Tuesday, February 13, 2007

Europeans and Americans at work

The last few years I have been fortunate enough to spend winters on an island in the Caribbean instead of my much colder home city of Pittsburgh. The place I stay is frequented largely by western Europeans. They get long vacations but most don't make a great deal of money and this place, relatively inexpensive, is ideal for them. And since many of them speak English I've had many interesting conversations with them. I have been particularly struck by their feelings about their work: most don't enjoy it and feel that their relatively long vacations are a just reward for slaving away the rest of the year.

Now many people in the United States don't enjoy their work either but, on the other hand, many more in the States seem to like their work more than do the Europeans I've spoken with. There's nothing scientific about this impression that I came to have so I was more than a little interested in a rather more thorough study of the matter by Edmund J. Phelps, the Nobel prize winner in economics in 2006. He wrote about this issue in an article in the Wall Street Journal's Opinion Journal yesterday, Entrepreneurial Culture: Why European economies lag behind the U.S. The article seems to be written in a style best suited to academics, so here I will try to summarize the main points that he makes, particularly those which focus on the opinions I took away from the Europeans I spoke with, though I don't believe I'm putting any words in his mouth.

He writes that, "Far fewer firms break into the top ranks in [western, continental Europe than in 'Anglo Saxon' countries such as the US and Britain], and fewer employees are reported to have jobs with extensive freedom in decision-making--which is essential at companies engaged in novel, and thus creative, activity." And he goes on to write why this may be so:

Participation rises [when jobs are relatively fulfilling and engaging] and productivity climbs to a higher path. Thus I see the sort of economic model operating in the Continental countries … which typically exhibit a Balkanized/segmented financial sector favoring insiders, myriad impediments and penalties placed before outsider entrepreneurs, a consumer sector not venturesome about new products or short of the needed education, union voting (not just advice) in management decisions, and state interventionism to be a major cause--perhaps the largest cause--of their lackluster performance characteristics. … There is the solidarist aim of protecting the "social partners"--communities and regions, business owners, organized labor and the professions--from disruptive market forces. There is also the consensualist aim of blocking business initiatives that lack the consent of the "stakeholders"--those, such as employees, customers and rival companies, thought to have a stake besides the owners.

In other words the culture itself in continental Western Europe acts in such a way that workers are viewed, and view themselves, as cogs in a grand machine rather than permitting them to be micro-entrepreneurs themselves. In my view this is certainly is the effect of European Marxism and, in general, socialism which was designed in an age when workers were seen in exactly that light and the hierarchical organization in which they were embedded did not want workers to think for themselves but simply to concentrate on the drudge work at hand and fill their quota.

The continental western European culture should be contrasted with the way work is viewed in the United States where there is a much higher level of self employment, an acceptance of risk, and appetite for the great rewards that such activity occasionally yields. But even in very large companies, since they tend not to be unionized—in the US, private unionization is less than 8%, with the highest rate in regulated industries such as transportation and utilities—there is the desire of management to push decision-making down to the lowest possible level and to encourage intracompany entrepreneurialism by workers. Phelps quotes this telling statement: "42% in France and 54% in Italy, versus an average of 73% in Canada and the U.S. … want jobs offering opportunities for achievement."


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