Wednesday, April 23, 2003

The Other Clash of Civilizations-I was meditation on the differences between the US and European economic systems in preperation for my Micro class this afternoon. Here are some general areas where the two cultures diverge. These are generalities that may occasionally verge on stereotype, but are useful to look at. Individual versus Collective Responsibility- The first primary difference is that the US system assumes that people can fend for themselves unless otherwise noted while the European system assumes than people need to be looked after, that the state is the primary source of well-being rather than the individual. This will lead to making welfare more generous and easier to get and make health care a public good. Top-Down or Bottom-up- In the US system, power flows from the public to the government; the assumption is that individuals have control over things unless otherwise noted and that things are legal unless they are made illegal. In European settings, without an assumption of limited government, government control is more expected and acceptable. Uniformity versus individuality-European culture is more group oriented; monopolies or government-run businesses are more accepted. The Japanese have this quirk as well, one oft-cited proverb is “The nail that sticks up gets hammered down.” Conversely, the US has a greater appreciation for individuality. It takes a certain rebel spirit to leave one’s home country and come to a new land; with the exception of those of us whose ancestors were brought over as slaves, most Americans are descendants of independent-minded risk-takers who immigrated to America. Risk-Taking versus Risk Aversion-Given the immigrant nature of the US, we’re descended from risk-takers. People in the US seem to have a higher-tolerance of risk than Europeans do. Thus, the European economies will tend to have a more conservative (as in status-quoian) approach to starting new businesses or taking chances in existing ones. Cooperation versus Competition – Many Europeans (and Americans) see our free-market system as encouraging selfishness and greed at the expense of the greater good. The American would counter that while cooperation on civil projects is good, the efficiency and innovation and responsiveness to consumer needs that economic competition creates outweighs the downsides of competition. Tradition versus Innovation-The “creative destruction” of free-market economics does in a lot of traditional items, as the closure of Cyprus Gardens just brought home to Polk County. Family traditions die when the woods you used to tromp around it as a middle-schooler is now part of a new subdivision or the restaurant that you always went to on Grandpa’s birthday went under. However, innovation usually means a better selection of things to buy; we always complain when our favorite TV show gets cancelled or the old mom-‘n-pop drug store gets bought out by the national chain, but we don’t stop to thank the system that made room for the good new show or when the new megamart has the stuff you need at 15% less than before. If the public at large wants something to stay open, they can keep that tradition alive by making it partially or totally a public good; the State of Florida is looking at buying part of Cypress Gardens. Another example is support for family farms which are economically inefficient but which hold a warm place in the public psyche. A free-market system isn’t designed to be controllable, and that makes a lot of people nervous. People are free to leave their hometowns, leave their careers and other aspects of their life. For societies that are used to having a place for everything and everyone, the dynamic nature of the marketplace replaces the stability of the system that they’ve grown up with. Quality of Life versus Economic Progress-A good example of this is American fast food versus European slow food. A ten-minute hamburger may be better than a two-hour five-course meal if you have a “better” use for the extra time. Is the five-course meal better than the QwikieBurger? Yes, but a QwikieBurger and a game of basketball or a QwikieBurger and a prayer meeting might be better that the two-hour five-course meal. We will do things in a quicker, harder-working, less-traditional manner, but we do it quicker and more efficiently. We don't have as much vacation time, but we do have higher pay. We do give us some traditions and have a somewhat more tense existance, but we have more freedom and more material goods to show for it.

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