I take the view that “competitiveness” is a bogus concept (ask Paul Krugman) along with an ugly, ugly neologism. But we seem stuck with it. Thus, via Kevin Drum, the World Economic Forum’s “competitiveness” rankings, wherein they gloss the concept as a measure of “how conducive their business climates are to sustaining economic growth.” Sustaining economic growth is a real concept — and we’re number six. But look who’s ahead of us — Switzerland, Finland, Sweden, Denmark, and Singapore.
That’s an awful lot of Scandinavian social democracies which, in turn, leads to a point worth making and remaking — one shouldn’t allow the existence of macroeconomic problems in France and Germany to support the conclusion that the European welfare state is simply a failed model. All of those countries differ from each other quite a bit, and the best evidence suggests that the problems in France and Germany relate primarily to aspects of the policy environment there other than the basic transatlantic disagreement about inequality and social welfare.