Meme Weeding: Costs and Office Productivity
One of the arguments I’ve seen from time to time excusing high construction costs in English-speaking countries is that their salaries are so high, it drags all other costs up. It’s a rather bad excuse, since there is very little correlation between construction costs and GDP per capita globally: he United States and Singapore are both very rich and very expensive to build metros in, but then Switzerland and the Scandinavian countries are also very rich and fairly cheap to build metros in, and the UK is expensive without being especially rich by European standards. But then I’ve more recently seen people in the US and UK try to specialize their argument to professional services productivity, to take into account that this is a sector where London is very strong and the cities of Germany are not. However, even this doesn’t explain construction cost patterns well. The pattern in which the Anglosphere is uniformly bad has to be understood not as a matter of high wages or productivity, but as a matter of the UK and US developing bad practices for somewhat different reasons and the other English-speaking countries imitating them out of cultural cringe.
The issue here is that while London is a global financial center with high office work productivity and a wealth of professional services, this isn’t true of the rest of the Anglosphere with the exception of the United States. Dublin is not a global financial center; Ireland has high GDP per capita but most of it is profits of corporations owned by foreigners, and local incomes average the same as in Italy. Dublin has a large tech industry for its size – American tech companies have hubs there to justify setting their global headquarters in Ireland to take advantage of a mutual loophole in American and Irish tax laws – but programmers are not usually a substitute for the sort of procurement experts, planners, and overseeing civil servants who are relevant for project delivery, and barely are a substitute for the mechanical and civil engineers who design station standards. Toronto is Canada’s financial center, but Canadian banks are not especially important outside Canada, so in that sense it is substantially less important for professional services than Paris.
What connects all of those Anglosphere cities – and also ones not mentioned above, like Sydney, Melbourne, and Auckland, not to mention Singapore and Hong Kong – is that they all have branch offices of British and American consultancy firms, so they’re more visible in their roles as centers of professional services. But that is not about professional services, but about their ties to British and American global corporate cultures. This is relevant to their high costs, not because the presence of a strong professional services industry raises costs, but because those countries all pick up American and British ideas about the superiority of the international consultancy to the state and then implement a project delivery system that seeks to empower such consultancies. As a usually intended consequence, this system also empowers personalist politicians, who get to micromanage those billion-dollar contracts, and would lack the institutional capacity to manage more normal-size contracts, which they would have to outsource to the permanent civil service rather than to their own political staffers.
In fact, the stereotype that high-cost, low-income-by-first-world-standards countries like Ireland, New Zealand, and Canada are hubs of professional services is itself part of the broader problem. Paris is a giant hub of corporate headquarters and professional services. They are not specialized to finance the way London’s companies are, but the banking profession isn’t more in competition for good managers with the public procurement profession than any other professional service. France is not a particularly industrialized country, unlike Germany or Italy; the good jobs there all involve managing other office workers, as in the US and UK. It’s just a different ecosystem of professional services firms from the British and American one, so it’s worse-known to Americans and Brits.
Similarly, Dublin may be a large tech hub due to its tax haven status, but Zurich has Google’s largest foreign office, at least as of the late 2010s. Zurich is also a rather large banking center for its size. Swiss wages and prices are legendarily high, and Switzerland is almost as deindustrialized as the US or France, but this has not driven Swiss infrastructure construction costs up. To the contrary, Switzerland feels at the top of the world, with little need to privatize its rail services or delivery; not being an EU country, it does not fall under the EU open access mandate, and has not imitated it in its intercity rail planning, because from its perspective, it has the best rail network in Europe by traffic and modal split, so it has little reason to imitate British managerial practices (or, for that matter, French speed; Swiss average rail speeds are low).
So the stereotype that high Anglosphere costs come from high professional services productivity, like the myth that Anglosphere countries other than the US and Singapore are exceptionally rich, is false. It persists because it helps people in the US and UK cope: their high costs, in this schema, are not an inferiority that they should fix, but rather a regrettable but livable side effect of superiority. It’s not the only place where this coping exists; I’ve seen Americans excuse their combination of the highest health care costs in the world and the lowest life expectancy in the developed world sensu stricto by appealing to their high wages, an appeal that’s entirely invisible if one looks at the developed world omitting the US (Nordic life expectancy is high with health costs at the EU average).
In truth, high costs in the English-speaking world are not an aspect of superiority – quite to the contrary. They coexist with some other more positive aspects, in the same way that each country or cluster of countries has its own set of social problems, averaging with positive aspects to a reasonable first-world living standard. But they don’t follow from wealth, democracy, or anything else that Americans and Brits are proud of, whether or not it’s even true. They’re a genuine problem, for which the solution must be to, to an extent, de-Anglicize and de-Americanize and instead pick up the better practices of the rest of the developed world.
Pedestrian Observations 
Thank you for this excellent summary and explanation of the topic. I only disagree on a small and largely inconsequential detail. You said that “Switzerland is almost as deindustrialized as the US and France.” Switzerland is an industrial powerhouse in specialized sectors with a manufacturing share of GDP of 18.11% in 2023, a share similar to Germany’s, and well above Italy’s 15.37%, US’ 10.2%, France’s 9.73% or the UK’s 8.25%.
London definitely has a hinterland that is almost entirely wealthy and which typically has higher construction costs than the rest of the country.
Plenty of homeowner examples on checkatrade.com – treat the high price as correct for London and the South East and the low one as correct for the rest of the country.
That said PPP will also be weighted towards London and the South East so…
Have you looked at John burn Murdoch’s analysis of US vs UK life expectancy gap? It doesn’t seem to be attributable to healthcare delivery at all, and is mainly driven by premature deaths in young people due to drug overdoses, traffic fatalities and homicides.
The UK brings up Europe’s rear. And no, it’s not mostly deaths from homicides and traffic, at least; the contribution of firearm deaths, including suicide, is around a quarter of a year (link), and the contribution of traffic should be less than that since the US has a larger gap in firearm deaths than in traffic deaths, and I think firearm deaths also skew younger.
More people die young it lowers the life expectancy. Because they never get old.
Sure, but the point is that the contribution of gun deaths (murders and suicides) is three months, and that of car accidents should be a little lower. It doesn’t explain the two-year gap the US has with the worst European countries (the UK, Germany, and Denmark), let alone the five year gap with the better one.
What does explain the gap is poor access to health care by working-class people. These are numbers from ~13 years ago for the US, but here is the US and here is France. University graduates have the same life expectancy in both countries; non-graduates have a rather large difference, because France has universal health care and the US does not.
Gun deaths and traffic fatalities skew towards males. Dead women lower life expectancy too. The U.S. has atrocious and getting worse maternal death rates. Atrocious infant mortality too.
Classifying the deads is not easy. You may recall the controversy about deaths “from” Covid and “with” Covid. The death certificates are often filled in the middle of the night by a young resident who did not know the patient. They are riddled with mistakes such as confusion between manner and cause of death.
Most developed countries only count a death as maternity-related if the physician certifying the death mentions a pregnancy-related cause such as eclampsia. US statistics generally attribute a death to pregnancy if the pregnancy check-box is filled. This may result in over counting US maternity-related deaths by as much as 300%.
The infants are difficult to misallocate. And it doesn’t matter what they are dead from. They are still dead.
The UK life expectancy drop is probably our poorer handling of Covid than our peers.
I seem to be blocked from posting links, so I’ll just respond link free. Please try to look for the references if you can, I apologize for the inconvenience.:
Ho JY. Causes of America’s Lagging Life Expectancy: An International Comparative Perspective. seems to put the number attributable to Homicides overall at 0.6 years not 0.25 as you state. it also attributes 0.4 years reduced life expectancy to traffic fatality disparities. and 1.5 years discrepancy to drug overdoses. I think this accounts for about half of the 5.18 years of total lower life expectancy for US men. It should be noted that due to the opiod crisis, Drug ODs accounted for 32.5 deaths per 100K in 2017. Also CVD like heart disease and stroke seem to be more prevalent in the US.
Your point regarding the disparity between college graduates and non college graduates, is really good. I’ll try to look into that. One possibility is that US college graduates with access to higher wages and better Medical facilities have better outcomes than peer countries when controlling for excess Mortality due to external causes like homicides, traffic deaths, and ODs. Then when you bring those external causes back into the picture they are brought back to level with peer countries. Just a hunch.
The reason I bring up the higher ASCVD rates is because these are more attributable to obesity and lifestyle factors than Healthcare delivery. Though, statins are remarkably effective against ASCVD per Peter Attia and maybe more equitable Healthcare delivery and collective bargaining lowering drug costs would mean more people’d have access to them.
Statin drugs are off-patent and relatively cheap. A bit of online shopping around I can get mine by mail order for 25 cents a tablet.
To get to the point where you have a prescription for a statin you need to have seen a doctor and had blood tests.
sure, but going to the doctor, getting the requisite diagnostic tests and getting a prescription is out of reach for working class people because of a lack of socialized cost controls(also note that better therapies like PCSK9 inhibitors are still expensive). but, when these people inevitably have a cardiac arrest they do get treated at the ER which is socialized by regulation. but said treatment is more expensive than statin therapy, so at a societal level it causes a reduction in life expectancy while increasing the total expenditure on healthcare. however, even if the us had socialized healthcare, due to higher obesity and more sedentary lifestyle there would still be higher incidence of ascvd, and consequently a lower life expectancy than peer countries.
It’s not the doctor’s fault, the laboratory’s fault, the pharmacist’s fault or the drug company’s fault the mythical magical working class person didn’t apply for coverage under the Affordable Care Act. That doesn’t change that statins are off-patent and relatively cheap.