Customer Reviews

Cowboy Capitalism: European Myths, American Reality

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This book shatters any doubt that a free-market system is far superior to government regulations when it comes to maintaining a healthy economy. Capitalists will admire the level of precision with which Gersemann destroys the arguments of those opposed to the American system of capitalism.

Detractors who favor the European system (at least those with the intellectual ability to do so) will concede to the error of this thinking. The book is comprised of short narratives followed up by indepth explanations with which the author incessantly debunks myth after myth of the European view of American capitalism ranging from second jobs to taxation.

Gersemann's writing will appeal to both the economic layman and the economic scholar. The layman will be endowed with a newfound knowledge of economics while the economist will be delighted with the statistical analysis that will challenge the wits of the most overeducated of peers.

As great as all this is, I must mention the absolute icing on the cake of this fine book. Cowboy Capitalism will surely prove a means of holding accountable those politicians who, destructively as one must conclude after reading this book, seek to transform our system of free market into a mirror of European government intervention.

The big three continental European economies - Germany, France and Italy - often look at the US free-market economic system with scorn. They see it as brutal and inhumane and refer to it derisively as "Cowboy Capitalism." Olaf Gerssemann is a German reporter who decided to look into the facts and truly compare the old-line economies of Europe to the United States' economy. What he finds out is just as instructive for Americans as it is for any European.

We as Americans hear a lot about the troubles and problems in our country. We hear plenty about layoffs and about corporate greed and corruption. There's probably something healthy about that - it certainly keeps us from getting complacent. However, we hear surprisingly little about how much is going right in our country and in our economy, perhaps because it's so obvious. But the obvious is most easily missed because it goes unnoticed.

That is where this book shines. Gersemann took no propoganda for granted. He did what few of us have the time or inclination to do - went and looked up the facts and found out the truth for himself. What he found is that on almost every economic front on which the Europeans (and many Americans) tend to slam this country and its economy, the United States far execeeded its European counterparts in terms of providing for its citizens. As he shows repeatedly, this doesn't just mean the wealthiest citizens either.

Gersemann covers employment, quality of employment, safety of employment, ability to find a new job when unemployed, wealth creation, education, health care and more. The results are really important for Americans to know. If more people would read this book, we couldn't be so easily deceived by politicians playing on our fears to push their own agendas.

Highly recommended.

The is an excellent, easy to read book that should be required reading for all high school students. I'm really surprised that this book doesn't seem to be getting more notice in the media. I'm a political junkie, subscribe to 8 political journals, and in the process read a lot of economics. My political views were more socialist when I graduated from college, but got more moderate as I kept doing my homework. When I got done reading this book, it gave me a full belief in the superiority of the capitalistic system, and I voted Republican for the first time in my life. In the book, the author goes through all of the most pertienent economic issues, comparing and contrasting the American and European Systems, and does an incredible job showing the superiority of the American one.

German reporter Olaf Gersemann examines common misperceptions of the American economy in Cowboy Capitalism, providing a survey of the continental econ-omies of Europe versus the United States and examining common myths and realities on both sides of the world. His survey reveals a variety of myths many Europeans believe about Americans and their economy, discussing the realities underlying the rumors. An excellent survey most valuable for its expose of European common sentiments about the U.S.

It is surprising that "Cowboy Capitalism", recommended by two nobel laureates (the late Friedman and Buchanan), would be accused of propaganda by a critical voice (Newton Ooi, below) who first proceeded to point out that all the facts it presents are true. "Cowboy Capitlism" has an agenda, of course - an agenda to show through the raw numbers that European (or NYTimes readers') perceptions of the two economic systems of central Europe and the US are skewed... that there is more to the differences and the benefits/detriments that each system offers, than is popularily acknowledged. Fear and suspicions (and lack of knowledge) are the cause of this - rather than facts. This book pokes fun at the former by trying to reveal the latter.

In doing so, CC is actually rather fair. It does not pretend that the European economic system is per se inferior to the US System. In fact, there were times in which it was rather superior. (Times of great economic stability had Germany, for example, grow its economy at a pace well above that of the US. Or healthcare - where Europe admittedly piggy-bag rides on US consumers' expenses, but which Gersemann has no probolem stating is a matter of preference, not "better" or "worse".)

Anyway... to look at the criticism listed below:

Home Ownership: The argument that because of higher population density, home ownership would *naturally* be less ("less land to build on") is completely ludicrous. What would follow that argument would be mass-homelessness, not low ownership rates. People in Europe still live in places... the question is: why don't they own? Apartments count, too, you know! (Density contributes to homes being more affordable - which is one of the reasons. Red tape making ownership more difficult is another. Rent-protection is yet another. (And when looking at entire countries, the numbers *are* meaningful. The author did not compare only New York to rural Europe.)

Education: I'm European, so I don't want to argue the point that by going to high school I am automatically smarter than a US college graduate... even though I had to learn that knowing where Malaysa and Phoenix are (I've 'always' known), somehow don't give me the edge on the job-market that I thought it would. :-( There are Americans who audaciously compete with me, despite flagrant lack of geographical knowledge... And win out! Perhaps other factors matter, too? Drats.

Unemployment rates are not measured by whether one "has to work" or not. Unemployment rates are measured by how many people *want* to work and can't. A busy little Hausfrau who takes care of the kids and whose husband makes enough to support the entire family doesn't show up in the unemployment numbers, because she probably doesn't run out and declare herself unemployed. So the higher numbers of unemployment of women in Europe reflect women who "have to work" -- but won't find a job. And that's the real problem... whether one likes the social ramnification and the dissolution of the family nucleus or not.

Computer use, Internet access et al. in Germany is well behind that of the US. Especially among the crowd that didn't grow up with them.
Computers, even made from recycled materials or made with the use of recycled parts (I've done that, years ago, but I wonder how common that still is) would still show up as a computer sold... They don't sit around trash-heaps and maker their own computers out of trash, after all.

The last point - oil-war-obesety-pharma-industry - is a little too dense fore me to get into. I am baffled.

Cowboy Capitalism does not pretend not to take sides. But it wants to show that it takes the side of greater economic freedom, because there are benefits to more people to be had - at the price of less security for others. (That's obviously a gross oversimplification... but aims in the right direction, I should believe.) The way this book does it is humorous (in a dry way) and merciless... but not with blindfolds or immune to "inconvenient" facts. This is a must-read for when your European friends come over to visit and try to tell you why everything is so much better in the old part of the world. (30% youth unemployment in France, a terribly efficient but very rigid economy, are just one of many points to consider...)

P.S. The Thinktank CATO is a libertarian institution, not a conservative one. The two overlap on many issues, but are not the same. (Legalization of drugs, Gay marriage et al. are points libertarians support; conservatives by-and-large don't.)

I enjoyed this book very much. The author is a journalist as well as a trained economist. The translation from the German is seamless. The approaches to issues are intriguing. The result is a book that is very easy to read and very thought provoking. The implied endorsement by the Cato Institute (the book's publisher) may raise concerns in the minds of some potential readers, but I urge them to let the author present his case without prejudice.

"This is a comprehensive, indeed truly encyclopedic, comparison of economic conditions and policies in the United States with those in Germany, France, and Italy. Gersemann, a German journalist based in the United States, provides detailed evidence to support his devastating rejection of common European fallacies about the American economy. A real treasure trove of thoughtful analysis."

--Milton Friedman, Nobel Laureate in Economics

"Citizens in all Western democracies want to provide more publicly financed welfare than they are willing, privately, to finance by taxes. The result is sluggish economies. In Old Europe the crisis is more acute than in the United States. This book documents the dramatic differences and stresses the proclivity of Europeans to denigrate the American experience rather than to acknowledge their own plight."

--James M. Buchanan, Nobel Laureate in Economics

"Gersemann pulls no punches in debunking prevalent European myths about the American economy. But Cowboy Capitalism is not about trumpeting American superiority; it's about helping Western European countries achieve the robust growth and job creation their citizens deserve."

--Henry M. Paulson, Jr, Chairman and CEO, Goldman Sachs Group

"This book offers an excellent comparison of U.S. capitalism with the 'social' model of Germany, France, and Italy. It is also a penetrating study of anti-market propaganda. Olaf Gersemann shows that the features of the American model that are attacked most by European critics from both left and right are those which continental Europe actually needs in order to overcome the social problem of high unemployment and to make the European economy more dynamic and competitive. The book displays a rare combination of clarity, passion, and moderation. I highly recommend that this book be widely read on both sides of the Atlantic."

--Leszek Balcerowicz, Former Finance Minister of Poland

"Gersemann combines the accuracy and incisiveness of a scholar with the verve and wit of the best kind of journalist. His readers will be fascinated from the beginning and enlightened by the end."

--Steven Landsburg, author of The Armchair Economist

Like the previous reviewer, I think Olaf Gersemann offers a balanced and well-documented case that France, Germany, and Italy would benefit from some American-style economic liberalization. Advancing an argument with logic and solid empirical evidence is not the same thing as writing propaganda.

Gersemann goes out of his way to point to that it is "foolish" to believe that post-war European economic models are "generally, under all imaginable circumstances, inferior to other economic models." He draws attention to the number of Americans without health insurance, the sorry state of many of our public schools, the alarmingly high rate of poverty among American unwed mothers and their children, and the "ridiculously high" compensation of many corporate managers. This book is not a one-sided apologia.

But it does, as advertised, manage to dispel many myths about American capitalism and the supposedly kinder, more agreeable European version.

As have a number of others before him, Gersemann reveals the hollowness of the claim that the purchasing power of working-class people in the U.S. has been stagnant since the early 1970s. And he does this using household income numbers as his primary statistical evidence, even though he could have shown even more improvement (as he briefly points out) if he had used the *per capita* money income of the average household. (Household income has been depressed because there are now fewer people per house, which is a sign both of more widespread home ownership, and thus more wealth, as well as a sign of higher rates of illegitimacy.) If further adjustments are made to control for immigrants--whose pre-immigration incomes do not, obviously, show up in U.S. statistics--it becomes even more evident that the American economy is much more successful at improving the of lot native-born workers in the bottom quintile than one would gather from watching ABC News or reading *The New York Times*. That our economy also improves the lives of immigrants, and in the process makes the gains of the native-born less statistically obvious, is cause for congratulations, not criticism. The improvement in the lives of particular individuals is what matters, not the fate of a particular quintile, the composition of which is ever-changing.

Gersemann also rebuts much of the nonsense reported about the percentage of Americans who are "trapped" in poverty and about low unemployment merely being the result of mind-numbing service jobs that don't pay a living wage. He demonstrates that those on the left who praise the security offered by the European system too often fail to note that security comes at the price of dynamism, which comes at the price of opportunity, especially for those on the bottom.

Unfortunately, the same neighborhoods in France that suffer most from this lack of opportunity, and from debilitating unemployment, voted overwhelmingly for the Socialist candidate (Ms. Royal) in last week's elections, even though it is not she but the much hated Mr. Sarkozy who stands at least some chance of offering them economic opportunities infinitely more lucrative than burning cars. And of course it was the French left that took to the streets when the government attempted to enact modest reforms to make the labor market more flexible. Marching for "social justice" and against "American conditions" also meant marching for the continued joblessness of North African immigrants. But what of it? It's all too easy to ignore arguments like Gersemann's, congratulate oneself on being morally superior to capitalists, and then take a nice long vacation.

Both Europeans and Americans would benefit from reading this book. It's not a groundbreaking work of research, and in fact most of the information Gersemann presents can be gleaned from the financial press. But the book doesn't pretend to be groundbreaking. What makes it a success is that it so clearly and dispassionately debunks many of the most frequently repeated falsehoods about the American and European economies.

Comfortable social capitalists' economy isn't working;
More comfortable capitalists are unemployed;
and citizens in the old world enjoy fewer economic freedoms.

Once and for all, see a new book with intelligent and understandble comparisons between old world countries of France, Germany and Italy with the USA written by an author knowledgeable of the Old World.

Find out what propels old world beliefs of superiority. Myth is all, always was, always will be, unless the USA drops its ball, too.

Every person, old and young, every senator and congress man and woman, every legislative representative, every single person in the executive branch of the U.S. government and those in France, Germany and Italy need to read this book by Olaf Gersemann.

This book explains that the European model of allocation assumes that the economy is static and employment can increase only by sharing existing jobs with regulation of hours and guaranteed employment. The US model is dynamic and companies that don't perform are replaced through the process of creative destruction by companies that do. Excess resources get reallocated to new enterprises to the benefit of everyone.