Downsizing the French welfare state would not just reinvigorate the country’s economic fortunes, as Ruchir Sharma argued (“The fat French state is about to get fatter”, Opinion, April 26). It is essential to protect against populists like Marine Le Pen over the long term by rebuilding a fairer, more meritocratic system.
France’s bloated state intervenes too strongly to equalise economic outcomes through welfare, social security and overbearing labour market regulations.
These measures create mass unemployment, low wages and disappearing industries — hobbling economic opportunity for those who struggle most to get ahead. Some Parisian barbers, for example, must complete 200 haircuts a month just to pay what they owe the state in taxes and social security contributions, leaving little to invest in their own futures.
The tragic result is that although France has one of the largest, most interventionist states in the world, its social mobility is awful — far closer to that of the free-marketeer US than its Nordic neighbours.
This has dire political consequences because the economic unfairness of low social mobility is extremely powerful fuel for populism. In fact, low social mobility is a far better statistical predictor of the geography of contemporary populism than inequalities of income or wealth or even immigration.
In an environment of low social mobility citizens see a rigged system where success flows unfairly from family origins and elite connections, rather than fairly from talent and effort.
It is little wonder they want to rebel against it. In his second term, Emmanuel Macron would do well to retain government intervention that is necessary for equal opportunity — public goods such as France’s famously high-quality healthcare, transport infrastructure and education. But he should press to toss out policies that undermine social mobility by equalising outcomes.
Research Fellow, Harvard University’s Growth Lab, Cambridge, MA, US
Adjunct Professor, University of Victoria’s Gustavson School of Business Victoria, BC, Canada
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