8 ms·

Quality of life costs money, and if we're not competitive, sooner or later that money will run out.

Cumpiler69 2y ago
It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not some magical hack nobody else thought of, it's just paid from the working class' wages and then redistributed to those in need. Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life? Billionaires and corporations certainly aren't gonna pay for it out if their profits, so the working class has to. But if the working class has no more high paying wages anymore due to stagnating growth , then your welfare budget also goes bye-bye. You can't just vote yourself more welfare and higher public sector salaries and pensions out of thin air without an economic growth to back that up. I mean, you technically can, but it doesn't end well as was proven every single time this was tried.
- kiba 2y ago
  Well paying job just mean that the primary distribution mechanism of wealth is through having a job, rather than only creating only jobs that are necessary. That's grossly inefficient. I rather pay people to stay at home rather than gunk up our industries with make-work, or worse actively making things worse. Innovation is important sure, but also efficient use of resources, including cramping down on negative externalities. That increases welfare and quality of life, ideally with no need to spend an extra dollar.
  - Cumpiler69 2y ago
    That's some idealistic stuff that's not gonna happen. The real world doesn't work like that. Yeah it's ineficient but it's the one we got right now. You're not gonna change it with your comments and beliefs. Meanwhile rent is due next month and you need to pay up by using these "ineficient" mechanisms set in place by powers higher than you.
    - kiba 2y ago
      Idealistic? So what? I am just pointing out the contradiction of people's thought. I perfectly know well it's not how things should work but how it works right now, but if people believed silly things I am going to point it out. You are welcome to point out flaws in my thinking.
  - AnimalMuppet 2y ago
    Stop thinking in terms of dollars. Think in terms of stuff - that's the actual wealth. You can move dollars around with or without jobs, but somebody has to make the stuff. Someone has to grow the food. Otherwise, you have dollars but not food, and you can't eat dollars. So the thing about jobs is, we really need jobs that actually produce stuff. We don't just need jobs, we need somebody to create the wealth. First it has to exist, then we can worry about how it gets distributed. So if you have a bunch of people who are not necessary, then the best thing to do is not to let them starve (which is also immoral), nor to give them pointless jobs (which is soul-destroying), but to find something useful for them to do.
    - bluecheese452 2y ago
      We have had the capacity to produce more stuff than we can consume for almost a century now. Take cars for example. We could easily produce one for every man woman and child. If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it. This isn’t a production problem, it is a social problem.
      - Workaccount2 2y ago
        >If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it. Its because the person making the car doesn't want to make one for someone who isn't making something of equal value in return. It makes them a sucker for being the one to make the car. You cannot legislate, policy change, indoctrinate, or force your way around this. It's why all attempts to do so always have failed. Every single time. Always. The only way to create actual value is to put in actual work.
      - kiba 2y ago
        We can't afford to make a car for every single person. It's catastrophic to our urban fabric.
- sofixa 2y ago
  > Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU. Falling behind the US doesn't mean there is absolutely nothing. I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness.
  - Cumpiler69 2y ago
    >I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU. I never said that. Please follow HN rules and reply to the strongest interpretation of one's argument, not the weakest. The EU economy was at the same level as the US economy 15-20 years ago., now it's only half the US. The EU missed out on all the major technological innovations in that time and therefore missed out on a lot of income for welfare while welfare expenses only grew due to ageing population and increasing cost of living. >Falling behind the US doesn't mean there is absolutely nothing. No, it means less money for welfare. Especially with an ever increasing ageing population. If you want to take care of all of those people at a high quality of life, it's gonna cost you, and we don't have that kind of money anymore. So you either get Europeans to accept slowly sliding into poverty due to declining welfare and rising CoL, OR, you need to bring in more money to the state somehow. Previously it was done in Europe via slavery and theft through colonialism, but since that conveyor belt of free money is gone and what's left to bring in more money is innovation in highly profitable high-growth industries where EU is almost absent. No, ASML, Airbus and some struggling German mittlestand companies can't support a whole continent like they did in the 1980's. >I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness. They would be fine, if those losses would come out of the pockets of tax dodging corporations, but they're not, they're being eaten up by the working class and the taxpayer who still expects the same welfare quality like in the good ol' days when the EU economy was as strong as the US. Do you you see how this level of welfare is unsustainable without matching economic growth?
    - 2y ago
- criddell 2y ago
  > I mean, you technically can, but it doesn't end well as was proven every single time this was tried. Arguably, Japan has been doing this for two or three generations now. Despite a crazy debt, quality of life in Japan is still pretty great.
  - CapricornNoble 2y ago
    There's a saying in economics: "There are four types of economies: developed, developing, Argentina, and Japan." One must be very careful drawing conclusions for other societies based on Japan as a sole example. I somewhat agree that Japan illustrates that massive infrastructure investment, combined with diligence in maintaining functioning societal systems, does in fact yield a high quality of life that appears sustainable even if the metrics of economic growth look terrible. That's because GDP as a measure of "quality of life" is a shitty indicator IMO, but that's a whole 'nother rabbit hole to go down...
  - Workaccount2 2y ago
    Japan is a monoculture that acts almost like one big family. Economic rules and values kinda go out the window similar to the way they do when you are selling your brother your old car or repairing your grandmother's sink.
  - handzhiev 2y ago
    Everyone who has been to Japan in the last 20 years or so could argue about the quality of life. Japan is not quite "shiny" and people are not rich.
- ta1243 2y ago
  > It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not some magical hack nobody else thought of, it's just paid from the working class' wages and then redistributed to those in need. If the US took the entire medicare/medicaid budget and split it evenly per person it would be left with more money than the UK spends on healthcare. Its not just how much you spend, its how much you waste.
kiba 2y ago
Quality of life also doesn't cost money. Road infrastructure in the United States might as well be a form of digging holes and then refilling it back up again. Grossly inefficient when we could invest the infrastructure money into world class public transit.
- wombatpm 2y ago
  I think you fail to grasp just how big the US is. Driving from Chicago to Minneapolis is ~430 miles/ 6.5 hours depending on weather and traffic. Every 10 miles or so there is an exit and usually some small town. Every 50 to 100 miles a bigger town. As I recall, after the Chicago suburbs you hit Rockford, Janesville, Madison, Baraboo, Tomah, Eau Claire, Menominee, and Hudson before you get to the St Paul collar communities. So 9 stops on on a single track running between two major cities, with only 1600 more miles to Seattle. And while the distance between stops increase, the population greatly decreases as you head west. Now road construction could be better. Because while Illinois has 300k lane-miles of road, it seems like they only have 200k of asphalt and 100k under construction at any given point in time.
  - Jensson 2y ago
    Scandinavia is sparser than USA and as large as the larger populated states, still has asphalted roads and public stuff even up north.
    - spiderfarmer 2y ago
      American exceptionalism at its finest.
    - jandrese 2y ago
      This is a bit misleading as those countries tend to have the vast majority of the population crowded into a handful of cities that are fairly close together and then a vast untamed wilderness where close to nobody lives. It's easy(ish) to have rail between Oslo and Bergen, less practical to extend that rail to Oldervik.
  - 2y ago
torginus 2y ago
I have had this niggling feeling for a long time that money (and capitalism) gets increasingly more divorced from reality, particularly as money is printed and these astronomic speculative stock market valuations are created based on some optimistic future scenario. This is not some pearl clutching moralistic argument, but a practical observation based on: - Transfer of ownership is not necessarily possible. You can't buy a technologically sensitive company because of regulations. Even if you can buy a foreign firm, transferring the talent, operational base etc. might not be possible. A CEO can't sell off his share of stocks even if they're worth billions because the loss of investor confidence. - Physical limitations on quantities of goods. There is a finite supply of real estate. If everybody in the world wanted a new car suddenly (and had money for it), car prices would go through the roof, and only a small fraction would actually get it. Imo capitalism is not flawed in the way that it is incapable of handling these situations, but it is very flawed in that money is an increasingly poor proxy for the abstract concept of value. This flawed nature of capitalism has been long since endemic (and dare I say integral) to the system, much more value has existed on paper than in reality (see banks), but I think there might be a breaking point at which the system might collapse and hyperinflation would set in.
- Ferret7446 2y ago
  It is precisely because individuals suck so much at correctly perceiving the allocation of value that free market economies ("capitalism") completely blow centrally planned ones ("socialism") out of the water. So the fact that you think money is divorced from reality is a very normal, mundane misconception.
  - torginus 2y ago
    You're taking my argument in the direction I never intended, then taking the dicothomy to the extreme, and then claiming victory unsupported by evidence. - I never wanted to contrast 'capitalism' and 'communism' or whatever. I merely wanted to point out that the fundamental absurdity of capitalism requiring infinite growth in a finite system has been resolved by having the growth of wealth coming from speculation on future unrealized value. Since I (or anyone else) can't predict the future, it might happen that things do not come to pass as they were expected and that future value might not be realized. Money is divorced from reality, it derives its value from the collective trust and belief by the people participating in the system that it can be exchanged for goods and services. In a system of rational and impartial actors, that belief is backed by chiefly existence of said goods (which is the real size of the economic pie) and less by the speculation of future potential that might or or might not happen. So in summary my argument is not between communism or capitalism, but a captialism that is backed by real world value and one that is backed by future speculation. Even if the former can create less economic growth, we can be certain that growth is real. - Central planning works. Great public works certainly are dreamt up and funded by governments yet they contribute enormously to the wealth of nations and enable a lot of value to be created. The moon landing was centrally planned and executed by a country whose per capita wealth was on par with modern day Poland, yet is considered the greatest achivement in history. - There are no real 'centrally planned' or 'free market' economies, as all countries employ both concepts to some degree. But if we were to make a argument, we could say that the US belongs to the 'free market' camp and China belongs the 'centrally planned' camp. Both countries are doing extremely well, this very discussion is about finding which one is actually doing better.
willtemperley 2y ago
Exactly and the fact that, for example, West and Central Africa are waking up [1] to the fact that France has been scamming them out of untold billions, probably trillions is going to shift power significantly. This is happening now. Senegal are following Chad in cutting ties with French military. [1] https://theconversation.com/cfa-franc-conditions-are-ripe-for-replacement-of-the-west-african-currency-rooted-in-colonialism-expert-226969 https://theconversation.com/cfa-franc-conditions-are-ripe-fo...
- willtemperley 2y ago
  Downvotes without comment are pathetic. Step up and make an argument. It's real, it's happening and Europe needs to wake up.
- readthenotes1 2y ago
  Because of the travle game(1) I learned that it was/is common for the leader of the former French colony to send hundreds of thousands in bribes to the president of France... (1) Travle posted here on hn months ago, but unfortunately a Webapp that downloads so I can't give you a url
- spiderfarmer 2y ago
  The economy is not a zero sum game. If other countries are doing well, all the better.
  - Cumpiler69 2y ago
    >The economy is not a zero sum game. Most parts of the global economy are. If you're selling cars for example, there's a fixed amount of drivers on the road you can sell cars to, so if you're VW, you're now competing with cheaper cars from Asia for those same drivers. You can't create new drivers out of thin air to expand the market demand for cars. Once the market is saturated, without having any moat, you enter in a race to the bottom. And that's what Germany's economy is discovering right now and why Europe's share of global GDP has been declining for the past 20 years.
devjab 2y ago
You are correct but it’s also more complex than that since competitive can mean many things. Currently the vast majority of government income for European countries is income tax, and income tax is usually more profitable when the market is actually competitive. Which means you need small local businesses and local production. Having completely optimised and global logistics and value chains isn’t necessarily good for wages. We can tax the wealthy and fortunes more than we do, and we probably should, but within the current systems it wouldn’t change that much. So in some sense many European countries are better prepared for economic downturns than the US even though European countries don’t have a lot of major corporations which don’t produce anything locally. Obviously it’s even more complex than this. Part of what is bringing down the economies in France and Italy is workers rights. Being able to retire at 60 is great, but it was also something that was obtained when people didn’t live as long and have as few children. Though Greece seems to have managed ok without having new public management plunder their country.
- Workaccount2 2y ago
  >Being able to retire at 60 is great, but it was also something that was obtained when people didn’t live as long and have as few children. Short aside this reminds me of: In the US, my Boss's neighbor is an 85 year old woman who retired 42 years ago. And still gets a paycheck twice a month (with CoL increases) and full health insurance. She became a municipal clerk when she turned 18, worked 25 years to get a full pension, then retired at 43. The optimism (maybe pessimism?) people had back in the day was wild. I nearly fell out of my chair when he told me this.

It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not some magical hack nobody else thought of, it's just paid from the working class' wages and then redistributed to those in need. Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life? Billionaires and corporations certainly aren't gonna pay for it out if their profits, so the working class has to. But if the working class has no more high paying wages anymore due to stagnating growth , then your welfare budget also goes bye-bye. You can't just vote yourself more welfare and higher public sector salaries and pensions out of thin air without an economic growth to back that up. I mean, you technically can, but it doesn't end well as was proven every single time this was tried.

kiba 2y ago
Well paying job just mean that the primary distribution mechanism of wealth is through having a job, rather than only creating only jobs that are necessary. That's grossly inefficient. I rather pay people to stay at home rather than gunk up our industries with make-work, or worse actively making things worse. Innovation is important sure, but also efficient use of resources, including cramping down on negative externalities. That increases welfare and quality of life, ideally with no need to spend an extra dollar.
- Cumpiler69 2y ago
  That's some idealistic stuff that's not gonna happen. The real world doesn't work like that. Yeah it's ineficient but it's the one we got right now. You're not gonna change it with your comments and beliefs. Meanwhile rent is due next month and you need to pay up by using these "ineficient" mechanisms set in place by powers higher than you.
  - kiba 2y ago
    Idealistic? So what? I am just pointing out the contradiction of people's thought. I perfectly know well it's not how things should work but how it works right now, but if people believed silly things I am going to point it out. You are welcome to point out flaws in my thinking.
- AnimalMuppet 2y ago
  Stop thinking in terms of dollars. Think in terms of stuff - that's the actual wealth. You can move dollars around with or without jobs, but somebody has to make the stuff. Someone has to grow the food. Otherwise, you have dollars but not food, and you can't eat dollars. So the thing about jobs is, we really need jobs that actually produce stuff. We don't just need jobs, we need somebody to create the wealth. First it has to exist, then we can worry about how it gets distributed. So if you have a bunch of people who are not necessary, then the best thing to do is not to let them starve (which is also immoral), nor to give them pointless jobs (which is soul-destroying), but to find something useful for them to do.
  - bluecheese452 2y ago
    We have had the capacity to produce more stuff than we can consume for almost a century now. Take cars for example. We could easily produce one for every man woman and child. If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it. This isn’t a production problem, it is a social problem.
    - Workaccount2 2y ago
      >If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it. Its because the person making the car doesn't want to make one for someone who isn't making something of equal value in return. It makes them a sucker for being the one to make the car. You cannot legislate, policy change, indoctrinate, or force your way around this. It's why all attempts to do so always have failed. Every single time. Always. The only way to create actual value is to put in actual work.
    - kiba 2y ago
      We can't afford to make a car for every single person. It's catastrophic to our urban fabric.
sofixa 2y ago
> Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU. Falling behind the US doesn't mean there is absolutely nothing. I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness.
- Cumpiler69 2y ago
  >I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU. I never said that. Please follow HN rules and reply to the strongest interpretation of one's argument, not the weakest. The EU economy was at the same level as the US economy 15-20 years ago., now it's only half the US. The EU missed out on all the major technological innovations in that time and therefore missed out on a lot of income for welfare while welfare expenses only grew due to ageing population and increasing cost of living. >Falling behind the US doesn't mean there is absolutely nothing. No, it means less money for welfare. Especially with an ever increasing ageing population. If you want to take care of all of those people at a high quality of life, it's gonna cost you, and we don't have that kind of money anymore. So you either get Europeans to accept slowly sliding into poverty due to declining welfare and rising CoL, OR, you need to bring in more money to the state somehow. Previously it was done in Europe via slavery and theft through colonialism, but since that conveyor belt of free money is gone and what's left to bring in more money is innovation in highly profitable high-growth industries where EU is almost absent. No, ASML, Airbus and some struggling German mittlestand companies can't support a whole continent like they did in the 1980's. >I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness. They would be fine, if those losses would come out of the pockets of tax dodging corporations, but they're not, they're being eaten up by the working class and the taxpayer who still expects the same welfare quality like in the good ol' days when the EU economy was as strong as the US. Do you you see how this level of welfare is unsustainable without matching economic growth?
  - 2y ago
criddell 2y ago
> I mean, you technically can, but it doesn't end well as was proven every single time this was tried. Arguably, Japan has been doing this for two or three generations now. Despite a crazy debt, quality of life in Japan is still pretty great.
- CapricornNoble 2y ago
  There's a saying in economics: "There are four types of economies: developed, developing, Argentina, and Japan." One must be very careful drawing conclusions for other societies based on Japan as a sole example. I somewhat agree that Japan illustrates that massive infrastructure investment, combined with diligence in maintaining functioning societal systems, does in fact yield a high quality of life that appears sustainable even if the metrics of economic growth look terrible. That's because GDP as a measure of "quality of life" is a shitty indicator IMO, but that's a whole 'nother rabbit hole to go down...
- Workaccount2 2y ago
  Japan is a monoculture that acts almost like one big family. Economic rules and values kinda go out the window similar to the way they do when you are selling your brother your old car or repairing your grandmother's sink.
- handzhiev 2y ago
  Everyone who has been to Japan in the last 20 years or so could argue about the quality of life. Japan is not quite "shiny" and people are not rich.
ta1243 2y ago
> It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not some magical hack nobody else thought of, it's just paid from the working class' wages and then redistributed to those in need. If the US took the entire medicare/medicaid budget and split it evenly per person it would be left with more money than the UK spends on healthcare. Its not just how much you spend, its how much you waste.

kiba 2y ago

Quality of life also doesn't cost money. Road infrastructure in the United States might as well be a form of digging holes and then refilling it back up again. Grossly inefficient when we could invest the infrastructure money into world class public transit.

wombatpm 2y ago
I think you fail to grasp just how big the US is. Driving from Chicago to Minneapolis is ~430 miles/ 6.5 hours depending on weather and traffic. Every 10 miles or so there is an exit and usually some small town. Every 50 to 100 miles a bigger town. As I recall, after the Chicago suburbs you hit Rockford, Janesville, Madison, Baraboo, Tomah, Eau Claire, Menominee, and Hudson before you get to the St Paul collar communities. So 9 stops on on a single track running between two major cities, with only 1600 more miles to Seattle. And while the distance between stops increase, the population greatly decreases as you head west. Now road construction could be better. Because while Illinois has 300k lane-miles of road, it seems like they only have 200k of asphalt and 100k under construction at any given point in time.
- Jensson 2y ago
  Scandinavia is sparser than USA and as large as the larger populated states, still has asphalted roads and public stuff even up north.
  - spiderfarmer 2y ago
    American exceptionalism at its finest.
  - jandrese 2y ago
    This is a bit misleading as those countries tend to have the vast majority of the population crowded into a handful of cities that are fairly close together and then a vast untamed wilderness where close to nobody lives. It's easy(ish) to have rail between Oslo and Bergen, less practical to extend that rail to Oldervik.
- 2y ago

torginus 2y ago

I have had this niggling feeling for a long time that money (and capitalism) gets increasingly more divorced from reality, particularly as money is printed and these astronomic speculative stock market valuations are created based on some optimistic future scenario. This is not some pearl clutching moralistic argument, but a practical observation based on: - Transfer of ownership is not necessarily possible. You can't buy a technologically sensitive company because of regulations. Even if you can buy a foreign firm, transferring the talent, operational base etc. might not be possible. A CEO can't sell off his share of stocks even if they're worth billions because the loss of investor confidence. - Physical limitations on quantities of goods. There is a finite supply of real estate. If everybody in the world wanted a new car suddenly (and had money for it), car prices would go through the roof, and only a small fraction would actually get it. Imo capitalism is not flawed in the way that it is incapable of handling these situations, but it is very flawed in that money is an increasingly poor proxy for the abstract concept of value. This flawed nature of capitalism has been long since endemic (and dare I say integral) to the system, much more value has existed on paper than in reality (see banks), but I think there might be a breaking point at which the system might collapse and hyperinflation would set in.

Ferret7446 2y ago
It is precisely because individuals suck so much at correctly perceiving the allocation of value that free market economies ("capitalism") completely blow centrally planned ones ("socialism") out of the water. So the fact that you think money is divorced from reality is a very normal, mundane misconception.
- torginus 2y ago
  You're taking my argument in the direction I never intended, then taking the dicothomy to the extreme, and then claiming victory unsupported by evidence. - I never wanted to contrast 'capitalism' and 'communism' or whatever. I merely wanted to point out that the fundamental absurdity of capitalism requiring infinite growth in a finite system has been resolved by having the growth of wealth coming from speculation on future unrealized value. Since I (or anyone else) can't predict the future, it might happen that things do not come to pass as they were expected and that future value might not be realized. Money is divorced from reality, it derives its value from the collective trust and belief by the people participating in the system that it can be exchanged for goods and services. In a system of rational and impartial actors, that belief is backed by chiefly existence of said goods (which is the real size of the economic pie) and less by the speculation of future potential that might or or might not happen. So in summary my argument is not between communism or capitalism, but a captialism that is backed by real world value and one that is backed by future speculation. Even if the former can create less economic growth, we can be certain that growth is real. - Central planning works. Great public works certainly are dreamt up and funded by governments yet they contribute enormously to the wealth of nations and enable a lot of value to be created. The moon landing was centrally planned and executed by a country whose per capita wealth was on par with modern day Poland, yet is considered the greatest achivement in history. - There are no real 'centrally planned' or 'free market' economies, as all countries employ both concepts to some degree. But if we were to make a argument, we could say that the US belongs to the 'free market' camp and China belongs the 'centrally planned' camp. Both countries are doing extremely well, this very discussion is about finding which one is actually doing better.

willtemperley 2y ago

Exactly and the fact that, for example, West and Central Africa are waking up [1] to the fact that France has been scamming them out of untold billions, probably trillions is going to shift power significantly. This is happening now. Senegal are following Chad in cutting ties with French military. [1] https://theconversation.com/cfa-franc-conditions-are-ripe-for-replacement-of-the-west-african-currency-rooted-in-colonialism-expert-226969 https://theconversation.com/cfa-franc-conditions-are-ripe-fo...

willtemperley 2y ago
Downvotes without comment are pathetic. Step up and make an argument. It's real, it's happening and Europe needs to wake up.
readthenotes1 2y ago
Because of the travle game(1) I learned that it was/is common for the leader of the former French colony to send hundreds of thousands in bribes to the president of France... (1) Travle posted here on hn months ago, but unfortunately a Webapp that downloads so I can't give you a url
spiderfarmer 2y ago
The economy is not a zero sum game. If other countries are doing well, all the better.
- Cumpiler69 2y ago
  >The economy is not a zero sum game. Most parts of the global economy are. If you're selling cars for example, there's a fixed amount of drivers on the road you can sell cars to, so if you're VW, you're now competing with cheaper cars from Asia for those same drivers. You can't create new drivers out of thin air to expand the market demand for cars. Once the market is saturated, without having any moat, you enter in a race to the bottom. And that's what Germany's economy is discovering right now and why Europe's share of global GDP has been declining for the past 20 years.

devjab 2y ago

You are correct but it’s also more complex than that since competitive can mean many things. Currently the vast majority of government income for European countries is income tax, and income tax is usually more profitable when the market is actually competitive. Which means you need small local businesses and local production. Having completely optimised and global logistics and value chains isn’t necessarily good for wages. We can tax the wealthy and fortunes more than we do, and we probably should, but within the current systems it wouldn’t change that much. So in some sense many European countries are better prepared for economic downturns than the US even though European countries don’t have a lot of major corporations which don’t produce anything locally. Obviously it’s even more complex than this. Part of what is bringing down the economies in France and Italy is workers rights. Being able to retire at 60 is great, but it was also something that was obtained when people didn’t live as long and have as few children. Though Greece seems to have managed ok without having new public management plunder their country.

Workaccount2 2y ago
>Being able to retire at 60 is great, but it was also something that was obtained when people didn’t live as long and have as few children. Short aside this reminds me of: In the US, my Boss's neighbor is an 85 year old woman who retired 42 years ago. And still gets a paycheck twice a month (with CoL increases) and full health insurance. She became a municipal clerk when she turned 18, worked 25 years to get a full pension, then retired at 43. The optimism (maybe pessimism?) people had back in the day was wild. I nearly fell out of my chair when he told me this.