Sunday 1 December 2019
WHY DO EXPATS VOTE DIFFERENTLY?
Nadeem F Paracha in the Dawn
Some nine years ago when, I was heading the media department of a British organisation, I got the chance to observe how most British expats in Pakistan voted in the UK 2010 parliamentary elections. Even though most of the Karachi-based British expats that I managed to talk to in this regard were somewhat reluctant to divulge which party they voted for, some eventually did tell.
Nine out of the 12 expats who agreed to reveal the party that they voted for, cast their votes for the Conservative Party. Two voted for the Liberal Democrats and just one claimed to have voted for the Labour Party. Two of them told me that, since the early 1980s, a majority of British expats around the world have preferred to vote for the Conservative Party. British expats have the right to vote in their country’s parliamentary elections, but this right lapses if the expat has remained resident outside the UK for more than 15 years.
Last year in Washington DC, during a round-table session that I attended on the electoral behaviour of expat Americans, most speakers were of the view that a majority of expat Americans tend to vote for the Republican Party. No significant data was shared to corroborate this, but some former US ambassadors attending the session claimed that most expat Americans working in Asian and South American countries vote for the Republican Party and that this has been the trend since 1980.
The session concluded that expats — at least American and British — were likely to vote for conservative parties. This is interesting, because over the last few years, there have been many reports published and columns written about expat Pakistanis and Indians overwhelmingly exhibiting support for centre-right parties such as the PTI and the Bharatiya Janata Party.
Indian expats were given the right to vote in Indian elections only in 2010, but those holding dual nationalities still cannot. Pakistani expats were given this right in October 2018, during the by-elections. Whereas 7,461 expats registered online to vote, only 6,233 cast their votes.
The phenomenon of most Indian and Pakistani expats demonstrating support for the BJP and the PTI has been repeatedly observed by many, but never fully studied. The answers may lie in a hefty study published in the May 2019 issue of the Oxford Academic Journal.
The study conducted by two American political scientists, A.C. Goldberg and Simon Lanz, concentrated largely on European countries. But Goldberg and Lanz argue that the results of the study can be relevant for other countries as well. One of their conclusions was that the voting/support preferences of expats are often contrary to those at home.
This is because their social, political and economic contexts are different. An issue in the country of origin will have a more abstract impact on expats residing in a different environment, hundreds or thousands of miles away. The impact of the same issue on those living in the home country is more tangible and immediate. This might be the reason behind the somewhat different understanding of the issue among the two sets of voters.
An earlier 2006 study, by the Dutch economist Dr Jan Fidrmuc and econometrist Orla Doyle, came to the same conclusion after studying the voting behaviour of Czech and Polish migrants/expats in Asia, Africa, Europe and Latin America. The results of this study indicated that the political preferences of immigrants change significantly because the migrants adapt to the norms and attitudes prevailing in the host country.
Fidrmuc and Doyle found that most Czech and Polish migrants living in European countries tended to vote for right-wing parties at home but, interestingly, those living in African and Middle-Eastern countries preferred left-leaning parties.
The economic and political environments in Europe and Africa and/or the Middle East differ. So expats/migrants in Europe, after experiencing the advantages of developed economies, are likely to understand ‘progress’ in their home country through the lens provided to them by their lived experience in developed countries. Thus they tend to support home parties promising progress along these lines.
But what about expats from developed countries opting to vote for conservative parties? Studies suggest that British and American expats voting for the Conservative Party and Republican Party largely vote to retain their countries’ rarely-changing external policies rather than the more fluid internal matters. They are more impacted by the foreign policies of their home countries than by their countries’ internal, more localised issues.
Findings of both the mentioned studies also more than allude to the fact that, outside the voting patterns of US and UK expats, expat voting can be fickle. Since most expats are likely to vote for the opposition, they can be quick to withdraw their support once the opposition comes to power and is slow to deliver.
Both PTI and BJP enjoyed overwhelming support from Pakistani and Indian expats before both were voted into power. However, the support for the two ruling parties is now receding at home, and there is restlessness within the pro-PTI and pro-BJP Pakistani and Indian diasporas respectively.
Indian PM Narendra Modi and Pakistani PM Imran Khan now apply separate rhetorics for their supporters within and outside the country. Outside their countries, to retain the diaspora’s attention and support, they have to continue sounding like they did when they were in the opposition, whereas the same rhetoric is now failing to stand up to a plethora of economic and political problems at home.
Indian historian Meera Nanda writes in The God Market that the changing worldview of the Indian middle classes (and diaspora) is being shaped by the “state-temple-corporate complex.” Rich Indians are heavily investing in this by fusing Hindu nationalism with modern economics. This combination excites the Indian diaspora and they identify it with Modi. But what happens when the corporate is finally swallowed by Hindu zealotry and leaves behind only Hindu nationalism?
On the other hand, what excited the Pakistani diaspora about PM Khan was the manner in which he tapped into the Pakistani diaspora’s engagement with contemporary identity politics, especially in the West. He did this by clubbing together displays of religiosity, anti-corruption tirades, populist post-colonialist rhetoric and lofty allusions to Scandinavian social democracy — which is curiously explained by him as an Islamic concept.
Whereas identity politics can lead to some awkward ethnic and sectarian tensions in Pakistan, it works well on the Pakistani diaspora. Therefore, the gap between the understanding of present-day Pakistani politics between the expats and the locals has continued to grow. Some locals have lamented that expats are still stuck in 2014, or in PTI’s more glamorous dharna years.
Some nine years ago when, I was heading the media department of a British organisation, I got the chance to observe how most British expats in Pakistan voted in the UK 2010 parliamentary elections. Even though most of the Karachi-based British expats that I managed to talk to in this regard were somewhat reluctant to divulge which party they voted for, some eventually did tell.
Nine out of the 12 expats who agreed to reveal the party that they voted for, cast their votes for the Conservative Party. Two voted for the Liberal Democrats and just one claimed to have voted for the Labour Party. Two of them told me that, since the early 1980s, a majority of British expats around the world have preferred to vote for the Conservative Party. British expats have the right to vote in their country’s parliamentary elections, but this right lapses if the expat has remained resident outside the UK for more than 15 years.
Last year in Washington DC, during a round-table session that I attended on the electoral behaviour of expat Americans, most speakers were of the view that a majority of expat Americans tend to vote for the Republican Party. No significant data was shared to corroborate this, but some former US ambassadors attending the session claimed that most expat Americans working in Asian and South American countries vote for the Republican Party and that this has been the trend since 1980.
The session concluded that expats — at least American and British — were likely to vote for conservative parties. This is interesting, because over the last few years, there have been many reports published and columns written about expat Pakistanis and Indians overwhelmingly exhibiting support for centre-right parties such as the PTI and the Bharatiya Janata Party.
Indian expats were given the right to vote in Indian elections only in 2010, but those holding dual nationalities still cannot. Pakistani expats were given this right in October 2018, during the by-elections. Whereas 7,461 expats registered online to vote, only 6,233 cast their votes.
The phenomenon of most Indian and Pakistani expats demonstrating support for the BJP and the PTI has been repeatedly observed by many, but never fully studied. The answers may lie in a hefty study published in the May 2019 issue of the Oxford Academic Journal.
The study conducted by two American political scientists, A.C. Goldberg and Simon Lanz, concentrated largely on European countries. But Goldberg and Lanz argue that the results of the study can be relevant for other countries as well. One of their conclusions was that the voting/support preferences of expats are often contrary to those at home.
This is because their social, political and economic contexts are different. An issue in the country of origin will have a more abstract impact on expats residing in a different environment, hundreds or thousands of miles away. The impact of the same issue on those living in the home country is more tangible and immediate. This might be the reason behind the somewhat different understanding of the issue among the two sets of voters.
An earlier 2006 study, by the Dutch economist Dr Jan Fidrmuc and econometrist Orla Doyle, came to the same conclusion after studying the voting behaviour of Czech and Polish migrants/expats in Asia, Africa, Europe and Latin America. The results of this study indicated that the political preferences of immigrants change significantly because the migrants adapt to the norms and attitudes prevailing in the host country.
Fidrmuc and Doyle found that most Czech and Polish migrants living in European countries tended to vote for right-wing parties at home but, interestingly, those living in African and Middle-Eastern countries preferred left-leaning parties.
The economic and political environments in Europe and Africa and/or the Middle East differ. So expats/migrants in Europe, after experiencing the advantages of developed economies, are likely to understand ‘progress’ in their home country through the lens provided to them by their lived experience in developed countries. Thus they tend to support home parties promising progress along these lines.
But what about expats from developed countries opting to vote for conservative parties? Studies suggest that British and American expats voting for the Conservative Party and Republican Party largely vote to retain their countries’ rarely-changing external policies rather than the more fluid internal matters. They are more impacted by the foreign policies of their home countries than by their countries’ internal, more localised issues.
Findings of both the mentioned studies also more than allude to the fact that, outside the voting patterns of US and UK expats, expat voting can be fickle. Since most expats are likely to vote for the opposition, they can be quick to withdraw their support once the opposition comes to power and is slow to deliver.
Both PTI and BJP enjoyed overwhelming support from Pakistani and Indian expats before both were voted into power. However, the support for the two ruling parties is now receding at home, and there is restlessness within the pro-PTI and pro-BJP Pakistani and Indian diasporas respectively.
Indian PM Narendra Modi and Pakistani PM Imran Khan now apply separate rhetorics for their supporters within and outside the country. Outside their countries, to retain the diaspora’s attention and support, they have to continue sounding like they did when they were in the opposition, whereas the same rhetoric is now failing to stand up to a plethora of economic and political problems at home.
Indian historian Meera Nanda writes in The God Market that the changing worldview of the Indian middle classes (and diaspora) is being shaped by the “state-temple-corporate complex.” Rich Indians are heavily investing in this by fusing Hindu nationalism with modern economics. This combination excites the Indian diaspora and they identify it with Modi. But what happens when the corporate is finally swallowed by Hindu zealotry and leaves behind only Hindu nationalism?
On the other hand, what excited the Pakistani diaspora about PM Khan was the manner in which he tapped into the Pakistani diaspora’s engagement with contemporary identity politics, especially in the West. He did this by clubbing together displays of religiosity, anti-corruption tirades, populist post-colonialist rhetoric and lofty allusions to Scandinavian social democracy — which is curiously explained by him as an Islamic concept.
Whereas identity politics can lead to some awkward ethnic and sectarian tensions in Pakistan, it works well on the Pakistani diaspora. Therefore, the gap between the understanding of present-day Pakistani politics between the expats and the locals has continued to grow. Some locals have lamented that expats are still stuck in 2014, or in PTI’s more glamorous dharna years.
Monday 25 November 2019
Is Labour the answer to Capitalism's decline?
On Milton Friedman and the Chicago boys
Milton Friedman's pencil
On Milton Friedman's pencil story
Soviet Union
China
China
Soviet Union
Do you take hours to make a simple decision? You may have Fobo
Fear of missing out has a more anxious sibling and could stop you going to social events – or buying your Christmas turkey. Here’s what is behind fear of better options explains Coco Khan in The Guardian
Recently, Mike Hall, 48, a management consultant based in Winchester, decided to get ahead with Christmas preparations. “Do I buy the free range bronze turkey for 10-12, or 12-14, even though there are only seven of us for Christmas Day?” he wondered, attempting to tot up all the different variables. “What about leftovers? Should I buy two turkey crowns instead? And which ones?” Such granular decision-making went on and on, until eventually he gave up in exhaustion. He has not yet bought a turkey.
Indecision when the decision is simple, or the options all acceptable, is the defining characteristic of “fear of better options” – or Fobo – a social phenomenon coined by Patrick McGinnis, a US venture capitalist and the man known for coining the term Fomo, or fear of missing out. Fobo can occur everywhere from minor decisions – what to watch on TV, what to eat for dinner – to more significant ones such as whether to take a new job. Whatever the case, a Fobo-afflicted person may find themselves overwhelmed by the possibilities of what might be (some call this “analysis paralysis”) even when no outcome is guaranteed, and when some of those options aren’t even on the table.
A common example may be figuring out what to do on Friday night. Sure, the invitation to hang out with work colleagues is convenient and guaranteed to be enjoyable, but there is another party across town where something even more fun might be happening. Then there’s someone on Tinder who floated Friday night as a possible date, while your flatmates are heading to a restaurant opening.
Someone with Fobo is likely to hold back on commitment, or commit then cancel.
“I bail at the last minute, all the time” says Aoife O’Donaghue, 24, a recent graduate based in Edinburgh. Such dithering can be exhausting for friends and family who depend on someone for a firm commitment, and bring stress to the person themselves.
FacebookTwitterPinterest A Fobo-afflicted person may find themselves overwhelmed by the possibilities of what might be (posed by model). Photograph: Carl Smith/Getty Images/fStop
For O’Donaghue, it’s always the smallest decisions she has the hardest time making. She describes a time at university where she was trying to figure out where to study - the library or a cafe. “I was thinking, ‘Will I work better in one place? Would I like a cup of tea? Will there be enough seats?’” O’Donaghue describes working herself up over this for 15 minutes until she had a stress-induced stomach ache. “I ended up going to the library, and then to the cafe. So it didn’t even really matter” she laughs ruefully.
So what’s going on? McGinnis, who has been researching Fomo and Fobo over several years for his forthcoming book, and for his podcast Fomo Sapiens, argues that Fobo is not necessarily a new human behaviour. “These feelings are biologically part of who we are. I call it the biology of wanting the best. Our ancestors a million years ago were programmed to wait for the best because it meant they were more likely to succeed.”
But the mass introduction of sophisticated technology and the internet has accelerated Fomo and Fobo into a common social behaviour. After all, we are now able to easily compare ourselves with each other (thus producing feelings of Fomo) and overwhelm ourselves with choice (producing Fobo).
“Go on Amazon to buy a pair of white shoelaces and you have in excess of 200 choices, whereas 50 years ago you would go to Woolworths and choose between three,” says McGinnis. “So that’s the context. The other factor – which is more emotional – is that Fobo is driven by narcissism, because when you have Fobo, you’re putting your own interests well before anybody else’s, which leaves all the people around you on hold.”
“Harvard is a place unlike others in terms of the amount of opportunities you have – classes, social events, interviews – at your disposal,” he says. “I came from a simple background – a small town in New England – and when I arrived I found it extremely overwhelming. I wanted to do everything – which is Fomo – but at the same time, I wasn’t willing to say no to anything and just choose one thing, which was Fobo. I would wait until the last minute to see if a better option came along. And I realised that that was a pervasive behaviour at Harvard because of it being a choice-rich environment.”
This is the main difference between Fomo and Fobo. Anyone with a smartphone looking over the often manipulated and unrealistic lives of others on social media might feel Fomo. But Fobo, according to McGinnis, is an issue for the privileged.
“Fobo is an affliction of affluence,” says McGinnis. “To have Fobo you must have options. So the richer you are, the more powerful you are, the more options you have. That’s when you start to feel it.”
McGinnis doesn’t believe that Fobo is restricted to the individual either – large corporations can be affected by it (“a multinational with access to big data can always find a reason to justify not doing something”), and so can countries.
“I have come to believe that the Brexit situation is Fobo. Fobo is the inability to choose between one of many acceptable outcomes. You may not like Brexit but there are plenty of acceptable ways it could be structured, without going to no deal. But any time Mrs May brought a proposal to the Commons, she couldn’t get a vote because all of the MPs were waiting for a slightly better option.”
On the individual level, though, O’Donaghue is not entirely convinced. “I’m a privileged person, compared with other people. But I don’t think the things I’m choosing between are very luxurious. I’m talking about choosing dinner, or what’s on the telly. Maybe my problem is one of overthinking.”
Decision-making is a complex mental procedure involving several of the brain’s executive functions, that is, the key cognitive processes your brain uses to control your behaviour – from planning to managing impulses. People with conditions such as ADHD and autism, where executive functions can be impaired, may find themselves struggling to choose between options.
But is Fobo just an easy-to-swallow euphemism for something more serious or taboo, such as an anxiety disorder?
Nicky Lidbetter, chief executive of the charity Anxiety UK, doesn’t think so. “It is possible for anxiety to be experienced around many different issues, of which a fear of choosing the wrong option in regards to big life decisions may be one,” she says. “Fear of a better option, however, is more likely to be linked to or a trigger for a pre-existing anxiety condition as opposed to being sufficient to warrant being categorised as an anxiety disorder in its own right.”
So for those without pre-existing conditions, what exactly is everyone afraid of? What is the “fear” in Fobo?
McGinnis says it is a “fear of letting go”. “In order to choose something you must let go of another thing and it’s the fear of having to mourn the road untaken. So we would rather not decide at all and keep all of our options open.”
There is some psychological foundation to this. Some psychologists have found that when it comes to decision-making, people can be split into two groups: “maximisers” or “satisficers”. Maximisers are people who make a choice based on maximum benefit later on, while satisficers (a portmanteau of “satisfied” and “sufficed” first coined by the Nobel laureate Herbert Simon in 1956) will make choices based on a modest criteria.
Maximisers, for example, may pay more for a bigger car than they actually need in case they want a bigger one in future, whereas a satisficer is likely to pick the car that is good for now. Maximisers set themselves high standards and are disappointed when they fail to reach them, lingering on what was lost rather than what they have. Both have been the subject of many studies, but one from 2011 conducted by a team led by Joyce Erlingher from Florida State University and published in the journal Personality and Individual Differences aimed to explore whether “maximisers show less commitment to their choices than satisficers in a way that leaves them less satisfied”. That is, are maximisers more likely to be unhappy with their choice, once they finally land on it? Their conclusion: a resounding yes. “Maximisers miss out on the psychological benefits of commitment,” the authors say. “Current research is trying to understand whether they can change. High-level maximisers certainly cause themselves a lot of grief.”
Perhaps then, those with Fobo are simply maximisers facilitated by contemporary technology, or perhaps contemporary technology is turning more of us into maximisers. Or maybe people just don’t really want to do half the things they say they do.
Whatever the case, for McGinnis, correctly identifying this phenomena and giving it a name is crucial in changing these behaviours, which he sees as being “destructive”.
“It’s my view that Fomo isn’t all bad because Fomo can be that little whisper in your ear that we should try something different. If you see your friend starting a business on the side, or you see your friends going on a vacation to Malta and you feel Fomo, that’s a cue to try something else and open up your perspective. So a little Fomo is fine. But Fobo is not good.”
O’Donaghue however, is not so concerned about tackling her Fobo. “I think its an inherent part of my personality,” she says. “People get used to you being like that if you’re good friends.”
Neither is Hall. “It’s part of who I am, I have always been this way” he says. “Last year, it took four attempts and three hours for me to buy a turkey, looking across M&S, Waitrose, Tesco, Sainsbury’s. In fact, it got so late, they couldn’t even deliver it by the time I chose one.” But he is confident he will get this year’s turkey soon. He has already decided which one.
Sunday 24 November 2019
Labour's spending plans aren't especially unusual – just look at Sweden
The US favours small government and low taxes, but many developed countries thrive on the opposite writes Larry Elliot in The Guardian
The gap between the richest and poorest in Sweden is far smaller than in the US. Photograph: Kevincho_Photography/Getty Images/iStockphoto
Labour’s plans for Britain involve a big increase in the size of the state. Government spending as a share of national output would rise to 45%. And apart from brief spikes in the mid-1970s and during the more recent financial crash, it has not reached those levels since the second world war.
To which the mature response should be: so what? A glance around the world shows that there are rich developed countries where the state is relatively small and there are rich developed countries where the state is large. In democracies, voters get the right to choose between the competing models.
Take Sweden and the US as examples of the contrasting approaches. The Scandinavian country, population just over 10 million, has a state that spends 50% of gross domestic product. The United States, population 329 million, operates with a much smaller state that accounts for 38% of national output.
The received wisdom, particularly among free-market economists, is that a small state means economic dynamism while a big state means the opposite: a sclerosis caused by governments burdening their populations with levels of taxation that stifle enterprise.
So how do the US and Sweden stack up against each other?
In terms of growth rates, there’s not been a lot to choose between the two in recent years, with both averaging around 2.5% a year in the half-decade up to 2018. If anything, Sweden’s growth rate was a tad higher.
The US has a slight edge when it comes to living standards. The average American had an income of $59,928 (£46,700) in 2017 while Sweden’s per capita income was $51,405. But the Swedes, as tends to be the way in Europe, are prepared to sacrifice income for leisure time. They work 1,621 hours a year on average compared to 1,781 hours for the average American.
What’s more, the focus on GDP per capita is a bit misleading since it says nothing about the way in which national income is divided up. In some countries, there is a wide gulf in incomes between those at the top and those at the bottom; in others there is a more even split. The US falls into the former category, Sweden into the latter.
One way of assessing income inequality is through the Gini coefficient. If income was distributed evenly in a country it would have a Gini coefficient of zero If, on the other hand, one person had all the income its coefficent would be 1. Obviously, every country is bunched around the middle of this range, but Sweden is closer to the bottom than the US. It has a Gini coefficient of 0.27 while the US’s is 0.41.
Big-state Sweden has a higher unemployment rate than the US – 6.3% against 3.9% – in 2018, but its employment rate is also higher. According to figures from the Paris-based Organisation for Economic Cooperation and Development dating back to 2016, 69.4% of Americans aged 15 to 64 are in work, compared to 76.2% of Swedes.
The two countries have very similar inflation rates of around 2%, but there is no evidence that high levels of public spending have impaired Sweden’s export performance. A current account surplus of 1.7% of GDP in 2018 was in contrast to the US’s 2.4% of GDP deficit.
The big economic numbers – income per head, unemployment, inflation and the current account – do not provide a complete picture of how successful a country is. Sweden has a much lower murder rate than the US – 1.1 per 100,000 inhabitants against 5.3 – and has a much lower incarceration rate – 59 per 100,000 people as opposed to 655 per 100,000 in the US. Swedes live more than four years longer than Americans on average.
When it comes to Nobel prize winners, the countries have similar records once their differing populations are taken into account – 383 for the US and 32 for Sweden. Here, though, the US has the edge. Only three of Sweden’s laureates have come since the turn of the millennium while 130 Americans have been awarded during the same period.
The comparison between these two quite different countries helps to illuminate the debate in the UK. Apparently, the size of the state has no bearing on whether a country is successful or not. At a guess, not many Swedes would want to see their country transformed into small-state America.
This is the right time to have just such a debate about the size of the state because there are factors in Britain that are systemically putting upward pressure on spending. Demographic changes mean all parties need to address the rising costs of an ageing population; the bills for the state pension, the NHS and social care are all going to increase. The climate emergency will require hefty state investment to make the transition to a zero-carbon economy.
But a word of warning. Sweden has evolved its model gradually whereas Labour’s plans involve abrupt change. The price for a big state is high levels of taxation – and it is a price the Swedes are prepared to pay. Overall, government revenues are 49.5% of GDP and taxes on the average Swedish citizen are substantially higher than they are in the UK. The Conservative party is going into the election promising both lower taxes and higher spending. The Labour party says a big state can be paid for by rich individuals and the corporate sector with everybody else tucking into a free lunch.
There are politicians who want Britain to be more like the US and some who favour the Swedish approach. Both are possible. What’s not possible is to have Swedish levels of public spending with American levels of tax.
Labour’s plans for Britain involve a big increase in the size of the state. Government spending as a share of national output would rise to 45%. And apart from brief spikes in the mid-1970s and during the more recent financial crash, it has not reached those levels since the second world war.
To which the mature response should be: so what? A glance around the world shows that there are rich developed countries where the state is relatively small and there are rich developed countries where the state is large. In democracies, voters get the right to choose between the competing models.
Take Sweden and the US as examples of the contrasting approaches. The Scandinavian country, population just over 10 million, has a state that spends 50% of gross domestic product. The United States, population 329 million, operates with a much smaller state that accounts for 38% of national output.
The received wisdom, particularly among free-market economists, is that a small state means economic dynamism while a big state means the opposite: a sclerosis caused by governments burdening their populations with levels of taxation that stifle enterprise.
So how do the US and Sweden stack up against each other?
In terms of growth rates, there’s not been a lot to choose between the two in recent years, with both averaging around 2.5% a year in the half-decade up to 2018. If anything, Sweden’s growth rate was a tad higher.
The US has a slight edge when it comes to living standards. The average American had an income of $59,928 (£46,700) in 2017 while Sweden’s per capita income was $51,405. But the Swedes, as tends to be the way in Europe, are prepared to sacrifice income for leisure time. They work 1,621 hours a year on average compared to 1,781 hours for the average American.
What’s more, the focus on GDP per capita is a bit misleading since it says nothing about the way in which national income is divided up. In some countries, there is a wide gulf in incomes between those at the top and those at the bottom; in others there is a more even split. The US falls into the former category, Sweden into the latter.
One way of assessing income inequality is through the Gini coefficient. If income was distributed evenly in a country it would have a Gini coefficient of zero If, on the other hand, one person had all the income its coefficent would be 1. Obviously, every country is bunched around the middle of this range, but Sweden is closer to the bottom than the US. It has a Gini coefficient of 0.27 while the US’s is 0.41.
Big-state Sweden has a higher unemployment rate than the US – 6.3% against 3.9% – in 2018, but its employment rate is also higher. According to figures from the Paris-based Organisation for Economic Cooperation and Development dating back to 2016, 69.4% of Americans aged 15 to 64 are in work, compared to 76.2% of Swedes.
The two countries have very similar inflation rates of around 2%, but there is no evidence that high levels of public spending have impaired Sweden’s export performance. A current account surplus of 1.7% of GDP in 2018 was in contrast to the US’s 2.4% of GDP deficit.
The big economic numbers – income per head, unemployment, inflation and the current account – do not provide a complete picture of how successful a country is. Sweden has a much lower murder rate than the US – 1.1 per 100,000 inhabitants against 5.3 – and has a much lower incarceration rate – 59 per 100,000 people as opposed to 655 per 100,000 in the US. Swedes live more than four years longer than Americans on average.
When it comes to Nobel prize winners, the countries have similar records once their differing populations are taken into account – 383 for the US and 32 for Sweden. Here, though, the US has the edge. Only three of Sweden’s laureates have come since the turn of the millennium while 130 Americans have been awarded during the same period.
The comparison between these two quite different countries helps to illuminate the debate in the UK. Apparently, the size of the state has no bearing on whether a country is successful or not. At a guess, not many Swedes would want to see their country transformed into small-state America.
This is the right time to have just such a debate about the size of the state because there are factors in Britain that are systemically putting upward pressure on spending. Demographic changes mean all parties need to address the rising costs of an ageing population; the bills for the state pension, the NHS and social care are all going to increase. The climate emergency will require hefty state investment to make the transition to a zero-carbon economy.
But a word of warning. Sweden has evolved its model gradually whereas Labour’s plans involve abrupt change. The price for a big state is high levels of taxation – and it is a price the Swedes are prepared to pay. Overall, government revenues are 49.5% of GDP and taxes on the average Swedish citizen are substantially higher than they are in the UK. The Conservative party is going into the election promising both lower taxes and higher spending. The Labour party says a big state can be paid for by rich individuals and the corporate sector with everybody else tucking into a free lunch.
There are politicians who want Britain to be more like the US and some who favour the Swedish approach. Both are possible. What’s not possible is to have Swedish levels of public spending with American levels of tax.
It's time to retire metrics like GDP. They don't measure everything that matters
The way we assess economic performance and social progress is fundamentally wrong, and the climate crisis has brought these concerns to the fore writes Joseph Stiglitz in The Guardian
‘And it should be clear that, in spite of the increases in GDP, in spite of the 2008 crisis being well behind us, everything is not fine.’ Photograph: Johannes Eisele/AFP/Getty Images
The world is facing three existential crises: a climate crisis, an inequality crisis and a crisis in democracy. Will we be able to prosper within our planetary boundaries? Can a modern economy deliver shared prosperity? And can democracies thrive if our economies fail to deliver shared prosperity? These are critical questions, yet the accepted ways by which we measure economic performance give absolutely no hint that we might be facing a problem. Each of these crises has reinforced the fact that we need better tools to assess economic performance and social progress.
The standard measure of economic performance is gross domestic product (GDP), which is the sum of the value of goods and services produced within a country over a given period. GDP was humming along nicely, rising year after year, until the 2008 global financial crisis hit. The global financial crisis was the ultimate illustration of the deficiencies in commonly used metrics. None of those metrics gave policymakers or markets adequate warning that something was amiss. Though a few astute economists had sounded the alarm, the standard measures seemed to suggest everything was fine.
Since then, according to the GDP metric, the US has been growing slightly more slowly than in earlier years, but it’s nothing to worry about. Politicians, looking at these metrics, suggest slight reforms to the economic system and, they promise, all will be well.
In Europe, the impact of 2008 was more severe, especially in countries most affected by the euro crisis. But even there, apart from high unemployment numbers, standard metrics do not fully reflect the adverse impacts of the austerity measures, either the magnitude of people’s suffering or the impacts on long-term standards of living.
Nor do our standard GDP measures provide us with the guidance we need to address the inequality crisis. So what if GDP goes up, if most citizens are worse off? In the first three years of the so-called recovery from the financial crisis, about 91% of the gains went to the top 1%. No wonder that many people doubted the claims of politicians who were then saying the economy was well on the way to a robust recovery.
For a long time I have been concerned with this problem – the gap between what our metrics show and what they need to show. During the Clinton administration, when I served as a member and then chairman of the Council of Economic Advisers, I grew increasingly worried about how our main economic measures failed to take into account environmental degradation and resource depletion. If our economy seems to be growing but that growth is not sustainable because we are destroying the environment and using up scarce natural resources, our statistics should warn us. But because GDP didn’t include resource depletion and environmental degradation, we typically get an excessively rosy picture.
These concerns have now been brought to the fore with the climate crisis. It has been three decades since the threat of climate change was first widely recognized, and matters have grown worse faster than initially expected. There have been more extreme events, greater melting of glaciers and greater natural habitat destruction.
It is clear that something is fundamentally wrong with the way we assess economic performance and social progress. Even worse, our metrics frequently give the misleading impression that there is a trade-off between the two; that, for instance, changes that enhance people’s economic security, whether through improved pensions or a better welfare state, come at the expense of national economic performance.
Getting the measure right – or at least a lot better – is crucially important, especially in our metrics- and performance-oriented society. If we measure the wrong thing, we will do the wrong thing. If our measures tell us everything is fine when it really isn’t, we will be complacent.
And it should be clear that, in spite of the increases in GDP, in spite of the 2008 crisis being well behind us, everything is not fine. We see this in the political discontent rippling through so many advanced countries; we see it in the widespread support of demagogues, whose successes depend on exploiting economic discontent; and we see it in the environment around us, where fires rage and floods and droughts occur at ever-increasing intervals.
Fortunately, a variety of advances in methodology and technology have provided us with better measurement tools, and the international community has begun to embrace them. What we have accomplished so far has convinced me and many other economists of two things: first, that it is possible to construct much better measures of an economy’s health. Governments can and should go well beyond GDP. Second, that there is far more work to be done.
As Angel Gurría, secretary general of the Organisation for Economic Cooperation and Development, has written: “It is only by having better metrics that truly reflect people’s lives and aspirations that we will be able to design and implement ‘better policies for better lives’.”
The world is facing three existential crises: a climate crisis, an inequality crisis and a crisis in democracy. Will we be able to prosper within our planetary boundaries? Can a modern economy deliver shared prosperity? And can democracies thrive if our economies fail to deliver shared prosperity? These are critical questions, yet the accepted ways by which we measure economic performance give absolutely no hint that we might be facing a problem. Each of these crises has reinforced the fact that we need better tools to assess economic performance and social progress.
The standard measure of economic performance is gross domestic product (GDP), which is the sum of the value of goods and services produced within a country over a given period. GDP was humming along nicely, rising year after year, until the 2008 global financial crisis hit. The global financial crisis was the ultimate illustration of the deficiencies in commonly used metrics. None of those metrics gave policymakers or markets adequate warning that something was amiss. Though a few astute economists had sounded the alarm, the standard measures seemed to suggest everything was fine.
Since then, according to the GDP metric, the US has been growing slightly more slowly than in earlier years, but it’s nothing to worry about. Politicians, looking at these metrics, suggest slight reforms to the economic system and, they promise, all will be well.
In Europe, the impact of 2008 was more severe, especially in countries most affected by the euro crisis. But even there, apart from high unemployment numbers, standard metrics do not fully reflect the adverse impacts of the austerity measures, either the magnitude of people’s suffering or the impacts on long-term standards of living.
Nor do our standard GDP measures provide us with the guidance we need to address the inequality crisis. So what if GDP goes up, if most citizens are worse off? In the first three years of the so-called recovery from the financial crisis, about 91% of the gains went to the top 1%. No wonder that many people doubted the claims of politicians who were then saying the economy was well on the way to a robust recovery.
For a long time I have been concerned with this problem – the gap between what our metrics show and what they need to show. During the Clinton administration, when I served as a member and then chairman of the Council of Economic Advisers, I grew increasingly worried about how our main economic measures failed to take into account environmental degradation and resource depletion. If our economy seems to be growing but that growth is not sustainable because we are destroying the environment and using up scarce natural resources, our statistics should warn us. But because GDP didn’t include resource depletion and environmental degradation, we typically get an excessively rosy picture.
These concerns have now been brought to the fore with the climate crisis. It has been three decades since the threat of climate change was first widely recognized, and matters have grown worse faster than initially expected. There have been more extreme events, greater melting of glaciers and greater natural habitat destruction.
It is clear that something is fundamentally wrong with the way we assess economic performance and social progress. Even worse, our metrics frequently give the misleading impression that there is a trade-off between the two; that, for instance, changes that enhance people’s economic security, whether through improved pensions or a better welfare state, come at the expense of national economic performance.
Getting the measure right – or at least a lot better – is crucially important, especially in our metrics- and performance-oriented society. If we measure the wrong thing, we will do the wrong thing. If our measures tell us everything is fine when it really isn’t, we will be complacent.
And it should be clear that, in spite of the increases in GDP, in spite of the 2008 crisis being well behind us, everything is not fine. We see this in the political discontent rippling through so many advanced countries; we see it in the widespread support of demagogues, whose successes depend on exploiting economic discontent; and we see it in the environment around us, where fires rage and floods and droughts occur at ever-increasing intervals.
Fortunately, a variety of advances in methodology and technology have provided us with better measurement tools, and the international community has begun to embrace them. What we have accomplished so far has convinced me and many other economists of two things: first, that it is possible to construct much better measures of an economy’s health. Governments can and should go well beyond GDP. Second, that there is far more work to be done.
As Angel Gurría, secretary general of the Organisation for Economic Cooperation and Development, has written: “It is only by having better metrics that truly reflect people’s lives and aspirations that we will be able to design and implement ‘better policies for better lives’.”
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