What Does Europe Do Right?
by Jeremy Rifkin

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Ask Americans what they most admire about the U.S.A. and they will likely say, individual opportunity to get ahead, at least until recently. Ask a European what they most admire about Europe and they will invariably say “the quality of life”.

Unfortunately, the American Dream, the social glue that has united Americans across class, ethnic, racial, and cultural lines for more than 200 years is weakening. Forty years ago,

Americans could justifiably claim to be the most egalitarian middle class society in the world. Today, the U.S. ranks 24th among industrialized nations in income inequality, the gap between the very few rich at the top and the multitudes of working poor at the bottom. Only Mexico and Russia score lower in the rankings of industrial nations. It’s no wonder that barely 51 percent of Americans still believe in the American Dream while one-third of all Americans say they no longer believe in the dream at all.

So, what does Europe do better than America? Create a quality of life for all of its people. The European Dream focuses on inclusivity, diversity, sustainable development, social rights and universal human rights, and peace and cooperation among people. These are the components for a good quality of life and the accomplishments have been impressive.

While Americans are 28 percent richer per capita than Europeans, in many ways, Europeans experience a higher quality of life, clear evidence that, in the long run, cooperation rather than competition is sometimes a surer path to happiness.

Consider, for example, the question of what constitutes the good society. We normally associate quality of life with good education, decent health, a proper balance of work and leisure, and living in a clean and safe environment. In all of these particulars, the most advanced European Union member states have begun to pass up America.

While America still sports the best universities and graduate schools in the world, the EU has begun to surpass the U.S. in schooling at the elementary and secondary school levels. Students in twelve European member states enjoy higher math literacy and in eighth EU states students outperform American students in science literacy.

In the health field, no one questions the fact that America has cutting edge, state of the art medical facilities unrivaled in the world for those who can afford it. But, when it comes to garden variety health care, Europe does better. The U.S. is only one of two industrial countries without universal health care insurance for its citizens. Forty million Americans are currently without any health insurance and at risk. Europe, on the other hand, claims more physicians per population and in the EU’s fifteen most advanced countries, life expectancy is a year longer than in the U.S. While the U.S. ranks a dismal 27th among the nations of the world in infant mortality, the EU member states have the lowest number of infant deaths of any region of the world. The high infant deaths in the U.S. are partially the consequence of the fact that childhood poverty in America is among the highest in the world. Today, 22 percent of all the children in the U.S. are living in poverty. While Europe also has poor people and childhood poverty, the social net prevents the youngest members of society from being abandoned altogether.

When it comes to the question of toil, American workers enjoy the dubious distinction of working the longest hours of any of the industrial countries in the world. The average paid vacation time in the U.S. is two weeks, while in Europe the average paid vacation is four or more weeks per year. Europeans like to say that “Americans live to work while Europeans work to live.” Europeans enjoy a total of 10.5 more weeks of leisure a year than Americans.

Living in clean, sustainable communities is also a benchmark of a good quality of life. Here too, Europe has shown a far greater commitment to protecting the global environment than America. For example, while the European Union has 165 million more citizens than the U.S., Americans waste a third more energy than Europeans. Europeans are also far more willing to tax their personal incomes to safeguard their environment and have a more rigorous regulatory regime to protect the environment from corporate polluters.

One normally assumes that a prosperous economy goes hand in hand with a safer society. In the case of the U.S., that’s not the case. While the richest nation on earth, the U.S. is one of the most dangerous places to live. Although there are unsafe neighborhoods and communities in Europe, they don’t begin to compare with parts of America. The U.S. has four times the homicide rate of Europe. Even more frightening, the rates of childhood homicides, suicides, and firearm related deaths in the U.S. exceed those of the other twenty-five wealthiest nations in the world, including the fourteen wealthiest European countries. It’s not surprising, then, that one-quarter of the entire prison population in the world is incarcerated in U.S. prisons.

Even the Euroskeptics acknowledge that the quality of life is better in much of Europe than in America, but argue that the vast social benefits are acting as a brake on the economy. They say its time to give up the dream and make the kind of deep structural reforms that America has made or their economy and society will not survive. There is, therefore, much talk in recent months about paring down social benefits, reducing the tax burden on citizens, freeing up capital for investment, eliminating hard fought safeguards for workers, and creating a more flexible labor force that can better compete with cheaper labor abroad.

The problem is that even though the U.S. has made all of these reforms, our economy is on even more shaky economic ground than Europe’s. The growth of the American economy in the past decade has had little do with the kind of draconian structural reforms that have been put in place. Rather, it was the vast extension of consumer credit, beginning in the early 1990s, that has been the prime mover of the American economy. Americans have gone on the biggest credit binge in history. The increased consumer spending, in turn, has boosted the American economy “artificially” for more than a decade. But, the economic momentum has been purchased at the expense of mortgaging our children’s future. The American savings rate, which was about 8 percent in the early 1990s, has plunged to less than 2 percent. This year, more people will file bankruptcies in America than file for divorce, graduate from college, suffer a heart attack, or are diagnosed with cancer. Bankruptcy has become an epidemic. To keep consumption artificially pumped up, the Bush Administration provided income tax cuts for Americans. More disposable income, however, ballooned the government debt to a record high. If the doubters need any proof as to the fact that America’s so called economic success is built on sand, just check the currency exchange rates. The dollar continues to be devalued relative to the Euro because investors are reluctant to invest in a currency backed up by so much debt.

And even with all of the increase in debt, America has experienced a net loss of over one million jobs in the past four years – the worst decline in employment since 1929 and the beginning of the Great Depression.

If America is not the appropriate economic model to emulate, then is there another course Europe can follow that will allow it to keep the European Dream alive, build on its past social accomplishments rather than eliminate them, and still grow the economy sufficiently to guarantee a better future for its people?

Interestingly, the European Union has before it a golden goose that is languishing rather than being fed. The key to the future prosperity of Europe is the quick and successful integration of the largest internal trading market in the world that stretches from the Irish Sea to the door steps of Russia. In Lisbon in the year 2000, the EU set a goal of becoming the world’s most competitive economy by 2010. Since then, the member states have procrastinated and stalled in making the necessary reforms to create a single integrated European commercial space. The EU needs to establish a common energy grid, a unified communication and transportation grid, a seamless set of regulatory policies governing commerce and trade and make the English language lingua franca for business across the continent. If the EU can successfully integrate the potentially biggest internal market in the world so that Europeans can trade across their member states with the same ease that Americans do across our United States, Europe will likely become the ascendant economic superpower in the world.

A last thought. While we Americans tend to over-hype our successes and not talk about our failures, my European friends seem to be continually preoccupied with their failures and rarely talk about their successes. Dreams require hope, optimism, and confidence in the future. Pessimists and cynics don’t lead society into the future. They only hold society back. What Europe so desperately needs now is a new generation of politically committed people willing to dream of a better tomorrow and take the necessary steps to make their dream a reality.