Ronald Reagan once said that if he could only get in a helicopter with Mikhail Gorbachev and fly over the United States, he would be able to turn the Soviet leader away from communism: “He would see how Americans live in clean and lovely homes, with a second car or a boat in the driveway.”
Reagan may have been naïve in his belief that he could change the mind of the Communist leader, but he was right to focus on the huge difference in living standards between the United States and the Soviet Union. Material living standards are not simply an indicator of wealth; they are also a great measure of the level of idealism and goodness in a society.
Since moving to the United States 14 years ago, I have often been struck by the endless examples of much higher living standards in the United States than in Denmark: Bigger houses, bigger cars, bigger grocery stores. And not just bigger – better, too, with a greater variety of goods for consumers to choose from. For instance, fresh and organic foods are much easier to come by at a decent price in the United States than in Denmark.
Earlier this spring, the World Bank quantified this difference in wealth. Drawing on data from 2011, the Bank estimates that so-called actual individual consumption (AIC) in the United States is $37,390 compared to $26,288 in Denmark. This is a difference of 42 percent.
AIC measures the value at purchasing power parity of goods and services consumed by each citizen in a given year. Importantly, the number takes into account the value of government-provided services. The large welfare state benefits in Denmark are thus included. AIC is widely accepted as one of the best measures of actual living standards. So, according to the World Bank, living standards in the United States are 42 percent higher than in Denmark.
One might object that life is not all about material wealth. As Robert Kennedy once put it, “the Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”
Fair enough. But does anyone really believe that lower material living standards improve your odds of pursuing the things that really matter in life? Material wealth is often a necessary condition for more idealistic pursuits. To take an obvious example: Think of all the free time that modern amenities such as washing machines and dish washers have created. While some people choose to waste this time, others invest the extra time available to them in playing with their children, volunteering, or putting extra hours into worthy professional pursuits.
Being an idealist is a lot easier in a society with a high standard of living. Perhaps this is why Americans tend to be more idealistic than Danes in my experience.