Stabs in the dark

by Henry on April 10, 2008

Clive Crook is probably my favourite sort-of-conservative big media commentator. But his “new piece”:http://www.theatlantic.com/doc/200803u/no-american-exceptionalism on ‘the End of the American Exception’ seems to me to be seriously out of whack.

That the United States stands apart is something Americans and Europeans have agreed on for a long time … Modern America has limited government, weak unions, high-powered incentives, capitalism red in tooth and claw. Post-war Europe has tax-and-spend, transport strikes, six-week vacations, and the welfare state. …Caricatures are well and good, but this one is just too much. In economic matters, America is far more like Europe, and Europe more like America, than either cares to admit. … health care … is America’s biggest social-policy exception …And it is marked for abolition. … . Consider regulation of business and finance. Few seem to question that the weight of regulation is less in the United States. In one area, anyway, this is true: Worker protections are weaker in America than in Western Europe … But think about product-safety regulation, or environmental regulation. … On regulation of corporate governance, Democrats are still calling for stricter rules … since Sarbanes Oxley, American financial and corporate regulation has been probably the most stringent and complex in the world.

…The unions are weaker here, it is said. To be sure, they have fewer members as a proportion of the workforce than in Britain, or (even more so) continental Europe. … proposed card-check legislation is expressly intended to slow and reverse the decline in union membership. This is a goal which few European governments would any longer think to embrace. In Britain it would be regarded as crazy … American unions remind me of the old-fashioned British kind. They seem anachronistically angry and assertive. … See what America’s unions have done to the auto industry. The Writers’ Guild just shut Hollywood down for several months. …I cannot think of a British union that any longer has that kind of muscle, or would think of exerting it if it did. In much of the rest of Europe, unions have become a quietly co-operative part of management more than militant champions of workers’ rights.

As I’ve “noted before”:https://crookedtimber.org/2007/10/08/alesina-and-giavazzi-have-a-point/, when someone writes about the “European model,” they usually have a specific country in mind. Crook, as he more or less makes clear, is thinking about Britain. But Britain is an unusually terrible proxy for ‘Europe’ for all the obvious reasons (not that any other country is a _good_ proxy, but still …). And if we compare the UK and the US – the two most prominent exponents of a particular logic of capitalist organization – we’re likely to end up concluding that Europe and the US are much closer than, in fact, they are.

Moreover, Crook’s picture of America seems to me to be quite seriously distorted. Environmental and product safety regulation? The Consumer Product Safety Commission hasn’t had enough members for a proper quorum for nearly two years, and is only keeping going through a piece of dubious legislative legerdemain. The innocuous sounding “Data Quality Act” gives business an effective veto power over scientific advice relevant to product and environmental regulation. The FDA has to rely on pharmaceutical companies’ own research and reportingto figure out whether or not drugs are safe – and this reporting has been shown to have, shall we say, some “quite serious problems”:http://www.nytimes.com/2008/04/06/washington/06patch.html?_r=1&em&ex=1207627200&en=d1fc4e4153f0ab30&ei=5087&oref=slogin. More generally, regulatory authorities in the US are extraordinarily reliant on industry self-reporting. But enough with the boring policy detail; Sir, I refute it thus:

If Crook’s account of US product and safety regulation is badly skewed, his account of the role of unions in politics is downright bizarre. Strikes are not, for obvious reasons, a particularly good proxy for union strength, especially when they are as sectorally unique as the Hollywood screenwriters’ action. And if unions in some other parts of Europe are “quietly cooperative,” rather than “militant champions of workers’ rights,” it’s for the very good reason that workers in these countries _have rights_ stretching beyond the right to be fired by their employer if he doesn’t like the colour of their tie. If German unions were as systematically and comprehensively screwed over as their US counterparts are, I can _guarantee_ that they would be just as “anachronistically angry and assertive” as their US colleagues.

As I said at the beginning, Crook is usually a smart and perceptive commenter on US politics. And he does say that this piece is only a “first stab”:http://clivecrook.theatlantic.com/archives/2008/04/the_end_of_the_american_except.php at the underlying question of US-Europe convergence. I do hope that the later stabs are better than this one, which is unusually disappointing.

{ 24 comments }

1

P O'Neill 04.10.08 at 6:47 pm

One problem is his apparent unwillingness to look beyond his direct experience. In the salaried classes with which he is presumably spending most of time, strikes in the classic British sense are of course not an issue. But who does go on strike? Every so often, the very underpaid workers who keep all those office park buildings clean do. They might even be “angry” about their poor conditions. But most of the time, most of the salaried class doesn’t have to deal with strikes. Now if airline employees go on strike, then people notice. And that still happens in Europe.

2

leederick 04.10.08 at 6:58 pm

I dunno. I think you’re both painting in a broad brush. Not that you’re probably got much alternative when you’re writing four or so paragraphs.

I don’t think the alegation that you’re actually comparing specific countries is that good a point. Maybe it was a decade back, but plenty of product-safety regulation, corporate and environmental legislation is genuinely pan-european. You say the FDA has to rely on pharmaceutical companies’ own research and reporting to figure out whether or not drugs are safe – are European regulators any different? I know things have been pretty bad for the last two presidential terms, but institutions like the FDA, EPA, CDC and SEC compare well to their European equivalents, particular if you take a long term view. And the US has a very strong tradition of anti-trust and corporate regulation that compares very favorably to Europe.

3

Uncle Kvetch 04.10.08 at 7:17 pm

health care … is America’s biggest social-policy exception …And it is marked for abolition.

Rubbish. If a Democratic is elected president in November, I’d put the chances of him or her actually enacting some sort of universal health insurance plan at about 1 in 10.

And if not, of course, the chances are 0 in infinity.

The American “exception” in health care is far more robust than a lot of people think. What is this notion that public opinion is less susceptible to being “Harry & Louise’d” now than it was in 1993 based on?

4

Henry 04.10.08 at 7:17 pm

leederick – I’m currently organizing an academic project on EU-US differences in regulation, and the conclusions of the various participants on differences all point in this direction (we could be all wrong, of course, but I don’t think we are).

5

lemuel pitkin 04.10.08 at 7:35 pm

I agree with leederick. if you are are going to make comparisons of the US with Eruope, you have to … compare the US with Europe. Specific shortcoming in the US regulatory apparatus have zero relevance. Anecdotes and data and all that.

The relevant questionsa are: is a given product subject to stricter regulation in the US, or in Europe? Is a given business transaction more likely to require govenrment approval in the US, or in Europe? Is a given rule more likely to be consistently enforced in the US, or in Europe?

I personally beleive the answer is, many kinds of regulation are both more extensive and more effective in the US than in Europe, especially than in Southern Europe.

* The federal government gets more revenue from a stil-progressive income tax than almost any European state. And unlike in much of Europe, even the highest income households do pay something close to the statutory rates.

* The Us data collection apparatus (Census, BLS, etc.) is far more comprehensive and reliable than most of its European equivalents.

* The US has a *much, much* stronger tradition of anti-trust regulation than any European country. Perhaps today it has been eroded down to the European level, but certainly not below it.

And so on.

Of course it is true that US unions are much weaker than in Europe (and the safety net is much stingier); there you’re clearly right and Crok is wrong. But there’s a significant sense in which *regulation* is a substitute for those things rather than a complement.

6

lemuel pitkin 04.10.08 at 7:40 pm

I’m currently organizing an academic project on EU-US differences in regulation

I hope you post something about the results here at some point. I could be wrong — wouldn’t be the first time.

7

shteve 04.10.08 at 9:05 pm

leederick – I’m currently organizing an academic project on EU-US differences in regulation, and the conclusions of the various participants on differences all point in this direction (we could be all wrong, of course, but I don’t think we are).

———–

Does that include central bank supervision of bank lending? Veeeery interesting.

8

Matthew Kuzma 04.10.08 at 9:28 pm

One thing he may be thinking of when he talks about product safety is food safety regulations. But America tends to have food safety regulations instead of, say, any kind of food culture. So we require that all cheeze be pasteurized, but I suspect that’s because we don’t have thousand-year-old cultural institutions built around food (or anything else, for that matter) that oppose such regulation, and we do have a massive food science industry that would probably be pretty happy to skip some steps in its manufacture of EZ Cheeze or Gogurt.

9

lemuel pitkin 04.10.08 at 10:26 pm

8-

Right, exactly. The US has a strong regulatory state precisely because it *lacks* other effective constraints on markets.

10

Slocum 04.10.08 at 11:51 pm

Clearly, in the space of all cultures past and present, western European countries and the U.S. are very near points. For visitors, virtually all one’s scripts (in the Schank & Abelson sense) for daily living work almost unmodified. One is surprised not by familiar things, but rather by the occasional things that don’t work as expected.

As for regulation, product safety, anti-trust, etc — the thing is that to a great extent the same products are bought and sold, the same companies operate, the same drugs are approved, regulators in both the U.S. and E.U. have to approve the same multinational mergers and acquisitions, the airlines fly the same aircraft with the same air traffic rules and maintenance practices, and so on. Culturally, we watch a lot of the same movies and listen to the same music.

With respect to the idea that the U.S. is some sort of regulation-free zone, I thought this was interesting — you may all be familiar with it, but I hadn’t seen it before. I suppose you’d call this guy a left-libertarian?

http://www.mindfully.org/Farm/2003/Everything-Is-Illegal1esp03.htm

11

lemuel pitkin 04.11.08 at 12:10 am

Slocum-

Very interesting article. Thanks! Most of us are probably familiar with Salatin through The Omnivore’s Dilemma, but I had never read any of his own writing before.

The piece very nicely illustrates my point — the US has heavily regulated agriculture *precisely because* it has free-market, profit-based agriculture. As Salatin repeatedly points out, the regulations that make no sense as applied to his farm are absolutely necessary for the massive agribusinesses that dominate the US farm sector.

Seems to me that both Henry and Crook are using “regulation” as shorthand for non-market or market-constraining institutions. When the opposite is closer to the truth.

(Of course we’ll have to wait for his research project to see how far this critique goes.)

12

Slocum 04.11.08 at 1:53 am

The piece very nicely illustrates my point—the US has heavily regulated agriculture precisely because it has free-market, profit-based agriculture.

Western Europe also has ‘free-market, profit-based agriculture’, no?

And milk pasteurization regulations are not some recent scourge introduced by lobbyists for big agribusiness, but were introduced 100 years ago during the progressive era:

http://ssh.dukejournals.org/cgi/content/refs/31/3/411

It’s also not the case that such regulations are introduced in the U.S. because of a lack of a tradition of craft production. For example, pasteurization recently became an issue in Apple cider production which is very often produced by small-scale producers. The tradition is there and, as I understand it, pasteurization is yet mandated, but retailers now commonly refuse to stock raw cider. I have a hard time seeing the fingerprints of big agribusiness here, for example:

http://www.aginfo.psu.edu/news/november99/cider.html

It seems to me that the simple explanation is the Europeans are more worried about industrial food practices than about ‘natural’ pathogens and for Americans, the reverse is true, and the food regulations in both places reflect those beliefs and priorities.

13

SG 04.11.08 at 5:03 am

That Salatini article was interesting Slocum and definitely suggests a bit of regulation-gone-mad craziness. But the author also shows classic moments of naive libertarian hopefulness which can only end in tears.

If the government allowed farming interns of the sort Salatini wants, and no-minimum-size houses, it would be a matter of seconds before his big farming mates down the road were packing 15 year old latino farm labourers into sardine tins. It’s likely that at least some of the regulations he describes have sprung from historical experience with these things. The author describes himself as a misfit, and the reason is probably that he wants to farm naturally, give rewarding jobs to people, etc. It’s worth asking why this makes him a misfit, and how a society can function if it doesn’t regulate the people he is different from. I certainly don’t get the sense he is blaming his misfit status on the rules – he is simply pleading to be excused the rules which (maybe) are designed to protect everyone else from people who are not like the author.

But the 900 sqft house thing, and the stuff about composting toilets – that’s just madness.

14

Slocum 04.11.08 at 11:38 am

If the government allowed farming interns of the sort Salatini wants, and no-minimum-size houses, it would be a matter of seconds before his big farming mates down the road were packing 15 year old latino farm labourers into sardine tins.

I doubt that — there many laws and regulations in the U.S. that provide exceptions for small businesses and family operations. Off the top of my head, for example, the ‘Family and Medical Leave Act’ applies only to companies with more than 50 employees.

But before we decide that operations like Salatini’s should be exempt, consider this:

http://www.allbusiness.com/furniture-related/office-furniture-including/760351-1.html

One of the ways that the Amish earn a living is with craft furniture manufacturing — should they be allowed to employ their children in the work? Certainly, this is a traditional way to learn a craft, but wood-working is obviously hazardous. As is farming, BTW — statistically, it’s a hazardous occupation. Do you think these regulations are unreasonable? If Salatini accepted interns, should he have to keep them away from sows with suckling pigs, off ladders, and out of grain silos:

http://www.ext.vt.edu/news/periodicals/fmu/1999-06/minorsag.html

15

lemuel pitkin 04.11.08 at 1:28 pm

Western Europe also has ‘free-market, profit-based agriculture’, no?

Western Europe has done far more to preserve traditional farming practices than the US. Is that even debatable?

It’s also not the case that such regulations are introduced in the U.S. because of a lack of a tradition of craft production. For example, pasteurization recently became an issue in Apple cider production which is very often produced by small-scale producers. The tradition is there and, as I understand it, pasteurization is yet mandated

Sloum, reread your last sentence. You do realize your example here supports my position, not yours?

16

Slocum 04.11.08 at 3:30 pm

Western Europe has done far more to preserve traditional farming practices than the US. Is that even debatable?

Nevertheless, farming in Europe is still ‘free-market’ and ‘profit based’ (or did I miss the part where European farms were organized into state-owned collectives?)

Slocum, reread your last sentence. You do realize your example here supports my position, not yours?

What has happened with cider pasteurization is that it is not de-jure mandated, but it is nearly de-facto mandated, and even unpasteurized cider production is much more heavily regulated than before. Many small producers, faced with the loss of outlets that will no longer sell unpasteurized cider, have shut down rather than make the expensive investment in pasteurization equipment. Others have adapted by emphasizing the ‘fall theme park’ aspect of the business (pumpkins, ponies, hay rides, etc). AFAIK, none of this was driven by the interests of big agribusiness.

Unpasteurized cider was not banned completely because there are enough people who want to go out for a drive in the fall and buy cider from small mill where they can watch it being pressed. But even so unpasteurized cider was pushed out of most retail grocers because, apart from the trip to the cider mill in the fall, most customers don’t care that much about raw cider and the grocers don’t want to take any chance of be involved in an E. coli incident.

17

SamChevre 04.11.08 at 5:09 pm

Salatin is hardly “left” in any normal sense of the word. (I live an hour away–I’ve met him, visited his farm, read most of his books, etc.)

Slocum–pasteurization has been required for a long time; that can confuse matters quite a lot as all kinds of additional things get lumped in to “pasteurization requirements”. Fifty years ago, a facility to process legal-for-sale milk cost as much as 10 cows; today, it costs as much as 500 cows. Also, cheese-makers didn’t have to use pasteurized milk until the 70’s or 80’s (for cows milk) and until a couple years ago (for other milk). And enforcement matters and has been hugely stepped up–it used to be that you weren’t SUPPOSED to sell raw milk, and you couldn’t sell it in a store, but selling a few gallons to neighbors was OK.

And zoning is probably the biggest problem of all (note how much of Salatin’s complaint has to do with zoning law), and is still new in rural areas; 20 years ago, the county I grew up in had no zoning at all.

18

engels 04.11.08 at 8:54 pm

Sam – since you proclaimed the Nazis to be a “left-wing” party, some might think that your opinions on who is and is not “left” are not the most reliable…

19

engels 04.11.08 at 9:05 pm

That said, I’ve never heard of Salatin (Salatini?) so can’t venture an opinion on his purported leftiness…

20

SamChevre 04.11.08 at 9:07 pm

OK, I’m curious; what about Salatin would make you think he’s on the left?

And I will repeat that Socialism is a movement of the left.

21

SamChevre 04.11.08 at 9:08 pm

Engels–Slocum’s #10 has a link to an article by Salatin.

22

engels 04.11.08 at 9:16 pm

Thanks, I know. I haven’t read it, but if I do then I shall get back to you.

23

engels 04.12.08 at 9:26 pm

Okay, I read it and I don’t see anything that entails a classification of left or right. Lots of people dislike regulations and paperwork. (Even I do!)

24

Order of Magnitude 04.13.08 at 5:27 am

#1. “But who does go on strike? Every so often, the very underpaid workers who keep all those office park buildings clean do.”
Workers on the continent (France, say) who strike are definitely not underpaid. The mixture of communist controlled unions (CGT for example), a rigid state run by clones from ENA, and a political system which does not transmit grassroots demands up the chain leads to mass protest periodically boiling up in paralyzing strikes. Nothing to do with ‘exploited’ or ‘underpaid’

Drug regulation — via the FDA — works far better than the european drug approval process. In fact the europeans are attempting to replicate the process in the Eu Drug Regulatory Agency. Plenty of drugs are approved in Europe way before the US precisely because the FDA’s demands are far more stringent.

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