Which planet is America on (and which Europe)?

The American political commentator Robert Kagan once claimed that ‘Americans are from Mars, Europeans from Venus’. If so, I have just spent a week in the capital of Mars. And, back on Venus, I have watched from afar the debate, if that is the right word, on the reform of the Martian healthcare system.

I am not sure about the Mars-Venus ascriptions. But I am more convinced than ever that in many fundamental respects, and in spite of their common roots, Europe and America inhabit different worlds. Indeed there are reasons to claim that Europe – with all its failings – has its two feet on planet earth while America is, well, on some other planet; this is certainly true with respect to healthcare, the focus here, but in fact in many other areas, too.

That will doubtless strike many readers as Eurocentric cultural snobbery. But is it?

Most educated Europeans know that not far short of 50 million Americans lack health insurance – that’s almost one in six – a unique situation amongst developed countries. Almost half of the uninsured are adult workers (not ‘undeserving poor’) and of course coverage rates are lower for low than highly paid workers (details here). Worse, this number is not a constant stock: in any one year a far greater number are at risk of becoming uninsured (through unemployment or because their employer ends coverage or hikes contribution rates to unaffordable levels).

Even worse, precisely those most in need of coverage are most likely to be without it. This is because insurers are allowed to weed out those with or suspected of having an existing medical condition. Less widely recognized, but probably even more important, is the fact that the US principle of ‘employment at will’ interacts fatally with the health system – and I use that adverb advisedly: between around 20 and 50 thousand Americans are estimated to die every year because of lack of insurance. Unlike in Europe, where employers normally have to justify dismissals (and health insurance cover is anyway essentially universal), in the US an employer can simply dismiss a sick worker. Given the dominance of employer-based health coverage, this means a simultaneous loss of good health, one’s job (and thus income) and – precisely when it is most needed – health insurance. This Damocles’ sword hangs over many if not most private-sector workers.

Now, American and some European commentators have defended this set-up – in the Mars-Venus vein – in terms of American individualism, self-reliance and an emphasis on market efficiency over a European focus on state-enforced equity and redistribution. Yet the US system is not only inequitable it is grossly inefficient. Health spending per capita and as a percentage of GDP is way above any of the other OECD countries – twice as much per person as in countries such as France and Germany (even allowing for price-level differences). Not only that, public spending – if you like, ‘socialised spending’ – on health is higher in the US per capita than in every OECD country except Norway and Luxembourg. Administration gobbles up twice the OECD average proportion of health spending. And above all: US health outcomes are extremely mediocre. The broadest measure – so-called potential years of life lost (PYLL) – ranks the US third-last for women and fifth-last for men in the OECD, albeit this also reflects other factors than healthcare.

If you have been following the US healthcare debate, you may well feel that such facts do not justify seeing the US on another planet compared to Europe: ‘sure, the US healthcare system is broken. But now it has been fixed with the passing of the health bill’. Err, no. Consider first the outcome, and then the process.

The outcome – Obamacare for short – has been described as historic. In some ways that is true: Obama has succeeded where a string of illustrious presidents going back to Harry Truman after WWII has failed. Yet ten full years down the line, it is forecast merely to have halved the number of people currently uninsured, still leaving some 23 millions without cover (although without the reform the number would rise to 54 million). Ten years after the historic victory, God’s own country will be keeping company with Turkey and Mexico, rather than more advanced countries like, say, Poland, within the OECD family – that is, of course, unless these emerging markets overtake the US in the intervening period. I think that is likely. Moreover, Obamacare does little to rein in the exploding costs of American medical madness. There are grave doubts about the longer-term financial sustainability of the system even after the reform.

Perhaps even more relevant for the ‘other planet hypothesis’ is the fact that this minimal reform – which, for all the media hype and dancing in the aisles of Congress, leaves the US with what can only be described as a unique healthcare system – has generated such vitriolic opposition. Despite widespread dissatisfaction with the current system, voters are, to say the least, cautious, and many viscerally hostile. Republicans railed against socialism, communism and a whole lot of other –isms (and thirty-four Democrats voted against in the House). The bill was turning back the clock of history, Congressman Devin Nunes said: ‘For most of the 20th century people fled the ghosts of communist dictators. And now you [Democrats] are bringing the ghosts back into this chamber.’ Mr. Nunes seems to be unaware that all of the European countries that threw off the Communist yoke twenty years ago now have ‘socialised medicine’. Such views are ‘on another planet’ in another, perhaps more insidious sense: a willing blindness in America to the fact, documented in hundreds of independent international studies, that the US health system performs worse than just about any system in the developed world – all of which are more or less completely ‘socialised’.

It is true that this is still focusing on healthcare alone. (Actually I think that is justified, not just because this is the topic of the hour, but also because healthcare is, well, a matter of life and death.) Yet I could write a year’s worth of monthly columns describing one social indicator after another in which the US is ‘off the chart’ compared with Europe. Given that I don’t have time to write them nor you to read them, here are some illustrative examples.

Of the thirty OECD member countries (which include Mexico and Turkey; data mostly from here) the USA was the fourth most unequal (Gini) and had the third-highest poverty incidence. It had the second-lowest cash transfers as a share of disposable income (but only the tenth-lowest tax burden), and the second-highest rate of teenage pregnancies. Of a smaller sample of twenty OECD countries, the US records the second-lowest average unemployment benefit replacement rate and the lowest employment protection (dismissal) legislation. On a global ranking of ‘economic security’ by the ILO, the US ranks 25th. The US is the only advanced country that has no statutory provision on paid holiday – it is the no-vacation nation – nor for paid sick leave. US incarceration and capital punishment rates are the highest in the developed world, as are its per capita carbon emissions.

I’ll stop before I get onto religion. I hope the message is clear. In one socio-economic field after another, when you rank the world’s rich countries, the US is at the very edge of the distribution.

So what’s the lesson for Europeans? You might be forgiven for thinking so, but my point is not to engage in America bashing. The US has much to admire. The issue is that implicitly and often explicitly the US has served as Europe’s role model. The défi américain – the challenge of catching up with the US – has dominated elite thinking in Europe since at least the 1960s. It lay behind the (failed) Lisbon strategy of the ‘noughties’. Increasingly, meeting this challenge came to mean adopting, or moving in the direction of, American social and regulatory institutions. My point is that Europe (or America) is different.

If the financial crisis should give pause in importing untrammelled financial capitalism, the healthcare debacle should stiffen Europe’s resolve regarding the role of its public sector and publicly financed service provision; more broadly, the sort of social indicators mentioned above should persuade European policymakers of the need to look with an unjaundiced eye at the institutions constituting the ‘European Social Model’ and the need to reform them. ‘Planet Europe’ should be open to learning from other parts of the world, but should be built according to the wishes of European citizens.

  • Richard

    Great column Andy! You quite rightly point out a few key differences between European and the US. Quite frankly, when I was listening to the US healthcare debate I too was wondering from what planet some Republicans were from. “Communism, death bill, against free market” – the only thing that was striking was (given that they really believe their crap) how outright stupid and ignorant they are. Probably never left the US, never saw a reason to do so but a know-it-all in all respects.

    I agree that there are many things to admire in the US. But the level of their political discourse is certainly not one of them!

  • Charles Levenstein

    While I am sympathetic to the general thrust of this article, I would like to remind Europeans that Italy has a top dog who belongs in prison (and everybody knows it), while Germany and France are led by conservatives. Tony Blair (who was that masked man) — is it true that he prayed with George W. Bush? Or exactly what were they doing? May I also mention the scandal of the Irish Catholic church? The Vienna boys choir? Just pause for a moment before becoming too smug about barbaric America.

  • Richard

    Dear Charles, it shouldn’t be a finger pointing game but if you start it I’ll continue (btw, this is a bit of fun and should not be taken too seriously).
    1. Italy has a strange top dog. Agreed, but not even the Italians elect actors or former wrestlers to high offices.
    2. Germany and France are led by conservatives. Yes, unfortunately. But the CDU and UMP have nothing in common with the US Republicans. In fact US Republicans would probably call them communists as even the European conservatives are in favour of all these socialised services and want to regulate the private sector. There is no mainstream European party that is as radically right-wing as the Republicans are.
    3. Tony Blair prayed with Bush. So what? They should have prayed more and talked less about going to war.
    4. Catholic church – a real tragedy (I am no church fan) but nothing distinctly European. Start digging in the bible belt and I am sure you’ll find unpleasant things…

    • Charles Levenstein

      No finger-pointing of course! I think that the rise of right wing populism is widespread — not just a scary American phenomenon. So,
      I went wandering thru Wikipedia to see if my impressions about European politics were utterly unfounded. These are some of the items I found.

      On 26 March 2009 Berlusconi commented:
      “I’m paler [than Mr Obama], because it’s been so long since I went sunbathing.”

      In France, if I rememebr correctly there is/was:

      “Jean-Marie Le Pen …a French conservative and nationalist politician who is founder and president of the Front National (National Front) party. Le Pen has run for the French presidency five times, including in 2002, when in a surprise upset he came second, polling more votes in the first round than the main left candidate, Lionel Jospin. Le Pen lost in the second round to Jacques Chirac. Le Pen again ran in the 2007 French presidential election and finished fourth. His 2007 campaign, at the age of 78 years and 9 months, makes him the oldest candidate for presidential office in France.
      “Le Pen focuses on immigration to France, the European Union, traditional culture, law and order and France’s high rate of unemployment. He advocates immigration restrictions, the death penalty, raising incentives for homemakers,[1] and euroscepticism. He strongly opposes same-sex marriage, euthanasia, and abortion.”

      Meanwhile, in Hungary,
      “The election’s results surprised Jobbik[128] as much as it shocked their opponents:[129] the party sending three MEPs to Strasbourg; coming close to level with the incumbent government (MSZP) while eliminating their coalition partner (SZDSZ), to become the nation’s third party.[28] Unsurprisingly, Morvai’s first speech[130] to the European parliament called for the chamber to be conscious of human rights abuses within the community, i.e. Hungary, in order to secure legitimacy about them taking place in other nations, i.e. Iran; as she pointed to what she called every major anti-government demonstration suffering the same fate since 2006.[131] Vona himself was pepper sprayed, handcuffed and arrested at a seated protest in Budapest on 4 July 2009,[132] a demonstration whose legality is still a matter of dispute. In doing so he consolidated his appeal to those who felt that Orbán had abandoned the original protesters of 2006. Vona in contrast, actively joining a demonstration after the police had begun violent efforts to break it up. With Jobbik saying of the incident, that “The violent arrest and forcible detention of the leader of a major European opposition party [was] a sickening development, and without precedent in the 21st Century.”[133]
      “October 25, 2009 Jobbic founded the Alliance of European National Movements in Budapest together with political parties from four European countries, Nationaldemokraterna (Sweden), Fiamma Tricolore (Italy), Front National (France) and the Front National (Belgium).[134]”

      And Deutsche Welle tells us about Poland:
      “After the victory of the National Conservatives in last year’s elections, right-wing extremist groupings in Poland are gaining influence — as illustrated by a recent attack on a gay and lesbian demonstration.”

      Racism, jingo-ism, homophobia, etc. (And I believe that Italy has elected a porn star to the parliament — but not to the top job. Not a professional wrestler, but close.)

      • Richard

        Good research Charles. I am not sure whether the Italians have elected the porn star but she was certainly a candidate. Wasn’t she even tipped for a ministerial job?

        I would never deny that we have a serious problem with ring-wing parties in Europe. We have always had and we still have! The difference I suppose is that none of the major political parties that can hope to form a government are as right-wing as the Republicans (although some Eastern European countries come close – but they are very young democracies).

        The big Le-Pen shock in France was when he made the final round of the presidential election rather than Jospin. BUt he would have never won this against Chirac in a million years.

        What I really dislike in the US is the fuzziness of the debate and the scare tactics by the Republicans. If they don’t like a certain policy they come up with red scare and declare the end of the world as people know it. What is also dangerous is the amount of outright lies they bring in.

        That’s a kind populism that in the UK where I live only right-wing fringe parties such as the BNP engage in. I find it scary that one of the two big traditional parties in the US is on this level.

  • Ron

    We Americans believe in self reliance and do not believe in redistribution of income. It is not the business of the federal government to be involved in social engineering and that includes abortions. As a Union of States, the States retain rights that are not available to the federal government. The federal government has circumvented this principle by providing funded mandates. Corporate profits are good. People own corporations. Government taxes are bad. Special interest groups own the government.
    Unemployment has traditionally been lower in the United States than in the Old World, because of these principles.

    • Charley

      I assure you, Ron does not speak for all of “We Americans.” There are many liberals and socialists in the US, and it was those forces that voted in Obama. The US is polarized and the US left hopes to win even more substantial victories in the future. We are of course battling a powerful opponent that controls the “free press” in the interests of rapacious capitalism.

  • Ron

    Most of the reporters in the US are liberals and socialists. Obama and his ilk have been spared from the bad press that usually follows poor politicians. Obama has proven that he is not up to the job of President. We are still in a recession, but the press reports that we are not. We will not be out of this recession until unemployment lowers below 8%.