[Thanks to Colin for posting this (my usual apologies for the delayed response). Pen-l ers should be aware that the article is "signed" by the long entrenched leader of a party that was originally founded as a Maoist group. In the '90s, as the mainstream Dutch Labour Party (PvdA) choose a Blair/Clinton path (the "purple" governments), this Socialist Party then moved "right" to become the main left party. It draws around 10% of the vote.]
1) The article is revealing for what it leaves out, given the "author". The U.S. did have some significant GDP growth in the last ten years --- but virtually all of the extra income and wealth went to the richest 10%! The less rich 80% of Americans may have even seen their real income and wealth *decline* a little bit (as we have discussed on Pen-l). The less rich 80% of Europeans have done much better than their American counterparts (although the Nordic and Dutch working class have fallen from their lofty perch and are now closer to the French/German level of benefits). It short, it is only the rich 10-20% of Europeans who should envy the U.S. model. 2) Making the class distinction is crucial to the analysis (and subsequent policies). Of course, this WAS always a hallmark of the left tradition. It was, and is, also a hallmark of what the Dutch Labour Party (or the other social democratic parties) leave out. But in today's climate, even a party like the Dutch SP is not emphasizing *who* is getting the benefit of GDP growth under neoliberal policies. I don't want to make too much of one example but this case follows the pattern of the rest of the European "left of the left", IMO. In France, Germany and elsewhere parties like the SP have rushed to fill the void left by the social democrats. They have had some - well deserved - short run political success by defending against cutbacks in social services or changes in the European Constitution, i.e. being outspoken about class interests in *political* processes. But, as we see in this article, they have begun to shy away from pointing out the class-based nature of the economy itself. 3) Pen-l has heard enough of me on the contrived nature of these international GDP comparisons (PPP and all that). So I will just point out that the Europe-US GDP growth differential is far smaller than the amounts added/subtracted by the nature of the various neo-classical models used in these studies. So such argumentation should be considered more a comparison of models than a debate about the results of policies. Paul At 01:29 AM 7/16/2006 +0200, you wrote:
http://www.spectrezine.org/europe/MarinissenEU.htm Facts don't support the idea that the EU is lagging behind the US Netherlands Economics Minister Laurens-Jan Brinkhorst is constantly harping on about Europe's poor economic performance relative to the US. This is a completely inaccurate picture designed to soften the Dutch people up for savage attacks on their social security and welfare system, argues Dutch Socialist Party leader Jan Marijnissen. In the last ten years economic growth in the United States has been persistently higher than it has been in the European Union. The conclusion which is often drawn from this is that "we don't do things as well as they do in the States". In reality, the US has experienced a more rapid population increase than has the EU, and a just comparison can only be made by looking at income per head. This gives a figure of 1.8% p.a. for the EU, somewhat lower than the United States' 2.1%. However, take Germany away and the difference disappears. Without the Federal Republic, the EU, as well as our own country, has done just as well as has the US. Slow German growth is partly to be explained by the fact that the Bundesrepublik has, during the last decade or so, had to spend more than a thousand billion euros on reunification. Labour productivity in the Netherlands, contrary to the impression which Brinkhorst is seeking to create, is around 10% higher than it is in the States. Germany and France also have higher productivity, while Belgium and Norway have the highest rates of productivity in the world, with the Netherlands coming in third in a table of GNP per work-hour.* All of these are European countries. Taking the continent as a whole, average GNP does indeed lag behind that of the US, but only because Europe includes the less developed economies of the South and East. A new study from Goldman Sachs' economist Kevin Daly demonstrates that productivity growth in Europe has been dampened during the last ten years as a result of cuts in social security and welfare. The consequent deterioration in provision has meant that more poorly educated people have been forced into employment, resulting in a lower growth of productivity per head. More or less the same process occurred in the US during the 1980s. Daly identifies a number of other reasons why rates of economic- and productivity growth in Europe seem lower than they really are. In the US, for example, spending on computers is counted as investment, giving the appearance of higher growth. A computer which remains at a constant price whilst doubling in the speed of its operations is, according to American statistical methods, half as expensive as previously. In Europe, on the other hand, the same computer would in most cases be counted as remaining at the same price. Once again, this difference leads to an underestimation of European growth. Average incomes in Europe are 30% lower than they are in the US. However, this difference can be fully explained by the fact that Europeans work shorter hours. Far more people work part-time in paid employment, spending the rest of their time on a range of activities, including voluntary work or trying to run a household. This is surely something to be proud of, rather than seen as a way in which we "lag" behind America. Some economists argue that Europe is in fact much better off than the States. Europeans have lower heating- and air-conditioning costs, because in general the climate is milder. This also contributes to apparently lower growth, as does the fact that we spend less on police officers and less on prisons. Lastly, Europe enjoys a generally higher level of social provision, better public services which are not reflected in the statistics. There are, in conclusion, plenty of grounds upon which we can insist that Europe has something of a lead over the US. High economic growth in the US is, moreover, extremely fragile. Enormous military spending, boosted by Iraq, as well as tax cuts, have allowed the Bush administration to stimulate the economy, whilst the Federal Reserve has lowered interest rates far more than has the European Central Bank. The result is that, from a surplus of 1% left by the Clinton administration, the US has acquired a 2004 budget shortfall which will reach almost 5%. Because of low interest rates Americans save only a sixth of the average for Europeans, and debt per head is far higher than it is over here. US growth is in reality financed from the 2 billion dollars poured into the country every day by foreign investors. Not long ago the Intelligence Unit of The Economist gave the Netherlands a mark of 8.62/10 for its economy! This puts us top of the class in Europe and second only to Canada globally. There is therefore absolutely no justification for pessimism. The right-wing cabinet of Premier Balkenende systematically exaggerates the problems of the Netherlands' economy in order to create the conditions under which it can carry out a programme of draconian cuts in social provision. It is remarkable to witness with what ease the cabinet is able to generate a sort of national inferiority complex. If anything stops us from addressing the real economic problems which exist, it will be a lack of hope and of confidence in ourselves. Jan Marijnissen is leader of the Socialist Party of the Netherlands (SP). The SP is the fourth largest party in the national parliament, with 8 MPs and 4 Senators. In the recent European Parliament elections it acquired a second MEP. You can read more about the SP, at http://www.sp.nl/en/ This is a translation of an article which appeared in the leading centre-left daily, De Volkskrant, on 5th July. *Figures from Kwartaalbericht 2003 van De Nederlandsche Bank, the national bank's quarterly report -- Colin Brace Amsterdam
