The French Devolution

Rich Lowry

4/24/2007 12:01:57 AM - Rich Lowry

France has often, for better or worse, led the way during its history: in state-building, when Louis XIV created the modern French monarchy; in proto-totalitarian politics, with its revolution of 1789; in mass-mobilized warfare, in the wake of the revolution. Now, France is being reduced to a sad object lesson, a warning of the deadening effects of Big Government economics.

France might not be on the road to serfdom, in the phrase of free-market philosopher Friedrich Hayek. But it has traveled far down the road to stagnation. Its presidential election, now in full swing with a runoff in two weeks between the main candidates of the right and left, Nicolas Sarkozy and Segolene Royal respectively, offers a glimmer of hope that the country will find a detour. Otherwise, this is how a great power ends, with a whimper.

Other European governments have reduced the burden of the state during the past decade, but France bucked the trend. Once associated with revolution, France now specializes in devolution, the steady descent of its economic indicators. The old saw is that other poor Southern states always say, "Thank God for Mississippi," since it can be counted on to rank 50th in most state rankings. Europe can say, "Thank God for France," since it seems ready to take on from Germany or Italy -- both recovering smartly -- the title "The Sick Man of Europe."

The Heritage Foundation Index of Economic Freedom ranks France as only the 44th freest economy in the world, and it shows. It can't cope in a world characterized by free-market dynamism. It used to rank eighth in the world in terms of per capita GDP; now it has slipped to 19th. In the late 1970s, France had a bigger economy than Britain's by a comfortable margin; now Britain has passed it. Fifteen years ago, France had a per capita GDP that was 83 percent of that of the United States; now it is 71 percent.

A 35-hour work week, mandates that make it expensive to hire new employees, liberal welfare payments and vacation policy -- all combine to make France the world's slacker. According to one economist, an average worker in America will work 30 percent more hours than the average worker in France during his career. That is, if the Frenchman works at all. Astonishingly, only 41 percent of French adults work, "one of the lowest labor-participation rates in the world," the Financial Times reports.

The perpetual French growth industry is government. At 54 percent of GDP, the state is large even by European standards. A quarter of French workers are employed by the government, double the rate of 1970. Not surprisingly, a nation of bureaucrats has not proven itself supple nor innovative. According to the Financial Times, "about half of the French electorate is dependent on the state for wages, benefits or pensions" -- a powerful voting bloc in favor of the state and of stasis.

France is a lesson in the perils of reactionary conservatism and of ideology. Prior to World War I, the country had a robustly free-market economy. But the recovery from World War II mightily increased the prestige of government planning. Ever since, a robust state has been associated with economic health, although the conditions favorable to central planning disappeared decades ago. Meanwhile, an anti-free-market, anti-"Anglo-Saxon" ideology blinds the French political elite to the folly of their Gallic statism.

There are recent examples of countries mired in decline breaking out of their funk -- foremost among them Margaret Thatcher's Britain. Sarkozy's reformist rhetoric has had critics calling him an "American neocon with a French passport" (would it were so), but he toned down his rhetoric on the eve of winning the first round of presidential voting this week. Even if he beats the more-of-the-same candidate Royal in the runoff, he might be hard-pressed to deliver on promises of change.

In which case, France still will have something to recommend it: the museums.