The nonsense about France
France is doing relatively well (graph 1). It clearly escaped the historical unique decline of productivity which took place in the UK (more on this below). And though it did not increase its productivity lead over Germany – it did keep its lead (graph 2).
Despite this clear success of French economic policies and its high rate of productivity, a sign of an effective economic system, France gets a bad press. ‘The Economist’ starts an article about French education with the sentence ‘Wary of competition when it comes to global markets..’. And Tyler Cowen sees France as one of the countries with enhanced risk of secular stagnation, soon to be left behind by history. What a nonsense. Dacia, a Romanian brand of cars owned by Renault, has by far the best quality/safety/size/price combination of all cars on sale in my country. And at least according to this test, the Dacia Sandero is the most dependable European car (yes, yes, I do drive a second-hand Dacia Logan. But also a Jan Janssen bicycle!). Anyway – French owned and Romania produced Dacia is seemingly not only the cheapest but also the best car of Europe. And compare France with the UK: the promising productivity UK increase after 2000 was, in hindsight, totally caused by an unsustainable financial bubble and the cancerous increase of an increasingly dysfunctional financial sector – once the bubble was punched the UK turned out to have been the country left behind by productivity-history (the Netherlands and Finland did bad too, supposedly successful ‘core countries’, however, though not as bad as the ‘flexible’ UK)!
Indeed, the British labour market does well – but the increase in employment is mainly caused by an increase in self-employment which is mainly caused by over 65s self-employed not leaving the labour force as they can’t afford this. Though they had to pay for this by a 22% decline in income. Read this. Employment in productive sectors like finance and oil production is down – and employment in crappy jobs is up (the first signs of a genuine recovery of the labour market are visible however: the average number of hours worked in second jobs is decreasing slightly). Anyway – an older labour force is not necessarily healthier and more enterprising than a younger one… And lo and behold – France did already reform its pension system some years ago (in 1993 as well as in 2003 and 2010 ). For one thing – the money available from privatisations is supposed to be put into a national pension fund. I’m not sure of the success of this policy – but it is a neat idea. For another thing – state pensions are not indexed to average wages anymore but to the price level. As the French birth rate is quite a bit higher than the disastrously low German rate – there seems to be no ‘kicking the can down the road’ pension problem anymore. And – like in all European countries – the percentage of people aged between 50 and 65 with a paid job is rising rapidly – the opposite of the dysfunctional ‘Great USA reset’. And in France, unlike the situation in the UK, these jobs seem to be real, modern, high high productivity jobs, instead of the marginal UK post pension jobs.As Engels and Marx already noticed, modern capitalism is characterized by a continuous increase of the number of people in wage labour – not by an increase in self-employment. Compare the USA and German data with Greece! Which means that the UK pattern is highly idiosyncratic – surely when it turns out that outside greater London regular employment actually decreases and the increase in self-employed ‘overexplains’ employment growth. This is no reset, this is labour market devolution.
Aside: next to high productivity and lots of modernity France has other perks, too. My favorite hangout in France, near Saint Ambroix: the Escheresque ‘Moulin du roque tombé‘ (that guy in this you tube clip is not me!!). Aside – to the east of Saint Ambroix you have perfect mountain bike routes while to the west you can cycle the mountains of les Cevennes. So, these ‘Anglais’ should shut up, about France. And repair their roads and sewer systems. And the social system as well.