Economics blogger extraordinaire Tyler Cowen had a reader ask him a question: why isn’t France an economic backwater? Between the 35 hour workweek and the taxes and the regulation, France should be doing much, much worse than it has been.
So, what’s the answer?
Cowen posted a few answers, and as usual they were characteristically smart and iconoclastic. Given our interest in France and economics, we felt compelled to respond.
Here’s what Cowen had to say:
1. The French elite work very hard and are educated very well.
That’s correct. (Although we would say that, as a member of the French elite.)
But it’s not well known enough how the French system of grandes écoles, very small, incredibly hard to get into elite schools, breeds an elite that may be tiny, incestuous and narrow-minded, but is indeed academically quite strong and very hard working.
2. Contrary to stereotype, France has arguably the strongest work ethic in the world. Given the rates of taxation, and the difficulty of being fired, most people still do a fair amount of work and they do it fairly well. If that’s not a work ethic, what is?
That’s sort of a dodge. By that measure, doesn’t Cuba have the best work ethic in the world?
Although we’ll say this: Paris is the only city we know of where there are two rush hours, not one. From 4 to 6, you have civil servants getting home. From 7 to 9, you have people who work in the private sector.
3. Esteem and approbation are especially important in France, as incentives. This is one reason, not always voiced as such, why immigration in such an issue there. It breaks down prevailing forms of status competition.
4. France has been well-positioned to benefit from the growth and economic integration of Europe. The more open the economy, the less domestic economic policy matters.
Very true. France has largely benefited, despite its best efforts, from globalization and economic integration.
5. The French are very smart and able, and have been so for a long time. You’ll note that a wide variety of French companies, whether Dannon or Carrefour, do well around the world. The French are preeminent globalizers.
It’s true that French corporations are leading globalizers and do very well abroad. It’s not noted enough in the United States because these corporations often aren’t in the US.
Carrefour is the world’s biggest retailer after Wal-Mart, and the biggest foreign retailer in China, but it’s nowhere in the US. BNP Paribas is, depending on how you measure it, the biggest bank in the world by assets, but it’s small in the US. AXA is the world’s second biggest insurance group by assets, but nowhere in the US. Etc. etc. etc.
6. The foreigners’ view of France, and its charm, would be very different if all of the country’s buildings dated from after World War II.
7. The French are the very best, and wisest, consumers in the entire world, whether it be for clothing, music, food, or for that matter Hollywood movies and American blues and jazz. The French government tries to influence this activity, or put up some nominal protectionist measures, but for the most part this French specialty and strength remains unregulated. It helps account for the very high living standard there.
This is where we’re most tempted to quibble. The French (or, rather, a small subset of them) are very discerning consumers, but they’re lousy consumers.
The economist Amar Bhidé argues in his book The Venturesome Economy that consumers play a great role in the innovation economy, by being willing to try new things and take a chance on new products. We think of innovation as being the province of scientists, venture capitalists and heroic entrepreneurs, but consumers actually play a very important role. Think of the early adopters that fuel the adoption of services like Twitter.
The French, with their aversion to risk and new things, are particularly awful at this. We may be very good at picking the right food or clothes, but whenever a new service is introduced, the typical French person’s answer is “Why would I use that?”, “That’s useless”, etc.
This is a huge drag on the French economy.
8. If you see a “World Music” recording from a French record label, buy it.
But Cowen’s last point is absolutely key:
Personally, what I find most distressing about France is the limited number of dimensions for status competition. Very often there is one right way to do things, to dress, and so on.
That is absolutely correct. France is, in the end, a status society. And it’s the limited number of dimensions for status competition that makes it such a closed, narrow-minded, backward place.
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