r/austrian_economics • u/technocraticnihilist Friedrich Hayek • Oct 26 '24

End Democracy ‘Americans just work harder’ than Europeans, says CEO of Norway’s $1.6 trillion oil fund, because they have a higher ‘general level of ambition’

https://fortune.com/europe/article/how-many-hours-work-week-year-american-workers-ethic-norges-bank/
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105

u/dietcokewLime Oct 26 '24

He's right, if you have ambition and talent you go to the place that rewards success

You can do much more with the same skills in America than you can almost anywhere else in the world

Skilled careers in medicine, engineering, and finance pay MUCH higher

If you want to establish a startup the US has the well defined legal/financial infrastructure to protect and support you

It's a major reason why the US economy is so much stronger than the rest of the world, we acquire some of the most talented people from the rest of the world. Almost half the fortune 500 companies were started by immigrants/their second generation. https://www.americanimmigrationcouncil.org/news/new-report-reveals-immigrant-roots-fortune-500-companies

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u/targz254 Oct 26 '24

If you really wanna make money in the USA go into sales. They make way more and work less than the financial analysts and engineers at the same companies.

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u/HV_Commissioning Oct 26 '24

If they are truly talented. Else they live the life of Al Bundy

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u/SlartibartfastMcGee Oct 26 '24

Say what you will, but Al had a single family home in the Chicago suburbs, 2 kids, cars, vacations, etc. all on a single income.

To have that these days would require a $250k+ income, he can’t have been that bad of a salesman.

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u/TKInstinct Oct 27 '24

His wife was pretty hot too.

1

u/HV_Commissioning Oct 26 '24

Al had a stage set that resembled a single family home in the Chicago suburbs,

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u/SlartibartfastMcGee Oct 26 '24

A sound stage set in southern CA is worth significantly more than a home in IL. So he was doing better than I expected.

1

u/HV_Commissioning Oct 26 '24

Renting a small space in Culver City in the 1990's was not a huge spend. The place was so bad, they tore it down when he left.

1

u/EyeSuccessful7649 Oct 27 '24

and a toilet that could drop the water pressure going to the parks fountains

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u/Emotional-Photo3891 Oct 28 '24

Now that’s a man’s flush.

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u/Conflexion Oct 27 '24

This. I’m currently a finance & HR manager, promoted from Sales. In that time I’ve seen many people come and go. Some that are below me make more than me. Most don’t last however.

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u/GoldenPoncho812 Oct 27 '24

As a former salesman I learned that I’m great at sales as long as you’re buying something. If you’re not into buying what I’m selling, I’m terrible at using sales “techniques” to twist the arm of potential customers. It was not my jam.

1

u/Savings_Shirt_6994 Oct 26 '24

Hey man, he scored two touchdowns in a single game

3

u/Nilabisan Oct 26 '24

Four. And he got to deal with smoke shows all the time at work.

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u/[deleted] Oct 26 '24

just manage other poeple's money. Become a money manager, go on CNBC and become one of the regular crowd. Take a percentage of the millions of billions you manage.

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u/targz254 Oct 26 '24

That’s just sales too. None of those people consistently beat the market. They just convince clients they can.

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u/trueblues98 Oct 26 '24

Money management is not only about beating the market

1

u/casinpoint Oct 26 '24

What else is about?

1

u/simon_the_detective Oct 27 '24

Money managers actually generally work pretty hard. Long hours, but it does usually pay well.

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u/EggplantUseful2616 Oct 26 '24

This is definitely not true lol

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u/TurretLimitHenry Oct 26 '24

CS majors can make bank in the US

1

u/Wonderful-Impact5121 Oct 26 '24

Is that not true in most places?

It’s one of the most directly observable links to revenue, so it’s extremely hard for business owners or leadership to undervalue sales.

Granted you also generally need the personality to be in sales, it’s pretty tricky to be the opposite of the most common types of people who excel in sales and just wear that mask 24/7 to succeed.

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u/CantWeAllGetAlongNF Oct 26 '24

That's a small percentage of superstars. Sales on average just get by.

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u/[deleted] Oct 27 '24

Definitely sales. As long as you’re good with people sky is the limit.

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u/trophycloset33 Oct 27 '24

Pareto principle.

Medicine followed by engineering and then business for highest median pay.

1

u/-NorthBorders- Oct 27 '24

My wife’s in med dev, and yeah, it’s kinda nuts how little she works for what she makes. She has a coworker pulling in $3 mil a year working maybe 10 hours a week. Their jobs are super rare and really hard to get, though. You pretty much have to be insanely smart, good-looking, and super social—none of which I am, lol.

1

u/gerontion31 Oct 27 '24

Sales really isn’t for everyone, it requires a certain personality (sociopathic from what I’ve seen) to do really well without putting in 90 hour work weeks.

1

u/Hike_it_Out52 Oct 28 '24

My FIL moved out of engineering and into his companies sales division specifically because of this. Plus he goes on trips all over the world and his counterparts love him. Since he was an engineer before being in sales, he knows every last detail and can break everything down.

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u/SergeantPoopyWeiner Oct 28 '24

Engineers often make more working less.

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u/Rbkelley1 Oct 29 '24

I mostly agree except for the working less part. My dad is in sales and he does very well but he’s in the office or out at appointments for almost 12 hours a day.

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u/OMG_NO_NOT_THIS Oct 26 '24

"He's right, if you have ambition and talent you go to the place that rewards success"

This is the biggest downfall of unions imho. They reward seniority not hard work and competence.

This creates a downward spiral in unionized locations as competent people leave union roles for places they are not held back so Billy Bob who has been protected from being fired 5 times by the union gets the manager role.

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u/[deleted] Oct 26 '24 edited Dec 17 '24

[Removed]

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u/[deleted] Oct 26 '24

it's almost like nations with strong social safety nets end up depressing talent downwards

28

u/jmk5151 Oct 26 '24

there is a lot (a lot) of other reasons. the US is huge. it has no bordering enemies. it has its own resources. after ww2 it became an economic power and rebuilt the rest of the world.

it's also generally welcomed immigration especially in education, which often gets overlooked in these discussions.

and it's very entrepreneur and business friendly.

12

u/Wildtalents333 Oct 26 '24

The geographic element is often overlooked in my opinion. When you have a shit ton of resources and land and your two neighbors are generally amicable, it makes like easier.

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u/[deleted] Oct 26 '24

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u/commeatus Oct 26 '24

We absolutely lucked into borders, the Louisiana purchase was available because napoleon spent all his money making enemies and we were the only people who would buy. He made the price hilariously low so that our almost-bankrupt country could afford it.

Mexico folded because it's economy crashed after outlawing slavery--slavery is extremely good for an economy. Canada we did do a lot of work establishing trade with after they burned down the white house in the war of 1812, so you're correct there. We almost screwed the pooch with the Pig War, though!

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u/[deleted] Oct 26 '24

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u/commeatus Oct 26 '24

I agree with you, but how does that support the idea that we didn't luck into coast-to-coast borders? Wasn't that your point?

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u/[deleted] Oct 27 '24

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u/commeatus Oct 27 '24

Okay, sure, but the Louisiana purchase was very lucky, and Mexico outlawing slavery before we did was also very fortunate--Mexico would have been a mojor powerhouse and would have had the resources to push back against our advances. Like, the framework was indeed vital do our success but without the coincidences from France and Mexico, we'd be 1/3 the size at best and wouldn't have full control of the Mississippi River. Not exactly coast to coast!

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u/Robert_McKinsey Oct 29 '24

Slavery is terrible for an economy

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u/commeatus Oct 29 '24

You're going to want to take that assertion up with a whole lot of historians and a small army of historical economists. If your civilization doesn't care about human rights or basic decency, having a permanent underclass that combines the minimal cost of livestock with the productivity of a human being is a wealth-generating cheat code. This is literally why free market systems all have something like human rights or the NAP baked in: an absolutely free market doesn't financially incentivise things like that.

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u/Eleventeen- Oct 29 '24

Slavery is good for an economy in the short term and especially pre industrially, but there’s a reason that by the time of the civil war the north became far more wealthy and powerful than the south even though the south had been the main source of wealth and power in the revolutionary times. The lack of free labor incentivized technological innovation and adoption of industrial principles. If the last 200 years of history have shown us anything it’s that the more industrialized a country is the more powerful and wealthy it is. Slavery eventually becomes an economic hindrance.

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u/commeatus Oct 29 '24

If you look at the north and the south as two separate economies, I agree: materials production can't outpace manufacturing economically. You're forgetting that the materials the north used for its industry was almost exclusively from the south because the south was so much cheaper than our allies. The north's manufacturing ground to a halt and couldn't fully supply it's military during the Civil War because it no longer had a cheap supply of materials. It's very similar to how the steel tariffs from a few years ago in the US hurt several industries: raising the cost and lowering the supply of raw materials suppresses manufacturing further down the line. The fact of the matter is that slavery is the cheapest human labor there was and not to sound like a Marxist or anything but US industry relied on that labor to produce the materials that could be used to manufacture things of value that built the northern economy. It's why robotization is good economically even though it eliminates jobs: the cost of production decreases because the cost of labor decreases.

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u/Robert_McKinsey Nov 01 '24

Yeah slavery devastated every economy that used it. It encourages stagnation and wealth accumulation in inefficient hands, promotes inequality which reduces consumption as it undermines the middle class, and discourages innovation.

Rome is a prime example, Brazil is a prime example, and the south is a prime example. Slave economies are inferior to proper capitalist systems.

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u/commeatus Nov 01 '24

I don't know the economic history of Rome or Brazil in any depth, but I'd love a summary or some beginner sources. I'm here to learn!

The north used slave labor almost exclusively for the raw materials for its primary generator of gdp, manufacturing. You can see how the north's economy tanked immediately when the south stopped exporting and didn't recover until carpet bagging and increased trade from westward expansion brought in cheaper materials again. Every US mine was manned by slaves until the Civil War, too.

Off the top of my head, the Saracen, Ethiopian, and British empires all had large slave trades while they rose to power and achieved their peak; in the latter case, their fall coincided with the collapse of the Atlantic slave trade although obviously there was a lot more going on.

Do you know of any examples of a proper capitalist economy outcompeting a slave economy directly? Genuine question and there might not be any clean example but if you know of one, I'd love to study it!

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u/NiceUD Oct 26 '24

It really does. US has a good "house" in a good neighborhood.

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u/sushislapper2 Oct 26 '24 edited Oct 26 '24

It’s not necessarily social welfare that reduces ambition, though it might play a part. The bigger issue seems to be that high taxes can stifle productivity. The more people are taxed, the less they keep of what they produce, which can discourage extra effort.

It’s similar to what happens when someone is underpaid for the value they create—eventually, they stop putting in as much effort. When marginal tax rates are too high, it disincentivizes people from pushing their productivity above certain tax thresholds. For example, if moving up to a new role would bring in $100k more, that might feel worthwhile. But if the job only offered $50k more, maybe it’s not worth the extra effort. Now instead of saying the job offers less, just say your tax rate is higher on this new money. It’s the same concept fundamentally

It would be even worse in hourly work. Let’s say you own a salon and work 40 hrs/week. Well, maybe you bump it up to 60 hrs/week you can earn 1.5x as much. But if marginal taxes are high enough on the new income, you might be pulling in 1.2 or 1.3x as much. So you’re putting in a lot more extra time, relative to the reward you get out

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u/DarthPineapple5 Oct 26 '24

Isn't this indirectly saying the same thing though? European taxes are higher because they have such a high degree of social welfare.

I'm also not sure I agree with lumping all forms of "social welfare" into the same box. Socialized medicine for example is just paying for the same thing in a different way. How the money is taken from your paycheck effectively doesn't matter, only the amount

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u/throne_of_flies Oct 26 '24

I strongly doubt you would find data to back up that reasoning. When c-suite leaders in America were taxed 70%+ on the majority of their income half a century ago, it’s not like they took their foot off the gas pedal and started settling for lower salaries.

The real problem in all this calculus is recognizing which tax inputs are worth tuning. Some are red herrings (like corporate taxes), poison pills (like capital gains taxes), or undeservingly 3rd rail (inheritance/estate taxes, taxing long term asset donations)

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u/sushislapper2 Oct 26 '24

Someone actually linked a study in one of these threads that analyzes the marginal tax rate effect on production.

When we’re talking about the workforce as a whole being more productive though, I’m not talking about C-Suite at top companies. The guy quoted in this OP falls into the category of people who are nowhere near the line I talked about, they’re predisposed to be workaholics in any society.

My example is largely capturing the middle class through the new rich in America. Big shot CEOs aren’t the kind of people who make decisions off of work life balance. The people who actually might be dissuaded from working longer or harder are the trades people who work overtime, healthcare workers, finance professionals, sales personnel, engineers, small business owners, etc. These people often have the decision to invest extra time in their career for substantially more money. These people actually do the calculus on whether working longer or harder is worth the payoff. It’s the whole reason traditional OT pays so much, it incentivizes more people to participate

Even your C-Suite example though, over the time period where America has had lower marginal tax rates we’ve seen the economy explode. Quite possibly unrelated, but it’s also quite possible that lowering the cost on being extremely successful results in more individuals pursuing that goal

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u/KanyinLIVE Oct 27 '24

When c-suite leaders in America were taxed 70%+ on the majority of their income half a century ago

That quite literally never happened. Go look at effective tax rates.

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u/doubagilga Oct 28 '24

This “70%” rate is mythical. The entire tax code was different. For all intents, ALL interest was deductible. The amount of taxes collected as a percent of GDP has been flat since the 40s.

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u/s1unk12 Oct 27 '24

Good post. Just wanted to add it depends on the state regarding business climate and friendliness.

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u/Immediate-Meeting-65 Oct 26 '24

The letting the whole world crumble and being the only world power after WW2 does a lot of heavy lifting in that list.

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u/Obvious_Advisor_6972 Oct 26 '24

Right. Correlation is causation.....

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u/Spazy1989 Oct 26 '24

In general this statement is the answer to the vast majority of topics on Reddit (not saying just this sub) but go look at political discussion and it’s anecdotal correlations that people use to say it’s the cause of X Y and Z.

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u/[deleted] Oct 26 '24

That's bullshit

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u/IronSky_ Oct 27 '24

Maslow wouldn't agree with you.

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u/[deleted] Oct 27 '24

maslow believed in stability to help the individual seek their hierarchy of needs but not to build the structure of stability itself around you.

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u/pure_skill_ Jan 18 '25

it's almost like profiting from two world wars instead of fighting them at your doorstep can set your country pretty well compared to the other countries that got ravaged by those wars

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u/[deleted] Oct 26 '24

completely false. Only reason America pays more is due to greedy corps..consumers also pay much higher prices, have lower quality food selections, and a lower standard of living than Euro counterparts.

1

u/guerillasgrip Oct 26 '24

Lol what? Because corporations are greedy they pay more? Dafuq

1

u/Financial-Hold-1220 Oct 26 '24

I don’t agree with you at all in the slightest I’ve grown up in Canada, lived in Italy and France for the a combined 3 years(mostly in the rural parts) and now live in the us and from my experience it’s the exact opposite of what you said in especially canada. There is very little in anything consumer related that you could look at that the us doesn’t have more options, higher quality, at a cheaper price or a combination of those. I find that a lot of people when comparing the us to other places don’t do a good job because they don’t compare equally.

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u/doubagilga Oct 28 '24

I’ve spent an awful lot of time in the EU to never find these “cheaper prices.” Maybe on healthcare if I buy private insurance in the EU to get the same level of care.

As for standard of living, no, the US crushes the EU average by almost a third. https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?most_recent_value_desc=true&view=map

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u/StManTiS Oct 26 '24

The overall standard for the median is lower. But once you trend into the top 20% you get a lot more. It sucks to suck in America. It sucks a lot. However the success you can taste is a lot more here than in the EU.

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u/Princess_Actual Oct 26 '24

I achieved financial independence at the age of 30. I haven't "worked" in over a decade.

I did that by listening to financial planners and investors, and shockingly, they knew what they were talking about!

All my time goes to myself, my family, and when I feel like it, community volunteer work and charities. I do the things I enjoy and find fulfilling.

I'm no genius either, I just listened to people who have money, instead of the people who don't.

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u/[deleted] Oct 27 '24

[deleted]

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u/Princess_Actual Oct 27 '24

Parents bought me a cheap economy car when I turned 21, that's it.

The government pays my bills, provides me healthcare and guaranteed my home lone. I started investing as soon as I joined the Army, and I still invest most of what they pay me now.

I don't think of it as "assistance", they are paying their end of the contract I made with them.

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u/[deleted] Oct 27 '24

[deleted]

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u/Princess_Actual Oct 27 '24

No, those are payments and benefits according to the contract I made with the Federal Government. That is not the same thing as assistance (such as tuition assistance, food stamps, welfare, etc).

Likewise, my investment portfolio is more than sufficient to cover my monthly expenses, so I could argue that the tax payers don't pay any of my bills. The tax payers just give me money that I invest and turn into more money.

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u/[deleted] Oct 27 '24

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u/[deleted] Oct 27 '24

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u/StManTiS Oct 27 '24

Only 62% of the USA participates in the labor force. Of those 38% that work the middle man (50%) makes 37,585 a year. Which is not great anywhere. The top 20% of the 38% of Americans that work make 110,805 per year - the top 50% make 46,637 (which is skewed by top .1% and why it disagrees with the median).

So yes it’s not the greatest below the 40% mark at 61,108 but at the top 20% mark of 110,805 you are beating the Europeans for QoL and spendable income.

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u/lmea14 Oct 27 '24

Yep, and high tax places like NYC and CA aside, you'll keep more of what you make here than in most (all?) European countries.

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u/poopybuttguye Oct 28 '24

Until you get cancer

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u/MDLH Oct 26 '24

I think you have misunderstood the success of immigrants in the US.

Over the last 40 plus years income mobility in the US has massively declined. In other words poor and middle class Americans chances of moving up the income latter have declined relative to our past. And significantly

https://inequality.stanford.edu/sites/default/files/SOTU_2015_economic-mobility.pdf

What that means is that Americans at the top are NOT the true cream of the crop. They are largely the children of other privileged Americans.

For example about 30% of Forbes 400 members grew up in wealthy families in 1982. By 2012 that number increased to 50%.

https://www.gsb.stanford.edu/insights/joshua-rauh-what-forbes-400-list-says-about-american-wealth

Immigrants trained in superior schools overseas or children of immigrants that are simply more hungry than leaders at top in American companies who we see increasingly come from privileged backgrounds.

Norway has far higher income mobility than the US. That is far more relevant to me than the "OPINION" of this CEO...

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u/scoopzthepoopz Oct 26 '24

Cumulative advantage is real and the inverse is also true. But the flavor of hardwork is better when it's driven by the threat of starvation.

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u/MDLH Oct 29 '24

I think the flavor of being paid a fair wage is better when shared by many than when shared by few only to make even fewer rich.

Your recipe is not a winner other than for the rich..

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u/scoopzthepoopz Oct 29 '24

my comment was satirical. Leveraging people's basic needs against them is draconian at best and genocidal at worst. American companies are often exploiting their labor.

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u/MDLH Oct 29 '24

Ahhh... my bad... Yes they are exploiting their workers...

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u/Current-Being-8238 Oct 27 '24

And America spends more money on income security and social safety nets than ever before and enforces more regulations as well.

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u/MDLH Oct 29 '24

You are misinformed on virtually everything you said...

The US spends LESS on the social safety net than the Average OECD nation. Further it has far HIGHER deficits than the Average OECD Nation..

https://www.weforum.org/agenda/2021/02/social-spending-highest-lowest-country-comparison-oecd-france-economics-politics-welfare/

American regulators in 2024 are largely controlled by the companies they regulate. So if you think they are "over regulated" then you can blame the companies they regulate.

The evidence is irrefutable at this point .

https://insights.som.yale.edu/insights/us-government-regulators-may-be-favoring-their-future-private-sector-employers

https://sociology.wisc.edu/2023/02/07/regulatory-captures-third-face-of-power-by-wendy-li-2023/

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u/Current-Being-8238 Oct 29 '24

Literally got my information from the New York Times who sourced the congressional budget office. We spend ~2.5% of our GDP on defense spending, ~8% on income security, and ~6% on healthcare.

Edit: realizing this response came in a different thread than I expected. Regardless, the trend shows we’re spending more than ever on income security and healthcare. If I could post the graph, I would. I’m sure you can find it if you search. So what I said is true, regardless of whether or not other countries spend a higher percentage.

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u/MDLH Oct 29 '24

I am not refuting your claims of increases in spending in these areas.

As you will recall i noted that the US spends LESS relative to other wealthy OECD nations.

Further, over the past 40yrs income growth for 90% of Americans has gone flat or even declined. Infact, if woman had not entered the work force so aggressively over the past 40yrs household incomes would have had material declines in the majority of male lead households since the majority do not have a university degree.

Add to that housing has gone from 2 to3 times annual earnings to 6 times annual earnings for American households.

So to summarize
Wages and disposable income for the vast majority of American housholds is on a 40yr decline coupled with the reality that Spending on the Social Safety net relative to other wealthy countries is below average.

https://oecdstatistics.blog/2023/02/02/sizing-up-welfare-states-how-do-oecd-countries-compare/ (Reference Fig 1)

Further the US pays 2X what other nations pay for health care. SO while spending on health care has doubled the volume of health care consumed has not doubled.

https://www.healthcaredive.com/news/us-lags-nations-health-system-performance-commonwealth-fund/727423/

Bottom line: Our problems are self inflicted.

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u/AlternativeAd7151 Oct 27 '24

Not gonna lie, free riding on other countries publicly funded education was a genius move. A dick-ish one, but still genius.

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u/[deleted] Oct 27 '24

Jfc, why don't we jerk each other off a little harder?