I love The Economist. It’s so smug and so uniform in its outlook, as though all the articles were written by that same, reassuringly ‘authoritative’ hand. This morning, though, on reading the piece about France’s infuriating proclivity towards statism, Back in the Driving Seat: The Return of Dirigisme, I detected a touch of self-doubt.
A devotee, as you would expect, of Anglo-Saxon, free market capitalism, the author of the piece could not help but acknowledge that France’s bizarre economic model, with its record of shameless statism, conservative banking and lavish public spending, has left her far better equipped to deal with the financial crisis than her more observant partners in the global economy.
The French economy is used to high unemployment, which is currently pushing 8.3%. America, whose unemployment rate in February was 8.1%, is not. The social consequences of joblessness in France (where the poor have access to decent schools, health care and welfare) and in the United States, are not the same at all.
France is constantly being rapped on the knuckles for her high public spending. Two years ago, this accounted for 52% of her GDP, compared with 45% in Britain. I have long been puzzled by the argument that it is permissible to encourage massive personal borrowing (the average owed today by every adult in Britain, including mortgages, is £30,450) and be so censorious of state borrowing. Now, of course the French budget deficit (running this year at 5.5% of her GDP) is well below that of Britain (7.2%) and America (12%).
Now, all you Anglo Saxon capitalists out there, could we please see a little more humility?