Cowboy capitalism

In "Cowboy Capitalism: European Myths, American Reality," author Olaf Gersemann notes how European bad-mouthing of America’s welfare capitalism has somehow become politically correct. He attributes this to jealousy, noting that the U.S. economy is more dynamic and that no matter how cow boyish it may be, Europeans subconsciously prefer it to their own.

For example:

  • U.S. employment climbed sharply between 1970 and 2003, for a gain of 59.3 million jobs; that's the equivalent of a 75 percent increase.

  • But for Germany (after reuniting with East Germany), France and Italy, the combined job gain was but an increase of only 17.6 million, or 26 percent -- a gain, yes, but one virtually two-thirds under the U.S. percentage gain.

    Furthermore, it's no wonder that average annual hours worked per person in 2002 in the United States topped the 1,800 mark, while only reaching the 1,400 mark in Germany and France and the 1,600 mark in Italy. European countries have cut down their work-weeks considerably, says Gersemann.

  • Workers in Germany and more so in France have "won" wide adoption of a 35-hour work-week and many employers face demands for a 30-hour work-week.

  • Remarks Germany's top trade union official Michael Sommer: "Workers who can afford to do so, should work less."

    Canada's top think tank, the Fraser Institute of Vancouver, notes the relative freedom of labour markets among countries. Less free markets have heavier regulation. For example,

  • Germany has the heaviest labour market regulations, ranking 80th in labour market freedom of 80 major nations covered, Italy comes in 76th and France 41st, whereas the United States is No. 3.

  • There are similarly depressing rankings for the European nations for relative size of government in 123 countries covered by the Fraser Institute: France tops the list at 123rd, Germany comes in at 107th, Italy at 96th -- while America is low at 22nd.

    Source: William H. Peterson, U.S., Europe, welfare state, Washington Times, November 2, 2004; and Olaf Gersemann, Cowboy Capitalism: European Myths, American Reality, Cato Institute, September 2004.

    For text

    For more on Economic Freedom and Growth

    FMF Policy Bulletin/ 09 November 2004
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