The Donald & Paula Smith Family Foundation hosted a debate at the CUNY Graduate Center on Tuesday with the tantalizing title “American Cowboy Capitalism vs. Euro-Sclerosis: Which Model Will End Up in the Dustbin of History?”

The announcement for the event described an “increasingly vociferous” debate between America and Europe. It said critics of the American economic model focus on what they see as a worsening distribution of wealth and a shrinking economic safety net, while critics of the European model points to Europe’s higher rate of unemployment and lower productivity.

A senior contributing editor to Institutional Investor, Harvey Shapiro, served as the debate’s moderator. He asked participants which approach would be more sustainable and therefore more desirable for the 21st century.

Mr. Shapiro pointed to the ups and downs of European work schedules: Germans typically enjoy five weeks of vacation annually; Danish citizens often take six weeks during the year, and many French stand by their 35-hour workweek. Sweden, he said, not only allows new mothers six months’ maternity leave, but new fathers enjoy a 10-day paternity leave.

An economics professor at Columbia University, Edmund Phelps, got the discussion rolling with some general questions such as “What is satisfactory economic performance?” and “What kind of economic system is needed to generate acceptable performance?” Before one can say any system falls short, he cautioned, one must define good economic performance.

Mr. Phelps mentioned that he considers “dynamism” – qualities that create work, allow for discovery of talent, and generate problem-solving – a critical element of economic success.

To measure productivity, he continued, it’s best to look at relative rather than absolute levels. For example, the economic boom of the late 1990s was almost a laboratory experiment, he said: America did relatively well, but Europe did relatively poorly during the Internet and telecommunications revolution. Unemployment rates in some of the Continental economies were (and are) in the double digits.

In Europe, corporate entities’ statism, communalism, and tendency to seek consensus among institutional players hurt the region’s ability to adapt to technology, Mr. Phelps said.

The editor of Challenge magazine, Jeffrey Madrick, described himself as a “substitute hitter,” since he spoke in place of the scheduled speaker, the president of the Foundation on Economic Trends, Jeremy Rifkin.

Mr. Madrick said that despite America’s recent strong performance, it “was in for long-term slow growth” compared to Europe, due to the Continent’s willingness to make greater social investments.

He critiqued John Steele Gordon’s book “An Empire of Wealth: The Epic History of American Economic Power” (HarperCollins) for claiming that virtually every major technological development of the 20th century originated in America. Although modest men like actor Gary Cooper may be admired, America still thinks that it is the best country in the world.

But, Mr. Madrick said, early in the century, Germans led the way in chemistry and later innovative Japanese firms such as Toyota and Sony revolutionized manufacturing. Germany and Russia pioneered rocketry (although the American Goddard made important contributions). “Why this triumphalism?” Mr. Madrick asked.

Mr. Madrick wondered if productivity and gross domestic product were the best measurement of a society, or whether things like longevity or infant mortality are more appropriate yardsticks. Over the long term, European nations generally spend more money on human capital, worries him.

“I’m not endorsing inequality or inadequate health care,” Mr. Phelps responded. He stressed that their debate was about economic models rather than a full range of social policies.

In Mr. Phelps’s view, institutions drive economic development harder than human capital: “Just piling on more Ph.D.s if you don’t have the right infrastructure” won’t help.

The Knickerbocker gauged reaction after the event. A professor from Cooper Union, Fred Siegel, said that the speakers should have addressed Germany’s unemployment: It’s is 12.6% of the working-age population, the highest since the 1932. A senior fellow at the Annenberg Center for the Digital Future, Thomas Lipscomb, said, “As a child, we used to save our money to buy care packages for war-ravaged Europe, and I expect some day to take some of my Social Security to pay for care packages for Europe in the midst of economic catastrophe.”

Television journalist John Stossel said the debaters were “splitting hairs.” James Taranto of Opinion-Journal.com said he had missed some of the debate, but “my money is still on the U.S.”

The next debate on “Tax Reform: Is There a Better Way?” is set for April 21. David Cay Johnston, author of Perfectly Legal” (Portfolio) will square off with Steve Moore, author of “Bullish On Bush” (Derrydale).