First, I reproduced Greg Mankiw's Table 7-1 on "Standards of Living", only w/ 2009 GDP (PPP) data:
What Greg Mankiw, and the professor who teaches the course for whom I TA, want students to take from this is that the US is the greatest country on the face of the Earth. And, when I introduced this to students, I really played up American exceptionalism. Who's number one? I asked. "America!" the students shouted! Makes one wonder, I suggested, whether this wasn't clear proof that America's economic system is the greatest on Earth. I asked the students if there was any reason at all in the data above to think otherwise. Nobody could.
So then I went on, "and this isn't the only measure of standards of living, we could also compare countries by Life Expectancy... So, how do you think America ranks in the world in life expectancy?" "Number one!" shouted the students! "Well, no... Let's look..." Here are the numbers, world rank/life expectancy in years...
US #38 / 78.2 years
Japan 1 / 82.6
Germany 23 / 79.4
China #82 / 73
India 139/ 64.7
Nigeria 182/ 46.9
Interestingly, students were not only shocked by how poorly America compares, but nobody could guess how low life expectancy in Nigeria is -- one girl covered her mouth and gasped when I wrote the number on the blackboard... One student, who had shouted out that America is "Number one!" in life expectancy, then shut up and said nothing the entire rest of section... "We're number thirty-eight!" doesn't quite have the same ring to it...
I then pointed out that this wasn't the only measure of "Standard of Living", after all, America also has the Greatest Health Care System on the face of the Earth. So, next we did infant mortality: rank / Mortality in deaths/1,000 births
US #33 / 6.3
Japan 3 / 3.2
Germany 14 / 4.3
China 82 / 23
Nigeria 183 / 109.5
Next, I went over the "countries Greg Mankiw doesn't want you to know about. You see, when I said earlier that America is the richest country on the face of the Earth, I was lying to you. We're sixth."
And, lastly, the kicker -- if we're going to talk about "standard of living", for a job which pays $100,000, would you rather work 80 hours and take 6 weeks of vacation a year, or work 100 hours a week, and take two weeks? Which job would we say has the higher "standard of living"? Of course, most would take the 80 hours/week job, with more vacation time. So, let's look at hours worked per year in these countries:
So, in other words, Dutch GDP at American levels of work would be $55,000. So, the Dutch work much less than do Americans, they live longer, and fewer of their infants die in childbirth. So, all in all, there are reasons to doubt that America is the greatest country in the world at everything -- we do a lot very well, but so does Europe, despite higher taxes and "socialized" medicine, and there are obvious specific areas where we can still improve.
Tuesday: Case-Shiller House Prices
3 hours ago