The Price of Everything - Eduardo Porter [81]
The fact that food occupies a smaller place in the budget of the typical American household also means the typical American cares less about its price. The United States Department of Agriculture estimates that if the price of meat were to rise 10 percent, an American family would eat 0.9 percent less. A Mexican family, by contrast, would slash its meat consumption by over 5 percent.
That alone can explain why animal welfare movements are much more popular in the United States than in places like the Congo or Mexico. It is more expensive to kill a steer in a humane sort of way. More Americans can afford that. A 2005 study by economists at Utah State University and Appalachian State University found consumers in the United States would be willing to pay 9 percent more to ensure the beef in their sandwich came from humanely treated animals.
In Mexico, this decision would change people’s diets: this range of price increases would lead families to cut their meat consumption by almost 5 percent. The price an American would pay to ensure the burgers hewed to the moral code would lead the typical Congolese family to eat 6 percent less meat. So perhaps one shouldn’t be surprised that Americans are more likely than Mexicans or Congolese to belong to an animal rights organization.
CULTURAL PREFERENCES ALTER prices, which alter cultural preferences. Restaurants and hairdressers are more common in New York than in Stockholm. Maids and nannies are a fairly common sight across Lisbon. In Oslo they are rare. The household-help sector in Portugal is about three times the size of Norway’s, as a share of the economy. Scandinavia is one of the more expensive corners of the world.
All these differences can be traced to one price: that of work. In Portugal, maids and nannies are much cheaper than in Norway, relative to workers in other occupations. In New York, the service industry relies on an army of cheap workers that is not to be found in Sweden. Danish laundry workers are more expensive than Canadian, compared with people in other jobs.
A study in the mid-1990s found that Swedish workers in the bottom tenth of income distribution made three quarters of the median wage, while in the United States they made only 37 percent. So though income per head was 25 percent higher in the United States than in Sweden, on average, the cheapest Swede worker was paid 60 percent more than the cheapest American. These prices are the product of different cultural choices.
The United States and Europe share more in terms of attitudes and beliefs than Europeans or Americans like to admit. Still, the transatlantic cultural gap provides a telling illustration of how self-interested economic motivations intertwine with ideology.
Europeans are a jaundiced bunch. They believe in the luck of the draw as a defining characteristic of life, and are skeptical of the proposition that the rich deserve their riches. They are unlikely to attribute success to effort—ascribing it instead to serendipity and external social conditions. Believers in the world’s unfairness, they prefer high taxes and aggressive income redistribution to impose justice on an unjust society.
Europeans’ belief in the unfairness of the distribution of income and opportunity is likely rooted in Europe’s feudal past—when prosperity had nothing to do with effort and much to do with having the right parentage. Americans tend to live on the other end of the spectrum of outlooks. They believe crime doesn’t pay and honest, hard work is the key to prosperity, sure that the American Dream is available to all. Ten times as many Americans say hard work will lead to a better life as believe success is a matter of luck and connections. In Western European countries, the ratio is rarely above two to one. More than a quarter of Germans think taxing the rich to give to the poor is an essential task of democracy. Less than 7 percent of Americans do.
Each of these sets of beliefs has created its economic reality. Skepticism about the justice of the market led Europeans to build norms that favor