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Panel Discussion: The European Way for America?

May 20, 2010 // 3:00pm5:00pm

Steven Hill, Director of Political Reform Program, New America Foundation; Kimberly Morgan, Political Science, George Washington University; Mitchell Orenstein, School for Advanced International Studies, Johns Hopkins University

The world faces a new set of challenges in the 21st century: economic recession, climate change and a burgeoning global population. In his book Europe's Promise, Steven Hill argues that Europe is uniquely well-suited to meet these challenges. He introduced the book by describing it as "a story of how post-World War II Europe transformed itself from a place of warring nations into a model for how a modern society can develop itself, care for its people, foster peace and prosperity partnerships with its neighbors and do all of that in a way that's environmentally sustainable."

Hill pointed to a broad range of "myths" common in the United States about Europe. Americans, for example, often view Europe's economy as sclerotic, stifled by overregulation. On the contrary, he noted, Europe's GDP is almost as large as that of the U.S. and China combined, and also has more Fortune 500 companies than the U.S. and China. Most European countries have also weathered the current recession much better than the United States, with only small rises in unemployment, for instance, in Germany. He distinguished between the European style of "social capitalism" and American "Wall Street capitalism," which has proven less resilient in the face of recession. "There is no question," Hill said, "that capitalism is the greatest wealth-generator that humans have ever devised. But there's an outstanding question of who gets that wealth. What Europe has figured out is how to harness that capitalist engine to create a more broadly shared prosperity."

Another myth is the notion that Americans enjoy a higher standard of living than Europeans. Hill described this idea as difficult to square with the much higher rate of poverty in the United States—20 percent--as opposed to 5 to 8 percent in most European countries. A related issue is taxes and the cost of living: Americans spend considerably more than Europeans for social support services: six times as much for child care, and three times as much for senior care. These costs may seem to be offset by lower taxes, he said, but ultimately, Americans end up paying much more for health insurance premiums, individual retirement plans and child and senior care services than Europeans. He concluded by characterizing the American approach to capitalism as ideologically based or "fundamentalist," whereas the European approach is "pragmatic," flexible enough to provide a more even distribution of prosperity.

In her commentary on the book, Kimberly Morgan described it as a "probing analysis of the Continent... one that offers a rich trove of best practices in Europe." One would be mistaken, however, to look for a single "European Way" to compare with that of the United States. Most of the social programs Hill describes, she said, are far from universal in Europe, and some European countries have even less social support than the United States. Mitchell Orenstein agreed, noting that the current Greek economic crisis has been exacerbated by national political interests in France and Germany. European countries have also done poorly at coordinating foreign policy, as evidenced in the past during the breakup of Yugoslavia, and still today in European countries' disparate relations with Russia. In comparing European versus American-style capitalism, Orenstein also concluded that neither system has done particularly well in the current recession, and it would be better to acknowledge that proponents of both systems have something to learn from each other.

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