Is Europe a Model for America? Or a Warning?

Europe softened the harshest edges of capitalism, provided safety nets and in important ways has exceeded the United States in well-being

Update: 2024-09-02 01:00 GMT

For liberals like me, Europe has often seemed a charmed place with sound lessons for America.

Europe softened the harshest edges of capitalism, provided safety nets and in important ways has exceeded the United States in well-being. European infants are less likely to die than those in America, childbirth is less dangerous in Europe than in the United States, and Europeans live longer.

Northern Europeans work less than Americans — only about 1,400 or 1,500 hours a year compared with 1,800 for Americans — and mostly enjoy universal health care, free or subsidized child care and solid public schools.

University education is often free or inexpensive. People place more value on abortion rights than gun rights, while avoiding ferocious so-called bathroom wars. If you flip burgers at a McDonald’s in Denmark, you’re paid more than $20 an hour, plus you enjoy six weeks of paid vacation, a year’s maternity leave and a pension plan. And a red Burgundy is almost as good as an Oregon pinot noir!

Yet it’s also only fair to point out that Europe is struggling today. The U.S. economy last year grew six times as fast as in the European Union, 2.5% to 0.4%.

The United States abounds with tech successes like Apple, Google and Meta, but there isn’t a single European company on one recent list of the world’s top 10 tech companies by market capitalization. One list of “unicorns” — startups worth more than $1 billion — shows that Africa’s smallest country, the Seychelles, has as many such firms (two) as Greece and almost as many as Italy or Belgium (three).

France offers almond croissants, luxury brands and an enviable way of life. But if it were a state, it would be one of the poorest per capita, on par with Arkansas.

Meanwhile, Europe’s population appears to be peaking in this decade and set to fall significantly for the first time since the Black Death in the 14th century. The declines in population and aging of societies are likely to continue in ways that will diminish the continent’s influence.

Militarily, Western Europe is dependent on the United States and unable to stand up to Russia on its own. Poland and the Baltic States do all they can, but unfortunately Europe today has no real leader: Germany’s chancellor is the obvious person to play that role, but Olaf Scholz is a shadow of Angela Merkel.

Once the engine of the region, Germany is now sometimes dismissed as the sick man of Europe. Partly for this reason, concern is growing that the faltering German government may cut support for Ukraine.

Meanwhile, President Emmanuel Macron of France is willing to lead, but no one wants him to.

“Our Europe can die,” Macron warned in April at the Sorbonne; he is alert to the peril but has few allies at home or abroad.

A book in 2005 by political scientist Mark Leonard explained “Why Europe Will Run the 21st Century.” But by one European calculation, if economies continue to grow at the current pace, by 2035 the average American and the average European will be as far apart economically as the average European and Indian are today (in fairness, assessing the gaps also depends on what exchange rate is used).

One reason gaps may grow is that the United States under President Joe Biden is investing in computer chips, batteries and high-speed internet; meanwhile, the European Union allocates almost one-quarter of its budget to agriculture and rural areas, sometimes subsidizing overproduction (so that Europe must then pay to turn so-called wine lakes into hand sanitizer).

The upshot is growing concern about Europe’s “competitiveness crisis.” At this summer’s Trilateral Commission gathering, in Brussels, I heard again and again variants of the idea that “America innovates” while “Europe regulates.”

There’s a case for regulation: In recent decades, I believe Europe has been better at protecting consumers from monopolies and toxic chemicals. But liberals like me should be sobered by the evidence that overregulation and weak governance in Europe may undermine the continent’s future.

In fairness, critics sometimes make Europe into a caricature, ignoring its enormous strengths. Instead of making people indolent, its investments in human capital have empowered people to work: Labor force participation rates are higher in northern Europe than in the United States. That’s partly because Europe does a far better job with child care, making it easier for parents to hold jobs.

It’s also true that crises sometimes lead to new bursts of vitality. Some 15 years ago, Greece seemed quite hopeless. Now it is one of the fastest-growing nations in Europe. After an economic crisis in the 1990s, Sweden reinvented itself and has become a leader in global innovation and entrepreneurship; it was Swedes who brought you Spotify.

And Estonia! Who would have bet in the 1990s that in 2024 one of the world’s most high-tech countries would be tiny Estonia, still living next to the bear that once terrorized it? Estonia is one of the most digitally savvy countries in the world today, and it’s a reminder that the economic engines of Europe may be moving to places once at the periphery.

J’adore l’Europe. I’ve lived at various times in both Britain and France and have traveled nearly everywhere on the continent. (Note to self: must get to San Marino and Belarus!) As I write this, I’m smiling at the memory of my Oxford college dormitory called the New Building — built in the 1730s.

Yet Europe needs a future as vital as its past. I fear that unless it sheds pointless but costly regulations, embraces innovation and bolsters its national security, it may become less a model for the world’s liberals than a warning.

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