One microcosm of the social market at work has been Wisconsin's public sector, where the generous perks and benefits of government work have crippled the state's ability to govern. That's why Madison, the spiritual home of the progressive movement, has looked a bit like a modern Greek city-state ever since Gov. Scott Walker took it upon himself to reform the system. The champions of the social market have not only thrown the kitchen sink at him in an effort to protect their ideals and their perks, they've brought in sinks from across the country to rain down upon him. And yet, it looks as if he will triumph next month in the recall effort.
Not entirely by Obama's design, for the last few years America's labor market has looked pretty European. We don't have the mobs of unemployed and unemployable youths loitering in the vain hope that some state worker will die or retire so they can take his place. But we're not that far off either. Workers don't want to leave their jobs because they have no faith they'll find another. Few firms want to create new positions because they don't know if the market will sustain them.
Under normal circumstances, the U.S. economy creates tens of millions of jobs every year and destroys tens of millions, with net new jobs. In a typical year, up to 50 million Americans change jobs, often happily. They get hired away, promoted, etc.
This process partly explains why America's capitalism has been so much more dynamic than Europe's. In the social market, once you have a job, you cling to it because you may never get another. European governments make it much easier to cling to that job by punishing businesses that fire people. The unhappy byproduct of such "compassion" is that businesses are also far more reluctant to hire people because each new hire is a potential long-term liability.
Yes, Romney created jobs while he was creating value and wealth at Bain; he also destroyed jobs. Both are necessary in a dynamic market that improves the prospects for most Americans through economic growth. Some suffer from the process. But I would argue more people suffer under the social market. Which system is better is, indeed, a worthy -- and overdue -- debate.