Comment by heydenberk | Hacker News Reader

Comment by heydenberk | Hacker News Reader

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I was making this point a few weeks ago and after looking into it more, I still think it's a valuable point to raise, but the truth is more nuanced than I expected.

States in the US vary in nominal GSP per capita by only 2x — from Mississippi at $35K to Delaware at $70K. In the EU, it ranges from Bulgaria at €6K to Ireland at €55K. (This excludes DC and Luxembourg, which are outliers in many ways.)

In fact, even Mississippi, the poorest US state, is wealthier than the EU average (€28K, about $31K)! Only the wealthiest EU countries are wealthier than Mississippi: Luxembourg, Ireland, Denmark, Sweden, Netherlands, United Kingdom, Austria, Finland, German, Belgium, France. And of those, only Luxembourg and Ireland have a higher GDP per capita than the US average.

So the EU member states vary economically far more than the states in the US do, and the US is more easily characterized as a uniformly "high income" region than the EU is.

Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi.

> Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi.

Remember good GDP versus bad GDP; a traffic jam increases GDP, but isn't anything particularly worth buying. Accumulated capital (like Notre Dame and the Louvre) doesn't show up in GDP either, and if anything tends to lower it. There's a lot of bad GDP and not much capital accumulation in the US...

Climate also doesn't show up in GDP, now that I think of it, and I think that has a lot to do with the Mississippi situation. Who wants to live in hundred-degree heat with hundred-percent humidity?

"Accumulated capital (like Notre Dame and the Louvre) doesn't show up in GDP either, and if anything tends to lower it."

Notre Dame and the Louvre are a couple of the things that make Paris the single biggest tourist destination in the world, from which it derives a huge amount of GDP. The French tourist officials make sure to monetize the Louvre for all they can.

*

"Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi."

No, it isn't, because people wouldn't love to move to France/Italy/Spain, they don't even want to. People say they'd love to live in Spain/Italy/France, but the fact that they don't reveals it's mostly cheap talk.

There are some exceptions in professions that make well above the average for these countries (also retirees, students). Europe is really very nice if you make well above the average, but this is not (by definition) the typical life in those countries. Very few Americans are excited by a 24k take home salary in a mid-sized French town, or 15k in an Italian formerly wealthy industrial city.

The vast majority of migration flows are up the GDP gradient.

"The French tourist officials make sure to monetize the Louvre for all they can."

The access to the Louvre (permanent collection) is free for :

everyone under 18 years old whatever the nationality,

every resident of the European Economic Area (31 countries) under 25 years old,

everyone under 26 years old whatever the nationality the Friday from 6 p.m. to 9:45 p.m.,

everyone the first sunday of each month between october and march and on july 14th,

other specific groups of people,

And it is 15€ for everyone else for a day. Not what I would call particularly excessive.

http://www.louvre.fr/en/hours-admission/admission

The Louvre still relies mainly on public subvention (102 M€ in 2015) tickets bring ~65M€, private subventions ~12M€. But yes it surely brings people and has a good impact on the local economy.

The benefits to French GDP are not mainly from the tickets, but from the tourism-related revenue (hotel stays, restaurants, flights, &c).

The official Paris tourist office has a picture of the Louvre on the top of its front page.

Let me put it this way: if I say that google monetizes its search engine as much as it can, I don't mean it charges you to search.

"The benefits to French GDP are not mainly from the tickets, but from the tourism-related revenue (hotel stays, restaurants, flights, &c)." yes, you can infer that from the last sentence in my previous comment, but still, they do not monetize it as much as they can because they could have decided not to make the entrance free for the youngsters and they would make more money even if the number of young visitors decreases.

The difference with the google search engine is if you are not willing to pay and so do not use the search engine then google won't make money at all from you whereas few people will decide no to go to Paris just because the Louvre entrance is not free.

Perhaps I should've given less dramatic examples than Notre Dame and the Louvre: stone cities, stone bridges, houses that have been inhabited since the 16th century, that sort of thing -- things we don't have in the US.

I can't comment on the rest of the US, but I'm seriously considering emigrating to Europe at some point, for the sake of long-term stability. The US might be in a very bad situation 300 years from now; I doubt that France, Germany, or the northern parts of Spain and Italy will.

> a traffic jam increases GDP

What? No, it doesn't, in any possible measure. Those are lost hours of productivity.

The driving hours usually come out of the participants free time instead of out of the work force. The traffic jam will increase gasoline consumption.

You are right though, it isn't a good example. Here is a better one: Someone getting cancer increases GDP significantly due to health care costs.

Not in France though :-)

Oh man you're mixing up so many concepts. GDP is product - what value you produce during the year. Nothing is produced during a traffic jam. If you want to see accumulated wealth and climate taken into account, compare quality of life.

He's right though, a traffic jam creates a problem that must be solved, and someone solving that problem (providing gas, advertising on the radio while you helplessly listen, etc) will sell product.

Wikipedia describes three ways of modeling GDP: production, income, and expenditure. A traffic jam means more production of fuel (and vehicles, accounting for wear and tear), more income for fuel producers and mechanics, and higher expenditures (fuel, wear and tear, and radio ads); GDP rises on all three measures. Free time does not contribute to GDP; neither does use of accumulated capital.

Less free time means less demand for services catering to people's free time, and consequently less production of, income from, and expenditures on such services.

> Mississippi's GDP per capita being similar to that of France, Italy or Spain

And that's why GDP per capita is so useless.

You have a few multi billionaires running your country, and you have tens of millions of people in abject poverty, tens of millions with no health insurance, etc.

Don't look at GDP per capita, it tells you noting about life for the average person.

How about median household income?

Mississippi's median household income is $36,919. This compares to the UK's median household income of $31,617.

Note, of course, that this doesn't count social benefits. The UK's household income is lower, but they also get the NHS, better unemployment insurance, and so on.

These are gross income values (pre-tax), so, actually they do count social benefits (at least partially, the median household may be the beneficiary of transfers).

"abject poverty" means something like "the worst poverty you can think of". For the US, that probably means some portion of the ~1.6 million homeless (not all of them though), not the tens of millions of people that are below the national poverty line.

We do have about 25 million people with no health insurance.

Luckily, we have so many people on the outside flinging poo at us to keep us humble.

>Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi.

It seems to me that there are many people who say things like that about most of the less-populated states.

To be honest, I'm glad. After moving to SF from a small Midwestern city, I've realized that I couldn't be paid to live here. Even if we don't mention the extremely high cost of living in San Francisco, if we just consider the negative externalities:

- Garbage everywhere

- Constant noise

- Unbelievable homeless problem

- High crime rates

- Extreme clash of culture (I see anti-tech graffiti on my way to work every day; I regularly overhear pretentious "how could you not be in tech?" conversations)

- Infinite suburbia

- High rates of mental illness (not that mental illness is a bad thing, but I think it is at least somewhat telling about the environment)

I'd still rather live back home in the Midwest, even if we didn't talk about explicitly quantifiable costs of living. There is an entire America out there between the coasts that has absolutely none of the things I just listed.

> High rates of mental illness (not that mental illness is a bad thing, but I think it is at least somewhat telling about the environment)

I'd say that mental illness doesn't make one a bad person, (just like having pneumonia isn't a punishment for your sins), but mental illness is a bad thing---it should be avoided, mitigated where it exists, and if possible cured.

I'm guessing you might have meant something similar?

Cool, when are you leaving? Because my friends who actually like the Bay can't find housing. You know where the door is.

I think you forgot to take into account the fact that that Europeans don't work as much as North Americans: https://data.oecd.org/emp/hours-worked.htm

That doesn't entirely explain why revenues in the US are that much higher than revenues in Europe however. The fact that the current trade value of the € against the $ is significantly lower to what it was ten years ago (European debt crisis) also partially explain the different revenues between the two continents.

Indeed, working hours explain surprisingly little: France usually has a higher GDP per capita than the UK despite far shorter working hours. They also move pretty much in sync.

I'm not sure it's really fair to compare Western Europe and former USSR countries in the same breath as the US.

You might as well compare California to Mexico because they share a physical border. You'll find similar disparities in income.

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