The American Left’s Two Europes Problem

By Tino Sanandaji

The American Left is far more interested in northern Europe than it is in southern Europe, despite the fact that southern Europe constitutes the majority of the population of the core 15 European Union members. Why?

 

A century or so ago, German sociologist Max Weber observed that Protestant countries in northern Europe tended to outperform the Catholic and Orthodox countries in the south of the continent. Weber believed that the northerners had a stronger work ethic, were thriftier, and possessed more of what is today called “social capital.” Though Weber attributed these differences to Protestantism itself, we should note that countries did not randomly convert to Protestantism. The roots for the cultural differences might very well go even deeper.

Economists have since largely abandoned Weber’s insights, and in general have turned against “cultural” explanations for economic outcomes. Yet Weber would not be surprised if shown a map of credit downgrades in Western Europe anno 2012. Western Europe can still roughly be divided into a northern, Germanic language, Protestant region, and a southern, Latin/Greek language, Catholic/Orthodox region.
These two Europes differ both in terms of culture and in terms of social and economic outcomes. France, Italy, Spain, Belgium, Portugal, and Greece have all been downgraded by Standard and Poor’s, sometimes repeatedly. Meanwhile, Germany, the United Kingdom, the Netherlands, Switzerland, Denmark, Sweden, Norway, and Finland all currently maintain the highest credit rating.¹ Southern Europe on average has a debt-to-GDP ratio of more than 100 percent and deficits as a share of GDP of more than 5 percent, while northern Europe is closer to a balanced budget.

Read more: http://www.american.com/archive/2012/february/the-american-lefts-two-europes-problem