Thursday, July 31, 2014

For whom the bell tolls: socialism and society

My brain got going after writing the quality of life comparison.  I didn't mention the social market economy and the important part it plays in equalizing German society.   I realized that I had a passion to write about the socio-economics of Germany and America.  I feel like these economic systems are misunderstood by many Americans.  First I am going to define socialism and some of the socio-economic models used in Europe and the USA.   Not because I think you're stupid, just so we're on the same page.

Socialism has a couple of different definitions that make talking about it very confusing.  It can be a transition stage in Marxist theory between capitalism and communism (communism is where the means of production are owned by the people as opposed to owned by the state), the abolition of private property,  communism and similar theories or when society allows the means of production to be owned and controlled by the state.  The most accurate definition for what I'm going to be talking about it the last one.  
b :  a system or condition of society in which the means of production are owned and controlled by the state  source
The social market economy model in Germany combines free market capitalism with regulation and state intervention to promote fairness and equality.  It's not socialism but the word is social is thrown in there because some important things are owned, run or regulated by the state since they can't be trusted to direction by the economy.  Please note the difference between everything being controlled by the state and just some things. Americans tend to grossly misuse the word and throw socialism out there any time they talk about government intervention in the economy.  Those people don't know what they're talking about. Type 'Obama a socialist' into Google and this is one of the first things that pops up. 

The US has a mixed economy model.  This means that some things are run, controlled and regulated by the state.  Instead of having a goal of taking care of its citizens the American model focuses on trying to influence the economy, keep unemployment down and keep financial collapse at bay.  Why?  It turns out that Laissez-faire capitalism (capitalism that is not somehow controlled or regulated by the state) can result in some very ugly things.  When I think of unregulated capitalism I think of the Bolivian water wars, trickle down economics, The Jungle, workers that were exploited by being paid in scrip, the Irish famine, and child labor.  There is a reason not a single country in the world has a purely capitalist economy.  The model is not sustainable. it would result in abuse and collapse.  Someone has to protect workers from exploitation and that responsibility usually falls to the government. 

To explain why this responsibility falls to the government we have to go into the theories of society, the state and the social contract.  Why do we have states and governments in the first place?  What happens if the central government collapses?  The theory of the social contract is the idea that left to our own devices there is nothing to stop people from killing, raping, and stealing.  Therefore society needs government to regulate society.  Individuals give up certain personal freedoms (the freedom to rape, pillage and kill), they agree to obey the government and pay taxes in exchange for protection and grantee of their civil liberties.  The American state does all kinds of good things for me, like making sure food and drugs are safe (FDA) or making sure the people driving on the road are qualified (DMV) as well as some not so good things like taking military action against nations with which I don't personally have any conflict.  It is super important to note that the social contract does not benefit all members of society equally but more on that later. 

It might be hard for someone raised in modern society to believe that the only thing keeping us from savagery is the state.  What about religion?  What about the moral compass?  Ancient and modern history can give us plenty of examples of people doing terrible things to other humans the second they are no longer prohibited by government or society.  This phenomenon crosses all races, religions, gender, age, education and economic status.  It usually happens during times of government disruption like war or conquer.  In no particular order: the Holocaust, feudal system, Kosovo, Conquistadors, Somalia, The Democratic Republic of the Congo, Portugal's age of discovery, Belgium Congo, Nanking, My Lia, Katrina, modern day Iraq, Haiti and Dakar, historical and modern day slavery. 

I'm not saying that governments are always benign institutions. They need to be regulated and are just as capable of evil as individuals.  Some societies and governments don't offer citizens civil liberties or abuse the social contract.  That's why democracy and republics are held as the best forms of government.  Government for the people by the people.  Right.

I think one of the flaws of American thinking is that America's focus on the individual doesn't take into account the role of society and government in maintaining the individual.  Society can continue without one person but one person would find it mighty difficult to go one without society.  That doesn't lower the value of the individual, it just puts it into perspective.   This is the part of the post where I throw poetry at you because who would I be if I were combining sociological theory with art?

For whom the bell tolls a poem
(No man is an island)

No man is an island,
Entire of itself.
Each is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less.
As well as if a promontory were.
As well as if a manor of thine own
Or of thine friend's were.
Each man's death diminishes me,
For I am involved in mankind.
Therefore, send not to know
For whom the bell tolls,
It tolls for thee.

by John Donne source

The resounding cry of Americans is 'why should I pay for someone else?'.  The answer is because you live within the benefits of society and the social contract.  Those at the top of the income bracket essentially exploit those at the bottom and is therefore responsible for their wellbeing.  Anything less is robbing the less fortunate of their civil liberties for your own gain.  Denying poor people health care, food, shelter, paying them unlivable wages, these things that happen in the US make the social contract skewed towards favoring the wealthy and exploiting the poor.  If the social contract works against a group of people they probably aren't going to follow it.  That's one explanation for crime in the US.  Denied equal access to resources people are more likely to seek income in illegal areas like selling drugs, prostitution, or theft.  Right now the US deals with the symptoms of inequality by passing tougher prison sentences and building more prisons to house people pushed to the fringe of society.

If you don't believe America exploits the poor try to imagine what would happen if the lowest paid workers went on strike.  That would be the people who prepare and serve food, cleaners, cashiers, farm workers, and those who care for the elderly and infirm.  I don't think middle class and wealthy Americans would be too happy planting, picking, processing and preparing their food, cleaning their cars and houses, and changing the bed pans and sheets of their elderly and infirm relatives.  Some things, like shopping, would simply be impossible without lowly paid cashiers.  Now I want you to think of what would happen if fertile women refused to get pregnant.  How many sectors of society are dependent on the birth of children?  How long would it take before there was a collapse?  Do you still think American women shouldn't have maternity leave and child care?  American society is dependent on the groups it seeks to exploit which just makes the exploitation more egregious.  We've tricked ourselves into devaluing valuable members of society.

Every time an American labels something like universal health care socialism I feel completely frustrated.  Not only is it inaccurate fear mongering, it casts something that would promote equality in a negative light.  I can think of a couple of things in the US that are owned and controlled by the state: k-12 education, the US mail system, the Army, police, social security, some banking institutions, unemployment, student loans and subsidies.   In comparison things I can think off the top of my head that are controlled by the German government: subsidized housing for low income families, daycare, k-12 and university education, state mandated vacation and maternity leave, health care and welfare.  These state run programs allow Germans to live a better life on less money.  Low wage earners can go to work because the state subsidizes things like child care.  These programs promote autonomy whereas America leaves single parents in a bind.  Parents can't work if they don't have affordable child care.  Germany has a more equal society and they mostly finance it by taxing higher earners.  Germany still has wealthy and middle class people.  They have the biggest economy in Europe.  What is America so afraid of? 

If you've managed to read this far my conclusion is this: social is not the same as socialism, poetry is wonderful, Obama probably isn't a socialist, equality makes the world a better place and we should work together for a better world.  Sorry if this post geeked out too much.  I had a lot of fun writing it.



Wednesday, July 30, 2014

USA vs. Germany: quality of life

It's hard to write a post about the quality of life in Germany vs. the US.  For one thing, I didn't spend too many of my independent adult years in the US.  I moved when I was 25 but I had decided to work a string of low paying office jobs right after graduating high school.   I didn't get serious about getting a university degree until I was in my 20s.   Most of what I know about the economy I learned while stuck in the low bracket of pay reserved for young women with a high school diploma.  I didn't make enough money to live alone and spent many years alternately dependent on student housing or living with my parents.  I know it's not possible to live a good life on 20,000 a year which is why I decided to go back to school.  Few things are more depressing than working 40 hours a week and not being able to pay rent, buy groceries and pay your car loan in the same month.  This period taught me to respect people at the bottom of the money making totem pole.  The amount of disrespect and abuse I saw was unbelievable.  And I won't even get into the sexual harassment and discrimination because it's too depressing to dredge up after all these years. 

This post is going to be so biased it's not funny, so read on keeping in mind the point of view I'm writing it from.  If I were still a person with a high school diploma and limited earning then Germany would be a much better place for me.  The US is a terrible place for people close to the poverty line.  It's also not a great place to live if you get laid off or disabled or have serious health problems that keep you from working.  The USA has a very limited social safety net and not everyone is granted equal access to social services.  Most of those services are most beneficial to middle class people facing a temporary lay off.  Germany does a better job of taking care of it's citizens though both countries have social problems.  I understand the fear Americans have of creating a welfare state but I see Germany developing more American-like social problems as it moves more towards profit based policies.  These changes were glaringly evident when we were looking at the housing market in Berlin.  You can read more that here and here.  

To compare quality of life I took the most current statistics I could find on basic things like: cost of living, health and health care, happiness, the environment, equality, infrastructure, freedom, safety and my own personal biases.  Some specific things like child care and maternity leave I'm not going to cover.  Obviously deciding which country you like better is a completely personal choice that entails all kinds of things not covered by statistical data.  I put this data together more for fun than as a real analysis of each country. 

The first thing I'm going to look at is the unemployment rate.  These rates don't tell us much about particular regions in the country.  I would imagine that it would be somewhat worse in Berlin and somewhat better in Chicago.  Germany beats out the US, but not by too much.   Probably because the US is still recovering from a recession.  Germany 1, USA 0

Unemployment rate-
Germany 6.6%
USA 7.2%

source source
Gender equality
Do I have to say that gender equality is a problem dear to my heart?  Probably not.  I am a feminist with a daughter after all.  Germany kicks the US in the teeth on this one.  American gender equality is just too depressing.  Germany 1, USA 0

Smallest gender gap
Germany 14
USA 23

Infant mortality rates
Infant mortality rate (Infant mortality rate is the number of infants dying before reaching one year of age).  Once again the US gets kicked in the teeth.  I have a feeling that the quality of care in the US probably depends a lot on having good health insurance so there might be difference here if it was controlled for income.  I can only speculate because I don't have that data.  Germany 1, USA 0

Germany 3 per 1000 births
USA 6 per 1000 births


Maternal mortality rate
The same as above, Germany 1, USA 0

Germany- 7 per 100,000
USA- 21 per 100,000

Health care 
Comparing health care is difficult because in the US the quality of health care depends a lot on if a person is insured and what kind of insurance they have, how much it covers and so forth.  When I was doing research on this the thing that I read over and over was 'The U.S. ranks behind most countries on many measures of health outcomes, quality, and efficiency. In part, that’s because the U.S. does not have the kind of universal health system common in most wealthy nations'.  Burn. The US health care system is in transition right now so it's impossible to know if health care is going to improve.  The most striking thing to note is that Americans pay almost twice as much for health services than Germans.  That's just crazy.  For most of my time in Germany I've had private health insurance which is both expensive and fantastic.  So far I have absolutely nothing out of pocket for my health care.  source  source Germany 1, USA 0
Cost of living and income

Consumer Prices in Germany are 10.61% higher than in United States
Consumer Prices Including Rent in Germany are 1.74% higher than in United States
Rent Prices in Germany are 17.83% lower than in United States
Restaurant Prices in Germany are 13.19% higher than in United States
Groceries Prices in Germany are 9.17% lower than in United States
Local Purchasing Power in Germany is 17.25% lower than in United States  
It's overall hard to say if the cost of living in Germany is higher or lower.  That's because the things that you absolutely have to have to survive like food, shelter and beer cost less but everything else is more expensive.  Another thing worth noting is that Americans get paid more than Germans.  Americans average monthly disposable salary after tax is $3,298.14 compared to $2,776.56 for Germans.  Americans are making 15.8% more and they pay less taxes.  Things like basic utilities cost 60% and going to the movies 20% more in Germany than in the US.  This is probably why even when Germans have clothing dryers than prefer to hang clothes on a line to dry. Germany 0, USA 2  source

The US ranks 37 and Germany 47 

So many issues probably play into this.  Good customer service?  Friendlier people?  More buying power?  An overall more positive attitude?  Even thought Germans say they feel more a part of their community, get more exercise, live in a better environment and have better work life balance they aren't as happy.  USA 1, Germany 0


General quality of life

Quality of Life Index
Purchasing Power Index
Safety Index
Health Care Index
Consumer Price Index
Property Price to Income Ratio
Traffic Commute Time Index
Pollution Index

United States 187.79 125.63 49.84 68.15 76.97 2.41 36.20 35.97
Germany 186.61 105.80 70.87 76.66 86.82 6.13 31.44 30.33

I find it funny 'traffic commute' made the list.  I think there needs to be a category for 'not enough cabinets' and 'angry neighbors'.  Anyway, the USA barely made it above Germany here.  source   USA 1, Germany 0