European vacation season isn’t over yet, and this year more Americans than ever have been flying across the Atlantic. By August’s end, they’ll be returning by the 787-full, jetlagged but jubilant, ready to regale friends with tales of their travels—and often enough, the view that the Europeans really have this quality-of-life thing figured out.
Europe’s cities, towns, and countrysides surely are pleasant places to visit. But does their appeal go further? Are they superior to America as places to live? For an evidence-based answer, the natural starting points are big-figure economic numbers such as GDP per capita and disposable incomes. On that score, America clearly comes out ahead of Europe (we’ll focus on EU countries for our purposes here). According to the World Bank, 2023 per capita GDP adjusted for purchasing power in the United States is more than one-third higher than that of the EU, at $81,695 vs. $60,350. Disposable incomes favor the U.S. as well.
Of course, while it is widely accepted that Americans are on average more productive and richer than Europeans, both America and Europe are sufficiently diverse and vast that generalizing isn’t that useful. Given that newcomers to the EU are still climbing out of the hole dug by Communism, a comparison with the richer corners of Europe is more apt. Moreover, Americans tend to work more for the money they earn. If we’re trying to puzzle out who has it better, it makes sense to adjust for the more plentiful leisure time afforded Europeans.
Last year, The Economist performed an exercise of this kind, stacking European countries up against the United States on the basis of per capita GDP adjusted for purchasing power and hours worked. The analysis found that EU countries Austria, Belgium, Denmark, Luxembourg, and Sweden (along with non-EU Norway and Switzerland) eclipse the U.S. in per-capita GDP when adjusting for those considerations. These countries, in a manner of speaking, have higher individual productivity than America. But if we isolate Norway’s 6 million people, Belgium’s 12 million, and the like, why not do the same for American states? That comparison tells another story.
According to our own methodology, if we assume American workers put in similar hours across the country, we can extrapolate that the richest eight American states per capita—New York, California, Massachusetts, Washington, North Dakota, Alaska, Delaware, and Connecticut (plus Washington, D.C.), are generating more wealth on average than The Economist’s standout European cluster of seven. And while the European group has a population of 50 million, our American subset combined has a population of more than 70 million. While two European countries (Luxembourg and Norway) still outstrip the richest American states per person (but not D.C.), they have a combined population less than that of New York City alone. And no European wants to see that wealth comparison.
There’s more to the question of life quality, however, than who has more money to spend; there’s the question of what you get for it. Bismark Analysis’s Marko Jukic offered an unconventional rejoinder to the conventional money answer in April. Jukic argued on X: “Europeans aren’t poor. They are illiquid. Much of Europe’s wealth is stored in safe streets, nice parks, public transit, ‘free’ healthcare, etc. which, it turns out, are too socially expensive for Americans to maintain. Americans take the money instead.” Jukic’s post, expanded upon in a Palladium essay, contends that Europeans aren’t worse off; they’ve invested in public goods, while Americans have pocketed cash.
The more than 40,000 “likes” the post garnered attest to the plausibility of this argument. There’s satisfaction to be had in safe, beautiful, shared spaces that you can reach without a car. But thought-provoking as Jukic’s conjecture may be, it is flawed. Safe streets and transit are public amenities, and ones to which Americans lack comparative access—but not because Americans “take the money instead.”
Consider two comparably sized cities, Berlin and Los Angeles. Berlin has a population of about 3.5 million; it spends about $2 billion annually on policing. Los Angeles has a nearly identical-size population and yet spends $3 billion on policing. New York spends more per capita, too, with its population of more than 8 million and a police budget of more than $5.5 billion. Berliners enjoy much safer streets than Angelenos or New Yorkers, but not because Americans are stingy on public safety spending. It’s a similar picture with transit, where Americans pay a lot but get lackluster returns. New York’s Second Avenue Subway expansion has come in at a cost of $2.5 billion per mile, ten times the per-mile cost Paris incurred for its impressive Grand Paris Express project.
These examples undermine Jukic’s hypothesis on causality but support his broader claim that life is in some ways better in Europe. In line with this mixed picture, the United States falls squarely in the middle of the OECD’s “life satisfaction” rankings, above the other English-speaking countries and France, Italy, Spain, and Belgium, yet below the Nordics, the Netherlands, and the German-speaking countries.
To recap: America is richer than just about all of Europe and happier than most of it, too. Yet some well-off European regions compare favorably, even if they lack the super-charged economic performance enjoyed by the most productive metros stateside, such as New York, the San Francisco Bay Area, Seattle, and Washington, D.C.
The ultimate question may be whether something in the less settled nature of America—a much shorter political history, more internal migration, greater cultural diversity—makes it both more economically dynamic and in some ways more dysfunctional, or whether the good can be bottled while the bad is discarded.
The more immediate question, though, is simpler, especially if you’re asking it from a European summer patio: Should you have the pilsner or the Bordeaux?
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