Why Are Americans So Rich?(richardhanania.com)
richardhanania.com
Why Are Americans So Rich?
https://www.richardhanania.com/p/why-are-americans-so-rich
50 comments
> cash is the metric for evaluating “success”, and factors into the daily mindset in a way that doesn’t exist so much in other developed countries
One, this is Bezos' day one philosophy at nation-state scale: America is always developing. Our culture benchmarks to emerging markets, not the Old World. (It's more true, in both cases, as an aspiration than reality.)
Two, at least in Germany, France, Sweden, Italy and the U.K., the European elites are--in my commercial experience--as rapacious as their trans-Atlantic peers.
> For example, the quality of public transit
The New York metropolitan area of over 20 million peoople has a regional-rail system that operates with reliability only rivalled by Switzerland [1]. American public transit is, in general, trash. But comparing America to European countries is an exercise in selection bias.
[1] https://news.ycombinator.com/item?id=41192264
One, this is Bezos' day one philosophy at nation-state scale: America is always developing. Our culture benchmarks to emerging markets, not the Old World. (It's more true, in both cases, as an aspiration than reality.)
Two, at least in Germany, France, Sweden, Italy and the U.K., the European elites are--in my commercial experience--as rapacious as their trans-Atlantic peers.
> For example, the quality of public transit
The New York metropolitan area of over 20 million peoople has a regional-rail system that operates with reliability only rivalled by Switzerland [1]. American public transit is, in general, trash. But comparing America to European countries is an exercise in selection bias.
[1] https://news.ycombinator.com/item?id=41192264
Note that I wrote quality of public transit. Sure, NYC has an extensive subway system. But compare the quality of the actual trains and stations themselves to somewhere like Berlin, Zurich, or London. NYC is far dirtier and less taken care of, aesthetically. Which was my point - aesthetic appeal of a subway station isn’t something New Yorkers seem to care about in comparison to residents of other global cities (that are ostensibly poorer than New Yorkers.)
> NYC has an extensive subway system. But compare the quality of the actual trains and stations themselves to somewhere like Berlin, Zurich, or London
Yes, quality. You've got a big, dirty subway system plus bus rapid transit plus taxis plus the Swiss-calibre regional rail system I mentioned. I've lived in Europe. The New York metropolitan regional rail system is comparable to its capitals' medians.
> aesthetic appeal of a subway station isn’t something New Yorkers seem to care about in comparison to residents of other global cities
I once voted in New York. Give me a choice between ten billion into prettier stations and more stations, more rail, more cars, and I know which I'd choose. New York City and its metropolitan empire have a high-quality, high-availability, broad-spanning and comfortable rail system.
Yes, quality. You've got a big, dirty subway system plus bus rapid transit plus taxis plus the Swiss-calibre regional rail system I mentioned. I've lived in Europe. The New York metropolitan regional rail system is comparable to its capitals' medians.
> aesthetic appeal of a subway station isn’t something New Yorkers seem to care about in comparison to residents of other global cities
I once voted in New York. Give me a choice between ten billion into prettier stations and more stations, more rail, more cars, and I know which I'd choose. New York City and its metropolitan empire have a high-quality, high-availability, broad-spanning and comfortable rail system.
Then we will just have to agree to disagree, because in my eyes there’s no way that NYC’s average subway station is 1/10 as clean as one in London, or that the regional train system is remotely as good as say, the S-Bahn system in Berlin.
> in my eyes there’s no way that NYC’s average subway station is 1/10 as clean as one in London
It's not. But New York's subway is 24/7. The Tube is not. Different optimisations.
During Covid, when stations could be shut down for a washdown they were clean. But they were closed.
> or that the regional train system is remotely as good as say, the S-Bahn system in Berlin
95 to 99% on time rates, to within 6 minutes, begs to differ. There is a reason cars remain dominant in Germany [1].
Also, you're comparing rubber ducks and battleships. The Berlin S-Bahn has 1.5mm daily ridership across 211 miles [2]. Just the New York Subway has daily ridership over 5mm across 250 to 800 miles, depending on how you count [3]. Both at about 25 mph. The Metro North, New York's regional rail system, transport about a quarter of a million per day across 400 to 800 miles [4].
The New York metropolitan area holds its own against Germany's trains. Partly because they're both underpowered, one due to not being built up enough, the other due to deterioration. But partly because the New York metropolitan area has half of Germany's GDP with a quarter of its population [5][6][7][8].
[1] https://ec.europa.eu/eurostat/statistics-explained/index.php...
[2] https://en.wikipedia.org/wiki/Berlin_S-Bahn
[3] https://en.wikipedia.org/wiki/New_York_City_Subway
[4] https://en.wikipedia.org/wiki/Metro-North_Railroad
[5] https://fred.stlouisfed.org/series/NGMP35620
[6] https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?location...
[7] https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?location...
[8] https://www.destatis.de/EN/Themes/Society-Environment/Popula...
It's not. But New York's subway is 24/7. The Tube is not. Different optimisations.
During Covid, when stations could be shut down for a washdown they were clean. But they were closed.
> or that the regional train system is remotely as good as say, the S-Bahn system in Berlin
95 to 99% on time rates, to within 6 minutes, begs to differ. There is a reason cars remain dominant in Germany [1].
Also, you're comparing rubber ducks and battleships. The Berlin S-Bahn has 1.5mm daily ridership across 211 miles [2]. Just the New York Subway has daily ridership over 5mm across 250 to 800 miles, depending on how you count [3]. Both at about 25 mph. The Metro North, New York's regional rail system, transport about a quarter of a million per day across 400 to 800 miles [4].
The New York metropolitan area holds its own against Germany's trains. Partly because they're both underpowered, one due to not being built up enough, the other due to deterioration. But partly because the New York metropolitan area has half of Germany's GDP with a quarter of its population [5][6][7][8].
[1] https://ec.europa.eu/eurostat/statistics-explained/index.php...
[2] https://en.wikipedia.org/wiki/Berlin_S-Bahn
[3] https://en.wikipedia.org/wiki/New_York_City_Subway
[4] https://en.wikipedia.org/wiki/Metro-North_Railroad
[5] https://fred.stlouisfed.org/series/NGMP35620
[6] https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?location...
[7] https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?location...
[8] https://www.destatis.de/EN/Themes/Society-Environment/Popula...
NYC stopped being the city that never sleeps a decade ago. That tagline is just hype at this point. Even if it was true, who cares about being able to take the subway at 3am? For the vast majority of citizens, this is a useless feature. I’d much rather have a clean efficient subway system that opens at 5 and closes at midnight.
All of these points are the same tired talking points brought up anytime anyone criticizes something about NYC. It’s one reason I got tired of living there - for as big and diverse of a city as it is, it’s actually quite an insular, close-minded place that doesn’t like to be criticized. There is always a reason why something cannot be improved, and you’ve hit most of the items on the checklist here. Personally I find the S-Bahn system easier to use and more extensive than the NY system, but YMMV.
Otherwise, this kind of conversation with a dozen footnotes is so tiresome. Yes, NYC has a good transit system. Yes, NYC is a big city, bigger than most cities in Europe. The original point of my comment was that no one in New York really cares about making it cleaner or nicer unless there is some financial justification for doing so. You’ve done nothing but prove my point here with your responses. The Bay Area is a similar situation: immense wealth in the area, and yet the quality of public spaces and infrastructure doesn’t reflect it. If you didn’t know better, you’d never guess that so much wealth is concentrated there.
And then if you compare NYC to Tokyo, and suddenly all of those justifications disappear, because Tokyo is both larger and busier yet manages to have a nicer cleaner system.
Which brings me to my original point, and the end of this sub conversation: culture is different in different places. Money has a centrality in American culture that it doesn’t have in Japan or Europe.
All of these points are the same tired talking points brought up anytime anyone criticizes something about NYC. It’s one reason I got tired of living there - for as big and diverse of a city as it is, it’s actually quite an insular, close-minded place that doesn’t like to be criticized. There is always a reason why something cannot be improved, and you’ve hit most of the items on the checklist here. Personally I find the S-Bahn system easier to use and more extensive than the NY system, but YMMV.
Otherwise, this kind of conversation with a dozen footnotes is so tiresome. Yes, NYC has a good transit system. Yes, NYC is a big city, bigger than most cities in Europe. The original point of my comment was that no one in New York really cares about making it cleaner or nicer unless there is some financial justification for doing so. You’ve done nothing but prove my point here with your responses. The Bay Area is a similar situation: immense wealth in the area, and yet the quality of public spaces and infrastructure doesn’t reflect it. If you didn’t know better, you’d never guess that so much wealth is concentrated there.
And then if you compare NYC to Tokyo, and suddenly all of those justifications disappear, because Tokyo is both larger and busier yet manages to have a nicer cleaner system.
Which brings me to my original point, and the end of this sub conversation: culture is different in different places. Money has a centrality in American culture that it doesn’t have in Japan or Europe.
> NYC stopped being the city that never sleeps a decade ago
I'll put a Post-It on the fridge when I get to my apartment there tomorrow.
> who cares about being able to take the subway at 3am?
Everyone I know in New York who works in medicine, for one. Everyone who has an early flight and wants to take the subway, either to their flight or to the airport where they work so the rest of us can take that flight. Everyone who wants to go to an outer-borough party and make it home without splurging on a cab.
> always a reason why something cannot be improved
Who said the Subway cannot be improved? Of course it can. It's dirty and we need more express lanes and more lines in general.
The S-Bahn is a smaller, simpler system for a smaller, poorer economy. It's not what New York needs to aspire towards. Beijing, Shanghai and Tokyo should be our models, not Berlin. (Paris can come too. As can Italy and the Netherlands' national rails. Deutsche Bahn gets bounced.)
> no one in New York really cares about making it cleaner or nicer unless there is some financial justification for doing so
Cleaner, yes. Nicer envelopes value judgements. I'd prefer another dirty station. Berliners wouldn't. We get a bigger system; they get a smaller, cleaner one.
> Bay Area is a similar situation: immense wealth in the area, and yet the quality of public spaces and infrastructure doesn’t reflect it
Bad comparison. Bay Area transportation infrastructure is trash. (I grew up in the Bay Area, too, so no home-field advantage here.)
> Money has a centrality in American culture that it doesn’t have in Japan or Europe
Money doesn't make a New Yorker value more dirty stations over fewer clean ones. (Do socialists build cleaner train stations?)
Again, look at the people with economic power in Europe and you see the same rapaciousness. There is simply less wealth to go around.
I'll put a Post-It on the fridge when I get to my apartment there tomorrow.
> who cares about being able to take the subway at 3am?
Everyone I know in New York who works in medicine, for one. Everyone who has an early flight and wants to take the subway, either to their flight or to the airport where they work so the rest of us can take that flight. Everyone who wants to go to an outer-borough party and make it home without splurging on a cab.
> always a reason why something cannot be improved
Who said the Subway cannot be improved? Of course it can. It's dirty and we need more express lanes and more lines in general.
The S-Bahn is a smaller, simpler system for a smaller, poorer economy. It's not what New York needs to aspire towards. Beijing, Shanghai and Tokyo should be our models, not Berlin. (Paris can come too. As can Italy and the Netherlands' national rails. Deutsche Bahn gets bounced.)
> no one in New York really cares about making it cleaner or nicer unless there is some financial justification for doing so
Cleaner, yes. Nicer envelopes value judgements. I'd prefer another dirty station. Berliners wouldn't. We get a bigger system; they get a smaller, cleaner one.
> Bay Area is a similar situation: immense wealth in the area, and yet the quality of public spaces and infrastructure doesn’t reflect it
Bad comparison. Bay Area transportation infrastructure is trash. (I grew up in the Bay Area, too, so no home-field advantage here.)
> Money has a centrality in American culture that it doesn’t have in Japan or Europe
Money doesn't make a New Yorker value more dirty stations over fewer clean ones. (Do socialists build cleaner train stations?)
Again, look at the people with economic power in Europe and you see the same rapaciousness. There is simply less wealth to go around.
By some economic measures (e.g. median income corrected PPP) NY state is also very close to Switzerland.
Otoh, wyoming has always been way ahead..
Otoh, wyoming has always been way ahead..
Ha, I have a potent nexus to each of the places you mentioned. Curious for the source on Wyoming--from where I'm writing this--being anywhere near New York or Switzerland. (We're above average in America and rich for Europe [1].)
[1] https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ....
[1] https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ....
Per capita, Wyoming does pretty well, I see. Wikipedia says that mining and tourism are the biggest components of the economy. Of course, whatever the bring in is reckoned against a pretty small population.
https://archive.is/ycvZb
The median ranking is very similar, but on mobile now (hence the shortened url)..
The median ranking is very similar, but on mobile now (hence the shortened url)..
I noticed that every time I get into a new hobby, Americans online are very much either focused on turning this into something profitable or feel guilty for spending time and money without turning their hobby into a side hustle.
That’s not really how I’ve ever thought about my hobbies. They are specifically there for me to enjoy my time after work.
That’s not really how I’ve ever thought about my hobbies. They are specifically there for me to enjoy my time after work.
If you have more money, but:
- you have to pay for everything as public services are ground to the bone - everything is built in a manner as predatory as possible to squeeze every cent out of users
Are you really richer?
- you have to pay for everything as public services are ground to the bone - everything is built in a manner as predatory as possible to squeeze every cent out of users
Are you really richer?
A small percentage absolutely unequivocally are. They don't rely on public services, don't have to wait in line for anything, get access to whatever they desire, live in the best places, eat the best food, vacation in the most scenic locals, and the list goes on. They also have the power to ensure the system either stays the same or only changes to work even more in their favor. So yes, they are indeed richer.
Click the following link, go down to the list of countries and sort by median wealth.
https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_...
USA is not ahead of the wealthier european nations unless you include bezos etc and measure mean wealth.
https://en.m.wikipedia.org/wiki/List_of_countries_by_wealth_...
USA is not ahead of the wealthier european nations unless you include bezos etc and measure mean wealth.
> USA is not ahead of the wealthier european nations unless you include bezos etc and measure mean wealth
Do it again with American states and European nations. A fair comparison given the symmetries in population and GDP.
It's wild for anyone travelled in America and Europe to conclude that one isn't very obviously poorer than the other. (Poorer isn't bad. But it is something.)
Do it again with American states and European nations. A fair comparison given the symmetries in population and GDP.
It's wild for anyone travelled in America and Europe to conclude that one isn't very obviously poorer than the other. (Poorer isn't bad. But it is something.)
>I recently talked to Callum Williams, senior economics editor at The Economist, about why Americans are so much richer than Europeans. Two of the answers are the productivity of big tech and flexible labor markets
https://x.com/RichardHanania/status/1850564972046172229
As a Danish person I don't agree with the "flexible labor market" thing. However the thing about big (tech) companies being economic powerhouses and a force of good seems increasingly true. A lot of people really need to rethink "big companies bad" and what we consider a monopoly in 2024.
That is also why the next US government, led by JD "breakup big tech" Vance can be an once in a generation opportunity for Europe to build giant economic tech powerhouses.
https://x.com/RichardHanania/status/1850564972046172229
As a Danish person I don't agree with the "flexible labor market" thing. However the thing about big (tech) companies being economic powerhouses and a force of good seems increasingly true. A lot of people really need to rethink "big companies bad" and what we consider a monopoly in 2024.
That is also why the next US government, led by JD "breakup big tech" Vance can be an once in a generation opportunity for Europe to build giant economic tech powerhouses.
Economic powerhouses? Sure. But forces for good? I don't think necessarily so.
Regarding the wealth thing, I'd really like to see some analysis that quantifies the risks of not having guaranteed health insurance. It is basically a gamble in the US. And even when tech companies pay for your insurance, it doesn't cover everything and can disappear at any moment if you are fired.
I'd also like to see some analysis of the impact of all the European companies that US companies acquire and integrated when they show promise. Not to mention that all the big tech companies have big offices with thousands of employees in Europe too. How much is this a wealth transfer either way?
Regarding the wealth thing, I'd really like to see some analysis that quantifies the risks of not having guaranteed health insurance. It is basically a gamble in the US. And even when tech companies pay for your insurance, it doesn't cover everything and can disappear at any moment if you are fired.
I'd also like to see some analysis of the impact of all the European companies that US companies acquire and integrated when they show promise. Not to mention that all the big tech companies have big offices with thousands of employees in Europe too. How much is this a wealth transfer either way?
> I'd really like to see some analysis that quantifies the risks of not having guaranteed health insurance
Boost access to healthcare and entrepreneurship goes up [1].
[1] https://pubmed.ncbi.nlm.nih.gov/20952079/
Boost access to healthcare and entrepreneurship goes up [1].
[1] https://pubmed.ncbi.nlm.nih.gov/20952079/
I think our Scandinavian-style labor market and healthcare is superior to what they have in the US. Americans also have a lower median wealth than us but that is because Americans, especially their minorities, have lower rate of home ownership. I only said big companies can be a force of good. I didn't praise the way Americans have decided to do healthcare (or housing).
Income redistribution that funds health and human dignity can be a good thing.
My point being you can support welfare and entitlements funded by income/wealth distribution without going full anti-big-business.
Interestingly one thing that increased home ownership in Denmark by making smaller Danish towns and cities more liveable were the shops and chains build by a retail group owned by Mærsk - the biggest shipping company in the world and what was for many years the only "megacorp" in Denmark.
>I'd also like to see some analysis of the impact of all the European companies that US companies acquire and integrated when they show promise. Not to mention that all the big tech companies have big offices with thousands of employees in Europe too. How much is this a wealth transfer either way?
Yes, it would be better for Europe if we had our own big tech companies. That is my point.
Income redistribution that funds health and human dignity can be a good thing.
My point being you can support welfare and entitlements funded by income/wealth distribution without going full anti-big-business.
Interestingly one thing that increased home ownership in Denmark by making smaller Danish towns and cities more liveable were the shops and chains build by a retail group owned by Mærsk - the biggest shipping company in the world and what was for many years the only "megacorp" in Denmark.
>I'd also like to see some analysis of the impact of all the European companies that US companies acquire and integrated when they show promise. Not to mention that all the big tech companies have big offices with thousands of employees in Europe too. How much is this a wealth transfer either way?
Yes, it would be better for Europe if we had our own big tech companies. That is my point.
Wealth is unevenly distributed.
> Average net worth is higher than median (at $1,059,470 vs. $192,084, respectively) ... (2023)
Reference: https://dqydj.com/net-worth-percentiles/
> Average net worth is higher than median (at $1,059,470 vs. $192,084, respectively) ... (2023)
Reference: https://dqydj.com/net-worth-percentiles/
> Wealth is unevenly distributed
One must really torture the numbers to conclude that Americans aren't richer, on any reasonable definition of average, than Europeans. (Even if we restrict the latter to EU residents.) The only population I can think of for whom this would be universally true are the chronically ill.
One must really torture the numbers to conclude that Americans aren't richer, on any reasonable definition of average, than Europeans. (Even if we restrict the latter to EU residents.) The only population I can think of for whom this would be universally true are the chronically ill.
First income inequality is far worse in the US that Europe, because of that, Ave Income is inflated. You take out say the top 10%, you will be a huge change.
You also need to define "rich". If you are born healthy and into a upper middle income family, you can end up rich, look at Gates, Zuckerberg and many other such people. In the US, if you or any of your children have any long term health issues, you will spend most of your income on health care. Thus you will be struggling to maintain a household.
So this "rich" thing is nothing but a "lets feel good" story, not reflection reality to the average US citizen.
You also need to define "rich". If you are born healthy and into a upper middle income family, you can end up rich, look at Gates, Zuckerberg and many other such people. In the US, if you or any of your children have any long term health issues, you will spend most of your income on health care. Thus you will be struggling to maintain a household.
So this "rich" thing is nothing but a "lets feel good" story, not reflection reality to the average US citizen.
> Rigid labor laws also remain a problem.
What The Economist may call a problem, people living in Europe call a blessing. We know we can count not just on 40-hour work week but also on 26 paid days of annual leave each year, apart from public holidays. When you fall ill, you don't worry about money or employment, you just rest and get better. When you get pregnant, you don't worry you will have to leave your little baby with random people a few weeks after it arrived to this world. And so on and so forth.
What The Economist may call a problem, people living in Europe call a blessing. We know we can count not just on 40-hour work week but also on 26 paid days of annual leave each year, apart from public holidays. When you fall ill, you don't worry about money or employment, you just rest and get better. When you get pregnant, you don't worry you will have to leave your little baby with random people a few weeks after it arrived to this world. And so on and so forth.
Sure, but Brits are 30% poorer than Americans.
> During covid, the United States was more willing to just directly give people money, while Europeans focused on trying to protect already existing jobs.
My perception, based on Denmark, Germany, and Italy is that European countries have a much stronger welfare system than the U.S therefore it makes sense not to worry so much about giving people money, if they lose the job they won't starve, and focus on keeping jobs active.
My perception, based on Denmark, Germany, and Italy is that European countries have a much stronger welfare system than the U.S therefore it makes sense not to worry so much about giving people money, if they lose the job they won't starve, and focus on keeping jobs active.
> European countries have a much stronger welfare system than the U.S therefore it makes sense not to worry so much about giving people money
That's one interpretation. The other is that Europe is more averse to risking firm collapse than the U.S., despite its social welfare system. It isn't a different balance, it's a fundamentally lower setting on the risk-reward spectrum.
That's one interpretation. The other is that Europe is more averse to risking firm collapse than the U.S., despite its social welfare system. It isn't a different balance, it's a fundamentally lower setting on the risk-reward spectrum.
I'm not understanding your argument that giving people money means that the U.S is more willing to risk firm collapse, or that by not giving them money Europe is more averse? What's the idea?
> giving people money means that the U.S is more willing to risk firm collapse, or that by not giving them money Europe is more averse
America is okay letting firms collapse, despite having a weaker safety net. After the financial crisis, where we were protective of our industry, we became protective of our peoples' livelihoods. Europe has a safety net. But it remains protective of its industry and their captains. That just produces a different risk-reward mix and tolerance to economic churn.
America is okay letting firms collapse, despite having a weaker safety net. After the financial crisis, where we were protective of our industry, we became protective of our peoples' livelihoods. Europe has a safety net. But it remains protective of its industry and their captains. That just produces a different risk-reward mix and tolerance to economic churn.
Is it a big mystery? It's the same reason the British were so rich before the US: the right things happening at the right time and place. For the US, being very large, a large population, a common language, lots of natural resources, these were all the seeds. Then fairly stable relations with the neighbors followed by Europe sparking 2 global conflicts, the second of which devastated the continent. Didn't the US have more than 50% of the entire worlds GDP in the 1950s? These are the factors that continue carrying the US high. Big tech can exist there because of them. And it will probably last a long time, after all Europe is as rich as it is because of it's history before the rise of the US.
Money are for poor people. Americans are obsessed with money. Ergo, americans are poor.
Seems legit !
Seems legit !
Wealth is unevenly distributed.
True. Since ancient history.
Yea, but why can't we correct this with modern technology? All the old reasons have more or less disappeared with shipping and computation. All the remains is greed.
Modern technology isn't the only reason for unequal outcomes.
There are reasons why some of us are muttering to ourselves on the sidewalks about alien invaders and others change the world...
There are reasons why some of us are muttering to ourselves on the sidewalks about alien invaders and others change the world...
Yea, that's my point: the reason is greed (and narcissism, self-delusion, etc). That's the only explanation I can think of: folks with privilege and power not only can't imagine a better world, they straight up prefer a hobbesian one where they can claim to deserve being on top.
I think GP means that humans are fundamentally unequal in terms of intelligence, capability, drive, motivation, and potential.
You're still right about greed, of course.
You're still right about greed, of course.
Probably time to dissect the brains of those monkeys that hoard billions of bananas
KingOfCoders(2)
It is a way of evaluating every kind of value and activity, and in scenarios where individual wealth is difficult to measure, the “public good” is disregarded or just ignored. For example, the quality of public transit, art, or architecture.
This comment sounds like a harsh critique, and in some sense it is. But there is also a kind of clarity that is appealing, in an abstract way, and is probably why the US is generally a more innovative dynamic place.