Continental CultureMike Rappaport

Nobel Prize Economist Edmund Phelps argues that the culture of the European bears much of the blame for its poor economic performance:

The values that might impactdynamism are of special interest here. Relatively few in the Big Three [France, Germany & Italy]report that they want jobs offering opportunities for achievement (42%in France and 54% in Italy, versus an average of 73% in Canada and theU.S.); chances for initiative in the job (38% in France and 47% inItaly, as against an average of 53% in Canada and the U.S.), and eveninteresting work (59% in France and Italy, versus an average of 71.5%in Canada and the U.K). Relatively few are keen on takingresponsibility, or freedom (57% in Germany and 58% in France as against61% in the U.S. and 65% in Canada), and relatively few are happy abouttaking orders (Italy 1.03, of a possible 3.0, and Germany 1.13, asagainst 1.34 in Canada and 1.47 in the U.S.).

Perhaps many would be willing totake it for granted that the spirit of stimulation, problem-solving,mastery and discovery has impacts on a country’s dynamism and thus onits economic performance. In countries where that spirit is weak, anentrepreneurial type contemplating a start-up might be scared off bythe prospect of having employees with little zest for any of thoseexperiences. And there might be few entrepreneurial types to beginwith. As luck would have it, a study of 18 advanced countries Iconducted last summer found that inter-country differences in each ofthe performance indicators are significantly explained by theintercountry differences in the above cultural values. (Nearly allthose values have significant influence on most of the indicators.)

The weakness of these values onthe Continent is not the only impediment to a revival of dynamismthere. There is the solidarist aim of protecting the “socialpartners”–communities and regions, business owners, organized laborand the professions–from disruptive market forces. There is also theconsensualist aim of blocking business initiatives that lack theconsent of the “stakeholders”–those, such as employees, customers andrival companies, thought to have a stake besides the owners. There isan intellectual current elevating community and society over individualengagement and personal growth, which springs from antimaterialist andegalitarian strains in Western culture. There is also the “scientism”that holds that state-directed research is the key to higherproductivity. Equally, there is the tradition of hierarchicalorganization in Continental countries. Lastly, there a strain ofanti-commercialism. “A German would rather say he had inherited hisfortune than say he made it himself,” the economist Hans-Werner Sinnonce remarked to me.

That last italicized line is truly extraordinary.  And I think speaks volumes.  It is not that it is so bad to inherit wealth  — it is lucky, but not shameful.  But the belief that making a fortune, especially in a functioning market economy, is shameful is really beyond the pale.