The presidential election proved Americans have embraced European-style social democracy and that ObamaCare is but the first chapter in a new era of big government. Or at least that’s the word from pundits from across the political spectrum. But despite the recent and significant growth of its government, America remains quite far from throwing away capitalism in favor of a European-style social market economy.
And not only does America’s relatively freer economy offer more opportunity and wealth than those of Europe, its larger private safety net offers more individual choice.
In fact, there seem to be many more Europeans who prefer American capitalism to their own system than Americans who prefer the European way. Today, there are nearly 10 times more working-age Europeans living in the U.S. than vice versa, according to data from the Organization for Economic Cooperation and Development.
And only 3.8% of those Europeans in America are unemployed, yet a whopping 10% of Americans who emigrate to work in Europe are currently jobless. A big welfare state, it turns out, won’t guarantee you a job.
Pursuing career aspirations is easier in America. According to 1972-2010 cumulative data from the General Social Survey and the 2010 European Working Conditions Survey, U.S. workers are much more satisfied with their careers than their European counterparts.
Of workers surveyed in the U.S., 47% indicated they were “very satisfied” with their current employment. Only 25% of those surveyed in Europe reported the same. Happy U.S. Workers
The U.S. also wins in overall job satisfaction, as 90% of American workers say they are satisfied with their current employment, compared to 84% in Europe. And more Americans are employed in jobs that suit their skills — 68% indicate they use “almost all” or “a lot” of their learned skills at their current job, compared to 55% in Europe who say their job skills “correspond well” with their current employment.
Workers in the U.S. also have an easier time of finding the right job in the first place. Americans spend much less time looking for work than Europeans do — in good economic times as well as bad.
During 2002-2011, 15% of unemployed Americans had been jobless for more than 12 months, compared to 44% in Europe, according to Eurostat.
And Europe has nearly three times the number of underemployed — defined as those working part-time because of the unavailability of full-time positions — than the U.S., according to the OECD.
But what about the security of the social safety net Europeans enjoy? Contrary to popular myth, the safety net in America is no less funded than in nanny-state Europe. During 2000-2007, America and Western Europe both devoted roughly 26% of spending to social services, according to OECD data.
Even Nordic countries spent less than 2 percentage points of GDP more than the U.S. The difference is that 38% of social spending in the U.S. is voluntary and privately funded.
Private philanthropy plays a much larger role in caring for the less fortunate here. Americans, the most charitable people in the world, donate 1.85% of GDP every year, according to the Johns Hopkins Center for Civil Society Studies.
That’s more than three times the Western European average of 0.48% and five times the Nordic average of 0.37%.
In addition, more Americans choose their own health care and retirement plans, which sharply reduces the need for government social spending and enhances individual choice.
Even after buying a large portion of their own social services, Americans still have higher incomes than their European counterparts.
U.S. post-tax household income less voluntary private social expenditure discounted for charitable giving is $28,182, according to my data calculations from the OECD, International Monetary Fund and others.
That’s more than $3,000 greater than the population-weighted Nordic average of $25,071 and nearly $4,000 greater than the Western European figure of $24,422. The U.S. also dramatically outperforms Europe in volunteerism and helping strangers, according to the Charities Aid Foundation, which ranked America as “the world’s most giving nation” in 2011. When bureaucracy steps aside, human kindness steps in.
Getting government out of the way creates more opportunity and wealth, gives people the freedom to choose their own social services without sacrificing the resources available to provide them, and promotes a culture of generosity. So much for the common European refrain of “cruel” American capitalism.