8 ms·

Why Are Americans So Rich?

18 points by dtquad 2y ago

dtquad 2y ago
>I recently talked to Callum Williams, senior economics editor at The Economist, about why Americans are so much richer than Europeans. Two of the answers are the productivity of big tech and flexible labor markets https://x.com/RichardHanania/status/1850564972046172229 https://x.com/RichardHanania/status/1850564972046172229 As a Danish person I don't agree with the "flexible labor market" thing. However the thing about big (tech) companies being economic powerhouses and a force of good seems increasingly true. A lot of people really need to rethink "big companies bad" and what we consider a monopoly in 2024. That is also why the next US government, led by JD "breakup big tech" Vance can be an once in a generation opportunity for Europe to build giant economic tech powerhouses.
- tellarin 2y ago
  Economic powerhouses? Sure. But forces for good? I don't think necessarily so. Regarding the wealth thing, I'd really like to see some analysis that quantifies the risks of not having guaranteed health insurance. It is basically a gamble in the US. And even when tech companies pay for your insurance, it doesn't cover everything and can disappear at any moment if you are fired. I'd also like to see some analysis of the impact of all the European companies that US companies acquire and integrated when they show promise. Not to mention that all the big tech companies have big offices with thousands of employees in Europe too. How much is this a wealth transfer either way?
  - dtquad 2y ago
    I think our Scandinavian-style labor market and healthcare is superior to what they have in the US. Americans also have a lower median wealth than us but that is because Americans, especially their minorities, have lower rate of home ownership. I only said big companies can be a force of good. I didn't praise the way Americans have decided to do healthcare (or housing). Income redistribution that funds health and human dignity can be a good thing. My point being you can support welfare and entitlements funded by income/wealth distribution without going full anti-big-business. Interestingly one thing that increased home ownership in Denmark by making smaller Danish towns and cities more liveable were the shops and chains build by a retail group owned by Mærsk - the biggest shipping company in the world and what was for many years the only "megacorp" in Denmark. >I'd also like to see some analysis of the impact of all the European companies that US companies acquire and integrated when they show promise. Not to mention that all the big tech companies have big offices with thousands of employees in Europe too. How much is this a wealth transfer either way? Yes, it would be better for Europe if we had our own big tech companies. That is my point.
  - JumpCrisscross 2y ago
    > I'd really like to see some analysis that quantifies the risks of not having guaranteed health insurance Boost access to healthcare and entrepreneurship goes up [1]. [1] https://pubmed.ncbi.nlm.nih.gov/20952079/ https://pubmed.ncbi.nlm.nih.gov/20952079/
k310 2y ago
Wealth is unevenly distributed. > Average net worth is higher than median (at $1,059,470 vs. $192,084, respectively) ... (2023) Reference: https://dqydj.com/net-worth-percentiles/ https://dqydj.com/net-worth-percentiles/
- JumpCrisscross 2y ago
  > Wealth is unevenly distributed One must really torture the numbers to conclude that Americans aren't richer, on any reasonable definition of average, than Europeans. (Even if we restrict the latter to EU residents.) The only population I can think of for whom this would be universally true are the chronically ill.
  - jmclnx 2y ago
    First income inequality is far worse in the US that Europe, because of that, Ave Income is inflated. You take out say the top 10%, you will be a huge change. You also need to define "rich". If you are born healthy and into a upper middle income family, you can end up rich, look at Gates, Zuckerberg and many other such people. In the US, if you or any of your children have any long term health issues, you will spend most of your income on health care. Thus you will be struggling to maintain a household. So this "rich" thing is nothing but a "lets feel good" story, not reflection reality to the average US citizen.
megamike 2y ago
Wealth is unevenly distributed. True. Since ancient history.
- throwaway19972 2y ago
  Yea, but why can't we correct this with modern technology? All the old reasons have more or less disappeared with shipping and computation. All the remains is greed.
  - downrightmike 2y ago
    Probably time to dissect the brains of those monkeys that hoard billions of bananas
  - readthenotes1 2y ago
    Modern technology isn't the only reason for unequal outcomes. There are reasons why some of us are muttering to ourselves on the sidewalks about alien invaders and others change the world...
    - throwaway19972 2y ago
      Yea, that's my point: the reason is greed (and narcissism, self-delusion, etc). That's the only explanation I can think of: folks with privilege and power not only can't imagine a better world, they straight up prefer a hobbesian one where they can claim to deserve being on top.
      - nathanaldensr 2y ago
        I think GP means that humans are fundamentally unequal in terms of intelligence, capability, drive, motivation, and potential. You're still right about greed, of course.
AnotherGoodName 2y ago
Click the following link, go down to the list of countries and sort by median wealth. https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_... USA is not ahead of the wealthier european nations unless you include bezos etc and measure mean wealth.
- JumpCrisscross 2y ago
  > USA is not ahead of the wealthier european nations unless you include bezos etc and measure mean wealth Do it again with American states and European nations. A fair comparison given the symmetries in population and GDP. It's wild for anyone travelled in America and Europe to conclude that one isn't very obviously poorer than the other. (Poorer isn't bad. But it is something.)
bryanrasmussen 2y ago
> During covid, the United States was more willing to just directly give people money, while Europeans focused on trying to protect already existing jobs. My perception, based on Denmark, Germany, and Italy is that European countries have a much stronger welfare system than the U.S therefore it makes sense not to worry so much about giving people money, if they lose the job they won't starve, and focus on keeping jobs active.
- JumpCrisscross 2y ago
  > European countries have a much stronger welfare system than the U.S therefore it makes sense not to worry so much about giving people money That's one interpretation. The other is that Europe is more averse to risking firm collapse than the U.S., despite its social welfare system. It isn't a different balance, it's a fundamentally lower setting on the risk-reward spectrum.
  - bryanrasmussen 2y ago
    I'm not understanding your argument that giving people money means that the U.S is more willing to risk firm collapse, or that by not giving them money Europe is more averse? What's the idea?
    - JumpCrisscross 2y ago
      > giving people money means that the U.S is more willing to risk firm collapse, or that by not giving them money Europe is more averse America is okay letting firms collapse, despite having a weaker safety net. After the financial crisis, where we were protective of our industry, we became protective of our peoples' livelihoods. Europe has a safety net. But it remains protective of its industry and their captains. That just produces a different risk-reward mix and tolerance to economic churn.
KingOfCoders 2y ago
[flagged]
- porridgeraisin 2y ago
  And then bickering over territory within themselves, and following it up by celebrating an independence day! Only a white man
- deadlydose 2y ago
  Sorta like what they did to one another prior to Europeans arriving.
  - KingOfCoders 2y ago
    I'm too stupid, never understand what people want to express with whataboutism. 1. Native Americans and settlers both did it, so it is good? 2. Native Americans and settlers both did it, so both are evil? Is it 1 or 2 that you want to express?
    - nathanaldensr 2y ago
      They want to express hypocrisy. When someone omits that other groups exhibit the same behavior as the group they're complaining about, it's dishonest to attempt to file a grievance without disclosing full information. Consider it a lack of "informed consent," to borrow a medical term.
      - KingOfCoders 2y ago
        But it can only be hypocrisy in the case of (2). So whenever someone invokes whataboutism, they mean "Native Americans and settlers both are evil"? So they agree with my point about the genocide of Native Americans, the stealing of land, oil, gas, gold, but want me to add "Native americans are bad too because they did the same" which I should have mentioned. Therefore they would be fine with "Modern Americans are rich because they stole the land, gas, oil, gold from the Native Americans, who stole it from someone else before". I always thought they considered their opinion a counter argument, I never saw it as agreement with my points. Thanks for clearing that up.
keiferski 2y ago
Analysts are always looking for some secret economic reason to explain these stats, but as an American living abroad for about a decade, I think there is a simpler explanation: American culture places money at the center of everything. And I mean everything: cash is the metric for evaluating “success”, and factors into the daily mindset in a way that doesn’t exist so much in other developed countries. Economics is the default worldview, not traditional culture or social harmony or some other approach. It is a way of evaluating every kind of value and activity, and in scenarios where individual wealth is difficult to measure, the “public good” is disregarded or just ignored. For example, the quality of public transit, art, or architecture. This comment sounds like a harsh critique, and in some sense it is. But there is also a kind of clarity that is appealing, in an abstract way, and is probably why the US is generally a more innovative dynamic place.
- JumpCrisscross 2y ago
  > cash is the metric for evaluating “success”, and factors into the daily mindset in a way that doesn’t exist so much in other developed countries One, this is Bezos' day one philosophy at nation-state scale: America is always developing. Our culture benchmarks to emerging markets, not the Old World. (It's more true, in both cases, as an aspiration than reality.) Two, at least in Germany, France, Sweden, Italy and the U.K., the European elites are--in my commercial experience--as rapacious as their trans-Atlantic peers. > For example, the quality of public transit The New York metropolitan area of over 20 million peoople has a regional-rail system that operates with reliability only rivalled by Switzerland [1]. American public transit is, in general, trash. But comparing America to European countries is an exercise in selection bias. [1] https://news.ycombinator.com/item?id=41192264 https://news.ycombinator.com/item?id=41192264
  - gradschoolfail 2y ago
    By some economic measures (e.g. median income corrected PPP) NY state is also very close to Switzerland. Otoh, wyoming has always been way ahead..
    - 2y ago
jemmyw 2y ago
Is it a big mystery? It's the same reason the British were so rich before the US: the right things happening at the right time and place. For the US, being very large, a large population, a common language, lots of natural resources, these were all the seeds. Then fairly stable relations with the neighbors followed by Europe sparking 2 global conflicts, the second of which devastated the continent. Didn't the US have more than 50% of the entire worlds GDP in the 1950s? These are the factors that continue carrying the US high. Big tech can exist there because of them. And it will probably last a long time, after all Europe is as rich as it is because of it's history before the rise of the US.
benterix 2y ago
> Rigid labor laws also remain a problem. What The Economist may call a problem, people living in Europe call a blessing. We know we can count not just on 40-hour work week but also on 26 paid days of annual leave each year, apart from public holidays. When you fall ill, you don't worry about money or employment, you just rest and get better. When you get pregnant, you don't worry you will have to leave your little baby with random people a few weeks after it arrived to this world. And so on and so forth.
- matthewfelgate 2y ago
  Sure, but Brits are 30% poorer than Americans.
JackSlateur 2y ago
Money are for poor people. Americans are obsessed with money. Ergo, americans are poor. Seems legit !

18 points by dtquad 2y ago

>I recently talked to Callum Williams, senior economics editor at The Economist, about why Americans are so much richer than Europeans. Two of the answers are the productivity of big tech and flexible labor markets https://x.com/RichardHanania/status/1850564972046172229 https://x.com/RichardHanania/status/1850564972046172229 As a Danish person I don't agree with the "flexible labor market" thing. However the thing about big (tech) companies being economic powerhouses and a force of good seems increasingly true. A lot of people really need to rethink "big companies bad" and what we consider a monopoly in 2024. That is also why the next US government, led by JD "breakup big tech" Vance can be an once in a generation opportunity for Europe to build giant economic tech powerhouses.

tellarin 2y ago
Economic powerhouses? Sure. But forces for good? I don't think necessarily so. Regarding the wealth thing, I'd really like to see some analysis that quantifies the risks of not having guaranteed health insurance. It is basically a gamble in the US. And even when tech companies pay for your insurance, it doesn't cover everything and can disappear at any moment if you are fired. I'd also like to see some analysis of the impact of all the European companies that US companies acquire and integrated when they show promise. Not to mention that all the big tech companies have big offices with thousands of employees in Europe too. How much is this a wealth transfer either way?
- dtquad 2y ago
  I think our Scandinavian-style labor market and healthcare is superior to what they have in the US. Americans also have a lower median wealth than us but that is because Americans, especially their minorities, have lower rate of home ownership. I only said big companies can be a force of good. I didn't praise the way Americans have decided to do healthcare (or housing). Income redistribution that funds health and human dignity can be a good thing. My point being you can support welfare and entitlements funded by income/wealth distribution without going full anti-big-business. Interestingly one thing that increased home ownership in Denmark by making smaller Danish towns and cities more liveable were the shops and chains build by a retail group owned by Mærsk - the biggest shipping company in the world and what was for many years the only "megacorp" in Denmark. >I'd also like to see some analysis of the impact of all the European companies that US companies acquire and integrated when they show promise. Not to mention that all the big tech companies have big offices with thousands of employees in Europe too. How much is this a wealth transfer either way? Yes, it would be better for Europe if we had our own big tech companies. That is my point.
- JumpCrisscross 2y ago
  > I'd really like to see some analysis that quantifies the risks of not having guaranteed health insurance Boost access to healthcare and entrepreneurship goes up [1]. [1] https://pubmed.ncbi.nlm.nih.gov/20952079/ https://pubmed.ncbi.nlm.nih.gov/20952079/

k310 2y ago

Wealth is unevenly distributed. > Average net worth is higher than median (at $1,059,470 vs. $192,084, respectively) ... (2023) Reference: https://dqydj.com/net-worth-percentiles/ https://dqydj.com/net-worth-percentiles/

JumpCrisscross 2y ago
> Wealth is unevenly distributed One must really torture the numbers to conclude that Americans aren't richer, on any reasonable definition of average, than Europeans. (Even if we restrict the latter to EU residents.) The only population I can think of for whom this would be universally true are the chronically ill.
- jmclnx 2y ago
  First income inequality is far worse in the US that Europe, because of that, Ave Income is inflated. You take out say the top 10%, you will be a huge change. You also need to define "rich". If you are born healthy and into a upper middle income family, you can end up rich, look at Gates, Zuckerberg and many other such people. In the US, if you or any of your children have any long term health issues, you will spend most of your income on health care. Thus you will be struggling to maintain a household. So this "rich" thing is nothing but a "lets feel good" story, not reflection reality to the average US citizen.

megamike 2y ago

Wealth is unevenly distributed. True. Since ancient history.

throwaway19972 2y ago
Yea, but why can't we correct this with modern technology? All the old reasons have more or less disappeared with shipping and computation. All the remains is greed.
- downrightmike 2y ago
  Probably time to dissect the brains of those monkeys that hoard billions of bananas
- readthenotes1 2y ago
  Modern technology isn't the only reason for unequal outcomes. There are reasons why some of us are muttering to ourselves on the sidewalks about alien invaders and others change the world...
  - throwaway19972 2y ago
    Yea, that's my point: the reason is greed (and narcissism, self-delusion, etc). That's the only explanation I can think of: folks with privilege and power not only can't imagine a better world, they straight up prefer a hobbesian one where they can claim to deserve being on top.
    - nathanaldensr 2y ago
      I think GP means that humans are fundamentally unequal in terms of intelligence, capability, drive, motivation, and potential. You're still right about greed, of course.

AnotherGoodName 2y ago

Click the following link, go down to the list of countries and sort by median wealth. https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_... USA is not ahead of the wealthier european nations unless you include bezos etc and measure mean wealth.

JumpCrisscross 2y ago
> USA is not ahead of the wealthier european nations unless you include bezos etc and measure mean wealth Do it again with American states and European nations. A fair comparison given the symmetries in population and GDP. It's wild for anyone travelled in America and Europe to conclude that one isn't very obviously poorer than the other. (Poorer isn't bad. But it is something.)

bryanrasmussen 2y ago

> During covid, the United States was more willing to just directly give people money, while Europeans focused on trying to protect already existing jobs. My perception, based on Denmark, Germany, and Italy is that European countries have a much stronger welfare system than the U.S therefore it makes sense not to worry so much about giving people money, if they lose the job they won't starve, and focus on keeping jobs active.

JumpCrisscross 2y ago
> European countries have a much stronger welfare system than the U.S therefore it makes sense not to worry so much about giving people money That's one interpretation. The other is that Europe is more averse to risking firm collapse than the U.S., despite its social welfare system. It isn't a different balance, it's a fundamentally lower setting on the risk-reward spectrum.
- bryanrasmussen 2y ago
  I'm not understanding your argument that giving people money means that the U.S is more willing to risk firm collapse, or that by not giving them money Europe is more averse? What's the idea?
  - JumpCrisscross 2y ago
    > giving people money means that the U.S is more willing to risk firm collapse, or that by not giving them money Europe is more averse America is okay letting firms collapse, despite having a weaker safety net. After the financial crisis, where we were protective of our industry, we became protective of our peoples' livelihoods. Europe has a safety net. But it remains protective of its industry and their captains. That just produces a different risk-reward mix and tolerance to economic churn.

KingOfCoders 2y ago

[flagged]

porridgeraisin 2y ago
And then bickering over territory within themselves, and following it up by celebrating an independence day! Only a white man
deadlydose 2y ago
Sorta like what they did to one another prior to Europeans arriving.
- KingOfCoders 2y ago
  I'm too stupid, never understand what people want to express with whataboutism. 1. Native Americans and settlers both did it, so it is good? 2. Native Americans and settlers both did it, so both are evil? Is it 1 or 2 that you want to express?
  - nathanaldensr 2y ago
    They want to express hypocrisy. When someone omits that other groups exhibit the same behavior as the group they're complaining about, it's dishonest to attempt to file a grievance without disclosing full information. Consider it a lack of "informed consent," to borrow a medical term.
    - KingOfCoders 2y ago
      But it can only be hypocrisy in the case of (2). So whenever someone invokes whataboutism, they mean "Native Americans and settlers both are evil"? So they agree with my point about the genocide of Native Americans, the stealing of land, oil, gas, gold, but want me to add "Native americans are bad too because they did the same" which I should have mentioned. Therefore they would be fine with "Modern Americans are rich because they stole the land, gas, oil, gold from the Native Americans, who stole it from someone else before". I always thought they considered their opinion a counter argument, I never saw it as agreement with my points. Thanks for clearing that up.

keiferski 2y ago

Analysts are always looking for some secret economic reason to explain these stats, but as an American living abroad for about a decade, I think there is a simpler explanation: American culture places money at the center of everything. And I mean everything: cash is the metric for evaluating “success”, and factors into the daily mindset in a way that doesn’t exist so much in other developed countries. Economics is the default worldview, not traditional culture or social harmony or some other approach. It is a way of evaluating every kind of value and activity, and in scenarios where individual wealth is difficult to measure, the “public good” is disregarded or just ignored. For example, the quality of public transit, art, or architecture. This comment sounds like a harsh critique, and in some sense it is. But there is also a kind of clarity that is appealing, in an abstract way, and is probably why the US is generally a more innovative dynamic place.

JumpCrisscross 2y ago
> cash is the metric for evaluating “success”, and factors into the daily mindset in a way that doesn’t exist so much in other developed countries One, this is Bezos' day one philosophy at nation-state scale: America is always developing. Our culture benchmarks to emerging markets, not the Old World. (It's more true, in both cases, as an aspiration than reality.) Two, at least in Germany, France, Sweden, Italy and the U.K., the European elites are--in my commercial experience--as rapacious as their trans-Atlantic peers. > For example, the quality of public transit The New York metropolitan area of over 20 million peoople has a regional-rail system that operates with reliability only rivalled by Switzerland [1]. American public transit is, in general, trash. But comparing America to European countries is an exercise in selection bias. [1] https://news.ycombinator.com/item?id=41192264 https://news.ycombinator.com/item?id=41192264
- gradschoolfail 2y ago
  By some economic measures (e.g. median income corrected PPP) NY state is also very close to Switzerland. Otoh, wyoming has always been way ahead..
  - 2y ago

jemmyw 2y ago

Is it a big mystery? It's the same reason the British were so rich before the US: the right things happening at the right time and place. For the US, being very large, a large population, a common language, lots of natural resources, these were all the seeds. Then fairly stable relations with the neighbors followed by Europe sparking 2 global conflicts, the second of which devastated the continent. Didn't the US have more than 50% of the entire worlds GDP in the 1950s? These are the factors that continue carrying the US high. Big tech can exist there because of them. And it will probably last a long time, after all Europe is as rich as it is because of it's history before the rise of the US.

benterix 2y ago

> Rigid labor laws also remain a problem. What The Economist may call a problem, people living in Europe call a blessing. We know we can count not just on 40-hour work week but also on 26 paid days of annual leave each year, apart from public holidays. When you fall ill, you don't worry about money or employment, you just rest and get better. When you get pregnant, you don't worry you will have to leave your little baby with random people a few weeks after it arrived to this world. And so on and so forth.

matthewfelgate 2y ago
Sure, but Brits are 30% poorer than Americans.

JackSlateur 2y ago

Money are for poor people. Americans are obsessed with money. Ergo, americans are poor. Seems legit !