Noah Smith challenges a comforting European delusion: that mocking America's flaws is a valid strategy for solving Europe's own deepening crises. In a piece that cuts through the noise of transatlantic finger-pointing, Smith argues that the current European fixation on American dysfunction is not just factually shaky, but a dangerous distraction from a continent facing stagnation, energy insecurity, and a resurgent Russian threat. For busy leaders watching the global balance of power shift, this is a stark reminder that bragging rights matter less than survival.
The Illusion of Superiority
Smith opens by recounting his experience at a festival in Ireland, where comedians and economists mocked the United States for its lack of universal healthcare, gun violence, and inequality. He observes that while these jokes once felt like friendly ribbing, they now carry a "strained and a little desperate" tone. This shift, Smith suggests, is a reaction to the executive branch's recent pivot away from traditional alliances, including scaled-back aid to Ukraine and the imposition of tariffs on European goods. Yet, he contends that this reaction misses the forest for the trees.
The core of Smith's argument is that this litany of American criticisms has become a form of "cope"—a psychological defense mechanism allowing Europeans to ignore their own structural decay. He writes, "Even if all of these things were true, it wouldn't reduce Europe's own deep-seated set of problems." This is a crucial distinction. The author posits that the transatlantic relationship is not a zero-sum game where one side's failure validates the other's success. Instead, he warns that "if the U.S. does poorly, this will ultimately make Europe poorer and less secure."
Smith dismantles the common narrative that Europe is fundamentally different from the American model. He points out that both regions operate as capitalist economies with high taxation and robust social safety nets. Citing recent research by Fisher-Post and Gethin, he notes that the U.S. tax and transfer system is "about as progressive as Europe," challenging the myth that America lacks a redistributive fiscal structure. Furthermore, he references data on economic freedom to show that the U.S. ranks similarly to North European nations like Germany and Sweden.
"Bashing America will not help Europe solve any of these issues. Pointing out the fact that America has higher inequality than Europe will not help Germany build a single electric car."
This framing is effective because it strips away the emotional satisfaction of moral superiority and forces a focus on material outcomes. However, critics might note that the comparison of tax progressivity overlooks the structural differences in how services are delivered—specifically, the fragmentation of the U.S. system versus the universal mandates in Europe—which can lead to vastly different outcomes for the working poor regardless of the net redistribution numbers.
The Reality of European Stagnation
The commentary shifts to a sobering assessment of Europe's current trajectory, drawing heavily on reports from the Wall Street Journal and Deutsche Bank. Smith highlights that Western Europe has been "adrift, an aging continent slowly losing economic, military and diplomatic clout." The data is stark: Germany's economy is barely larger than it was in 2017, while the U.S. has grown by 19% in the same period.
Smith attributes this stagnation to a toxic mix of overregulation, expensive energy, and a lack of dynamism. He cites the example of a single project to build a tunnel under the Thames, which has spent $340 million just on planning permits, and a high-voltage transmission line in Scotland that took 12 years to permit. These are not abstract policy failures; they are concrete barriers to building the infrastructure needed for a modern economy.
The energy crisis is particularly acute. Smith notes that industrial electricity costs in Germany are three times higher than in the U.S., and four times higher in the U.K. Despite ambitious green plans, Europe's electrification has stalled at roughly 23%, while China approaches 30%. The author argues that the region's "anti-development regulations and broken grid interconnection system are preventing the transition."
This regulatory stranglehold has left Europe vulnerable to Chinese competition. Smith points out that China is now dominating the very industries where Europe should have a comparative advantage: batteries, solar panels, and electric vehicles. "Germany's industrial backbone is facing an unprecedented challenge," he writes, noting that a five-year decline in industrial production threatens millions of jobs. The result is a reversal of trade flows, with China exporting manufactured goods to Europe rather than the other way around.
"Europe is no exception. Every country and region in the world has challenges and shortcomings."
The historical context here is vital. As noted in the Index of Economic Freedom, the post-war European model relied on stability and social consensus, but the current global environment demands agility and rapid industrial scaling—traits that the current regulatory framework actively suppresses. The author's argument that Europe is losing its competitive edge is bolstered by the fact that its share of the global economy is now at its lowest point since the Middle Ages.
The Path Forward
Smith concludes by suggesting that the solution for Europe may require adopting some of the very American traits it despises. He does not advocate for gun violence or political chaos, but he argues that loosening regulations on factory construction, mining, and hiring is essential for building new industries like drones and EVs.
"In order to build new industries... Europe will have to loosen its regulations around things like factory construction, mining, mineral refining, hiring and firing, and so on," Smith writes. He acknowledges this might exacerbate inequality and increase short-term carbon emissions, but argues these are necessary trade-offs for long-term security and independence from China and Russia.
This is the most provocative part of the piece. It suggests that the ideological purity of the European social model is becoming a liability in a world defined by great power competition. The author warns that continuing to paint America as a "plutocratic hyper-state" while Europe's own foundations erode is a fatal error.
"It is, in short, a cope. And it is not helpful."
A counterargument worth considering is that the regulatory environment in Europe is a deliberate choice to prioritize social cohesion and environmental protection over raw GDP growth. Smith's utilitarian approach risks undervaluing the social stability that these regulations provide, even as they hinder rapid industrial expansion. However, given the existential threat posed by a revanchist Russia and the economic pressure from China, the cost of inaction may soon outweigh the benefits of the status quo.
Bottom Line
Smith's strongest contribution is his refusal to let Europe hide behind a facade of moral superiority while its economic and military power wanes. His argument that transatlantic solidarity is a shared destiny, not a competition, is both timely and necessary. The piece's biggest vulnerability lies in its potential underestimation of the political difficulty of deregulating Europe's deeply entrenched social contracts, but the urgency of the external threats makes this a risk worth taking.