I’m referring to unionization, since this is the topic of the post, but also the broader idea of top-down market regulation that includes provisions for workers rights and taxation of externalities, driven by generally left-leaning, anti-capitalist sentiment. In general, it seems Europeans expect more of their government than Americans do. Historically, Americans have tended to be more distrustful of their government, believing that the less it gets involved in their affairs, the better.

This distrust of government pushed the US toward a generally laissez-faire approach to regulation, while most European countries have gone the opposite direction. The approaches differ in terms of workers rights, labor laws, and taxation. Specifically, as a simple example, in the US, you can fire somebody whenever you want. Generally speaking, taxes are lower, it’s easier to start a company, and the regulatory environment is friendlier to business models driven by venture capital.

I’m arguing that it shouldn’t be a surprise, then, that the US has produced more innovation and economic capital than European countries, partially because the regulatory environment is friendlier and more encouraging of risk.