83 mil. Germans compete with 1.4 bil. Chinese. Why can't 300 mil. Americans?

Quick: What country is the world’s #1 exporter?

Yes, it’s China. But only by a whisker over Germany. And from 2003 through 2008, the correct answer was Germany!

In “Why Germany Has It So Good — and Why America Is Going Down the Drain”, Terrence McNally engages lawyer Thomas Geoghegan — a graduate of Harvard and Harvard Law School and author of Were You Born on the Wrong Continent? — in an excellent discussion. Geoghegan says Americans are dismissive of European socialism but that it works, and holds up as Exhibit A 83 million Germans' ability to compete with 1.4 billion Chinese:

“Since 2003, it’s not China but Germany, that colossus of European socialism, that has either led the world in export sales or at least been tied for first. Even as we in the United States fall more deeply into the clutches of our foreign creditors — China foremost among them — Germany has somehow managed to create a high-wage, unionized economy without shipping all its jobs abroad or creating a massive trade deficit, or any trade deficit at all. And even as the Germans outsell the United States, they manage to take six weeks of vacation every year. They’re beating us with one hand tied behind their back.”

Geoghegan says America hollowed itself out by outsourcing most everything except marketing while Germany focused on producing high-quality manufactured goods that people around the world — even in China — are willing to pay extra for.

My favorite portion of the interview was the two men taking turns bashing America’s insane worship of GNP:

McNally: Let’s make a quick comparison of GDP. The problem with GDP is that it has only an addition side, it doesn’t have a subtraction side. So an auto accident increases GDP; crime increases GDP.

Geoghegan: Waste and fraud and gambling; Katrina increases GDP; urban sprawl especially increases GDP. Hours stuck in traffic increase GDP.

McNally: plus the fact that we’ve monetized so many things that we used to do for ourselves or for our families

Geoghegan: You’re shelling out $50,000 in tuition for NYU law school and your counterpart in Europe is getting it for free. How pathetic for the poor European adding nothing to GDP. In America we’re increasing GDP, but dragging down people’s standard of living.

It’s a very perverse system of accounting. You say it’s all addition and no subtraction, but it’s not even all addition. Nothing increases your well-being or your material standard of living as much as leisure time. Among the untouchables in India, of course, that’s absolutely not the case; leisure is a nightmare, unemployment is a nightmare. But for many, a loss of leisure is a loss of material value.

For example, leisure to go to a free concert at Millennium Park in Chicago. It’s a glorious experience. People in Europe are gaga about it, because it’s the one thing in America that seems to them the most European — wonderful orchestras, pop bands, jazz bands, playing right in the middle of the city; gorgeous lawns; people picnicking, etc. — and it’s all free. It’s so un-American, there’s no money going out the door. It makes a mark on your life but you can’t turn it into a sum of dollars, so it doesn’t mean anything — even though of course it means everything.

Posted by James on Thursday, October 14, 2010