Day By Day

Saturday, May 19, 2007

Rethinking France

For years now the general consensus in the blogosphere has been that Europe in general and France in particular were drifting into irreversible demographic, economic, and political decline. One of the most widely praised books of the past year, Mark Steyn's America Alone, takes that assumption as its thesis and marshals an impressive array of evidence in support of the proposition.

But there is another perspective to consider. Rootless Cosmopolitan reprints a comment by Bernard Chazelle that takes issue with Steyn's argument. He writes:

With the highest birth rate in Europe after Ireland, France contributes 70% of Europe’s natural population growth. GDP per head in France, Germany, Japan, and the UK are nearly identical. Growth over the last 10 years has averaged 2% in france, 2.1% in the U.S., and 2.3% in the UK. In the last quarter, France actually raced ahead of Britain and the U.S. Productivity is higher in France than in both countries (and 50% more so than in Japan). But pity the French: with their 35-hour work week, 5-week paid vacations, and 16-week paid maternity leaves, they work 30% fewer hours than Americans. Maybe that’s why they live longer (81 years vs 78) and infant mortality is lower (4.3 vs 7 per 1000). Unless the reason is France’s health care system: the best in the world, according to the World Health Organization. Or perhaps it’s the narrower inequality gap: child poverty in France is half the British rate and one third the American.

“French decline” experts like to contrast France’s catastrophic unemployment rate of 8.3% (lower than the U.S. rate during the Reagan years) with Britain’s marvellous 5.5%. In the process they miss two points: First,
France created more jobs than the UK in the last 10 years. (The discrepancy comes from the fact that France is younger and has experienced higher labor force growth). Second, virtually all of the job growth in the UK since 2000 has been the result of public spending. The neoliberals who so admire Britain’s recent growth
conveniently forget that it was built on a Keynesian binge through tax increases and a huge public sector expansion: from 37% to 46% of GDP in a mere 6 years. Gordon Brown at the Exchequer has, indeed, looked much the part of a French finance minister with a London office.

José Bové, the Astérix of French politics, has burnished France’s antiglobalisation
image by ransacking McDonald’s outlets wherever he can find enough TV cameras to capture his exploits.
But while France has been noisily scoffing at globalization for decades, it has quietly become one of the most globalized nations on earth. (Reform by stealth is a French disease.)
Some of the evidence:

  • France has more companies listed in the Fortune Global 500 than
    Britain and Germany;
  • for the last 10 years, France’s net foreign investments (FDI) have ranked in the top 5,
    and its net FDI outflows have been the world’s largest;
  • foreign investors own 45% of all French stocks. The comparable
    figure is 33% for Britain’s and only 10% for the US.

  • These are interesting, if not dispositive, statistics. Certainly there is a lot of cherry-picking going on here on both sides of the argument, and not all of the comparisons are legitimate, but they do show that there is, at least, an argument to be made. Funeral observances for France and Europe may be premature.