Trading Places: A Tale of Two Countries

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Trading Places: A Tale of Two Countries

Regressives love markets as a tool for organizing our social sphere.  Love ‘em!

That’s fine, up to a point.  Marketplace of ideas?  Great notion.  Political choice?  Could we have a lot more, please?  Competition in commercial relations?  I wish the folks on the right were one-tenth as serious about that as is their rhetoric.

In other respects, however, the market is not the way to go.  Letting the market take care of my health security (have we already forgotten that “managed care” was originally sold to us on the basis of bringing the wonders of the business model to medicine?) hasn’t worked out so very well.  And, as we’re going to realize acutely in the coming decades, turning over environmental stewardship to the magic of the marketplace has been about as brilliant an idea as would be giving nuclear warheads to angry meth-torqued teenagers or religious lunatics sporting apocalyptic visions of the paradise that will follow global annihilation.

But, I’ve got an idea.  And perhaps my (mostly imaginary) friends on the right will indulge me and play along.  Let’s call it the Marketplace of Countries, shall we?  Let’s take two (for the sake of simplicity) countries and compare them to each other.  Then we can use the magical market modality to determine our respective assessments of them.  If it turns out that one country looks a lot more attractive than the other, surely we’ll want to exercise that much vaunted power of marketplace choice, and validate that one as the superior place to live, right?

Fair enough?

An additional beauty of this test is that while the right and what little that goes for a left in America today can hardly ever agree on any solutions to problems, I think we can mostly agree on what constitutes the problems, right?  Not always, but mostly.  For example, a richer country is better than a poorer one, isn’t it?  No debate on that.  A more educated society beats an ignorant one, no?  And wouldn’t we all like to feel safe from crime?

Okay, then!  Let’s compare Country A and Country B on a variety of measures, and see what we come up with, shall we?

How about if we start with physical security?  Suppose I told you that in Country A the murder rate is 5.0 per 100,000 people.  I believe you’d say “Ouch!”  That’s ranks in about the top ten percent of countries internationally.  Maybe, therefore, you’d like it better in Country B, where the rate is about one-sixth of that nasty figure, at .89 per hundred thousand people instead.  And that’s true even though Country A has the death penalty going, while in Country B they think that the government murdering its own people is  a pretty barbaric thing to do.  Hmm.  So much for that whole deterrent argument, eh?  But I digress...

How about health?  How do the two countries compare?  In Country A, there are substantially fewer hospital beds per thousand people (3.3) than in Country B (3.6), and the infant mortality rate – always a key indicator of national health – is more than twice as bad, with 6.3 deaths per thousand live births in A, compared to 2.75 in B.  That probably explains why the World Health Organization ranks Country A as having only the 37th best health care system on the planet (out of about 200 countries), while Country B’s is 23rd best.  That may also help explain why people live a fair bit longer in Country B (80.74 years) as compared to Country A (78.14).

Surely, though, Country B is spending a helluva lot more than is A on its health care system in order to get these numbers, right?  I mean anyone can improve delivery by spending more money, can’t they?  Well, not exactly.  In order to achieve this record of fewer hospital beds, staggeringly greater infant mortality, and killing people off at a younger age, Country A is actually spending twice as much as Country B in annual health care costs.  That is, $4271 versus $2145 per person, per year.  At that rate, good thing they spent more!  Just think how sick people would be in Country A if they spent four times what Country B does on health care.

The two countries are pretty similar in terms of education measures.  Both sport 99 percent literacy rates.  People go to school a bit longer, on average, in Country A than B – 12.0 years versus 11.4.  But Country B devotes a greater portion of its GDP to education, and does slightly better than Country A on measures of reading, scientific and mathematical literacy.

Country A and Country B are also pretty similar when it comes to measures of civil and political liberties.  They both get rated 6 on a 7 point scale.  Not bad.  But that is where the similarities end.  Government corruption levels in Country B are among the lowest in the world, earning a 9.2 rating on a 10-point scale, while in Country A that number is only 7.6.  In Country A, voter registration rates run at about 50 percent, whereas in Country B they’re 74 percent.  In A, turnout of registered voters tops out at 64 percent, while in Country B fully eight out of every ten registered voters shows up at the polling place.  In Country B 43 percent of parliamentarians are women, whereas in Country A it’s only 14 percent.  And the overall gender empowerment index (a composite statistic that accounts for women’s participation in government, business, academia, salary ratios, etc.) for B is .824, whereas for A it is .757.  In short, both countries are relatively free democracies, but B achieves much greater participation of its people – and, importantly, all of its people – than does A.

There are certain social indicators that are quite telling as well.  In Country A, they sure go to church a lot.  Forty-four percent of people attend once a week or more often, while in Country B only 4 percent do.  It’s not so clear that such piousness makes them better people over there in A, however.  Teenage pregnancy rates are not only higher, they’re nearly ten times higher in Country A than in Country B, coming in at an annual rate of 1672 versus 178 per one million people, respectively.  And a look at environmental responsibility shows similar massive discrepancies.  Country A produces over three times more the annual carbon emissions – 19.48 tons per capita – than does Country B, at 5.4 tons.  That’s not only, er, rude, it happens to be quite lethal as well.  Given the global pollution and climate effects of such a massive carbon footprint, one might say that Country A doesn’t exactly play well with others.

But, you might argue, what everyone really cares about is getting rich.  I’d say that varies a lot from culture to culture (which also means that any given society doesn’t have to be obsessed with money if it doesn’t want to be), but I’d surely agree that it’s important to compare economic performance across national boundaries.  Country A had a slightly better rate of GDP growth in 2005 than did Country B, 3.2 percent over 2.7, and a slightly lower unemployment rate in 2004, 5.5 versus 6.5 percent.  However, it’s also important to note that A grows in population each year at a much greater rate (.883 percent, using 2008 figures) than does B (.157 percent), which likely more than wipes out the GDP growth rate differential between the two countries.  In any case, the net difference in GDP per capita between them turns out to be pretty small anyhow.  In Country A people earned, on average, $44,155 in 2006, while in Country B that figure is $42,553.

So, for all their differences, it turns out that A and B are more or less equally wealthy countries, right?  Well, yes and no.  They do indeed both enjoy relatively equal (and quite high) standards of living.  But GDP per capita is, after all, a very well-named figure.  As a measurement of economic well being, it is indeed gross.  Since it is an average, it tells us nothing about the distribution of wealth and income in a given country.  Very different concentrations of wealth can produce identical averages.  And, it turns out that they are very different in this case.  In Country A the share of income received by the richest ten percent of the population is 31 percent, whereas in Country B it is 20 percent.  In Country A, child poverty rates are ten times what they are in Country B.  Ten times.  That is, the share of children living in households with income below fifty percent of the national median is 22.4 percent in A, whereas in B it is a mere 2.6 percent.  And the overall polarization of wealth, as measured by the Gini coefficient statistic, is twice as high in Country A (45) as compared to Country B (23).  Country A is thus the 42nd highest country in the world in terms of economic inegalitarianism, located right between Cameroon and Uruguay.  Every single country that is higher than it on that list is a third world country, as are the next 26 below it on the list, assuming one does not count Russia (#54) as a developed economy.  Country B, on the other hand, is the least unequal society in the entire world.

Ah, well, you say:  “Country B is some communist dictatorship, where they have no free market and they imprison the wealthy!  It’s North Korea, right?!  Evil egalitarianism brought to us courtesy the business end of gun barrel!”  Alas, ‘fraid not.  Indeed, here we can consult our good friends at the ultra-conservative Heritage Foundation, which ranks countries according to their level of economic freedom, per an index that the right-wing think tank has cooked up.  Turns out that in extraordinarily unequal Country A, that figure is 3.2, while in extraordinarily equal country B it’s – wait for it, now – all the way down to 3.1.  It would seem that both places are – in the current parlance of our friendly downsizing, union-busting, middle class-crushing political class – quite “open for business”, thank you very much.

And, interestingly, notwithstanding its welcoming attitude to business big and small, it turns out that working conditions are also much better in Country B than in Country A.  People in B work 1564 hours per year, whereas in A it is 1792.  Based on a forty hour work week, that means that the 228 extra hours being worked by the folks in Country A translate into nearly six additional work weeks per year, even though, as we’ve seen, GDP per capita is pretty similar.  (Hmm.  Doesn’t that therefore also mean that they work for a lot less over there in Country A?)  And, indeed, when it comes to vacation and holidays, the legally required minimum that workers must receive in Country B ranges from 25 to 32 days, depending on one’s age.  In Country A that number is zero.  Although most workers actually get 7 to 21 days off work each year, many do not, and none are legally required to.  Moreover, when people lose their jobs, they do much better in Country B than in Country A.  In addition to not losing health and pension coverage, the unemployment benefit replacement rate (a composite statistic) is 29 in Country B, and more than double that (14) in Country A.

In Country B, people receive substantial support through government programs throughout the duration of their lives, from cradle to grave.  In Country A, there is little of that, except for seniors, who receive a modest governmental pension supplement and help with their health care expenses.  Of course, such programs are expensive, and in Country B all forms of taxation combined are equal to 54 percent of GDP, while in Country A that figure is instead 30 percent.  For individuals in Country B, that translates into 41 percent of family income going to taxes, while only 19 percent does so in Country A.  Yet, that does not seem to bother the citizens of Country B, who indeed are quite delighted with the economic system.  When asked to rate themselves on a ten-point scale with respect to their degree of financial satisfaction, the mean response there was 6.6.  What was it for Country A, where people get to keep so much more of what they earn?  A whopping 6.7.

We could go on and on with this.  Did I mention, for instance, that 82 percent of workers in Country B are members of trade unions (the highest level in the industrialized world), but only a mere 13 percent in Country A (nearly the lowest).  I’m sure that little factoid has nothing to do with the comparative economic conditions for workers in each place, eh?  Anyhow, you get the picture I think.  Call me crazy, but it seems like there’s a pattern emerging here.

So let’s recap, shall we?  In Country B, as compared to Country A, people are way safer, they’re healthier and they live longer.  They are far more equal socially, politically and economically.  They’re much more engaged in their democracy, and their government is less corrupt.  They are far more environmentally responsible, secularist, and they have one-tenth the teenage pregnancy rates.  They spend more on education, and their public is more literate in language, math and science.  They pay more in taxes, but in exchange for that, they get far more benefits and a lifetime of almost complete freedom from economic anxiety.  They work far fewer hours each year, and they are just as satisfied with their financial position as the folks in Country A, despite netting far less income after taxes.  They have essentially eliminated poverty within their national borders, while tens of millions of children and adults are impoverished in Country A.  Oh, and I didn’t even mention how much Country A loves to fight wars, and Country B never does.

So, where would you rather live?  Hey you guys out there on the right, with your constant mantra about the wonders of the marketplace.  I’m talkin’ to you.  Which product are you gonna buy at this market?  Sorry, I can’t hear you.  I can no longer make out the lofty choruses of your “Ode To Market”, or the sweet strains of “Bring Back The Morning Again, Ronald”.  All I hear are footsteps, and they’re getting quieter and quieter.

Here’s what Barack Obama said about Americans in his state of the union address, as reported in the official text:  “As contentious and frustrating and messy as our democracy can sometimes be, I know there isn't a person here who would trade places with any other nation on Earth.  (Applause.)”

(Other) regressives, meanwhile, love to rail against the perils of evil European socialism, as supposedly embodied by the pernicious Mr. Obama himself.  For example, a 2009 article in Slate noted that, “The columnist Charles Krauthammer recently called the president's address to a joint session of Congress last month ‘the boldest social democratic manifesto ever issued by a U.S. president.’  Newt Gingrich claims that Obama wants to bring us ‘European socialism.’”

So, let me see here.  According to both the far right and the alleged left, European socialism is a total disaster of malaise and stagnation and oppression, and America is all warm and fuzzy and “exceptional”, right?

But how is it, then, that Country B above – you know, the one that kicks ass in just about every measure – is that paragon of evil socialism, Sweden?

(Though it also could have been Norway.  Or Denmark.  Or Germany.  Or Canada.  Or just about any developed democracy in the world, including those prissy poofs in France, who actually do have the world’s best health care system.  As opposed to the blowhards from a certain other country – ranked right between Slovenia and Costa Rica on the list – who merely claim to.  Incessantly.)

And why is it that the dysfunctional Country A – deficient in nearly every measure, and often quite sickeningly so – is none other than America?

I wish I could have been at the state of the union speech, so that I could have jumped up in the halls of Congress and shouted to the president, “Excuse me, Barack, but, yes, there is a person here who wants to trade places!”

“It’s me!  (Notable absence of applause.)”

David Michael Green

David Michael Green is a professor of political science at Hofstra University in New York.

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