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Why European economies lag behind Anglo-American ones

Edmund S. Phelps, 2006 Nobel Laureate in economics, suggests a number of reasons why European economies might lag behind the economies of the UK, Canada, and the US.

Surprisingly, Phelps does not attribute Europe's grim unemployment and lower productivity to "the plethora of social insurance entitlements and the taxes to pay for them", but to a dearth of spirit – "the spirit of stimulation, problem-solving, mastery and discovery" that gives rise to economic dynamism. Phelps suggests that Europeans have abandoned self-fulfillment for safety and no longer understand "the Enlightenment theme that a nation's culture ultimately makes a difference for the nation's economic performance in all its aspects – productivity, prosperity and personal growth."

Ironically, this means that the desire for safety creates danger. The effort to be safe and comfortable means that millions of young people cannot find jobs.

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