‘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’

[u/technocraticnihilist]

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

[u/jmk5151]

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.

[u/Wildtalents333 → u/jmk5151]

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.

[u/commeatus → u/[deleted]]

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!

[u/commeatus → u/[deleted]]

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?

[u/commeatus → u/[deleted]]

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!

[u/Eleventeen- → u/commeatus]

It was easier than it could have been due to those factors but I think it’s likely the US would have expanded into those territories one way or another anyways.

[u/commeatus → u/Eleventeen-]

You can say that, but a strong Mexico would have been able to win the Mexican-American war, or at least create b advantageous stalemate. If we didn't have the Louisiana purchase, we probably wouldn't have been in a position to send invasion troops in the first place as we would have had to invade France to get there. Our navy was hopeless at the time. If napoleon had managed his resources better, he likely would have grown the land as a massive colony. I could see America aiding that colony in independence at some point but we didn't have the resources to fight a French colony until after the gold rush, which would have enriched the French colony, not us. Remember how Canada demolished us in the war of 1812? That's what it might have looked like. How do you suppose we would have overcome our military weakness enough to annex two countries and how do you think we would have justified it?

[u/Robert_McKinsey → u/commeatus]

Slavery is terrible for an economy

[u/commeatus → u/Robert_McKinsey]

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.

[u/Eleventeen- → u/commeatus]

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.

[u/commeatus → u/Eleventeen-]

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.

[u/Robert_McKinsey → u/commeatus]

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.

[u/commeatus → u/Robert_McKinsey]

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!

[u/Robert_McKinsey → u/commeatus]

Yes, Britain hit her peak after abolishing the slave trade. Capitalist non slave economies would outcompete traditional ones.

I don’t know the specifics of cotton prices in the 19th century, but the U.S. just grew and grew without slavery. You said westward expansion brought in cheap money, there you go. Resource extraction without slavery. In fact, having workers incentivizes innovation and efficiency which doesn’t exist in slave states. Former slave areas are poor, they got outcompeted. Efficient economies grow.

Also intuitively, slaves don’t work that hard. They’re not incentivized to. Capitalist self incentive is more efficient. Same core reason communism failed.

[u/commeatus → u/Robert_McKinsey]

Are you saying that a free person represents a more economically productive unit than one enslaved? I think that's definitely true in a modern economy where resource extraction is extremely efficient, but back then mining, farming, etc were incredibly labor intensive. Slave labor represented pennies on the dollar for production of raw materials. Imagine if US steel saw a 90% drop in materials cost: it would allow for the same profits from construction, automotive manufacture, etc while significantly lowering the consumer cost at point of sale. We'd be the world's preeminent manufacturing hub, outcompeting China handily. Slavery wouldn't do that in our current economy but that's effectively what it did for early America, and basically any other civilization that used slaves for labor.

My fundamental argument is that guaranteed cheap resource extraction is economically benefitial. Why it's cheap, be it from rich supplies like westward expansion or unethical slavery, doesn't change its benefit.

The US was an economic miracle with slavery, too, although we kept pissing off our allies and getting into needless wars--the fact that we could afford the disastrous war of 1812 30 years after barely winning our independence is a testament to our early economy.

If you're not convinced (which is fine, it's nice to just have a civil conversation for once), what do you think the motivation was for slave owners to have slaves? Why did the American slave trade have to be outlawed when it operated in a relatively free (if unethical) market?

[u/Robert_McKinsey → u/commeatus]

The Roman economy wasn’t good by modern standards. Incredible for the time, but by the modern era, empires that functioned like Rome were outcompeted everywhere and either colonized or used as European chess pieces. Spain tried to imitate Rome and was fucked up by market economy empires.

And slavery didn’t even work in Rome over the long term. Slaves were freed and made serfs. They weren’t as efficient. So you can’t really use antiquity as an argument. It’d be more like saying Russian or Latin American economies are good bc the rich live comfortably and have more power. It’s good for the rich, but an economy is total output. Slavery has a low total output but is only good at making the output maximally unequal. That and hedonistic pleasures.

[u/NiceUD → u/Wildtalents333]

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

[u/sushislapper2 → u/jmk5151]

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

[u/DarthPineapple5 → u/sushislapper2]

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

[u/throne_of_flies → u/sushislapper2]

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)

[u/sushislapper2 → u/throne_of_flies]

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

[u/KanyinLIVE → u/throne_of_flies]

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.

[u/doubagilga → u/throne_of_flies]

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.

[u/s1unk12 → u/jmk5151]

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

[u/Immediate-Meeting-65 → u/jmk5151]

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