America and Europe
I continue to by mystified by the desire to pit America and Europe against one another. The latest entrant in the transatlantic war is the usually cogent Umair Haque, who weighed in with this post.

“Europe is poised to be the world’s next fountain of innovation; far more so than the US. Here’s why. Europe has two huge capital stocks that no one else in the world does: social and cultural capital.

America is a giant market. But that’s all it is – nothing more. Is that what India and China want to be? Are they willing to pay the price America is paying – a society fraying at the seams? Anti cultures, where the life revolves solely around consumption and production? An economy where the market is chewing up and spitting out every form of capital, in the insatiable quest for near-term returns, and so the center can’t hold?”

I came across the post on Jeff Nolan’s red-blooded blog, where he wrote in response:

“This whopper of a post is so skewed with generalizations and stereotypes that I am left speechless. But then again, I am just a dumb American lacking in culture, style, and a charming foreign accent.”

I have to admit, I instinctively reacted like Jeff did. As a patriotic American, I don’t like having my country insulted. But in the end, I decided a better idea would be to tackle Umair’s argument head on.

Once the polemics are stripped away, Umair’s argument comes down to three assertions and an unspoken assumption:

1) Europe has more social capital than the rest of the world, especially the United States.

2) Europe has more cultural capital than the rest of the world, especially the United States.

3) A free market economy is poor at generating social and cultural capital.

4) Social and cultural capital are the generators of innovation.

I happen to agree with point 4, so I’ll focus instead on points 1) 2) and 3).

1) Europe has more social capital than the rest of the world, especially the United States.

One problem in refuting this point is that Umair never defines what he means by social capital. I take it to mean a society where differences are accepted, experimentation is encouraged, and opportunities are available to all who can take advantage of them.

If this is the case, I don’t see how Europe has a clear-cut advantage. Most of the European nation-states are less diverse and less tolerant than the United States. The US government has never banned headscarves from schools. Are there nut jobs and white supremacists in the US? Sure. But no more so than in Europe.

Moreover, you can’t treat either entity as a monolith. Is France different from Albania? Absolutely. And Manhattan is different from rural Texas, and San Francisco is different from Little Rock, Arkansas. Not better. Not worse. Different.

2) Europe has more cultural capital than the rest of the world, especially the United States.

What is culture? Is culture Italian operas, French avant garde plays, and experimental music? Yes, absolutely. But culture is also bluegrass, cheerleading competitions, and taiko drumming.

The only way to claim that Europe has more cultural capital is to claim that only Euro-centric culture “counts.” And let’s not forget that the ancient Egyptians were creating the Pyramids while the Gallic tribes were clad in furs, and that the ancient Chinese were launching rockets while the Goths were throwing rocks at each other.

But wait, aren’t those ancient history? If one wishes to make that argument, then why not look only at the post World War II era?

Culture is in the eye of the beholder, and if you define culture as “art created from the European Renaissance to the present day that is important to Western Civilization,” it’s pretty hard not to view Europe as the cultural leader.

But if you define culture as “distinctive forms of art created in the past 60 years, regardless of where it flourishes,” Europe’s contribution is hardly all-powerful.

Just take a look at the Nobel Prize laureates in the field of literature in the past 20 years:

2005 Harold Pinter
2004 Elfriede Jelinek
2003 J.M. Coetzee
2002 Imre Kertész
2001 V.S. Naipaul
2000 Gao Xingjian
1999 Günter Grass
1998 José Saramago
1997 Dario Fo
1996 Wislawa Szymborska
1995 Seamus Heaney
1994 Kenzaburo Oe
1993 Toni Morrison
1992 Derek Walcott
1991 Nadine Gordimer
1990 Octavio Paz
1989 Camilo José Cela
1988 Naguib Mahfouz
1987 Joseph Brodsky
1986 Wole Soyinka
1985 Claude Simon

Does that look like a picture of European dominance?

3) A free market economy is poor at generating social and cultural capital.

Why is a free market economy poor at generating social and cultural capital? What a free market economy does is to decentralize decision-making to the invisible hand of self-interest. I don’t see how that makes it poor at generating social and cultural capital.

The independent film industry in the United States seems to be doing just fine without government funding. So is the music industry.

It is true that many of the great artworks of Western civilization were created in less-free markets, but that is simply a reflection of the fact that truly free markets didn’t exist in the key centuries of the Renaissance. In fact, the Italian Renaissance flowered in the region of the world that had the most market freedom at the time.

I think it’s probably more accurate to say that the market helps increase social and cultural capital, by creating wealth more efficiently. It’s that surplus wealth that allows societies to set aside resources to create works of art. The Medici family wouldn’t have been able to commission works from Michelangelo if it hadn’t made a fortune in the market. True, wealth doesn’t always lead to cultural creativity. But it’s pretty clear that it doesn’t have a major negative correlation.

Now perhaps I’ve been a bit tough on Umair. After all, he probably dashed of his posting very quickly, posting some half-formed thoughts, not necessarily checking his logic or buttressing his arguments with facts. But that’s what makes it all the more damaging. If the instinctive and deeply rooted attitude of an Americanized entrepreneur is so mistaken, it is a sign that the transatlantic conflict is worse than I feared.

Yet at the same time, I, one of Jeff Nolan’s aforementioned “dumb Americans,” have taken a valuable hour of my time (which I should have spent sleeping, or working on some capitalist activity to generate wealth) and invested it in trying to create a piece of cultural capital that will make those who read it think a little deeper.

Perhaps there’s hope for us after all.

Bonus: I couldn’t take some of the more egregious statements in Umair’s post, so I took the liberty of refuting them below.

A) “Living in the States is, by any realistic measure of social or cultural value, deeply inferior.”

I find it amazing that many of the same people who leap to defend any criticism of a minority culture will think nothing of labeling the United States with the same groundless prejudice. If you believe that some cultures are better than others, you are no better than the racist who dismisses rap as not a true art form.

B) “The Friedmanite argument completely misses the fact that markets can’t solve public goods problems like healthcare, and so…welll…Americans die because they’re poor and sick.”

Every economist acknowledges the existence of externalities, but the answer is to find a way to deal with those externalities like pollution in a market-based fashion. Would people be less opposed to free markets if instead we called them “de-centralized, grassroots decisionmaking?” Moreover, the statistics clearly show that American medical care is, by and large, better than that in European nations.

C) “Put another way, the simple fact is that the world’s cultural innovations are invented in Europe, and diffuse outwards from there. Europe is still the world’s media, fashion, art, culture epicenter.”

This may be the most absurd statement of all. It is more accurate to say that Europe is the European world’s media, fashion, art, culture epicenter. Go ask the residents of any other continent if they feel that Europe is the center of cultural innovation. I seriously doubt that the Asians who are pioneering broadband and mobile culture, or the Africans who inspired Picasso, or the South Americans, or the remaining Native Americans and tribesmen would agree with this assertion, which, in my opinion, borders on racism, and certainly qualifies as ignorant chauvinism.

D) “Just think about the wasteland the American “market” for media – really, a collection of monopolistic markets – has created; contrast it with, I don’t know, the Beeb, the CBC, RAI, etc. That’s a a very important comparison – because those dynamics are the future of all consumer industries.”

If you gathered together the world’s television critics, it would be hard to generate a consensus that European content is so superior. If one judges on popularity (at least in markets without government regulations on the amount of foreign content allowed), American content rules the airwaves. If one judges on critical esteem, it’s hard for me to believe that the culture that created shows like “The Sopranos,” “Deadwood,” and “Battlestar Galactica” is in any way inferior to the cultures that created shows like “Big Brother.”

E. “Consider how many great fashion designers are American (no, Ralph Lauren and P Diddy don’t count).”

May I inquire why they don’t count? What is the mark of a great fashion designer? If you want high fashion, aren’t Tom Ford, Vera Wang, and Isaac Mizrahi great designers?

F. “Knocking Europe is to completely miss the reason people love to live there.”

I don’t see why there is a need to “knock” anyone. Different people have different tastes and beliefs. That doesn’t necessarily make one better or worse. If Europe were in fact the best place to live for all people, wouldn’t its population be increasing, rather than decreasing? Some people prefer the European lifestyle. Some prefer the American. Some prefer the Latin. That doesn’t make any one of them definitively better.

G. “Because America has robbed Peter to pay Paul – mortgaged it’s social and cultural capital for less durable, less valuable financial capital – it is less and less able to innovate in a world, where, suddenly, the economic is deeply enmeshed in the social, the cultural – and the creative.”

In the end, the proof must be in the pudding. Is the United States less innovative than Europe? Are more new business models being created in the States, or on the Continent? Alas, I lack the knowledge to say for certain. But I doubt that Europe holds a commanding advantage.