Two comforting but destructive myths are alive in some parts of Europe, particularly France. The first is that average US workers have a lower standard of living than workers in Europe, the second that US companies lift their profits by laying off workers. These myths are comforting because they justify the Europeans' continuing resistance to market forces. They are destructive because that resistance is causing financial capital to flee Europe and seek richer rewards on the other side of the Atlantic.

US companies create jobs by using this capital to finance growth in capacity and, hence, in sales. But France's high minimum wage, generous mandatory social benefits, and obstacles to eliminating redundant jobs have made French industry loath to hire, though the country's unemployment rate is almost three times that of the United States. To help redress this unfortunate state of affairs, the French government has shortsightedly cut the work week, depriving healthy, expanding companies of the effort of an eager workforce. In a sad irony, the US model, which is officially indifferent to the problem of joblessness, creates not only bigger revenues and profits but also more jobs than the European model, which misguidedly accepts slow growth as the...