Dream On America: World Rejects the US Model

Dream On America: World Rejects the US Model

Much has made, for instance, of the differences between the dynamic American model and the purportedly sluggish and overregulated "European model." Ongoing efforts at European labor-market reform and fiscal cuts are ridiculed. Why can't these countries be more like Britain, businessmen ask, without the high tax burden, state regulation and restrictions on management that plague Continental economies? Sooner or later, the CW goes, Europeans will adopt the American model—or perish.

Yet this is a myth. For much of the postwar period Europe and Japan enjoyed higher growth rates than America. Airbus recently overtook Boeing in sales of commercial aircraft, and the EU recently surpassed America as China's top trading partner. This year's ranking of the world's most competitive economies by the World Economic Forum awarded five of the top 10 slots—including No. 1 Finland—to northern European social democracies. "Nordic social democracy remains robust," writes Anthony Giddens, former head of the London School of Economics and a "New Labour" theorist, in a recent issue of the New Statesman, "not because it has resisted reform, but because it embraced it."