Why America Outpaces Europe (Clue: The God Factor)

The New York Times

June 8, 2003

Why America Outpaces Europe (Clue: The God Factor)


OXFORD, England — It was almost a century ago that the German sociologist Max Weber published his influential essay “The Protestant Ethic and the Spirit of Capitalism.” In it, Weber argued that modern capitalism was “born from the spirit of Christian asceticism” in its specifically Protestant form — in other words, there was a link between the self-denying ethos of the Protestant sects and the behavior patterns associated with capitalism, above all hard work.

Many scholars have built careers out of criticizing Weber’s thesis. Yet the experience of Western Europe in the past quarter-century offers an unexpected confirmation of it. To put it bluntly, we are witnessing the decline and fall of the Protestant work ethic in Europe. This represents the stunning triumph of secularization in Western Europe — the simultaneous decline of both Protestantism and its unique work ethic.

Just as Weber’s 1904 visit to the United States convinced him that his thesis was right, anyone visiting New York today would have a similar experience. For in the pious, industrious United States, the Protestant work ethic is alive and well. Its death is a peculiarly European phenomenon — and has grim implications for the future of the European Union on the eve of its eastward expansion, perhaps most economically disastrous for the “new” Europe.

Many economists have missed this vindication of Weber because they are focused on measures of productivity, like output per hour worked. On that basis, the Western European economies have spent most of the past half-century spectacularly catching up with the United States.

But what the productivity numbers don’t reveal is the dramatic divergence over two decades between the amount of time Americans work and the amount of time Western Europeans work. By American standards, Western Europeans are astonishingly idle.

According to a recent study by the Organization for Economic Cooperation and Development, the average working American spends 1,976 hours a year on the job. The average German works just 1,535 — 22 percent less. The Dutch and Norwegians put in even fewer hours. Even the British do 10 percent less work than their trans-Atlantic cousins. Between 1979 and 1999, the average American working year lengthened by 50 hours, or nearly 3 percent. But the average German working year shrank by 12 percent.

Yet even these figures understate the extent of European idleness, because a larger proportion of Americans work. Between 1973 and 1998 the percentage of the American population in employment rose from 41 percent to 49 percent. But in Germany and France the percentage fell, ending up at 44 and 39 percent. Unemployment rates in most Northern European countries are also markedly higher than in the United States.

Then there are the strikes. Between 1992 and 2001, the Spanish economy lost, on average, 271 days per 1,000 employees as a result of strikes. For Denmark, Italy, Finland, Ireland and France, the figures range between 80 and 120 days, compared with fewer than 50 for the United States.

All this is the real reason that the American economy has surged ahead of its European competitors in the past two decades. It is not about efficiency. It is simply that Americans work more. Europeans take longer holidays and retire earlier; and many more European workers are either unemployed or on strike.

How to explain this sharp divergence? Why have West Europeans opted for shorter working days, weeks, months, years and lives? This is where Weber’s thesis comes up trumps: the countries where the least work is done in Europe turn out to be those that were once predominantly Protestant. While the overwhelmingly Catholic French and Italians work about 15 to 20 percent fewer hours a year than Americans, the more Protestant Germans and Dutch and the wholly Protestant Norwegians work 25 to 30 percent less.

What clinches the Weber thesis is that Northern Europe’s declines in working hours coincide almost exactly with steep declines in religious observance. In the Netherlands, Britain, Germany, Sweden and Denmark, less than 10 percent of the population now attend church at least once a month, a dramatic decline since the 1960’s. (Only in Catholic Italy and Ireland do more than a third of the population go to church on a monthly basis.) In the recent Gallup Millennium Survey of religious attitudes, 49 percent of Danes, 52 percent of Norwegians and 55 percent of Swedes said God did not matter to them. In North America, by comparison, 82 percent of respondents said God was “very important.”

So the decline of work in Northern Europe has occurred more or less simultaneously with the decline of Protestantism. Quod erat demonstrandum indeed!

Weber’s vindication has profound implications for the next year’s enlargement of the European Union, when the Baltic States, Hungary, Poland, Slovenia and the Czech and Slovak Republics will become full European Union members.

A crucial feature of this enlargement, compared with those of the 1970’s and 1980’s, is that the material gap between old and new members is far wider this time. In 1974, the richest old member (Luxembourg) was twice as rich as the poorest new member (Ireland) in terms of per capita gross domestic product. Today, the average Luxembourgeois is more than five times richer than the poorest new member (Lithuania).

The impact of adopting the European Union’s economic and social rules is bound to be far greater for this generation of new Europeans. They should remember what happened in the 1990’s to the East Germans, who initially celebrated their accession to the vastly richer West German Federal Republic, only to discover it meant unemployment for roughly a third of the work force.

This is where productivity statistics matter. Even after more than a decade of free-market reforms, productivity levels in the Czech Republic, Poland, Slovakia and Hungary are as low as one third of the French level. What this means is that unless wages in those countries are set at around a third of French levels, their workers will not be able to compete.

East Europeans are currently able to compensate for their low productivity by working longer hours. The average Czech worker does more than 2,000 hours of work a year — a figure steadily rising since the collapse of Communism, even as working hours in Western Europe were declining. Unfortunately, European Union labor legislation will reverse this, to prevent what the West Europeans disingenuously call “social dumping” — the competition from low-wage economies. Czechs will be obliged to work less by a combination of legal entitlements to a shorter working week, longer holidays, higher minimum wages and generous unemployment benefits when their employers go bust because of all this.

The question is how much the Czechs will care about the ensuing enforced leisure. Like nearly all the 10 new members of the European Union, the Czech Republic is a predominantly Catholic country. (The exceptions are Protestant Estonia and Latvia.) But one striking consequence of 40-plus years of socialist rule in Eastern Europe has been a decline of religious belief almost as marked as that in Northern Europe.

According to Gallup, 48 percent of Western Europeans almost never go to church, but the figure for Eastern Europe is just a bit less, at 44 percent. Meanwhile, 64 percent of Czechs regard God as not mattering at all — a higher rate than even in Sweden. In this respect the difference between “old” and “new” Europe may turn out to be less than many Americans now believe. Enlargement of the European Union may simply confirm the eastward spread of the leisure preference in an increasingly work-shy and Godless European continent.

The loser will be the European economy, which will continue to fall behind the United States in terms of its absolute annual output. The winner will be the spirit of secularized sloth, which has finally slain the Protestant work ethic in Europe — and Max Weber, whose famous thesis celebrates its centenary by attaining the status of verity.

Niall Ferguson is a professor of financial history at the Stern School of Business, New York University, and a senior research fellow of Jesus College, Oxford. He is the author of “Empire: The Rise and Demise of the British World Order and the Lessons for Global Power.”

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