What do the French Really Believe About Capitalism?

The French elite (both left and right wing) are famous for disparaging the savage inequalities of Anglo-Saxon laissez-faire capitalism.  (BTW, I’ve never been clear why they include Britain in that category.  If France has socialized medicine then Britain has communist medicine.  And government spending is currently 50% of GDP in Britain.)

The Economist magazine often points out that the French are actually much more pragmatic then their rhetoric suggests, and that they have come to terms with markets.  It seems to me that the current economic crisis in the PIGS provides a good test of this proposition.  So what have the French been telling their southern neighbors to do, in order to rescue their economies?

  1. Privatize, privatize, privatize.
  2. Deregulate market access.
  3. Make it much easier for firms to hire and fire workers.
  4. Raise the retirement age to 67.
  5. Shrink their governments, which are already smaller than the French government as a share of GDP.

In other words, the French think a troubled economy can best “reform” by becoming more like the United States.

I’ve always thought that the French have a fine model–but it only seems to work in France.

About Scott Sumner 491 Articles

Affiliation: Bentley University

Scott Sumner has taught economics at Bentley University for the past 27 years.

He earned a BA in economics at Wisconsin and a PhD at University of Chicago.

Professor Sumner's current research topics include monetary policy targets and the Great Depression. His areas of interest are macroeconomics, monetary theory and policy, and history of economic thought.

Professor Sumner has published articles in the Journal of Political Economy, the Journal of Money, Credit and Banking, and the Bulletin of Economic Research.

Visit: TheMoneyIllusion

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