Comment by gjsman-1000
7 months ago
And this is why the EU's GDP versus the US is now only 65% and shrinking. The regulations are about beating US companies into compliance, sometimes with righteous motives; but there's no forethought on how a domestic EU startup might be able to comply, or how a startup would convince investors to take the gamble.
Yeah, because EU software companies were totally destroying the American software industry before the last decade…
The EU’s relatively shrinking GDP has much more to do with their populations growing older and their population size stabilizing, and the relatively tiny amount of migration, than EU digital laws, most of which have been replicated throughout the world.
Additionally, the EU has always had weak financial markets, and the only strong financial center, the city of London, quit the EU and both the EU and the city of London have suffered because of that, with a whole bunch of LSE listed companies moving to New York (including possibly Shell, which would be devastating for London as a financial center).
>The EU’s relatively shrinking GDP has much more to do with their populations growing older
I'm not buying this argument. Same how the US's economy isn't stronger because Americans have more kids because we're not talking about agrarian civilizations here where every pair of hands on the farm ads proportional labor output. In service based economies, a smart person with a wealthy VC behind him can generate the GDP growth of tens of thousands of traditional labor jobs so population growth isn't the bottleneck.
EU economy is weak not because of lack of more kids, but because they have not captured any high growth industries (specifically tech) to generate better jobs and new wealth for future generations of youth. Europe is all old wealth and in the hands of old people. Once the economy becomes a fixed pie with no growth, population growth follows suit. EU economy is weak because after 2008 they went the route of austerity while the US printed it's way out dumping cheap money on fueling economic growth.
If Europeans would hypothetically start having way more kids tomorrow, those kids would end up being even poorer having to share the same fixed pie of limited economic resources. Another argument why more kids != wealthier for Europeans, is a news I read today of another local university graduate who moved his start-up to the US, so what's the point in making more kids if they have no funds to increase the GPD here and they leave? More kids with no comparable growth in money = those kids competing with India or Bangladesh.
Labor is absolutely the bottleneck. You can come up with as many billion dollar ideas as you like, but without people to pay for them, where does the income come from? Economies grown because money flows, it gets invested, and that investment creates income, which goes to the workers and owners, and gets spent again. With fewer people, it doesn't matter how rich some of them get, the entire economy will slow down, because there is nowhere to productively spend that money in that economy -- it flows out.
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> Yeah, because EU software companies were totally destroying the American software industry before the last decade…
In https://news.ycombinator.com/item?id=44553811 I pointed out that in the past a lot (former) successful German software were simply bought out by US-American software companies.
And that will continue, since it’s a reinforcing effect: Just like successful American startups tend to be bought by the big corps, the same happens here. There’s just no behemoth regionally to swallow them.
That's not necessarily true; as the EU had many major players, especially historically: SUSE, Ericsson, Nokia, SAP; all were or are being shredded by US competition despite a domestically entrenched position. Even in 2008, when both economies did badly, the EU and the US had nearly identical GDP figures.
The EU might point to ASML as a point of pride; but that assumes an ASML competitor wouldn't get tens of billions to compete the moment ASML is inconvenient.
ASML (plus Airbus, SAP and Spotify) can't feed 300 million EU workers. Europe needs more than just a point of pride on the entire continent to be an economic powerhouse. Like we say in my country: "a single bloomed flower does not make spring".
2008 was a point where euro was overvalued compared to dollar at 1.60$ after the subprime crises. It's not a significant number.
If my coworkers are anything to judge by, the smart ambitious Europeans are coming to work in tech in the US to seek their fortune.
> US is now only 65% and shrinking.
It's a fake news that just don't take into account on currency value change (euro has lost some value between 2019 and 2024). But if you look really want to look at it this way, I have a bad news for new: USA has shrink 15% since January compared to Europe as EUR go from 1$ to 1.15$.
If we look at GDP at purchasing power parity from 2007 to 2023 we have this:
- European Union: 31,162 => 61,217, +96% (https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...)
- USA: 48,050 => 82,769, +72% (https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locat...)
Which shows a slight catching-up by the European Union over the period.
>GDP per capita, PPP (current international $)
In other words, it's already been adjusted for exchange rates. If you adjust for today's USD/EUR exchange rate, you're double-adjusting it. The US dollar has dropped in the recent months, and much of that is arguably due to bad decision making by the current administration, but it hardly refutes the claim that US growth has outpaced EU growth for the few decades.
No they are about improving the lives of EU citizens.
America doesn't give a flying fuck about it's people it puts corporations first.
Now I don't judge every nation has it's own culture.
Actually, that's because the USA has the world reserve currency as a result of the former Bretton Woods system, itself a result of World War 2. This allows it to command a large exchange rate premium without having to actually work for it. This is the reason the USA has a larger GDP per capita than every other country except for a bunch of tax havens (which have artificially inflated total GDP).
you mean the US GDP is bigger because the US lacks consumer and environmental protection?
We can look at China that is focused on growth at all costs. If you look at rare earth metals, they're equally distributed but they are toxic to extract. The west has pretty much stopped extracting. China is still going full steam ahead. https://e360.yale.edu/features/china-wrestles-with-the-toxic...
China would bulldoze my hometown in 2 seconds if it meant an addition 0.1 GDP. I would say that the US is between Europe and China for balancing GDP vs protecting its citizens.
>We can look at China that is focused on growth at all costs.
It's easy to look down on others from an ivory tower in the wealthy developed west, but consider that China was dirt poor a few decades ago. What else would you have chosen? Die of poverty while protecting the environment? Same with India. They did what they had to in order to survive.
The west did that too in the industrial revolution. China had to speed run decades of industrial evolution in years. So why gaslight other countries for doing the same thing your country did a few decades earlier?
The good news for them is China recently stopped extracting rare earths on the cheap for the west. Their cities, air, water are waaay cleaner than they were just a decade ago. Chinese cities are actually livable now.
That's why the west is scrambling to find alternative sources on the cheap in other places that will let their environment be trashed, like Ukraine and Africa, since China doesn't want to be the west's easily exploitable environmental pay-piggy anymore, and good for them.
The bad news for the planet is that environmental destruction is not stopping, it's just moving away from China to other poorer places with weaker economies and militaries who are more malleable to western pressure and corporate demands.
>China would bulldoze my hometown in 2 seconds if it meant an addition 0.1 GDP.
Your western nation most likely did the same from the industrial revolution till WW2.
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Everything has tradeoffs. You can protect children extremely well, if you mandate that every household have a live-in social worker, subsidized by the government with a 30% caretaker tax on top of standard income tax. If a government were to pass such legislation, do you hate children and love money that much to want to repeal it?
At some point, protections are not feasible - and the EU's "consumer and environmental" protections are apparently unfeasibly expensive in their current form to have a competitive economy. This is also self-defeating, as only in the context of a competitive economy, would these protections have any merit or be enforceable. Beggars can't be choosers.
I don't get your first paragraph, sorry.
But I disagree with your sentiment that the EU is going too far. Look at how healthy and happy the US is and how happy and healthy we are. The market, corporations and the economy are there to serve us, not to dominate us. Their existence is a means to an end, not an end in itself. Consumer and environmental protection are not a luxury, it's essential.
And surely, tariffs and trade wars have nothing to do with anything, right? It's just this damn overregulation and nothing else!!111