Tuesday, January 12, 2010

Learning From Europe

From the New York Times, Nobel Prize winning economist Paul Krugman opines on the proven effectiveness of social democracy:

But taking the longer view, the European economy works; it grows; it’s as dynamic, all in all, as our own.

So why do we get such a different picture from many pundits? Because according to the prevailing economic dogma in this country — and I’m talking here about many Democrats as well as essentially all Republicans — European-style social democracy should be an utter disaster. And people tend to see what they want to see.

After all, while reports of Europe’s economic demise are greatly exaggerated, reports of its high taxes and generous benefits aren’t. Taxes in major European nations range from 36 to 44 percent of G.D.P., compared with 28 in the United States. Universal health care is, well, universal. Social expenditure is vastly higher than it is here.

So if there were anything to the economic assumptions that dominate U.S. public discussion — above all, the belief that even modestly higher taxes on the rich and benefits for the less well off would drastically undermine incentives to work, invest and innovate — Europe would be the stagnant, decaying economy of legend. But it isn’t.


While straight-up socialism would probably be more economically just, social democracy combines the economic dynamism of capitalism with a great deal of economic justice, as well as the freedom that the word "democracy" implies. And it works. And you don't need gulags in order to pull it off. Indeed, Western Europe's adoption of the social democracy model after WWII is probably what drained dry domestic support for the communists and revolutionary socialists who were running around at the time.

I know I've called myself a leftist many times here at Real Art, and in the US that's exactly what I am. But in Europe, I'd just be a moderate. A strong supporter of the status quo, a defender of the way things are. I mean okay, I'm a contrarian by nature, so I'm sure I'd find something to bitch about if I were French or German, but you get my drift.

Maybe I should start calling myself a social democrat. It really is the only way to go.