Posted by I have at this point been taking part in public life for long enough that I usually have a sense of when I am about to say something controversial. If I make a strong criticism of Donald Trump or attack the excesses of wokeness, I know that I’m about to get some angry emails in my inbox. I no longer mind, really; it’s one of the less pleasant aspects of doing a job I truly love, one that is well worth the bad which comes with the good.
But from time to time, I still get a nasty surprise. For sometimes I blithely express a fact that I take to be far removed from the most emotive issues of the day and well-established in the relevant literature—only to learn from the state of my inbox that I had vastly underestimated the strength of popular sentiment about it.
When I recently spoke to Paul Krugman on his interview show, for example, I casually mentioned the astonishing economic divergence between Europe and the United States. Whereas both continents were similarly affluent a few decades ago, America is now nearly twice as rich as Europe.
Cue a flood of outraged emails. Lots of people wrote to me to say that I must have the facts wrong, or at least must have failed to understand what really is important. Nominally, some correspondents conceded, the GDP of the United States might now be much higher than that of France or Germany. But that’s only because America lacks a welfare state and is so vastly unequal. In reality, the average European is doing just as well.
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The strength of this reaction may have had something to do with Krugman’s audience, which skews progressive. But oddly, mentioning this fact has elicited a similar reaction from very different audiences in the past. When I off-handedly cited the same stat to a center-right Member of the European Parliament a few months ago, he too had an allergic reaction. Raising his voice, he insisted that such stats just weren’t meaningful; in all of the metrics of life quality that truly mattered, such as disposable income and access to good housing, Europeans were surely doing at least as well as Americans.
But that just isn’t true. Largely unnoticed by the general public on both sides of the Atlantic, America has pulled away from Europe. The average American is now vastly more affluent than the average European. And this difference in life quality is not only reflected in the overall size of the economy; it is also evident in much more practical metrics such as the disposable income, the living space, or the services accessible to the average person.
When I was a teenager, the United States and the richest large countries in Europe, such as Germany and the United Kingdom, were similarly affluent. In 1995, Germany’s nominal GDP per capita was a little higher ($32,000) than that of the United States ($29,000), with the United Kingdom lagging behind at a noticeable distance ($23,000)
When I was in graduate school, the United States and the richest countries in Europe remained similarly affluent. In 2007, on the cusp of the financial crisis, for example, Britain was in the lead ($50,000), with the United States ($48,000) and Germany ($42,000) following closely behind.
Since then, the two continents have markedly diverged. To an extent that few people have fully internalized, an economic gulf has opened up between America and Europe. On average, Americans are now nearly twice as rich as Europeans. According to the latest available data for GDP per capita, the United States stands at $83,000, with Germany at $54,000 and the United Kingdom at $50,000.
The contrast to less affluent European countries is even more striking. The GDPs per capita of France ($45,000) and Italy ($39,000) have fallen to about half of America’s level. Those of Portugal ($27,000), Greece ($23,000) and Poland ($22,000) are less than a third that of the United States.
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