Comment by pembrook | Hacker News Reader

Comment by pembrook | Hacker News Reader

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These are all logical fallacies and red herrings that have nothing to do with what we're talking about.

If we try to steer the ship back to the topic at hand...here's why we should be concerned that Europe's private sector isn't growing much or innovating much.

It turns out, Europeans entire way of life is funded by taxing the activity of the private sector and redistributing that money to things like healthcare, education, pensions, etc. Innovation (increased productivity) is the only way to reliably grow this pie, and innovation is exclusively the domain of the private sector due to the competitive pressures of markets.

If our private sector is entirely composed of aging industrial-age conglomerates waiting to be disrupted by more dynamic and innovative Chinese competitors (China is rapidly becoming better at the things European industrial companies used to dominate), our entire society is at risk. Militarily, we're sitting ducks, and economically, we are as well.

Modern Europe is economically heading the way of the Soviet Union, with an increasing share of GDP driven via centrally controlled government spending (we're now at over 50% on average in the EU, the Soviets were around 70-85% at peak).

Meanwhile, The Chinese Communist Party has ironically created one of the most dynamic, capitalist systems on the planet. The Chinese supposedly "communist" economy is in fact more market-driven than even the US economy (33% government-driven vs 36% government-driven), and you can see this in the numbers: https://www.imf.org/external/datamapper/exp@FPP/USA/FRA/JPN/...

It doesn't take a Phd to understand that a much larger and more unified population in China, with a more unleashed private sector, is going to eat the lunch of the smaller, disjointed micro-economies in Europe. And this doesn't even factor in the rise of industrial investment in the US in recent years.

China may be market-based, but does China actually allow successful entrepreneurs to actually retain the fruits of their successes, or are those fruits confiscated in ways unrelated to taxation? Look at Jack Ma, for instance.

This is why the rule of law is so important. It's a Maslow's Hierarchy type situation, and if the choice is between creating value in a system which will tax a good proportion of it away (current EU) and creating value in a system which may capriciously confiscate it (current China) then I argue that people are more incentivised in the first case.

https://www.bbc.com/news/articles/c5yvyl710jpo

Hard to say for sure about Jack Ma, did anything actually happen to him, and if so, was what happened to him fair? He seems better off than me.

China still has many billionaire and millionaire entrepreneurs, so it does appear that they have the concept of markets and capitalism on a leash in such a way that wins for the people of the China, the central government, and the entrepreneurs. Even if some of that isn't perfect, they live in a country of rising prosperity, and I live in a country of 30 years of stagnation where billionaires just bought the government to turn us into an impoverished 3rd world feudal state.

Even if I'm completely wrong about about China and it's all a lie or bubble, my country isn't exactly offering a future.

Great analysis. I will disagree with your last point though. The intangible remains; China is not an open society by any means, and its companies are under gov surveillance (just look at DeepSeek). I met a very smart man at a conference a few weeks ago. We were discussing evs in China. His response was he wants to stay in the US and does not use DeepSeek due to its surveillance. He feared if he visited China he would get in trouble. This transcends my anecdote. Private companies operating under oppressive regimes will not prosper. The chains of oppression are not to be underestimated

> innovation is exclusively the domain of the private sector due to the competitive pressures of markets.

You are able to read this very comment (and write your own) in large part specifically because of public-sector innovation.

Certainly a good point, but largely overstated. It's fundamentally incorrect to act as if the private sector didn't do the bulk of the development of computing and the internet itself, commercializing and evolving the software and hardware, and running the physical fiber optic lines.

But thank god for the US department of Y combinator for taking a risk on all those evil private startups so they'd be able to support this government website.

It's also fundamentally incorrect to act as if the private sector would've done very many of those things without extensive cooperation with and guidance/mandate from the public sector.

This is a logical fallacy and a red herring that has nothing to do with what we're talking about.

I say "GDP doesn't matter that much" and you pivot back to how GDP isn't growing and that's a problem.

You say the future will be like the present except that China will replace the USA in the position the USA currently occupies. So what? The present is pretty good.

You say that the USSR is when the government does stuff and that's really bad. That's going to need more evidence.

Funding is a way of keeping track of the things that are done, not a way of doing things. Different economies put more or less importance on the accounting and more or less importance on the actual doing. Facts about funding cannot be conflated with facts about actual doing, especially in economies that are more likely to override the funding if they don't like the way the funding is causing doing. (That's something like what the "government fraction of GDP" is - it's the percentage of times the people didn't like the free market results and chose to override them)

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