Cowboy Capitalism

I just got done reading Cowboy Capitalism: European Myths, American Reality. I had been eagerly anticipating reading this book for some time. It's stated purpose was to offer analysis, debunking what much of Europe (specifically in this book, France, Germany and Italy) thinks about America's economy and American life in general. In that regard it did a fine job. One thing I felt a little shortchanged about, though, is that the author relies a little too much on opinion surveys in Part III: Unequal and Unjust. In this part of the book the author takes on Europe's biggest weakness; unemployment.

Several European economies have unemployment rates greater than 10%, which would be unconscionable in the US. However, once you have a job in Europe, you're supposedly going to be OK, but that's not really the case. The author points out that the average European fears job loss much more than their US counterpart. My own thoughts on this would be that once I had a job, that's what I had to do for the next 40 years, as it was in the '50's and 60's. But that's not the way it works here now. The average worker has a choice, jobs are plentiful and with some determination you can get one. The average time someone spends looking for a job in the United States is much less than in France, Germany and Italy.

Another point in the US's favor is the greater equality in education that we posess, especially higher education. The United Stetes ejoys a greater college premium (earnings greater than the mean for college graduates) than the 3 other countries studied and a greater percentage of students from the bottom fifth of family income go to college than the other 3 countries. This means that economic mobility is much higher in the US than in Europe.

To me it's intuitive that the US system is better than the European welfare state. The author made a good case that that's true. However, there were several points in the book that I thought he may have been reaching. The book is well worth reading, it's only about 200 pages. The author isn't the best writer in the world, which is a bit of a drawback, but Philip Roth doesn't write this type of book.

Overall the author made a good point that Germany, in particular, does more harm than good by implementing many of their employment safeguards and social safety net. The US should rely as much as possible on market forces to dictate employment policies and not follow the European model.