[Marxism] Difference between Europe and USA :Economic theory explaining London attacks

m. hasan mhasanmd at gmail.com
Fri Aug 5 08:41:29 MDT 2005

Gary Becker won the Nobel Prize in economics in 1992. Richard A. Posner is a 
federal judge and law lecturer. Both teach at the University of Chicago. 
They share a blog and I thought that it might interest some on the list . 
The last entery in the blog proposed an economic theory that incorprates a 
cultural component to explain why Muslims born and raised in Britain were 
involved in the last London subway attacks and that this situation does not 
apply in the case of the USA. There were multiple comments with and against 
this theory of Posner and Becker and they deserve to be taken into account . 
Since the European model favors more vacations and less income while the 
reverse situation pertains to the American model , I included a recent entry 
from Billmon's blog about the vacations of President Bush which appear to 
conform to the European model.

  July 31, 2005 Islamist Violence and Immigration Policy--Posner 

A long article by Robert S. Leiken, "Europe's Angry Muslims," in the 
July/August 2005 issue of *Foreign Affairs*, written before the recent 
London bombings, when it is read in conjunction with the economist-columnist 
Paul Krugman's column in the *New York Times* this past Friday (July 29), 
entitled "French Family Values," brings into focus important issues of 
immigration policy, and, more fundamentally, of the different economic and 
cultural models of the United States and Western Europe. 

Leiken points out the strong appeal of Islamic extremism to the large Muslim 
minorities in countries such as France, Spain, the United Kingdom, and the 
Netherlands (in France, the Muslim population is approaching 10 percent of 
the total population; in Netherlands, 6 percent), including many 
second-generation Muslims--Muslims who were born in these countries but have 
not adopted their political or cultural values. The widespread penetration 
of these nations by Islamic extremists lies behind political murder in the 
Netherlands, bombings in the United Kingdom and Spain, and widespread 
anti-Semitic vandalism in France. The nations of Western Europe appear to be 
riddled with Islamist terrorist cells that also incubate plots to attack the 
United States. The non-Muslim populations of Western Europe are increasingly 
and in some instants lethally hostile to their Muslim minorities. In 
contrast, although there are several million Muslims in the United States 
(more than in the U.K., for example, though constituting a smaller 
percentage--about 1 percent versus almost 3 percent), most of them, like 
their counterparts in Europe, of Middle Eastern or Central Asian heritage, 
the American Muslim community is well integrated. It is prosperous (with a 
median income actually slightly above the national average), so far 
unthreatening (though security officials believe there are some terrorist 
cells; and heavy-handed tactics by the FBI since the 9/11 attacks have 
caused some disaffection among American Muslims), and not objects of 
significant hostility by non-Muslim Americans. 

Krugman's column does not mention Europe's Muslims, but in defense of the 
French (more broadly, the European) model, argues that the French have made 
a good trade--their average incomes are significantly lower than those of 
Americans, but they work a good deal less. This is partly because of a much 
higher unemployment rate than in the United States (Krugman's complacency 
about high unemployment is notable), but mainly because Western Europeans 
work fewer hours per week, take much longer vacations, and retire earlier. 
In effect they trade material goods for leisure, a trade that Krugman 
regards as a sign of high civilization. Krugman (here relying on a recent 
working paper by the economists Alberto Alesina, Edward Glaeser, and Bruce 
Sacerdote) recognizes that the greater leisure of the French and other 
Europeans is, as it were, forced, because it is the product of laws that 
restrict labor mobility and hence work opportunities, make it difficult to 
fire lazy workers, provide a variety of economic benefits uncoupled from 
work, and even restrict the number of hours a week a person can work. But, 
further relying on the working paper, Krugman argues that without 
compulsion, workers could not get the amount of leisure they really want, 
because leisure is not worth as much if other people don't have it, assuming 
leisure has a strong social component--that you engage in leisure activities 
with other people, and therefore suffer a loss if they don't have leisure 
time to spend with you. 

Krugman's failure to relate the European model to Europe's Muslim problem is 
telling. To point to the upside of Europe's social model without mentioning 
the most serious downside is to provide bad advice to our own policymakers. 
The assimilation of immigrants by the United States, compared to the 
inability of the European nations to assimilate them--with potentially 
catastrophic results for those nations--is not unrelated to the differences 
between economic regulation in the United States and Europe. Because the U.S. 
does not have a generous safety net--because it is still a nation in which 
the risk of economic failure is significant--it tends to attract immigrants 
who have values conducive to upward economic mobility, including a 
willingness to conform to the customs and attitudes of their new country. 
And because the U.S. does not have employment laws that discourage new 
hiring or restrict labor mobility (geographical or occupational), immigrants 
can compete for jobs on terms of substantial equality with the existing 
population. Given the highly competitive character of the U.S. economy, in 
contrast to the economies of Europe, employers cannot afford to discriminate 
against able workers merely because they are foreign and perhaps do not yet 
have a good command of English. By the second generation, most immigrant 
families are fully assimilated, whatever their religious beliefs or ethnic 

In contrast, even in a country such as France that has a declared policy of 
requiring all immigrants to assimilate, immigrants from alien cultures, such 
as that of the Islamic world, tend to be marginalized and isolated, even in 
the second and later generations. European unfriendliness to immigrants 
might be thought a cultural rather than an economic phenomenon, but the 
paper by Alesina, Glaeser, and Sacerdote on which Krugman relies argues that 
the European preference for leisure, also supposedly cultural, rests on 
policy, specifically the employment laws. So too in all likelihood is the 
difficulty European nations have in assimilating immigrants. The less fluid, 
less competitive, less market-oriented, and indeed less materialistic (the 
only color important to businessmen is green) a national economy is, the 
less opportunity it will provide to alien entrants. 

Advocates of the European model point to the pockets of poverty in the 
United States, but may not realize that poverty cannot be abolished without 
recourse to measures that produce the social pathologies that we observe in 
Europe. Social mobility implies the opportunity to fail. If society protects 
jobs, the employment opportunities of ambitious newcomers are reduced and 
they may end up at the embittered margin of society. Thus, it is not poverty 
that breeds extremism; it is social policies intended in part to eradicate 
poverty that do so, by obstructing exit from minority subcultures. If 
Muslims in European societies do not feel a part of those societies because 
public policy does not enable them to compete for the jobs held by 
non-Muslims--if instead, excluded from identifying with the culture of the 
nation in which they reside they perforce identify with the worldwide Muslim 
culture--some of them are bound to adopt the extremist views that are common 
in that culture. The resulting danger to Europe and to the world is not 
offset by long vacations. 




Krugman’s recent New York Times article on French "family values" cited by 
Posner is the latest of many attempts during the past decade to justify, 
high labor taxes, restrictions on the ability of companies to shed 
employees, a French law that restricts work to no more than 35 hours per 
week, and various other restrictive labor-market legislation in continental 
countries. They supposedly lead to more civilized goals than are obtained in 
the freer Anglo-Saxon markets. That this leads to very high unemployment 
rates and limited job opportunities, especially for immigrants and young low 
skilled native-born men and women, and a shortage of part-time work for 
mothers and others, is the price that apparently has to be paid for these 

But are any advantages of this system worth such a high price? Clearly, the 
European system of employment helps the "insiders" with good jobs, and works 
against "immigrants" and other newcomers ,or "outsiders" in labor markets. 
It is claimed that the European system promotes "family values" over 
individualistic ones. Yet the data do not support this contention since 
marriage rates are lower in Europe than in America, and not a single 
European country has birth rates that are high enough to maintain their 
populations without continued immigration. The French birth rates are 
somewhat higher than their neighbors only because of massive subsidies to 
having children. Yet even the French rates are way below replacement levels 
and those in the United States. 

Workers in France, Germany and other continental European nations are also 
said to gain more leisure hours that they want and yet are unable to obtain 
in freer labor markets of the Anglo-Saxon type since each work decision 
there is made more individualistically rather than collectively. But there 
is no evidence that these regulations are the result of a strong demand to 
consume leisure jointly with other families. As Robert Putnam, the author of 
"Bowling Alone", and others have pointed out, the trend has been just the 
opposite: sharply away from joint consumption of leisure in clubs or bars, 
and more consumption through individualistic activities like television and 
computer games. Is there pleasure in the traffic jams that develop as 
virtually all the French, Italians, and German families that can afford it 
go on their August vacations to the same limited number of beach and 
mountain resorts? 

The prospects of declining population and the heavy financial burden from 
the payments needed to provide generous retirement income and health 
benefits to older persons would seem to lead European countries to try to 
attract young immigrants who would pay taxes on their earnings to help 
finance the cost of these entitlements. The labor market restrictions, 
however, make it hard for immigrants to obtain jobs in the legal economy, so 
either they are unemployed, or they work in the flourishing underground 
economies of Europe, where they avoid paying taxes. Apparently, the French 
intentionally do not collect data on unemployment rates of their Muslim 
population, but economists there tell me they believe it is more than double 
the official overall French rate of over 10 per cent unemployed. 

Given the poor work prospects of Muslim immigrants, and the fact that the 
German, French, Dutch, and other European populations do not generally like 
their Muslim minorities, it is no wonder that Muslims there feel alienated 
from the general society. As a result, some of them become bitter, and 
develop hatred of the West and the fanaticism that leads to radicalism and 
terrorism. That only feeds greater opposition from the general population, 
which helps explain why the French and Dutch strongly voted against 
approving the new European Constitution. 

There is an ongoing debate among economists over whether social mobility is 
greater in the United States or Europe. The general evidence on this does 
not offer a definitive answer, but there is little doubt that most 
immigrants believe opportunities for themselves and their children are 
greater in the United States. This is why America is the first choice of 
most immigrants whenever they can choose where to go, and it also explains 
the different attitudes of immigrants in Europe and America. As Posner 
emphasizes, most immigrants, non-Muslim as well as Muslim, feel far more 
accepted in the United States than in Europe, are less segregated here in 
both their living arrangements and employment, and appear to advance more 
easily toward higher level jobs. As a result, they are less promising 
material for radical Islam, although clearly radicals are operating and 
planning in the United States as well as in Europe. 

However, the British experience is somewhat disturbing to this thesis, for 
Great Britain is at least a partial counter example to our analysis. For 
British labor markets are very much like those in the United States; in 
fact, Britain has lower unemployment rates than the U.S., has equal labor 
market flexibility, and provides above ground jobs for Muslims and other 

I believe the main reason for the difference with the United States is that 
new immigrants are easily accepted in this country since it is a nation of 
present or past immigrants. Foreigners of all kinds have never been so 
welcome in Britain, and are even less welcome in continental Europe. So even 
under the best of economic conditions, immigrants in Europe do not easily 
integrate into the general society. Still I confess these vicious attacks on 
London subways and buses are not only awful, but I also find them difficult 
to understand. 



 « Bombs Away <http://billmon.org/archives/002075.html> |
 August 03, 2005 
 Nice Work if You Can Get It

President Bush is getting the kind of break most Americans can only dream of 
-- nearly five weeks away from the office, loaded with vacation time. The 
president departed Tuesday for his longest stretch yet away from the White 
House, arriving at his Crawford ranch in the evening to clear brush, visit 
with family and friends, and tend to some outside-the-Beltway politics. By 
historical standards, it is the longest presidential retreat in at least 36 

The August getaway is Bush's 49th trip to his cherished ranch since taking 
office and Tuesday was the 319th day that Bush has spent, entirely or 
partially, in Crawford -- roughly 20 percent of his presidency to date. 

*Washington Post*
Vacationing Bush Poised to Set a
August 3, 2005

 The U.S. ranks below 10 other countries in paid vacation days for workers. 
In the U.S., the average worker gets 16 paid vacation days a year, compared 
to 30 days in Portugal and Spain; 25 days in Austria, Finland, Sweden and 
France; and 20 days in Belgium, the Netherlands and Switzerland. European 
countries guarantee workers paid vacation days by law. 

*Rep. Bernie Sanders, I-VT*
Working Families in the Global

In addition to fewer vacation days, Americans on a whole do not use all the 
vacation that they receive. A 2003 poll showed that Americans planned to 
take 10 percent less vacation than in 2002, and 18% are unable to use all of 
their annual vacation due to work demands. 

*Texas State Comptroller*
Local Government Management
February 2005

To me, I don't begrudge the president going on vacation, but I do think 
being out of Washington for a month is not a good appearance. I do think 
it's a little excessive. 

*Rush Limbaugh*
A Month Away From Washington
Makes You a Target, Mr. President 
August 3, 2005

[image: vacation.jpg] 

Posted by billmon at August 3, 2005 09:29 PM

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