I have little doubt that the heart of the study reaches a correct mathematical conclusion--that the average Swede has a lower income than the average American black. It does, however, contain a few myths I'd like to briefly address below.
In a message dated 12/29/02 10:23:43 PM, [EMAIL PROTECTED] writes: << [snip] Does anyone on the list have any comments about this story? Despite the fact that the left-liberal responses I read to this article were devoid of substance, I still think there must be more to the story than this article says. Do you all think it is better to be black in America or white in Sweden (and why, of course)? Or does the answer all depend on some other factor? ~Alypius>> Assuming that the study got its numbers right, one would be better of in a material sense--food, clothing, shelter, medical care, idle entertainment--as an average black in America rather than as an average Swede. People don't necessarily maximize income, especially not measureable income; they maximize utility. Is it better to be a black in America? I don't know, and probably neither does anyone else. I'd venture a guess that an awful lot of American blacks would say otherwise, though I'm not sure. It's easy to image that if only I were (white, male, middle-class, rich, pretty, thin, this, that, or the other thing that I'm not) I'd be much better off. Even if they would say otherwise it doesn't mean that it's correct since they don't know what it's like to be a Swede any more than a Swede knows what it's like to be a black American. Most economists tend to focus on incomes as a proxy for utility, but I've seen studies which conclude that people with higher incomes don't feel any happier. Personally I'd rather have the problems of high income than those of low income--but in truth we're comparing here high income to higher income. [snip] <<"Weak growth means that Sweden has lost greatly in prosperity compared with the United States," HUI's president, Fredrik Bergstrom, and chief economist, Robert Gidehag, said.>> This is misleading, as are most economic stories of failure and success. Relative failure means only that your ego gets wounded. As the next line indicates, the average Swede has a 20% higher real income today than he or she did 20 years ago. I'd take a 20% real increase in my income any day. Of course I'd rather have the 56% increase, but both represent successes. Ind International Monetary Fund data from 2001 show that U.S. GDP per capita in dollar terms was 56 percent higher than in Sweden, while in 1980, Swedish GDP per capita was 20 percent higher.>> <<The median income of African American households was about 70 percent of the median for all U.S. households, while Swedish households earned 68 percent of the overall U.S. median level. This means that Swedes stood "below groups, which, in the Swedish debate, are usually regarded as poor and losers in the American economy," Bergstrom and Gidehag said.>> Again it's not a race to some finish line, winner-take-all contest. It's not a contest at all. Both blacks Americans and Swedes win by having higher incomes. What this does say is that in America we have a relatively distorted nothing of what it means to be poor. By long-term historical standards, even poor Americans are fantastically wealthy. Look at the poorest nations of the world to see how people have lived for most of human history. That's poverty. Even by our own recent standards, poor people are rich: back in the 1990s I saw a study which reported that the average welfare recipient in America consumed more in constant dollars than the average middle income American in 1955. And that average income American in 1955 had a real income exceptionally high not only by long-term human standards, but simply by standards of the world in 1955. <<If the trend persists, "things that are commonplace in the United States will be regarded as the utmost luxury in Sweden," the authors said. "We are not quite there yet, but the trend is clear.">> Well that may come to pass, but as I understand it, a vastly larger share of Americans than Europeans own their own homes, so the "commonplace in the US, luxury in Europe" has been going on for some time. I understand that the socialized medical systems of many European countries also don't provide many of the treatments--like kidney dialysis or heart-bypass surgery--that Americans routinely get. Perhaps, if real Swedish incomes continue to grow, even there socialized medical system will provide commonly what the US system has provided commonly for decades. Of course by then the US system will probably be providing newer services that the Swedish economy won't--it's better, all other things held constant, to have a really high income than a merely high income. There's no doubt that we'd all rather have a $100 income than a $70 come or a $68 income, holding all other factors constant. But the losers are the ones with a an $8 income in 1980 and a $5 income today, not the people who have gone from a $50 income to a $68 income. David Levenstam
