[helene_t]

My department has a joint-venture with a start-up in [you know which country]. The deal is this: we get the self-esteem-boosting credit for being first authors of the scientific papers that come out of the project. They commercialize the technology that come out of the projects. Why didn't we choose a European partner? Well, I'm afraid they just don't exist. Our capitalists prefer to invest in real estate, or in business development overseas.

The Pascal language and the WWW were invented in Zwitserland. The Pascal implementation that became world-wide defacto standard was developped in Denmark. Both technologies comercialized in [you know which country].

The game of Bridge was probably invented in Turkey or Rusia, but commercialised in [you know which country]. The LOTT was invented in France but commercialsed in ....

One of my brother's friends specialized in helping venture capitalists and entrepreneurs find each other. Do you think he stayed in Denmark? Of course not, he could find much better carriere oportunities in ....

What is it that makes Americans so good at business?

I don't think it's their primary schools, delivering teenagers with some of the worst academic skills in the whole civilized World.

What about immigration? Seems to provide a lot of high-quality human capital for the American high-tech business. Not excatly how it works here in Europe. Does our social system attract less motivated or less able immigrants? Or are we too etnocentric/racist to admit non-Europeans access to the jet set?

Or has it to do with our social values? Is it so that while Americans strive to get rich in order to earn social recognition, we European try to avoid it because rich people are considered parasites?

Any other ideas? In particular, is there something we could change in order to get some business development going?

[mike777]

Much of Western Europe has chosen income redistribution and subsidized social services over increased living standards. Add in protected industries, a not invented here attitude, punitive tax policies and a history of not incorporating immigrants into the overall society but creating ghettos of immigrants that last generation after generation. Also add in long vacations that if nothing else foster a culture of leisure compared to a culture of 60-80 hour work weeks.

Of course the USA has all of the above as well just to a lesser degree. Add in a culture of immigration where extremely hard working people come in and have the ability to become a huge part of society as their children and grandchildren become our future leaders.

How many second and third generation children of immigrants are at the top of your society in education, industry, government and your military?

We have quite a bit more poor children becoming rich adults and less of income distribution and a welfare society.

Take France as an example, there Unions shut down the country, here we fire them all. In France students protest for protection, here immigrants stand in 110 heat for any dirty job they can get. Here immigrants start up Google, in France the government writes a check to start up a competing search engine. Where does the French Goverment get the money, off of higher taxes of those few that choose to work.

Just for fun try and find out what percentatge of the entire country pays income taxes. My bet is more than 60% of the entire population pays nothing or almost nothing. Keep in mind most children and old folks will pay almost no income tax for starters.

Add in a VAT sales tax that hardly encourages consumption.

As for your comment on academic skills, I think the tone of the comment says it all. We value many other skills besides academic ones. Plummers, mechanics and builders become very rich in our country. Immigrants without a high school education own houses, cars and have the opportunity for a high standard of living.

One small example a son of a very good friend of mine barely had the skills to make it through high school. He spent all his time surfing and playing tennis. He started up several businesses. One buying cars on the cheap, fixing them up and reselling them. A second built around surf boards, skate boarding and fashion for all those dudes and the chicks that hang with them. Dude! He is now building a 2 million buck house for his family.

[hrothgar]

I think that you'll come to very different conclusions depending on what time frame that you consider...

Looking back 100 years ago, the US benefited from four very significant advantages:

1. Enormous natural bounty... North America had enormous amounts of useful raw materials. (timber, coal, iron, petroleum)

2. Good legal system that recognized individual property rights

3. East-West trading axis (Its much better to have the length of a continent running E/W than North South

4. I know its somewaht dated, but I think there is something to Max Weber and his theories about the "The Protestan Ethic and the Spirit of Capitalism"

Look more recently and you'll draw different conclusions:

From my perspective, success breeds on success. If your state (or for that matter you country) establishes a tradition of creating successful enterprises, you start building a lot infrastructure designed to nuture new startups. Looks at all the Venture Capital thats in place in Silicon Valley....

As other folks have mentioned, the US is also very good at accepting immigrants. Part of the reason that we can get away with our piss poor school systems is that we steal the best minds from the rest of the world.

[helene_t]

hrothgar, on Aug 5 2006, 05:11 PM, said:

3.  East-West trading axis  (Its much better to have the length of a continent running E/W than North South

Yes, Jared Diamond is one my favorties as well

As for this good legal system, you talk about: it's funny, since when I wrote this about the poor performance of American primary schools I was just about to add one of the well-known jokes about the U.S. legal system (last one was about someone sueing a sperm bank, claiming 1 million bugs because they turned out to have a hidden camera in the masturbation box). What's so cool about the U.S. legal system?

Someone mentioned it as a major reason for the economic boom in China (I think it was one of the books I had to read at business school). Since the Deng era, it has been possible for Chinese farmers to own their land without the risk that the government takes it back against some unrealistically low compensation. This has made it attractive for farmers to invest in buildings, dams etc.

Until a few decades ago, we had similar problems in some European cities, but I think that now private estate is reasonably well protected against crazy local goverment initiatives. Or is this not true?

[hotShot]

Well the US educational system may not be so good, but in the end this means that banks and companies judge the people by examaning their abilities. You can do almost any job for a living, if you're not good enough you won't make it long.

In western europe there is a lot of education, guilds go back to the middle ages. So people are fixed to the job they once learned and are judged by certificates they can present and not by the abilities they have.
Since banks base their judgement on certificates, you won't get money unless you can prove you are a successfull businessman. In this tradition giving venture capital is a sin.
Now say you have the money and you have a good idea for a business,
bureaucracy comes in. You will have to bring lots certificates, first of all one that allows you to be in your selected business. As if national laws and regulation are not enough there are EU regulations to follow.
Do the netherlands e.g. have adapted the european cableway regulations yet? I know there is no mountain, but the cableway regulation must also be used for "wired surfing" at lakes......

This way new business ideas are very hard to establish.

[cherdano]

hrothgar, on Aug 5 2006, 05:11 PM, said:

1. Enormous natural bounty... North America had enormous amounts of useful raw materials. (timber, coal, iron, petroleum)

2. Good legal system that recognized individual property rights

3. East-West trading axis (Its much better to have the length of a continent running E/W than North South

4. I know its somewaht dated, but I think there is something to Max Weber and his theories about the "The Protestan Ethic and the Spirit of Capitalism"

Good list -- I'd add:

5. No war on own soil since quite a few decades.

6. The dollar. Those who earn in dollar (abroad) tend to invest in dollar, making up for USA's trade deficit.

[mike777]

Japan is a great example that natural bounty is not necessary for success. BTW Japan does not run EW

People count a heck of alot more than cheap oil and gas and cheap land. Enforced property rights are very important.

[Winstonm]

Quote

What is it that makes Americans so good at business?

It's simple - we cheat.

[Elianna]

helene_t, on Aug 5 2006, 05:59 AM, said:

I don't think it's their primary schools, delivering teenagers with some of the worst academic skills in the whole civilized World.

What about Universities? And I don't mean just well-known universities like Harvard and Yale, etc. I mean the universities and colleges that aren't known ouutside of their specialty or area. From highly rated ones like (Harvey Mudd College), to ones that get made fun of as party schools (like San Diego State), they all do a good job of catching these teenagers up to the level they should be in the first year, and giving them a good, very well-rounded post-high school education the next three (or more) years.

I stress well-rounded, because I believe that this is another way that most american colleges differ from European ones (that I've heard of from other people, at least): Students are expected to take many classes outside of their major. This gets people out of a "blinders" mindset: they're expected to learn subjects that they may not be as interested in learning (that's why they're not majoring in them), and I think that this helps executives, etc. in training to look at problems in different ways. Or at least listen to different people who think in different ways.

You may say that this applies only to college graduates, and point out that not everyone in the US is a college graduate. True. But at least 80% of the people in my high school graduating class (a public school in Los Angeles) went on to four year college (so they probably completed at least one year) and the ones I knew of the rest at least spoke about going to community college.

I'm not actually saying that education is the reason that America is successful in business, I'm just saying that it's not necessarily a reason for it NOT to be successful.

If you asked me what a reason could be, I'd say that the amount of time people are expected to work is a big factor. It is pretty common for people to have 60 hour work weeks. I would be surprised if this were as common in many western european countries.

[mike777]

to be fair I have never seen anyone work a 60 or 80 work week. I have seen them be at work that long....but estimate they worked closer to 20 hours than 80

I also loved asking my coworkers what they did yesterday or last week....I estimate the work level at about one hour but ..maybe two hours......

[helene_t]

mike777, on Aug 5 2006, 04:29 PM, said:

How many second and third generation children of immigrants are at the top of your society in education, industry, government and your military?

Let's see what immigrants I can think of ....

Jie Zhao used to live in the Netherlands but went back to China. Not sure why. Maybe he and/or his wife just felt more comfortable there.

Ayaan Hirsi Ali was selected as "European of the year" by Reader's Digest and one of the top 100 influential persons in the World by Time Magazine. Some of you may have heard the sad story about her. She will start working for the American Enterprise Institue in D.C. shortly. I'm no Bush fan but at least I can appreciate that he will pay her better than the Dutch parliament did.

An English enterpreneur in Utrecht whom I met at a job interview said that when he needed to discuss something with the bank he had to send a native Dutch because Dutch bank representitives won't negotiate with Englishmen who have a reputation of not repaying their depts. Well, an Englishman in Utrecht is like a New Yorker in New Jersey so maybe he didn't realy count as an immigrant, but that only makes the story more alarming.

One of my German friends in the Netherlands, a top bureacrat at a provincial government, wanted to get her German partner, who was offered a job as a librarian at the Godel Institute, into the country. Believe it or not, that's possible. But her partner had to go to the immigration office every year to renew her residence permit, and employers, landlords etc. are always complayning about the lack of permanent permits in such situation ("do you also have a working permit?"). When I tell the police and other bureacrats that since 1982 there has been no such thing as "working permits" for EU citizens and since 1998 no residence permits either, they refuse to believe me. In 2002 I send a letter to the ministry of justice, who told me that it takes some years for new laws to drip through to the lower levels of the bureacracy and there was nothing they could do about it.

[helene_t]

Elianna, on Aug 6 2006, 05:16 AM, said:

I stress well-rounded, because I believe that this is another way that most american colleges differ from European ones (that I've heard of from other people, at least): Students are expected to take many classes outside of their major.

This is interesting. I think that universities here are changing in that direction, too. At least in Denmark and Netherlands, the two country that I know most of. But then by offering multi-diciplinary programs like bioinformatics, law/economics, "communation sciences" etc as alternative to the traditional subjects.

[joshs]

Elianna, on Aug 5 2006, 10:16 PM, said:

helene_t, on Aug 5 2006, 05:59 AM, said:

I don't think it's their primary schools, delivering teenagers with some of the worst academic skills in the whole civilized World.

What about Universities? And I don't mean just well-known universities like Harvard and Yale, etc. I mean the universities and colleges that aren't known ouutside of their specialty or area. From highly rated ones like (Harvey Mudd College), to ones that get made fun of as party schools (like San Diego State), they all do a good job of catching these teenagers up to the level they should be in the first year, and giving them a good, very well-rounded post-high school education the next three (or more) years.

I stress well-rounded, because I believe that this is another way that most american colleges differ from European ones (that I've heard of from other people, at least): Students are expected to take many classes outside of their major. This gets people out of a "blinders" mindset: they're expected to learn subjects that they may not be as interested in learning (that's why they're not majoring in them), and I think that this helps executives, etc. in training to look at problems in different ways. Or at least listen to different people who think in different ways.

You may say that this applies only to college graduates, and point out that not everyone in the US is a college graduate. True. But at least 80% of the people in my high school graduating class (a public school in Los Angeles) went on to four year college (so they probably completed at least one year) and the ones I knew of the rest at least spoke about going to community college.

I'm not actually saying that education is the reason that America is successful in business, I'm just saying that it's not necessarily a reason for it NOT to be successful.

If you asked me what a reason could be, I'd say that the amount of time people are expected to work is a big factor. It is pretty common for people to have 60 hour work weeks. I would be surprised if this were as common in many western european countries.

I think this is a very important point. I remember about 10 years ago, MIT did a study to try to understand why MIT students had higher test scores than Harvard Students (both SATs and GREs, etc) but typically when reaching a business setting, the MIT students ended up working for the Harvard students.

Some of the factors were out of MITs control (Old Boy network), others they could do something about. Chiefly: the diversity of classes that people take, the diversity of interests of the students, and the personality of the students (these are not independant, the students who wanted to over specialize on math and science, often had personalities that were less gregarious and did much worse in business settings)

A lot of what makes Americans good at business is self fulliling. We as a society, value hard work and the status assocaited from getting to the top at business (or being rich in general), and that in turn makes role models out of the people who are successful at it, and influences all of our behavior.

I remember when i was traveling in New Zealand some years ago. I ran into 500 brtis, 300 germans, 200 Israelies, and about 10 Americans. Americans believe that can't take time off and they must owrk all the time to get ahead. The value of time. Time to yourself. Time to spend with family and friends and so on, has a much lower importance on americans these days. I think this is bad, but its interesting to note it socialogically....

[mike777]

If we assume Americans work to get ahead, whatever that means, what do Europeans do to get ahead?



All economics means is a way to increase your standard of living. If your higher priority is something else you may need to spend more time on other things.

[barmar]

mike777, on Aug 7 2006, 03:05 PM, said:

If we assume Americans work to get ahead, whatever that means, what do Europeans do to get ahead?

I think the difference may be in what they consider "getting ahead" to be.

Americans generally value wealth, so they strive to be successful in business. The paradox is that they work so much that they don't have much leisure time to enjoy the wealth they've gotten.

Europeans, on the other hand, tend to value enjoying life. They work enough to be able to have what they need, but they don't go overboard just trying to get richer.

In other words, Europeans work to live, while Americans live to work.

[mike777]

Well I would say they say this but this is the big Lie

We have heard this line for at least 100 years if not longer.

Yet it seems many who wish to work cannot find work in Europe. In fact roadblocks are put up for many that wish to work. Has everyone forgotten the riots in France already, yet nothing has changed there.

I also must object to this view of Europeans as of one mind. It seems Eastern Europe including large parts of Russia would strongly disagree with you.

[Winstonm]

The U.S. produces nothing but debt. The world builds and sells to the U.S. in exchange for IOUs which in turn are given back to the U.S. in exchange for better IOUs which will be paid for with more IOUs.

The world make goods - we print paper.

I can't say we are good at business, but as con men we are world class.

We have created the ultimate Ponzi scheme and have the entire world financing our extravagance.

I would say a good businessman does not bankrupt his company - the U.S. cannot pay for its fiscal gap.

You might try Hong Kong - I hear they still have real businessmen there.

[mike777]

WinstonM you must have wrote this tongue in cheek.

Not only do you claim the USA produces nothing of value, but you say the rest of the world is stupid...so stupid in the extreme that we get away with it.

Following this logic we are the smartest people in the whole world

This is from a cool man who saw Janis live!?

[Winstonm]

Quote

This is from a cool man who saw Janis live!? 

Twenty-five bucks to see her for 15 minutes and then watched her dragged off by the constabulary - how cool (or smart) was that?

I don't consider the rest of the world stupid - even the bright can be conned - especially when it's the only game in town at the moment.

[mike777]

Winstonm, on Aug 7 2006, 10:35 PM, said:

Quote

This is from a cool man who saw Janis live!? 

Twenty-five bucks to see her for 15 minutes and then watched her dragged off by the constabulary - how cool (or smart) was that?

I don't consider the rest of the world stupid - even the bright can be conned - especially when it's the only game in town at the moment.

Again to infer it is the only game in town infers that everyone is too stupid to come with a winning game?... come on you really do not belief that do you?
With trillions at stake my bet is on someone else coming up with a winning game!