More than anything, it is the ingrained American entrepreneurial spirit and work ethic that separates us from Europe and the rest of the world.
More than anything, it is the ingrained American entrepreneurial spirit and work ethic that separates us from Europe and the rest of the world.
The following is a lightly edited extract from Eurotrash: Why America Must Reject the Failed Ideas of a Dying Continent.
‘W hat Can America Learn from Europe About Regulating Big Tech?” asked The New Yorker in the summer of 2020. If one paid attention to the mainstream American media, they might wonder what Americans can’t learn from Europe, a continent perpetually on the cusp of overtaking the United States in a range of industries and innovations and sound governance.
In reality, Europe, despite its wealth, its relatively stable institutions, its giant marketplace, and its intellectual firepower, is home to only one of the top 30 global Internet companies in the world (Spotify), while the United States is home to 18 of the top 30. Of the top 154 technology companies in the world that appeared on the Forbes Global 2000 in 2019, 65 percent were American. The next-highest contender was China, with 20 percent. In a Forbes graph divvying up the origins of the world’s top tech firms, Europe is relegated to the “other” category with Africa and South America.
For that matter, only one European company appeared in the top ten corporate powerhouses in all world industries in 2020 — an oil concern — and only seven in the top 50. Americans make up nearly half of the list — despite having 500 million fewer people than Europe and 100 million fewer than European Union member states. Let’s just say, all the top-selling smartphones and computers in Europe are made in South Korea and the United States, not in Norway or Spain.
The American meritocracy — contrary to popular belief — is growing more accessible to ordinary people as the years go by. But more than any policy initiative, or any leader, or any regulation, it is the ingrained American entrepreneurial spirit and work ethic that separates us from Europe and the rest of the world. It’s not because we are born smarter or wealthier or because, as many Europeans like to maintain, we are blessed with geographical luck and an abundance of natural resources that we are richer. Rather it is our culture and ingrained behavior.
One of the most underrated traits we hold, for instance, is our relative comfort with risk — a behavior embedded in the American character. It is true that most nations romanticize their founding, and, in many ways, we are no different. Still, it is hardly hyperbolic to contend that the United States was conceived in risk. While the Spanish and French crossed the Atlantic Ocean to extract treasure, the first British and then German settlers, men and women escaping religious and political persecution, took immense personal risk not only by traversing the sea to land in North America but by building their communities in unexplored and potentially treacherous lands. They did this with the expectation that there would be little, if any, oversight or protections from their governments back home in Europe. Americans, self-selected risk-takers, created an individual and communal independence that engendered creativity. And early on, these communities were creating a slew of innovations that nurtured self-efficiency in agriculture, home building, trapping, hunting, and self-defense.
Later, the Founders of the nation — many of them entrepreneurs and inventors themselves — took great personal risk in being branded traitors by the British Empire, even though they were already likely among the wealthiest and freest people on earth. The Americans who subsequently pushed west, and the ones who kicked off the first industrial revolution, also participated in this tradition. As did the great industrial enterprises of the 20th century and the tech pioneers of Silicon Valley. As does every man and woman who starts a small business today.
One inescapable by-product of taking chances is failure. One of the reasons Americans are more willing to take on risk is that failing isn’t seen as a humiliating or a career-ending event — but rather almost as a compulsory ingredient to accomplishment. There is nary a tale of American triumph — not those of the Wright brothers, Alexander Graham Bell, Walt Disney, Steve Jobs, Thomas Edison, Ulysses Grant, or Henry Ford — that isn’t buttressed by a slew of failures. Even today, hundreds of self-help books assure people that failure is an event to be learned from and embraced.
This is not so elsewhere. “Les misérables,” read a recent headline in The Economist — the European voice of neoliberalism — which argued that “Europe’s culture is deeply inhospitable to entrepreneurs” and that Europe has shown a “chronic failure to encourage ambitious entrepreneurs.” The biggest problem, notes the magazine, is that “executives are extremely risk-averse” and intimidated by new ideas. When European entrepreneurs were asked by Ernst & Young what they thought of their nation’s entrepreneurial culture, the German, Italian, and French entrepreneurs were far less confident about the future of their country as a place for start-ups than those in the United States, Canada, or even Brazil.
Start-up employees in the United States have twice as much upside exposure as their European counterparts. The benefits of labor in U.S. companies permit investors and CEOs, and employees, to amass wealth. Because of a preoccupation with “inequality” — one shared by the modern American Left — European rules and taxation for stock-option remuneration make it difficult for start-up employees to enjoy the benefits of innovation — and make it harder for new companies to attract talent. One CEO of a Berlin-based start-up recently noted that he “can’t provide his people with a stake in the future of their venture without incurring crushing costs and hassle.” European banks, incidentally, have on average a 6.7 percent return on capital while among American banks the average is 14.4 percent.
In many ways risk also comes with a lower downside in the United States, where companies that go bankrupt can renegotiate their debt, which offers innovators more space to take risks, without the threat of failure decimating their future. Nations such as Ireland, France, and Germany have been attempting to adopt American bankruptcy rules, and the European Union has sent a directive to member states to reorganize their own.
But the deeper problem is that European culture values stability over success, security over invention, and leisure time over work. A study of innovation around the world found that nearly 42 percent of Europeans between 18 and 35 cited “fear of failure” as the barrier to creating a new business, which is not only far more than the United States but far more than developing areas such as sub-Saharan Africa and Latin America. In another poll, 43 percent of European respondents said that they feared opening a new business because they worried it may bankrupt them, and 33 percent said they were averse to opening a business because it would mean “irregular income.” Nearly 60 percent of Europeans would prefer to work as an employee rather than take on the risk of starting their own business.
“In Europe, failure is regarded as a personal tragedy,” Petra Moser, a German-born professor of economics at Stanford and its Europe Center, told the New York Times. “Here it’s something of a badge of honor. An environment like that doesn’t encourage as much risk-taking and entrepreneurship.” When asked “Suppose you were working and could choose between different jobs. Which would you prefer, (a) being an employee; or (b) being self-employed,” nearly 70 percent of Americans chose to be their own boss but only 40 percent of the French. In the United States, over 50 percent of workers of all ages want to be the boss.
What is the price for this success? Much has been made by American journalists about the fact that Europeans work fewer hours than we do. Americans never go on vacation! Americans eat at their desks! American take their work home with them! Americans are always on their phone!
Americans, they say, live to work while Europeans work to live.
Yes. So what?
It is true that large numbers of American employees do not even take their allotted vacation time, while most Germans and French take every last second of it. This only tells us that the American propensity to work longer hours has a lot more to do with state of mind than any specific state government policy or employee-benefit problem. Americans like their jobs. They like to work.
Why do so many American Europhiles assume that more work is a drag on life? Many American pundits have argued that the “religion of workism” — as The Atlantic magazine put it recently — makes us unhappy, causing dissatisfaction in our lives. When reading about the topic journalists will often beg the question and try to figure out why Americans “need” to work more hours than Europeans, or why they feel “compelled” to put in long hours, though there’s little evidence that these aren’t simply personal choices.
Most polls show that American workers are perfectly happy with their jobs. When Gallup first asked employed adults whether they were “satisfied” or “very satisfied” with their work in 1993, 86 percent responded in the affirmative. When asked the same question again in 2019, 92 percent said they were satisfied. It is not merely about wages, either. In a 2016 survey, Pew asked workers to best describe how they felt: Fifty-seven percent said that it provided them with “a sense of identity,” compared with 40 percent who said that their job was just what they did for a living.
Americans were also “satisfied or very satisfied” with relations with co-workers, the flexibility of their hours, and their job security. Among other things, more than 70 percent were satisfied with their boss, their vacation time, and their chances for promotion. A recent CNBC study found that “meaningfulness” was the most significant overall component of happiness among American workers. American men value wages, promotions, and bonuses more than women do. Women value co-workers, social life, and work–life balance more than men do. The most obvious motive for Americans’ propensity to work longer hours is that there is a higher chance of a payoff. Europe’s deficient work habits, conversely, are incentivized by generous social nets and onerous labor laws that disincentivize initiative.
Though, as anyone who lives in the United States could tell you, in many ways the idea that Americans are wholly consumed by their work is something of a myth, anyway. Studies show that we work, on average, one hour longer than the average European per day. A recent OECD study of advanced economies found that under 12 percent of American workers regularly put in 50 or more hours every week at their job. The United States fell in about average among industrialized nations in this regard. Out of the 27 nations in which employees worked less than the United States, though, only three (Australia, Japan, and New Zealand) were not European. It would be more accurate, then, to say that Americans have a healthy work ethic and Europeans show a high degree of . . . well, let’s call it complacency.
“If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire,” British writer George Monbiot once noted. Indeed. Hard work only pays off in a meritocratic system and culture that rewards it. And in Europe, hard work is less likely to guarantee results because policies that allow people to keep the fruits of their labor and compete matter far less. Another thing Europhiles want to change.