Social Democracy

| Wed Jan. 6, 2010 12:50 PM EST

David Brooks and Ross Douthat, the New York Times' top conservative columnists, have gazed upon Jim Manzi's essay on conservative reform in National Affairs and found it worthy of great praise. The New Republic's Jon Chait, who just launched a new blog, isn't so sure:

The weakness of Manzi's essay is that it does almost nothing to establish its key premise that President Obama's agenda will stifle growth. Almost all the work of establishing this point comes in this section:

From 1980 through today, America's share of global output has been constant at about 21%. Europe's share, meanwhile, has been collapsing in the face of global competition — going from a little less than 40% of global production in the 1970s to about 25% today. Opting for social democracy instead of innovative capitalism, Europe has ceded this share to China (predominantly), India, and the rest of the developing world.

Manzi's argument is poppycock. First, as Chait lays out and as Manzi admits to Chait via email, Manzi is comparing the US from 1980-present to Europe from 1973-today. Secondly, Manzi is including former Communist bloc countries in his "calculations"—making this far from a fair comparison between American-style economic strategy and European-style "social democracy." The Ukraine in 1983 was not a social democracy.

At first glance, all this reeks of intellectual dishonesy. But Chait very generously decides to give Manzi the benefit of the doubt and argues that Manzi "simply assume[d] that [social democracy] inherently produces dramatically lower growth." It's interesting that Brooks and Douthat, who are supposedly the "thinking person's" conservatives, made exactly the same assumptions. Since conservatives just know in their guts that the European socioeconomic model is bad for economic growth, there's no need to actually prove it. Anyway, Chait has more on this, including a guest appearance by Kevin.

Update: Manzi responds to Chait. Ezra thinks he is pretty convincing, but I'm not so sure. Manzi doesn't offer any explanation for why he used the countries and time periods that he did. Manzi is arguing that the "innovative capitalism" model is superior to the "social democracy" model. It's his responsibility to make sure that he doesn't undermine his arguments by throwing late-90s France and late-70s Ukraine into the same basket and calling it "Europe." And as Manzi's own commenters point out, he doesn't even begin to address Chait's points about population growth. The declines in share of global GDP that Manzi seems so worried about seem to have little to do with the failures of "social democracy" and a lot to do with stagnant population growth.

Update Two: The Economist's Democracy in America blog hits Manzi hard on the population growth point:

[T]he entirety of the difference between the change in global GDP shares in America and Europe from 1980-2009 is explained by the difference in population growth rates. That's the whole thing. Europe's share of global population fell by 40.4%, while its share of global GDP fell by 25.2%. America's share of global population fell by 13.2%, while its share of global GDP rose by 2%. Indeed, given that per capita income rose at essentially the same rate (66% in America versus 63% in the EU15), population growth is the only possible explanation for the difference.

This seems like a win for Chait. In this case, contra commenters, The Economist weighed in to defend Europe's social model. That's probably because their American politics blog tends to be leftier than the print magazine.