Whether you can observe a thing or not depends on the theory which you use. It is the theory which decides what can be observed.—Albert Einstein, 1926
Americans often feel exasperated with the economic intransigence of their continental European cousins. To a typical American, the typical non-English speaking European often seems obsessed with big government, large welfare systems and making it hard to do business by interfering with capitalism. In fact, despite much rhetoric to the contrary, even Anglo-Saxon Britain is right in the middle of big-government, large-welfare European countries. The scale to which Europeans have directed economic resources toward this goal is staggering: between 2004–2009, Europe was a “lifestyle superpower” that expended €2.6 trillion (US$3.42 trillion) per annum on social protection, equal to 58 percent of the global spend, which for the rich European countries was around one-fifth of each member country's gross domestic product (GDP) (Gill and Raiser 2012). As a comparator, in 2010 the US achieved its military superpower status through 43 percent of the global military spend, more than the next 15 largest spenders combined, but costing “just” US$689 billion (Gill and Raiser 2012).
There is, of course, a rationale behind the European pattern of expenditure. Nowhere else in the developed or developing world, apart from Japan, are disability-adjusted life expectancies so high, income and educational inequalities so low, old age provision so generous, fossil fuel efficiency so high, nor regional economic convergence so typical (Gill and Raiser 2012).