Where is inequality greater?

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.

Comments

I think you need to add "in an urban area". If you live in a rural area, then the US system is a no brainer because congestion only effects urban areas.

Sorry, but this is an unusually ignorant post. It not only invents a place called "Europe" which seems to be a substitute for certain parts of France and Germany, but it then goes on to make broad and highly questionable statements about this place.

Tyler 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."

a) On what planet US do people not look down on each other for their tastes. I may inhabit elitish circles but there's plenty of Americans who look down on most of the habits of people living between either coast. I would also point out that the pressure to conform in US high schools, (and to conform to some fairly idiotic things in my elitist european opinion) is especially strong.

b) Finland has about the least strict societal dress code you are likely to come across and lots of people watch lots of TV. I believe the same is true in the rest of the Nordics. Your understranding of "Europe" is clearly very partial.

High speed limits, no congestion and no enforcement of traffic laws? Obviously he hasn't visited the Netherlands.

how much of this is cause and effect? is a society that promotes income equality doomed to have an offseting increase in other forms of inequality? or is a society with greater cultural inequality more likely to support income equality, since it doesn't threaten the higher cultural status of elites?

in the end we're all status seeking primates.

My parents like Nascar and ARE millionaires.

Oh, and they did it by working hard and saving A LOT, starting out both from single-parent households that were extremely poor.

I'd like more toll roads, fewer parking lots, and less on-highway parking, but I'll take the USA, thanks.

I think the whole point and allure of NASCAR is a complete lack, or even disdain for subtlety. I suspect the rich in America are more likely a bourgeois rich, and have some sympathy for that. The more "refined" money, probably not so much.

I'm not a fan, but I think I get it, and could be if the sport itself wasn't so boring. I find F1 incredibly boring as well. I find almost all racing boring. In fact, anything with anything resembling a track I find boring. This may be why I don't like baseball either. There just aren't enough interesting things happening on a defined path. Maybe why I'm a libertarian!

Any sport where the performers have to wear the brands of their owner/sponsors will not be a sport held in any true esteem by the wealthy.

Not true. Professional golfers wear the brands of their sponsors on their hats and shirts.

It reminds me of a piece I once heard from a BBC foreign correspondant. He recounted the fantastic meals he'd had with well-heeled politicians and bureaucrats. Then contrasted with what he ate and drank with a billionaire from the US - basic burgers, and coke. The point being the US elite are, or make an effort to be, more in touch with proletarian level culture than those in Europe. (But Brussels gets fantastic restaurants.)

Whether this is actually true or not as a generalisation I have no idea.

I think the difference is that in the U.S., social status is based primarily on monetary wealth, while in Europe, social status is based upon family lineage. Certainly, there are "new money" and "old money" distinctions in the U.S., but those types of distinctions are much more entrenched in European culture (if only because they have several centuries on us in terms of historical development). In that way, there is an argument that there is more inequality in Europe because you can't control what family you were born into, so there is a barrier to the upper class that can't be overcome even if you become wealthy.

Bryan Caplan says Veblen-like,
"If you're at least upper-middle class, the convenience is worth the price."
Do we conclude, we should preserve much of the public domain for the wealthy?
However, I gather most households own a car in many European countries,
while they drive far less than U.S. car owners.
Anyway, the real preference for European transportation by the 80% lower and middle class lies not in driving cars but in public transportation.

Shouldn't an economist ask not "what transportation system do the wealthy prefer",
but "which transportation system leads to a higher GDP?"
I haven't a clue.
A public transportation system like Hong Kong's largely has a circular train system on which 100,000 people live at each stop. Large grocery stores, restaurants, ... reside on the first three floors of 60 story buildings beside each train station. You get a piano lesson or a tutor comes to your apartment from the same 60 story building. Your grandparents live in an adjacent 60 story building. This concentration reflects many efficiencies.

In the U.S., even the poor use their cars. Cheap energy and cheap cars give the poor and middle class a great freedom that forces local markets to compete against more distant markets; and a great freedom to attain more remunerative employment.

Digressing as the poster and commenters did, we can ask,
"if we specialize our friends from the population of people, do we and the GDP gain?"
Again, I haven't a clue.
But Jane Addams (at whose Chicago Hull House, America's most famous philosopher John Dewey considered working)
said in Democracy and Social Ethics, 1902,
"...there is a conviction that we are under a moral obligation in choosing our experiences,
since the result of those experiences must ultimately determine our understanding of life.
We know instinctively that if we grow contemptuous of our fellows,
and consciously limit our intercourse to certain kinds of people whom we have previously decided to respect,
we not only tremendously circumscribe our range of life, but limit the scope of our ethics."
And perhaps limit GDP increases to the top 20% of the population,
so limiting the nation's whole GDP,
which comes from all people.

I don't understand how higher unemployment benefits and universal healthcare make Europe a worse place for poor people. Surely that's a typo.

This discussion seems to be narrowly avoiding the major difference between the transportation networks of US and Europe: geography. Way back in the early days of the Republic we envied the canals of Europe for their more efficient transportation value, especially for freight. So we built some canals too. And guess what, aside from the Erie Canal, they were mostly boondoggles, because our geography, specifically the Appalachian Mountains, made them almost completly useless.

Europe is a small, dense place so getting around it is fundamentally different. We may never reach their levels of population density, so it's foolish to assume that we can approach transportation the same way.

Tyler: The annecdotal premise of your post is not representative, and maybe just plain wrong. As others have written above, and I can also attest, traffic conjestion is a major problem in many places in Europe. Germany has whole classes of conjestion that are unheard-of in the U.S., like highway traffic jams between cities not associated with any regular commuting time. Perhaps your musings on social status have some truth, but this was a terrible example with which to illustrate them.

"It's odd ... to cite Finland as Western Europe"

Only if you were born after 1990. The term "Western Europe", as I'm sure you know, is overwhelmingly used to refer to the European countries that did not fall to communism. In any case, the same argument applies to the Nordic countries and Norway and Denmark as every bit as western as France and Germany. Germany, like Sweden, is actually rather central so maybe that's not Western Europe either.

I think you're scrabbling a bit here.

lmao at "Not only that, I would meet people conversant in world geography, politics and economics who could name more than one head of state, and who could express themselves in several languages and actually speak better English than a Texan!"

i love it when people assume that europeans are more worldly and cultured than americans just by virtue of being born somewhere else.

guess what. the entire world is full of the same ignorant people! please oh please approach a german builder, a croatian plumber, or a norwegian pizza-delivery driver and ask them their opinions on "world geography" and economics.

boy, the prejudices of americans about europe in this thread are surpassed only by the prejudices of europeans about americans. what a fascinating discussion.

Any sport where the performers have to wear the brands of their owner/sponsors will not be a sport held in any true esteem by the wealthy.

I disagree. Lots of the wealthy will give you bonus snob points for watching EPL.

Then there's the whole wilderness thing. There's no where in Europe comparable to Yosemite, Sequoia or Yellowstone National Parks. Europe has oodles of beautiful architecture, the US has oodles of beautiful natural scenery. What's ironic is the Europeans tend to be more of environmentalist and the have far less natural environment than Americans.

I am completely baffled by the windshield perspective in Kaplan's post. Isn't it much better for the poor to have decent public transportation in urban centers? Why is that just an upper-middle class thing? Similarly, what do the tolls and speed limits have to do with anything when there's excellent long distance rail (and comically cheap flights too)?

Also agreed that there's plenty snobbery in the US. You can't even live in Brooklyn without being looked down upon, let alone Iowa.

"Sure, but in Europe, that commute can encompass a pleasant stroll through inner city neighbourhoods, full of cultural and gastronomical pleasures. Who wouldn't want to spend a little more time given that luxury..."

It can, I suppose, but rarely does -- contrary to your idealized image, travel in Europe is almost as auto-dominated as in the U.S.:

"In the United States, automobiles account for about 88 percent of travel. In Europe, the figure is about 78 percent. And Europeans are gaining on us."

http://www.washingtonpost.com/wp-dyn/content/article/2007/01/26/AR2007012601589_pf.html

As pointed out over at Caplan's blog, to take one of his examples, you can get from Paris to Strasbourg on the TGV (French for very fast train) in 2hours 20 minutes, and the best deal currently is 15 euros each way. If you have a large family (more than 3 children) it may well be cheaper. I think in calculating which system is better for the rich you need to take account of all the alternatives.

There's no where in Europe comparable to Yosemite, Sequoia or Yellowstone National Parks. Europe has oodles of beautiful architecture, the US has oodles of beautiful natural scenery.

The Alps? The Fjords? Do you mean protected areas, because it seems like there are tons of naturally beautiful places in Europe. Granted, I've only seen a small part, but the bus rides through Southern Germany and Austria, from Munich, to Salzburg, to Vienna, and back to greater Bavaria were freaking awesome.

Lol, I followed both posts (here and at Caplans blog) and at both the comments are getting more and more hilarious by the minute.
Just some things to think about:
@ Peter Whiteford: Show me the TGV ticket for 15 Euros. I have yet to see it. For this particular route a single *starts* at about 96 $ I think, non-refundable ones might be cheaper, but not by much.

@argument about "oh, our country is so big", that makes it sound like the average american travels half-way across the continent every weekend, any proof for that?

@about the wilderness: How many americans actually go to yellow stone and the like more then once in ten years or so?

@anon Yes, certainly there are ignorant people everywhere, but for example most european countries are smaller (such it isn't that easy to ignore the rest of the world), and make children go to school longer, so they learn at least some what more about the world. Exceptions apply of course, like the British ... (konce met a guy who lives 30 mins from london but hadn't been there till he was 18) For the not upper-class americans from my experience europe either doesn't even exist or their view of it is similiar to that of some alien world. (at least I imply that from the butt load of question that just left me speechless ...)

flo,

anon here again. i'm simply trying to dispel the usual/arcadian image that certain americans, eg Jimbino, have of life in europe.

the myth of the continental intellectual arises because of selection bias. while in europe, americans tend to communicate with hoteliers, publicans, and other tourists in such places as hotels and pubs. while in america, americans (obviously) tend to interact with europeans who are there on holiday or for business, etc. in either locale, 'people who are more likely to know about the world because they interact with others' have already self-selected themselves into the sample.

there are just as many people who have never been more than 20 miles away from home in birmingham as there are in frankfurt, trondheim, nebraska or seattle. i don't buy into large generalisations about so-idealised worldliness or cultural appreciation.

"For me the major difference between the USA and Europe is that the USA is unspeakably boring. Same fast food everywhere, same lousy beer and wine choices, same choice of local papers or USA Today, same 1000 bland TV channels.

Driving from here in Austin, a rare cultural mecca in the USA, it takes a day to get to another state, and in the meantime you will pass through country where you can't even get a beer or a glass of wine. Where, because of that, there is no such thing as fine dining, let alone an interesting variety. Where you won't even find a USA Today, let alone an NYT or WSJ. Even in Austin, you can hardly find a London, Frankfort, Paris or any other world-class foreign newspaper anywhere. You can't even see sex or nudity on public TV! For the European, it must seem a cultural wasteland indeed.

If I were to spend the 700 boringissimo miles from Austin to El Paso driving in Europe instead, I would pass through 10 countries with a much greater choice of everything. Not only that, I would meet people conversant in world geography, politics and economics who could name more than one head of state, and who could express themselves in several languages and actually speak better English than a Texan!"

THIS MADE ME LAUGH UNCONTROLLABLY. Does the commenter really want to fit so easily into the stereotypical, post college, move to Austin to experience "great culture" person.

My guess is that the commenter will next move to Seattle, NYC, San Francisco, or London.

Hilarious.

Something that I have found different from my hometown (Guayaquil) and the european cities in which I've been to is that here in most american cities nobody walks as much as europeans and people in latinamerican cities do. In these cities people walks to the theater, grocery, laundry, even school, college, or a very common one is walking a few blocks from your workplace to your favorite restaurant, etc.
Because there are a lot of colonial and medieval cities in these places, there is a lot to see while walking too. Of course, as a local you may not be amaze for what surrounds you.

Caplan is pretty ignorant - I live in Germany, pay around 300 dollars tax for my new car (a Citroen Berlingo - no real American equivalent, but not tiny), there are no tolls in Germany for cars, traffic enforcement is about equal to what I experienced when living in NoVa (though more camera based for speed/lights), parking is generally free where it would be free in NoVa, and costs where it would cost in DC (see that little sleight of hand? - one is suburbs, the other is a city). But I will give him the point about traffic congestion, at least compared to the DC region. What continues to astound me is the lack of rush hour in all but a very few cities in Germany. And of course, higher fuel taxes. Which tend to fund things like mass transit - how very unfair to the car drivers to actually subsidize transport options for those who don't own cars, like children or the elderly.

'Why do you find so many working class Europeans moving to the U.S., but the Americans moving to the Europe are strictly upper-class?'

Strange - I never before considered myself upper class. And the only German I have known that lived in the U.S. (where her 2 children were born) was quite, quite upper class. Guess you need to work some more on those generalizations, just like Caplan.

I love it when someone visits a couple of cities, and comes to a conclusion which is diametrically opposite what I observe. What planet does Bryan Caplan live on? One where the data automatically adjusts to fit his conclusions?

Traffic in the Ruhr, or the UK, or the Netherlands, is diabolical-- probably at least as bad as Atlanta. Even with the congestion charge, London traffic is only marginally better than Manhattan traffic, (arguably worse), and Manhattan is an island.

So the UK has high car taxes, high gas taxes, few road tolls (except London and the Birmingham bypass) and diabolical traffic.

The one advantage you have in London over New York, let alone any other American city, is that the bus actually takes you somewhere, and relatively cheaply. But the Tube is stuffed-- it can't handle the load. German cities (and Paris) at least have well-functioning U-Bahns and trams, generally.

The real factors are:

- density of cities - the requirement for the provision of minimum levels of parking in all commercial and residential zoning in the US means that US cities sprawl, and that means public transport is uneconomic

- provision of public transport - European cities have good public transport. British cities have mediocre public transport. American cities have little or no public transport outside of the usual suspects (Washington, NYC, Boston etc.). And the low density sprawl prevents there ever being any

If the US was truly interested in poor and lower middle class people, it would allow higher housing density, as Europe does, thus allowing cheaper housing. But zoning in the US is all about keeping out people of lower socio-economic orders: let them live in the Inland Empire

- a steady US political refusal to believe that oil is a scarce, strategic resource, and therefore there is an externality in its consumption, to be addressed with taxation

But Europe has manic traffic. And this is bad for middle class people as well as rich people. Poor people take public transport.

Oh and the Tube stops running at midnight, so you have to take the atrocious (though wildly entertaining) night buses. The NY Subway runs 24-7.

valuethinker: "density of cities - the requirement for the provision of minimum levels of parking in all commercial and residential zoning in the US means that US cities sprawl, and that means public transport is uneconomic"

European cities are also sprawling Their pre-automobile inner cores might be dense, but the post-automobile suburbs are starting to look very much like U.S. suburbs.

U.S. pre-automobile cities have dense cores as well, but the growth is all in the suburbs.

Residential zoning gets blamed for much of the sprawl in the U.S. But is that really the only reason? Families will choose single family housing whenever it is affordable. That preference, combined with the huge population growth of metro areas, meant that sprawl was inevitable.

Court-mandated forced busing also contributed heavily to sprawl in the U.S. After the Supreme Court ruled that children in independent school districts need not be bused to adjacent school districts to achieve integration, the flight to the suburbs exploded. Parents can endure quite a long commute in order to keep their kids off schoolbuses and in the perceived safety of their neighborhoods.

valuethinker: a steady US political refusal to believe that oil is a scarce, strategic resource

Are you implying that modern sprawl leads to increased energy consumption? That may have been the case in the pre-internet world, when geographic clustering of businesses was still desirable. But today the geographic dispersal of employment locations is common. Sprawl allows many more single-family houses to be located close to those dispersed employment locations.

I like Germany and mass transit, I'm not bashing either of the two.

The gas price comparison seems like a red herring to me.

Having spent appreciable time driving in Spain - though admittedly not in other EU countries so I welcome corrections to what I'm about to say - driving is not significantly more expensive from a fuel perspective.

Filling a VW Passat with diesel 8 months ago (last I was in Madrid) cost about 50 euro where it cost about $35 to fill a VW Jetta (my brother owns one).

On that 50 euros, one could travel the equivalent of 700 miles. In the Jetta, 300 if lucky, and the Jetta is a smaller, less powerful car (both are manual in this case).

Why, when pundits talk about "inequality", do they never talk about the elephant in the room: that in Europe, inequality is far more permanent and institutionalized than it is in the US. Lack of economic mobility is at least as important as inequality itself.

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