E.U. States and US Economies Compared Economically

Even in reporting and analyzing seemingly-objective economic data for comparative purposes, political ideology can creep in if that instinctual urge is powerful enough. Even in comparisons of political entities that are on the same level (e.g., city, region/province, kingdom, empire), “word-games” can be used to suggest that the republics being compared are on different political levels. The use of linguistic subterfuge is, I submit, underhanded and based on a stubborn refusal to admit to oneself that the two or more political entities being compared are indeed on the same level, rather than one being higher than the other. In the case of comparing GDP and GDP per capita between E.U. and U.S. states, the very fact that the states are being compared to each other, rather than a state in one union to another union (as if a state in one political union were equivalent to another union of states—a category mistake to be sure!), means that the respective states are in fact equivalent even though different labels are used according to whether a given state is in one union or another. In arguing these points, I shall juxtaposition the respective labels to highlight the absurdity of using different labels for ideological purposes.

In mid-April, 2026, Euronews, which reflects Euroskeptic language in order to appease critics of the E.U., reported that top E.U. states and U.S. republics were roughly similar in “economic size rankings.”[1] Even though E.U. states, like U.S. states, were (and had been) semi-sovereign states, Euronews belied its own economic likeness of the respective economic sizes of big states in both unions by erroneously inventing the label, “EU countries” just before “US states.” Then, in the next paragraph, the journalist used the label, “European economies” for the E.U. states yet retained US states. In English, the expression, “Something funny is going on here” is a way of applying suspicion to another person’s underlying motives. In other words, something more is going on in the writing of the article than merely comparing economic numbers. This is the idea.

The “word games” bent on subtly overlaying differentials are undercut when we turn to the numbers themselves. In terms of GDP, the list from highest to lowest shows E.U. states and U.S. states clustered: Germany, California, France, Texas, Italy, New York, Spain, and Florida. That big states in one union of states are economically equivalent to big states in the other union is good evidence that the respective states in the two unions are equivalent more generally. To take one example, the GDP of Spain in 2025 was €1.687 trillion and that of Florida was €1.624 trillion.[2] To be sure, in making more general comparisons between the two semi-sovereign states, Spain’s greater size, 3.6 times the territorial size of Florida, is significant. However, that Spain’s 505,990 square kilometers falls between the 423,970 of California and the 695,662 of Texas strongly suggests that in terms of territory, the large (and small) states of the respective unions cluster together, rather than it being the case that a large state in one union clusters with the other union overall. To be sure, the exception to this is Alaska being larger than the E.U. itself, but otherwise, the large states in the two unions cluster not only in terms of economic output, but also geographical size.

The article’s report of GDP per capita even puts some large U.S. states above even large E.U. states because New York, California, Illinois, Texas, and Florida have higher numbers than do the Netherlands, Germany, France and Italy. The bar-graph in the article even has all of the states in blue whereas the U.S. and E.U. are in other colors so those two unions could be compared to each other. Even though the graph is labeled as “EU’s top 5 economies vs. top 5 U.S. states” (notice, too, the subtle, selective use of periods in “U.S.” but not “EU” as if this means that the latter is an organization rather than a union of states!), that all of the states are shown with blue bars indicates that the states of the respective unions are equivalent (and that the unions can be compared with each other, rather than to a state).

In making the argument of state-equivalence, out of which I derived union-equivalence, I once read the ten volumes of George Bancroft’s History of the United States of America, From the Discovery of the American Continent after having taken Joanne Freeman’s Yale course on the American Revolutionary War. In writing British Colonies Forge an American Empire: A Basis for Trans-Atlantic Comparisons, I wanted to highlight that according to Bancroft’s studies, people on both sides of the Atlantic viewed the British colonies as being on the scale of the countries in Europe at the time. Bancroft reports in his texts that both the political elite in the colonies and in the British Empire’s host kingdom (i.e., Britain) tended to view the United Colonies as being on the empire- rather than kingdom-level.[3] In fact, even New England, the Mid-Atlantic, and Southern (informal) sub-groups of colonies were viewed as empires in themselves by some people! Not just a few British politicians were nervous about there being an empire (or empires!) within the empire; an empire consists of kingdom-level political entities. That both Virginia and Ireland were regarded as members of the British Empire is strong evidence that the British colonies in North America were regarded from the start in the Greek rather than the Roman sense of a colonialization (i.e., a colony constructed to be equivalent to the host country rather than as a part thereof; for example, a city-state in Greece creating another city-state). This is the historical underpinning for my conclusion that the U.S. states, rather than the U.S. itself, are equivalent to E.U. states, and therefore I submit that the claim that a state of the E.U. is equivalent to the U.S. is a political category mistake. In historical terms, no one would have claimed that a kingdom and an empire are equivalent because empires consisted of kingdoms. That both a free-standing, or free, kingdom and an empire were both sovereign does not make the two equivalent because sovereignty is merely an attribute rather than definitive.  

Comparative politics can extend beyond comparing types of political systems (e.g., democracy, autocracy) to consider the matter of equivalence in terms of city-states, regions, kingdoms, and empires. Early in the seventeenth century, the European jurisprud Althusius wrote Political Digest on federalism based on the Holy Roman Empire. In his text, he clearly distinguished between the different levels in a federation: the guilds, the cities, the regions, the kingdoms, and the empire. His theory of federalism has the next-lower being members (and thus represented) in the next-higher, with individuals being members only of the guilds. His isomorphic federalism is more the case in the E.U. than the U.S. because none of the American states have federal systems. By viewing the E.U. and the U.S. as equivalent, Althusius’s theory could be seen to be applicable to the U.S., especially in regard to that union’s large, internally heterogenous states like California, Illinois, and New York. Comparing apples with apples, and oranges with oranges in comparative politics can indeed have such significant practical benefits, but not if Europeans and Americans go on treating individual states in one union as being equivalent to the other union rather than to states thereof.

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1. Servet Yanatma, “E.U.’s Largest Economies vs. Top US States: How Do They Compare in GDP?”  Euronews.com, 12 April, 2026.
2. Ibid.
3. Skip Worden, British Colonies Forge an American Empire: A Basis for Trans-Atlantic Comparisons.

RBI Overheating India’s Economy: On Materialist Greed Fueling Ceaseless Consumerism

A phenomenon as massive as the global coronavirus pandemic, which ran from 2020 to 2022, is bound to have major economic ripple, or wave, effects in its wake. India’s record high 9.2% growth of GNP in the 2023-2024 fiscal year illustrates the robust thrust of pent-up demand met with increased supply. To the extent that consumption over savings is the norm in any economy, a couple years off can subtly recalibrate economic mentalities to a more prudent economic mindset wherein saving money is not so dwarfed by spending it. Moreover, putting the brakes on a consumerist routine and societal norm can theoretically lead to putting the underlying materialism in a relative rather than an absolute position and thus in perspective. Yet such a “resetting” must overcome the knee-jerk instinct of any habit to restart as if there had been no change. Coming back to college, for example, after a summer away, students tend to pick up their respective routines right away as if the recent summer were a distant memory. India’s astonishing rate of economic growth just after the pandemic demonstrates that the penchant for consumerism and economic growth as a maximizing rather than satisficing variable returned as if the steeds in Socrates’ Symposium—only those horses represent garden-variety eros sublimated to love of eternal moral verities, to which Augustine substituted “God.”

The full essay is at "RBI Overheating India's Economy."

GDP Per Capita in the E.U. and U.S.: Changing Perceptions

Historically speaking, the E.U. and U.S. are relatively large in territorial expanse and population, so it is only to be expected that significant economic (and cultural) differences exist from state to state in the respective unions of states. In Europe, some medieval kingdoms have relegated to being but regions in E.U. states. Holland, for instance, is a region in The Netherlands, which in turn is a E.U. state. The same can be said of Bavaria (and England, were the United Kingdom still a E.U. state). To compare the economic inequality in such a region with the inequality in the E.U. (or U.S.) over all would be deeply misleading. For example, rural/urban economic patterns that pertain to an economy containing one major city do not translate into the multiple rural/urban patterns that exist in a modern (empire-scale) union of states. In short, scale matters, especially in how we make use of mathematical averages.  Comparing GDP per capita is a case in point; states should be compared with states.

Although recent studies had suggested that upward mobility was higher in the E.U. than in the U.S., the GDP per capita in the latter was significantly more in the latter than the former. To be sure, the gap is less “when adjusted for purchasing power parity (PPP)—which accounts for cost-of-living differences.”[1] Also, comparing the E.U. and the U.S. misses out on the significant differences between states in each of the empire-scale unions; such differences in turn can be used to compare individual states in one union with individual states in the other.

It is difficult to believe that in “the third quarter of 2024, Mississippi’s GDP per capita was €49,780, just €1,524 less than Germany’s at €51,304.”[2] That the industrial base in the latter state greatly exceeded Mississippi’s industry makes the respective numbers all the more perplexing. Because the E.U. average GDP per capita was €40,060 as compared to the U.S. average of €80,023, a person might begin to wonder whether a false economic-equivalence has pervaded both the American and European general perspectives. Certainly geographically, Americans may be surprised how much smaller Europe is than North America (and, accordingly, the E.U. in relation to the U.S.).  The GDP per capita comparisons may thus be like superimposing geographic maps at the expense of previously-held perspectives and assumptions of equivalence.

This is not to say that every E.U. state was poorer than every U.S. state; Luxembourg’s €125,043 is more than New York’s €107,485.[3] Nevertheless, it is significant that the figures for Germany, France, Italy, and Spain are less than those of West Virginia, Arkansas, Alabama, and South Carolina—each of these being below the U.S. average. It would not be at all surprising to read that these figures are incorrect, but, then again, the generally-held false geographical equivalence that Americans and Europeans naturally hold concerning the E.U. relative to the U.S. may, as a phenomenon of a false assumption of equivalence, exist economically too.

Were I to attempt an explanation—not being an economist—I would want to look at whether the relatively higher tax rates in the E.U. discourage economic activity. I would also want to investigate the extent to which the shorter work-week in Europe may also be a factor in the relatively lower GDP per capita. Furthermore, the relatively generous social policies in many E.U. states may also discourage the long-term unemployed from filling job openings, thus reducing factory efficiency and output and lowering per capita averages. Lastly, I would want to know just how much the different PPPs decrease the gaps of GDP per capita. I suspect, however, that all of these possible factors operate only on the margins, rather than explaining the entirety of the differences, given the magnitudes of the differences. It may simply be that hoch Kultur and the higher population (urban) density in the E.U. carries with it the false assumption that the E.U. must be as economically productive per person as in the U.S.

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1. Servet Yanatma, “How Do America’s Poorest States Compare to Europe’s Largest Economies,” Euronews.com, January 6, 2025.
2. Ibid.
3. Ibid.

GDP and Poverty: Is Economic Growth the Answer?

From 1959 to 1973, the American economy grew 82 percent, per person. It is easy to assume this is why the poverty rate decreased from 22% to 11 percent.[1] From roughly 1985 to 1990 and then again from 1995 to 2000, heady growth rates are also correlated positively with declining poverty rates. But correlation is not causation. Indeed, had the correlation in the 1959-1973 period continued, the subsequent per capita growth would have ended poverty in 1986. What then are we to make of the relationship between GDP and poverty?

According to Heidi Shierholz, an economist at E.P.I., the “very tight relationship between overall growth and fewer and fewer Americans living in poverty” broke apart in the 1970s.[2] In spite of the OPEC oil cartel’s inflationary shocks in 1973 and 1979, the poverty rate remained relatively constant through the decade of “stagflation,” spiking only once Reagan took office—perhaps on account of David Stockman’s domestic budget cuts that hit the poor especially hard and Paul Volcker’s high interest rates at the Fed (to decrease the inflation rate) that increased the cost of borrowing money. To be sure, the recessions in the early 1980s and the early 1990s are associated with increases in the poverty rate, which even lags the subsequent recoveries, and the rate fell as the economy was humming along in the late 1980s and 1990s. Even so, eleven percent seems to be the rate’s floor. Perhaps this is why the relationship broke apart in the 1970s?

According to Thomas Piketty, the period from World War I to the 1970s is unusual economically because the shocks reduced returns on capital relative to the growth rates of income and GDP. The economist suggests that inequalities in income and even wealth narrow under this rather artificial arrangement; typically, returns on capital have outsized increases in income, thus increasing the inequalities. Perhaps the inverse relationship we are looking at holds only when the rate of return on capital is low relative to the GDP rate. However, as I indicate above, heady growth periods after the 1970s can be found in which the poverty rate is decreasing, and recessionary periods in which the rate is increasing.

So we are back to the 11 percent floor. When the relationship broke apart in the early 1970s, the poverty rate was indeed at 11 percent. Instead of continuing downward, the rate hovered, when up a bit, then slightly downward until just above 11 percent before heading starkly upward in 1981.[3] What might be behind the floor? It seems doubtful to me that 11 percent of the adults in America are simply unable to work for non-economic reasons. It seems more likely that the market mechanism, which can support wages at the minimum wage without any upward pressure (e.g., from labor shortages), functions at an equilibrium short not only of full employment, but rising wages (relative to returns on profits and stock appreciation) as well. In other words, we cannot look to the market to “grow” us out of poverty. While undoubtedly a help, the market is only part of the solution.

The question is thus how we can fill in the rest of the solution. What, outside of the economy, can make up the difference? As the source and enforcer of societal rules, government is not intrinsically the answer, for to be the “man in charge” does not in itself connote supplying materials (including jobs). Yet the government could direct that materials and or jobs be provided outside of private industry, such as by non-profit organizations receiving funds from tax revenues and thus directly under government oversight. Even now, the Full Employment Act of 1946 directs that everyone who wants a job should be able to have one—that this is a task of government to oversee. Lest employment be viewed as an end in itself rather than a means, we could stipulate that everyone has at least a minimum amount of money and wealth. Hence the unemployable veteran, for example, would not have to suffer in poverty. Lest breaking through the 11 percent floor make it more difficult for Walmart or McDonalds to pay cashiers the minimum wage of just over $7 an hour, we might remember that a part of the solution is not in itself more important than the solution itself.

That is to say, hits taken at the margins to part of the solution as the rest of the solution is added should not outweigh the solution itself, for the end is more important than any one of the means. Too often, I fear, the American public discourse obsesses on the downsides on the margins to a means, being all too willing to preempt a full solution just so the particular means is not slighted in any way. I suppose this is a sort of tunnel vision, with greed playing a supporting role. Death and taxes may be inevitable, but surely poverty is not. Indeed, it may be viewed as an artificial byproduct of human society and thus as fully within our powers and responsibility to eliminate rather than take as a given.

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[1] Neil Irwin, “Growth Has Been Good for Decades. So Why Hasn’t Poverty Declined?” The New York Times, June 4, 2014.

[2] Ibid.

[3] Ibid.