Every time I go to Europe I wonder what kind of future the place has:
1. The average American consumes 77 percent more than the average citizen of EU-15, read here.
2. Germany has recently failed in its attempt to reform the country’s antiquated store closing laws. German shops, with some exceptions, cannot stay open later than eight at night or on Sundays or major holidays. The German public strongly opposes these laws, but the small shop lobby dominates.
3. A recent survey in France suggests that 70 percent of French schoolchildren aspire to become bureaucrats rather than captains of industry. (See the IHT, June 9, “Divided We Graumble,” by Roger Cohen, p.2.)
4. The beauty of European cities typically stems from 1920 or earlier, when much of Europe was economically freer than the United States. How would U.S./Europe comparisons feel to us if all of Europe had been built after the second World War? How many people would then think that the “European way of life” is superior.
5. Guido Tabellini (FT, June 3) tells us that Europeans consume more leisure because they find it harder to get good jobs, not because of a cultural preference for the finer things in life.
6. The major European economies face serious demographic problems and have a hard time pushing much above a one percent growth rate. Americans call it a recession when our rate of growth falls to a mere two percent.
Hey, wait a minute:
American investment in the European Union is at an all-time high. So how bad can things be?
This is what makes economics an interesting science. My best guess is that it is easier than ever before to free-ride on the productivity and ingenuity of your neighbors. This is a great benefit of globalization, but it also makes it too easy for economies to postpone needed reforms.
That being said, here are further grounds for hope.