A Tale of Two Cities: London and Paris
There is a socio-economic malaise in France. Which choices and models are available for the French to think about?
Dickens caught the public imagination with his Tale of Two Cities: Paris and London. It may be hard for Americans, or almost any other nationalities for that matter, to understand the rivalry between these two differing concepts of urban life. The rivalries are real none the less and they extend well beyond the two capitals. When Paris was jostled out of the Olympic Games by London, the gasp let out by the crowd outside the Hotel de Ville in Paris was loud and deep. I knew that they were hurt but I did not expect an intensely rude telephone call that night from a close French friend. Although he does not live anywhere near Paris and although he does not normally find himself in sympathy with those who live there, he was beside himself with rage. I did my best not to laugh but in the end there was little else to do. We remain friends. The French felt that the Games were theirs almost by right. I had observed a play for them that seemed old-fashioned, distant more fifties than contemporary.
I have had discussions with French friends over the last few years about the state of the French economy, the high level of taxation, the very high and persistent level of unemployment that often leaves young people, facing levels of unemployment much higher than those of older people, in despair or trapped in jobs in which they are overworked and cannot take the risk of leaving. Such conversations have tended to be circular in nature: the British economy is doing well but the French still like their social system if only the problem of unemployment could be solved. Sometimes high taxes are blamed, sometimes the inward flow of labor from other countries in Europe and elsewhere. Globalization is all very well but France needs to defend its national interests.
It has been hard to get a conversation going that asks for the assumptions behind French prosperity in the post-war years to be evaluated, to be compared to the British model after the challenges made to the economy and society by the reforms forced through by Margaret Thatcher. Somehow France will need to tackle its restrictive labor laws and face its growing pensions and social security problems.
This reluctance to evaluate assumptions seems also to have been the case and not just at local level but at the national level, and at the European level too. The wide-spread riots of last year that have some of their origins in the very high rates of unemployment experienced by ethnic minorities, seems, immediately at any rate, not to have encouraged, any greater willingness to reflect but the debate since has been intense. The British continue to press successfully for EU reform in terms of increasing competitiveness in all sectors. The ‘Anglo-Saxon’ (the French forget the Norman heritage in Britain) view of flexible resource allocation and a drive towards not just efficient markets but effective markets and policies is not one that is easy to sell to most French people— even those interested in reform. The French way has been very successful in the past, if only it could continue as it was. Economics, especially free-market economics is regarded as the Anglo-Saxon discipline ‘par excellence’. Thomas Friedman’s criticisms of the short working week and the long holidays seem beside the point to French ears. That there is a discussion in France there is no doubt, but it is, even where pursued with intensity, a French-style discussion.
French suspicion of the world economy (now in terms of job loss and ‘outsourcing’) is not a new phenomenon. French suspicion of an overly-free market economy domestically is not new either. Both suspicions have roots that go back not just to the immediate post-Second World War. They go back at least as far as Napoleon and the Continental Blockade. They may go back even further than Napoleon to the French administrative tradition prior to the French Revolution. In pre-revolutionary France and under Napoleon, there was a strong administrative tradition of regulating economic life. Recall Napoleon’s jibe about ‘the nation of shopkeepers’. The French approach and the British approach were compared in an effort, by economists such as Ganilh, before, and after the fall of Napoleon to find the right approach that managed economic life in a republican framework. Others at the time also argued over the relevance of various theoretical and practical models rooted in the French intellectual tradition. Adam Smith was translated early into French and appreciated and evaluated but his writing on matters of economic policy was never swallowed whole, even by his most loyal follower, J-B Say. The current anti-free-market and anti-globalization mood runs deep. Sophie Pedder, writing in the Economist on the 26 October 2006, talks of the willingness of politicians ‘to blame, and thus to discredit, outside forces’. Pedder quotes Nicolas Baverez: ‘The French political class has constructed a wall of lies against the globalized world’. Simon Jenkins, writing in the Sunday Times last year talked of the way in which the French ‘have voted to barter prosperity— higher personal incomes— for a better communal style of living’. France, he argued, refuses to allow local bread shops, local stores and post offices to go under. France may be centralized but it is interested in the well being of the localities that make up the whole.
There does not seem to be as yet any consensus reform agenda. The market is looked upon with suspicion yet planning does not look as if it has anywhere to go. Some may look to Britain but not with any great relish. The political challenge for the French is to create change but change that is in some sense compatible with high levels of social welfare. This will require not the adoption of the ‘Anglo-Saxon’ model but an adjustment to it, one that leads towards greater economic flexibility whilst at the same time, is capable of preserving much of the social welfare system currently under such strain. In the meantime enterprising young French people can find work by moving to the United Kingdom where they are in competition with others from Eastern Europe.