Thomas Friedman has an extremely astute column in The New York Times on why Europe is sinking and India is rising:
To appreciate just how explosive, come to Bangalore, India, the outsourcing capital of the world. The dirty little secret is that India is taking work from Europe or America not simply because of low wages. It is also because Indians are ready to work harder and can do anything from answering your phone to designing your next airplane or car. They are not racing us to the bottom. They are racing us to the top.
Indeed, there is a huge famine breaking out all over India today, an incredible hunger. But it is not for food. It is a hunger for opportunity that has been pent up like volcanic lava under four decades of socialism, and it’s now just bursting out with India’s young generation.
“India is the oldest civilization, the largest democracy and the youngest population – almost 70 percent is below age 35 and almost 50 percent is 25 and under,” said Shekhar Gupta, editor of The Indian Express. Next to India, Western Europe looks like an assisted-living facility with Turkish nurses.
Indeed, Friedman’s onto something here. Productivity in Europe is extremely low – European society has shifted from an emphasis on work to an emphasis on doing anything other than working. Months of paid vacation are nice, but months of paid vacation don’t produce widgets, software, or expand the economy. Meanwhile, Indians have a very strong work ethic, and even if the wage differences were nonexistant, would still be more cost-effective than European workers. Countries in Eastern Europe, Asia, and the Indian subcontinent are perfectly willing to work hard and don’t demand 35-hour work weeks.
The welfare state may make its workers arguably happier, but it isn’t sustainable. There’s a key difference between protecting workers from harm and creating a society in which work is systematically devalued. Europe crossed that line years ago. Unless Europe can instill a greater work ethic in its people, they can’t be competitive with the rest of the world. The ossified European labor market makes that difficult at best.
So basically you’re conceding that the great dividends of globalization is a culture with ever-higher work demands for everybody and fewer financial and quality-of-life benefits to show for it? And this is a good thing? Remind me again why the civilized economies of the world should sign on to trade policy that not only reduces their long-term manufacturing capacity to rubble, but threatens to unravel every quality-of-life gain made in the last century.
The ultimate irony is that the pro-globalization weasels wagging their righteous fingers in the faces of American and Western European workers and telling them their just gonna have get used to working more hours for less compensation are the same people relentlessly whining about the decline of the role of family in America and throughout Western culture. “Where were the parents?” they shriek every time a troubled child guns down his classmates or steals an apple off of a push cart. Allow me to answer that question in advance for every act of juvenile mayhem committed in the post-globalization world….”THEY WERE AT WORK, STUPID!!!”
What’s the source for your assertion that “Productivity in Europe is extremely low”?
According to the OECD (http://www.oecd.org/statsportal/), in 2003, French productivity (as measured by GDP per hour worked) was actually higher than that of the United States at $47.2 versees $43.5.
“Remind me again why the civilized economies of the world should sign on to trade policy that not only reduces their long-term manufacturing capacity to rubble, but threatens to unravel every quality-of-life gain made in the last century.”
Because it’s raising hundreds of millions of people across Asia into the middle class, that’s why. Come now, do 50 million whiny Frenchmen outweigh the 500 million Chinese and Indians who will be able to attain a standard of living that they would only have dreamed about a generation ago, within the next 20 years? I think not.
Nick, you’re talking self-sacrifice here, which is hardly in the interest of most citizens in the industrialized economies of the world. Would you willfully elect to forfeit your own job so that your neighbor could have it? I think not….yet that is what you’re asking the French to do, along with your own countrymen.
Higher standards of living in the Third World can best be attained in the way that worked for Japan post-World War II…..through heightened foreign aid by First World economies directed towards self-sufficient economic development. Exporting our manufacturing capacity and the quality of life of our blue-collar (and increasingly white-collar workers) is a plutocratic game certain to end poorly. Globalization is playing out in a way that is a far bigger threat to American security than Islamic terrorism….no matter how much you delude yourself into believing that our trade policy is a giant act of charity to the starving Chinese.
I wonder why Friedman has to add in some ethnocentric anti Turkish jibe. I have been in Turkey 5 months now and can vouch that Turkish health care is quite decent in the larger cities and western half of the country. I wonder if Friedman is being employed by someone in the Armenian or Greek lobby now. There is no need for tangential bigotry.
Yes, that’s a model that worked so well for Africa.
Direct foreign aid almost never works. Hernando De Soto, the great Peruvian economist, has the right idea. The only way to alleviate the endemic povety of the Third World is to foster the rule of law and encourage indigenous economic development. That’s the model that has worked in every state that’s tried it, from the market reforms of Chile to the booming economies of the Baltic states.