It's worth pointing out this happened entirely post 2008. This is not some "decision" people took, or some long term loss of empire. The US recoevered from the 2008 crisis way better than everyone else, and nobody really understands why yet.
A country with a business friendly, low regulatory environment, coupled with a high work ethic and poor work/life balance, if nothing else, is not going to be a country that falls behind.
Americans complain a lot, and the system isn't that comfortable or respectful, but they aren't facing existential economic irrelevance.
Quite the opposite. The US quickly recovered from 2008 thanks to tech. Tech that the rest of the world wasn't able to keep up with thanks to it being a heavily regulated environment (patents, copyright, etc.).
You would be hard pressed to find anyone who claims the EU has a "Tech Friendly" environment.
Every techie with skill and an idea in the EU said "F-this, I'm going to the US to start my company" which lead to others saying "F-this, I'm going to the US for tech work". There is no one to point the finger at, because even today, this is exactly what Europeans want. They just haven't put the pieces together to link "heavy regulation and very worker/consumer friendly environment" with "Nobody wants to plant their seeds here". Instead it seems the EUs plan is to just continually fine foreign tech companies to make up for the barren infertile business lands they cultivated.
Germany is a borderline shrinking economy with workers averaging 400 hours less time at work per year than their American counterparts. And this is celebrated like it's some kind of triumph. Everyday I wish I could violently shake Europeans and beg them to open their eyes. Economic strain will fracture all of Europe.
The only hope the EU has is that Trump fucks up the US enough in the next 3 years that we aren't able to continue to attract the vast majority of the people worldwide who actually want to work and reap the rewards of their efforts.
The EU has chosen stagnation, which seems fine at first but looks worse and worse as all the people (or nations in this case) who didn't make that choice continue to grow. Unless you have a closed, close knit community like the Amish, stagnation does not end well.
> with workers averaging 400 hours less time at work per year than their American counterparts
If true (seems dubious to me), that's a ~20% difference. The difference in wages is a lot larger than that though, at least for tech workers. So that doesn't really explain why German tech can't compete against US tech.
Also, there's quite a bit of evidence that a better work/life balance improves productivity.
I think vacation time is a red herring. My guess is that the various forms of worker protection, making it impossible or very laborious+expensive to get rid of disfunctional team members, are a much larger factor.
But also, let's not forget that the major difference between the state of the economy in the US and the EU is Silicon Valley. Without its tech companies, the US doesn't amount to all that much anymore. This could also be explained as a historical fluke with lots of momentum.
> If true (seems dubious to me), that's a ~20% difference. The difference in wages is a lot larger than that though, at least for tech workers. So that doesn't really explain why German tech can't compete against US tech.
1805 for the US (slightly more than the OECD average) vs. 1335 for Germany, which works the least.
Germany can't compete with US wages in tech because their companies don't generate as much revenue or profit, either per employee or in total.
> Also, there's quite a bit of evidence that a better work/life balance improves productivity.
There is, and the US is more productive per hour worked than the EU. Maybe that work/life balance in the US isn't as bad as reddit would have you believe.
> I think vacation time is a red herring. My guess is that the various forms of worker protection, making it impossible or very laborious+expensive to get rid of disfunctional team members, are a much larger factor.
An emphasis on regulation over productivity is the core issue IMO, including mandates for paid time off. By incentivizing leisure and bureaucracy designed to stifle change (both for the better and for the worse), you're effectively punishing highly productive individuals.
> But also, let's not forget that the major difference between the state of the economy in the US and the EU is Silicon Valley. Without its tech companies, the US doesn't amount to all that much anymore. This could also be explained as a historical fluke with lots of momentum.
It's not a fluke. Like every other organization, the EU is getting what it encourages, which is stagnation and a lack of productivity. They will have to adapt at some point, the only question is how painful that process will be.
> Germany can't compete with US wages in tech because their companies don't generate as much revenue or profit
Right, because, thanks to heavy regulation driven by the USA, it is illegal to compete on a direct basis. The only hope Germany could have is to compete on being more innovative, but how do you out-innovate when you don't have much of a revenue basis to use to fund innovation and are trying to challenge businesses in the USA that have secured the moat that gives an effectively unlimited money printer? Not going to happen.
Like was pointed out earlier, you cannot successfully operate in a highly regulated environment (well, except where those regulations are to your favour, as is the case for Silicon Valley tech). While Europe tends to want more balance in IP laws, what practical choice does Germany have but to comply to the USA's demands? There is no benefit to Germany in allowing Dinsey nearly endless copyright terms, but the USA has a lot of leverage that it isn't afraid to use and that is something everyone else does have to concern themselves with.
This is the second time you've just stated that the US is the source of "heavy regulation" in the tech sector without any explanation of what that means.
Given that virtually no one else on Earth agrees with that claim on its surface, do you care to explain what you mean, or are you just going to repeat it and move on each time?
And to be clear, pointing at copyright extensions for IP like Mickey Mouse is not a compelling argument, because it in no way prevents a German company from producing a product like Instagram, Claude, AWS, or virtually anything else that was launched in the US in the last 20+ years, both because its irrelevant and because the companies responsible for those products also had to operate under the same regulatory regime you're talking about.
> This is the second time you've just stated that the US is the source of "heavy regulation" in the tech sector without any explanation of what that means.
So? I know what I mean.
> because it in no way prevents a German company from producing a product like Instagram, Claude, AWS, or virtually anything else that was launched in the US in the last 20+ years
Aside from all the patents, trademarks, copyright, etc. that would make it impossible to reproduce. You could create something that kind of like sort of the same to a squinting onlooker, but the users are going to know that they are nothing alike.
In theory you can innovate to provide something that is actually better, not just the same, but can you actually when you are up against moat-ed money printers?
No one else who has responded to you does, so you'd think you'd care, but I guess that makes the chances of a meaningful dialogue very clear.
> Aside from all the patents, trademarks, copyright, etc. that would make it impossible to reproduce. You could create something that kind of like sort of the same to a squinting onlooker, but the users are going to know that they are nothing alike.
Again, what specifically are you talking about? Not only does all of that regulation exist in the EU (plus many others, which is what makes your claim about heavy regulation in the US so bizarre), but there are numerous alternatives to each product I mentioned in the US (I specifically picked ones that did not create a new product category for this reason).
What is it about the regulatory policies in the US that allows US competitors to exist, but not EU ones?
> No one else who has responded to you does, so you'd think you'd care
For what reason? Not my problem. It makes no difference to me.
> What is it about the regulatory policies in the US that allows US competitors to exist, but not EU ones?
Where do you think these competitors are, even if based in the USA? I'd much rather support my neighbour, but I have no idea how to find the Instagram not owned by Zuckerberg and friends and, quite frankly, despite your insistence, I am quite certain it doesn't exist. There is really no chance of it existing as if anyone tried to complete on a direct basis, the law would see that they be shut down immediately.
I can find photo sharing services with different usage models, but you would be hard-pressed to think of those as being direct competitors. Perhaps that is where things break down here, though? Not noticing the usage of "direct" in the earlier comment?
While a direct competitor can just straight up copy other parties, indirect competition requires innovation. That brings us back to the question of how do you innovate when you don't have revenues to support investing in innovation?
Finance is a larger sector, but largely exists to support tech. If tech disappeared, as suggested in the earlier comment, the USA's finance sector would soon diminish to near-nothing and might even totally collapse under the weight of that loss.
For a more relatable example, it's kind of like how agriculture manufacturing (machinery, fertilizer, etc) is a larger sector of the economy than agriculture itself. All well and good when everything is functioning, but if agriculture collapsed, it becomes pretty obvious that said manufacturing would go down with it. It is no help that it is a larger sector.
In modern economies supporting sectors will almost always be larger than the "core" industries they support.
Please explain how US patent and copyright law prevents "the rest of the world" (which I assume really means the EU, because China seems to be doing just fine in their own sandbox) from developing a meaningful tech sector?
They have done very well in the manufacturing sector via IP theft starting in the 1970s.
I don't see how that's relevant to much post-2008 in the tech sector, which is primarily software driven and where China has very intentionally built their own walled garden.
The UK choosing to shut down most of its native financial sector is a good example. With RBS it was particularly mad because the government ended up being a massive shareholder and then they chose to shut down all the profitable parts of the business, and double-down on the worst parts. Natwest rates franchise was probably worth £5bn, they basically shut the unit down in entirety (and a lot of those people went to large hedge funds and just went back to generating hundreds in millions in revenue) meaning that the taxpayer lost tens of billions AND the economy was knee-capped for decades.
This is taken as an example to show that even when the incentives were there, the government took a decision for nakedly political reasons. In the opposite direction, they folded HBOS into Lloyds, this was done to protect Scotland (both the PM and the Chancellor had a large number of constituents who would have lost their job if these banks were shut down...they were bailed out) and the result was Lloyds needing a bailout about one year after the banking crisis ended in the US. Again, this was sold to the public as the result of "risky casino bankers on huge bonuses"...in reality, it was just poorly paid commercial bankers lending very large amounts of money to people who couldn't ever it pay back AND politicians then making terrible choices with other people's money to boost their chances in some byelection no-one remembers.
This attitude permeates almost everything the UK does. Schools, politics first. Healthcare, politics first. Electricity, politics first.
I genuinely do not understand how anyone can't look at the scale of political intervention into the economy in the UK and not understand why this might lead to lower growth than the US. In Scotland, the government is 60% of the economy, this higher than Communist states with no legal private sector, it is an incredible number. If you look at income distribution, after-tax income under £100k is as flat or flatter than Communist states too, again this is incredible.
What is surprising is that the UK's economy is growing so quickly. The supply-side in most sectors is almost completely gone, in some economically-significant sectors you have regulators effectively managing companies, very few workers have economically useful skills because of the strong incentives in place to acquire non-economic skills...and the economy is still growing faster than most of Europe. To be fair, almost all of that immigration of low-skilled labour into the UK which is going to be absolute time-bomb financially and the rapid growth in public-sector pay has also helped consumption (even more so, the UK is running a deficit of 5% of GDP with revenues growing 4%/year in an economy that is shrinking in per capita terms...obviously, this is not sustainable)...but growth is still way higher than reason would dictate.
Comparing this to the US is not serious in any way. You have a country that prioritises growth beyond reason and are comparing that with a country which is hostile to change beyond reason. There is no possible comparison. The decisions every government since 1997 has made have been intended to reduce growth, people happily voted for this, and are now upset that the economy is shit...why?
Decisions made in 2008 were also a huge part of this.
The UK had a framework to liquidate financial institutions that was similar to the US, and this was deployed in early 2008 with Northern Rock and B&B. The end result was a multi-billion pound profit to the government.
Gordon Brown then decided that he needed to lead the global economy (and he has written, at the last count, two books which explain in significant detail that he was a thought leader and economic visionary through this period) by bailing out banks that were large employers in his constituency. With RBS, this involved investing at a very high valuation and then shutting down all the profitable parts of the bank, the loss was £20-30bn. With HBOS, he forced the only safe bank to acquire them, this resulted in the safe bank going bankrupt a year after the financial crisis ended in the US, and another multi-billion pound loss.
The US benefitted massively from having one of the most successful financial executives of the period, Hank Paulson, running the economy rather than (essentially) a random man from Edinburgh who have never had a job in the private sector (apart from law, obv) but held a seat with a huge number of constituents working at the banks he should have been shutting down (Brown himself had never worked in the private sector at all, parachuted into a safe seat after his doctorate). Geithner nearly suffered from that same fault, but did well with TARP (again though, iirc, this was Paulson's plan).
