf_all_taken 5y ago
  Comletition leads to innovation for all while monopolies lead to stagnation or degeneration with a few benificiaries.
- simonh 5y ago
  Oh sure, but as you say they're not the same thing. To disrupt at scale you need to be able to grow to that scale. There are too many barriers to doing this in Europe. I do think Europe has many advantages the US and China don't have, it's not like being able to develop massive scale enterprises is the be-all and end-all of economics, but it is self-limiting in some important ways.
j_wtf_all_taken 5y ago
Sounds like a really unhealthy market so maybe we should regulate that so this massive upscaling is not required? Like enforcing interoperability between platforms, privacy rules etc.?
- simonh 5y ago
  You can't legislate away practical constraints like economies of scale or basic economics. The Soviets and Maoists tried that and it doesn't work. Also at this sort of scale, of big international business, they are, well, international. Europe can legislate itself into an artificially divided, segregated, politically engineered economic corner as much as it likes but that won't help it's companies compete in America, or China, or anywhere else.

csomar 5y ago

Only if you assume that these big companies are owned by a few people. They could be as equally distributed as small businesses nullifying the effect. Though since the USA is quite unequal comparing to Europe, it probably is not.