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Comment by crop_rotation | Hacker News Reader

The European approach makes a lot of sense in other stable industries (Automobile/Steel). But in a fast moving quick changing (e.g. Tech) industries, all it does is prevent new risky companies from starting and making it harder for them to adapt. Maybe it is a good thing. But only time can tell that. So far to me it seems like the American approach is winning economy wise.

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I think “winning” really depends on your criteria for success. Maybe it’s winning on overall metrics like GDP, but on an individual level, the story is far less clear.

Like, is it winning to have the option of starting a company that produces generational wealth for yourself, while living in a city unable to solve its homelessness problem? Is it winning to be a 1%-er but have no safety net so that you're always precarious, at risk of being wiped out by factors you have no control over? Is it winning to have a school system so dysfunctional that you send your kids to private schools that most of your neighbors can't afford?

I expect that from a perspective that prioritizes stability, safety, and sustainability, a model where it's hard to be fired and companies are encouraged to take long term responsibility for their employees (and therefore grow slowly) makes a lot of sense.

> I think “winning” really depends on your criteria for success. Maybe it’s winning on overall metrics like GDP, but on an individual level, the story is far less clear.

This is an excellent point. America does an exceptional job of making rich people richer, but it also ranks poorly in many quality of life metrics. It is now #25 on the social progress index (https://www.socialprogress.org/). If people are richer but their children are more likely to die in child birth (U.S. ranks #50), or be murdered (U.S. ranks #137 in homicide), is that really better?

Your perspective sounds overly mired in tech and San Francisco issues. For most of the country geographically, it’s good to be able to make a business because you can make money doing something useful for other people, create jobs for others. By doing so you improve and create further opportunities for your community, and your taxes pay for the safety nets (that do exist) and decent schools, and you and your employees can be philanthropic on top of that, which is fairly common.

Building quickly and creating good, reliable jobs don’t have to conflict.

Economy-wise maybe, but there is more to workers rights than that. They also affect things like life expectancy and quality of life.

Small companies are typically exempt from mass layoff regulations. And obviously nobody can force a failed company to continue operating. That should cover most of the "risky new company" case.

Maybe there's some marginal effect in the willingness of established companies entering risky new business.

There is no actual European approach, there are different levels of worker's rights across various industries and in different countries. In Denmark if you have been working for more than a month than when you are fired you have a certain amount of time that you get paid (unless you find a new job), but you still have to work for them if the company wants you to.

In the tech industry it is generally 3 months and they don't want you to work during that period.

It’s also generating insane levels of inequality, so it really only works if you subscribe to the capitalistic illusion that GDP is a good indicator of the success of a society.

At least in the tech world calling the layoffs as increasing inequality is not exactly the same.

Well, the concepts of regulated free markets, free trade between nations, and generally free immigration have created the single largest increase in human living standards in history.

> single largest increase in human living standards.

That's a good point. It'd be useful if the US could raise it's game for it's citizens, and let them participate in that too. :)

Ask someone from a hundred years ago how it's going today and you'll have your answer.

There wasn't a question. ;)

Check your facts. As much as I am a firm European democrat, you might wanna see what Chinese “state driven capitalist communism” has done between 1975 and today. Again, if the measure is number of people lifted out of poverty, China wins hands down.

Now, as much as we can’t consider China’s success without considering the lack of freedoms inscribed within the communist social pact, we can’t take just the good of American capitalism by only using gdp or trade volume as an indicator, because - again - inequality and lack of basic human needs and life safety wouldn’t be included.

Reference: https://www.worldbank.org/en/news/press-release/2022/04/01/l...

Check your perspective. Taiwan, Hong Kong, Singapore, Japan, Korea all industrialized faster and have a higher standard of living than China.

All did it in the 1980s - 40 years ago. All did it without oppressive communism.

While it might not have been communist, Korea certainly was oppressive when it built the chaebols which did involve a fair bit of government management.

Also re: Taiwan: https://en.wikipedia.org/wiki/White_Terror_(Taiwan)

Hong Kong has made it to oppressive communism, so that’s going to be interesting to watch going forward (or backwards?).

Yes for sure. From China, to free markets, back to China. I think we’re already seeing the effects on Hong Kong. No so great.

>if the measure is number of people lifted out of poverty, China wins hands down.

>Check your perspective.

>All did it in the 1980s - 40 years ago. All did it without oppressive communism.

Japan industrialized long before 1980 and all the countries listed have miniscule populations compared to China. The only country you can really attempt to compare to China's scale is India but good luck landing the same poverty alleviation conclusions.

Good luck finding examples of successful communism.

An alternative take would be that China only saw prosperity after partially adopting Western economic values. Additionally, Chinese economic development and Western economic development occurred in vastly different contexts. China had access to Western imports to jump start their industrialization and access to the Western scientific and policy know-how needed to build an advanced economy. The West had to figure things out as they went along. This is obviously a broad generalization, I just want to make the point that China is definitely not a slam dunk counterexample

You're reinforcing my point. China grew so fast due to embracing market capitalism with Deng Xiaoping, whereas Mao before wanted Marxist-Leninist central planning, which predictably failed. There's nothing "capitalist communist" about it, they're not even communist at all since workers don't own the means of production. Now I'm not saying the American model is great either, but market capitalism is an incredible invention.

I can see the pros of the European approach, but reducing equality can not be the only goal. If the economy keeps falling behind, the median standard of living will keep dropping. A strong economy can adopt higher taxes and more social services due to election pressures. A fallen behind economy will find it much harder to jump back.

The other problem is that tons of European talent keeps going to the US. The people who have the skills to make higher wages might not care about inequality too much, since they would be the ones benefitting from it. I am not sure how Europe can solve that though.

Yes but European economies benefit from the American approach without all the downsides. You guys got Google and smartphones and AI in the past couple decades. Europeans lack technical innovation and they don't need it because the innovation comes from somewhere else before percolating into the European economy for free.

The European approach is the winning approach so long as at least one country does all the hard work.

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