One of the common myths propagated by the Left is that Nordic-style Socialism, or as Bernie Sanders calls it, “Democratic” Socialism, is far better than Capitalism as an economic system. This detailed comparison of GDP, GDP Per Capita, Purchasing Power, relative cost of living, and a variety of other metrics casts a great deal of doubt on this assertion.
America ranks higher in most income and wealth metrics than most of the OECD countries, and only the country of Luxembourg is consistently higher. Countries like Germany, Sweden and Finland are below most American States in addition to the US baseline.
Here are a few great quotes:
We find something similar when we look at Germany, but in Germany’s case, every single US state shows a higher median income than Germany. Germany’s median income is $25,528. Things look even worse for the United Kingdom which has a median income of $21,033, compared to $26,517 in Mississippi.
So much for the magical German economic miracle. The United Kingdom is arguably the more horrifying statistic, however. The shared cultural values with the Anglosphere mean that America could look very much like the United Kingdom if it continues on the present course, and if a Socialist like Bernie Sanders were to be elected.
Since Sweden is held up as a sort of promised land by American socialists, let’s compare it first. We find that, if it were to join the US as a state, Sweden would be poorer than all but 12 states, with a median income of $27,167.
The Left would be wise to take note. Saying that we should be more like Sweden, with its high rape rates (courtesy of Muslim migrants), failing economy, and poor median income is an exercise in idiocy.
But, but, but… don’t you *know* that the *real* problem is not with the theory, it was only with who was in charge the last (2000) time(s)? This time, I’m SURE we’ll (finally) get it right!
Whatever.
God could get socialism to work. I don’t think He’ll bother to try, but He could do it if He wanted to.
No human ever will.
Last time I travelled in Europe, particularly, the UK and Netherlands, it struck me how low the standard of living of my friends and relatives were there. No one had a dishwasher, a dryer or central AC/heat. Eating at a restaurant cost roughly the same as a kidney. The more I travel, the more I realize how great America is. People who never leave America don’t realize just how crappy the rest of the world is.
I think the UK stats are wrong, simply because someone forgot to convert Sterling to dollars. The median I have heard is over £500 a week, which is approx $750, which brings a figure north of 30000 annually, a figure that I am persuaded is realistic.Von Mises’ institute’s mistake I am afraid. The cost of living though in the UK is fearsomely high, especially in real estate.
An additional factor is the VAT tax rate. It is high enough in the midwestern community where I shop, but poor Brits and Europeans get to pay somewhere near an extra 20% of their AFTER-TAX income on VAT when shopping. So, median income comparisons are off by at least 10% on that factor alone.
Another factor is the very high fuel taxes that permeate daily life. Anything that must be hauled by truck must cost more because fuel costs are more than double. I hate to think of the end-to-end costs of shipping a single pallet in the UK compared to the US. Hardly a single component of the total is less.
edt: you might be confusing average (mean) salary of the UK (about $40,000US) with median income (about $29,000US). Median is the point at which half the people make more and half make less, while average is the total salary paid divided by the number of people collecting salaries – mean income is higher than median income because there is no top bound to a salary but it hard to find people who will pat for the privilege of working. Also income is only partially related to wages/salary, the greater the portion of the population who income is not primarily or exclusively from wages the less that the average salary has on average income. And there are more complications to comparing incomes, that’s why the paper uses the OECD median disposable income numbers – to account for things like taxes and the NHS and so forth. There are arguments for using other values than mean disposable income, but the authors at Mises state that they are using the mean disposable income numbers.
No, I am not confusing average for median, at least no more than wikipedia and other sources:”In 2012-13, median income was approximately £21,000 a year”
https://en.wikipedia.org/wiki/Income_in_the_United_Kingdom
The graph projects UK median income, and describes it, as quoted in this article, as $21,000. Not correct. At time of writing, £21,000 is $32,000.
I suspect the figure for the Von Mises Institute original article is the one which takes into account purchasing power parity, and deducts that from the baseline.
However, if you think that is incorrect, I urge you to take your figure to them. If they issue a correction, I will do likewise. Otherwise, I am inclined to take their word on the matter.
The Mises authors used OECD calculated median disposable income. The OECD median disposable income (current prices) number for the UK for the last year calculated (2012) is 16,122 denoted in pounds sterling which at the 2012 OECD calculated conversion rate of .7664 would be a little over 21,000 denoted in US dollars and corresponds to the graph.
Wikipedia uses as it’s headline income number the 2012/2013 SPI calculated annual pretax median income The closest US income number comparable to the 21,000 SPI number is 32,000 (pretax median US income on tax returns for 2011 from the IRS) which with the current conversion rate means about par with the UK. It must be noted that the US number includes those whose income is below the personal allowance and owe no taxes, a group which the SPI number excludes.
There are a lot of different ways to slice the numbers and many choices to made in comparing numbers and it is easy to make a mistake but failing to convert from pounds to dollars was not one the Mises authors made. Indeed I noted at least one mistake in conversion, but it wasn’t there: when converting from US census data for the states to OECD equivalent data they failed to realize/note that the US census data is for households while the OECD data is for individuals. Since they used a conversion factor (.59) from US Census to OECD equivalent which encompassed this difference, it is very unlikely that this had a significant effect on their analysis but they should have noticed/noted it.
Oh and don’t forget that it is advisable to take at least US Census statistics with a grain of salt, and all numbers derived from them. Not that other countries stats might not also be a problem, but we know that the US Census invented numbers.
and the OECD use figures from the national authorities, and here are the UK’s
http://www.ons.gov.uk/ons/rel/household-income/nowcasting-household-income-in-the-uk/2014-15/rft-table-1.xls
£25,630 = $39,129
I’ve followed the linked statistics from the article to the OECD, and even there in the tables UK household disposable income is over £20,000 on the most recent figures (and, by all accounts, rising somewhat in recent times). Moreover, it is around or above that of Germany in the OECD figures, which is quite contrary to the graph made by Von Mises. I really don’t care that much, I actually live in the Czech Republic, but it smells bullshitty to make such an assertive argument, which began in essence with a UK-related question, and then to have no accessible supporting stats, or no explanation of why those that they reference appear contradictory of the argument they make, or how the numbers in the graph they (Von Mises) give were reached.
And the mean US Household disposable income is listed at over 38,000 US dollars, apple to apple (and the UK household mean was a hair under 20,000 pounds sterling in 2012).
At the OECD stats site ( stats.oecd.org ) go the ‘social protection and well being’ theme in the left column, click the ‘by measure’ tab and at the top of the table scroll down to ‘median disposable income (current prices)’ measure to see where the Mises authors got their values for median disposable income, which for the UK was 16,122 denoted in pounds stirling in 2012 which was the last year the OECD site calculated for the UK. The OECD Stats site (like many similar sites) generates new tables for each user and what table shows up at a link is unpredictable, but the site itself is very accessible as you no doubt found.
If you think there is a better measure than median disposable income for comparing the economic performance of European not quite socialism to US not very capitalism, feel free to inform people, even the people at Mises. The authors at the Mises blog use median disposable income to show that comparisons made on the basis of GDP per capita were not far off, but if you have a better way of comparing nations in an apples to apples fashion then use it and see what the results are, people are constantly coming up with new ways to measure across nations and often the results are surprising. As always, trying to reduce things to one measure can be misleading – people are not all the same and each person values things differently, economic performance (or murder rate, or healthcare spending, or old master paintings per capita) is not the only way to compare nations.
I recall that in the wake of the 9/11 attack, when so many in-kind donations were flooding into the NYC area that it swamped local charities, that some news report out of Sweden was how many people wanted the government to make a big donation because tax rates were so high that individual Swedes had little to spare. Pitiful.
Having just lost a friend who emigrated from the U.S. to Germany, this article is myopic by asserting that income defines happiness. In my friend’s case there were two factors: (1) short-term thinking in American business and government, (2) agencies of the government being used to exact revenge on political foes. With regards to #2 the East German Secret Police, known as the Stasi, is still fresh in peoples’ memories. Today, Germans enjoy a rich political discourse.
No mention is made of happiness. This is not an article about how happy you are, or how happy your friend is. It is an article about income and purchasing power.
I expect the reason the UK looks so bad on these charts is the adjustment for purchasing power parity. Things are expensive there.
That was my assessment also.
The first maxim of Democratic Socialism (Liberalism) is to NEVER allow the truth or facts to intrude on agenda. They will get this right even if it kills all of us.
The discussions and lack of clarity as to what is actually being compared by Mises is standard in these matters. I for one would like to see the median and average government burden paid per capita overall and then by wage bands of the bottom 90% and then top 10% of both individuals and businesses. IOW, those who pay to provide government services.
If the issue at hand is a capitalist-republic versus a socialist-democracy, I want to know first, what each one costs in dollars and more importantly, the costs of each in terms of freedom from government and independence as a human being.
I firmly believe that middle and working class incomes and lifestyles would be significantly better living under a weak capitalist-republic federal government with slightly less weak state governments and most governing and cooperation among citizens done at the community level through local govt and civic actions by citizens working outside or with government.
Strong governments that pretend to of ‘of, by and for’ the people, degrade citizen’s lifestyles and are unsustainable over generations as we can see by the SJW’s and related sorts of Eloi infesting the US and Europe.
Ever watch BritComs? Note the kitchens, all with half-size refrigerators.
I noticed the same thing in Germany when I was there. Small kitchens and appliances.
The Swedes do have low unemployment, but so do the Swedes in the US.