Economic nonsense about France

Yet again. Here’s what the BBC has to say in its updated-for-the-upcoming-elections online background article about France:

But France’s economy has grown more slowly than any other developed country in the world. In 2006, its 2% growth was the worst in Europe.

Well, sorry to beat a late parrot, but one year does not a trend make: if we look at, say, the 5-years period between 2002 and 2006, the average annual rate of growth of France was a meagre 1.6%*, but that is equal to the euro area average and higher than what the Netherlands (1,4%) and Germany (0,9%) and Italy (0,7%) and Portugal (0,6%) managed over the same period. I’ll spare you the 10-years period (1997-2006) which is even more favorable to France.

But even if we grant the Beeb’s dubious premise that 2006 growth is the ultimate yardstick to measure the strength of an economy (and in that case I have an old “US has grown more slowly than nearly every other developed country in the world” headline from 2001 to sell you), their claim isn’t even true. Or, if it is, we can safely conclude that Italy (1,9% growth in 2006 according to Eurostat) and Portugal (1,3%) are neither European nor developed countries.

The Beeb goes on:

[France] also has one of the highest unemployment rates – 9.8% – of any European country.

Well, it’s true there is a heated debate right now in France about the accuracy of the latest unemployment figure (8,4% at the end of February). But the latest, unfudged, Eurostat figures put French unemployment at 8.8%, a whole percentage point under the number reported by the BBC. I guess those Portland Place keyboards are quite slippery.

…and on:

Public finances are coming under strain from the pension system and rising healthcare costs and the tax burden is one of the highest in Europe, at nearly 50% of GDP in 2005.

Seriously, why is is impossible to, you know, check the number? Eurostat put the tax revenues iin France in 2005 at 45,8% (pdf). This stiffling level obviously explains the French economic underperformance (there’s little dispute among economists on this, after all) but it is “nearly 50%” only in the sense that it is also “nearly at the EU average”.

… and on :

Although frequent strikes and demonstrations have been an effective way of achieving – or objecting to – reform, unions are relatively weak in France.

Maybe I’m reading a bit too much into this, but this is another pet peeve of mine, and I’m awfully sure that a reasonable interpretation of this sentence is that strikes are a lot more frequent in France than in your average developed country (less Italy and Portugal, obviously). But, in fact, they aren’t: according to the British Office of National Statistics, the average number of working days not worked per 1,000 employees in all industries and services was at 34 in France for the period 2001-2005, less than the EU 14 average (53) and just a whisker higher than the OECD average (33). The thing about France is that strikes, though a lot less frequent than in Spain or Italy or Canada or Denmark (to say nothing about those crazy commies in Iceland), are heavily concentrated in sectors where work interruption is highly visible (transports, utilities) and usually accompanied by demonstrations conveniently organized in Paris, just under the windows of your average foreign correspondent. I know, we suck at PR.

Look: I guess we all agree that French economic performance has hardly been impressive of late (though strangely it was better under the rule of those raving leftists of ours) and that some -sorry Jérôme- reforms are badly needed. But I don’t see how that should allow just about every journalist on the planet to casually disregard official statistics in order to pander to the prejudices of a public already convinced that France is the.worst.economy.ever. Just because it’s France doesn’t mean it’s ok not to do your homework.

* I’m calculating arithmetic mean here, based on Eurostat figures, and I humbly ask my numerate readers to cut me some slack on that one. I know it’s not the proper thing to do (though that doesn’t change relative positions), but geometric mean is just a pain in the ass to do with Excel.

10 thoughts on “Economic nonsense about France

  1. Interesting stuff. The American press is even worse, mind.

    At the risk of being facile — okay, /too/ facile — I wonder if it doesn’t have something to do with a long, long tradition of viewing France as The Other. You don’t see nearly as much of this sort of thing when talking about Germany, never mind Italy or any other large European economy.

    It’s almost as if the Anglosphere is still haunted by the nagging fear that France might offer some sort of, y’know, viable alternative way to construct a society.

    Doug M.

  2. It’s especially strange, seeing as the US *doesn’t* have a history of seeing France as The Other. La Fayette, Louisiana, the whole Americans-in-Paris tradition (both a white and a black thing), General Pershing, the US contribution to liberation, Marshall aid, good economic ties (notably IBM)…it’s weird how the whole thing was manufactured in late 2002.

    It’s the Brits who have a history of seeing France as the other.

  3. The neolibs have run amok since 2002. It would seem that “9/11 changed everything” on the economic front, and the rich are waging war mercilessly on everybody else – and attack those that object, like the French.

    China’s emergence and globalisation are just pretexts.

  4. Elites in all three countries (US, UK, France) seem to think it is in their benefit to play up minor differences between the countries into yawning chasms.

    French elites talk incessantly about “Anglo-Saxon” economics or society and how horrible it is, and how multiculturalism and affirmative action are ruining those countries.

    Everyone is playing the game, and it would be very interesting to know why.

  5. I think, if one is talking about economic performance, that a better measure would be GDP/working-age population. The working-age population numbers (broadly defined – say 18-70) are declining in a place like Italy, and certainly not declining in France. Strictly based on its population growth rate, one would mechanically expect France to grow faster than Germany and Italy.

    Another way to slice the numbers would be to investigate TFP and capital deepening with some type of Solow decomposition; let’s utilize these more exact measures of economic performance and leave the context-less GDP numbers to the newspapers.

  6. A hit’n'run comment: Denmark has a tax revenue at 47-48% of GDP, and doing great – unemployment at below 4% at the moment. So there. Man, I love smearing Denmark in market fundies’ faces.

    Also, the economist cited at Bloomberg apparently works at AEI, and, well, you know, they don’t have a whole lot of credibility post-Iraq. The AEI brand is a red flag to me, signalling ideological entrenchment.

  7. Alex: rarely do I hear you ever say something that simply doesn’t match my own experience, but you just did. America’s weird relationship to France was not “manufactured in 2002.”

    While it is always possible that I am suffering from manufactured memories, I remember it from the 1980s. Calling France the “Other” might have been too strong, but a mysterious anti-French sentiment in the U.S. goes back at least to De Gaulle, and possibly earlier. After all, the whole Americans-in-France thing was often driven by people who quite consciously left to escape things that they didn’t like in America.

    Not convinced? Well, here I have on my computer a powerpoint presentation that I prepared before the turn of the century for a class of undergraduates precisely to counteract prejudices about the failure of the French economic model.

    So I do apologize, but it’s just wrong to say that anti-French in the U.S. sentiment was “manufactured in 2002.”

  8. Doug: “You don’t see nearly as much of this sort of thing when talking about Germany, never mind Italy or any other large European economy.”

    With the possible exception of Sweden, which is widely viewed as *the* paragon of social-democracy and, as such, frequently targeted by the libertarian press. That obviously reinforces your last point.

    Jérôme: yeah, just teasing you :-)

    Alex: I agree with Noel Maurer on that one. American Francophobia didn’t spring out of nothing in 2002. That’s not to deny the massive involvement of the VRWC, but the ground was already fertile: just take a look at the US army guide for soldiers stationed in France in 1945 and you’ll that many of the clichés heard today about the French were already widespread.

    (fair and balanced remark : of course, anti-Americanism is even older in France. See Patrick Roger’s book for the long and version)

    Hektor: because not being like the dreaded Other just makes you feel good about yourself and because the failings of the Others’ society confirms the superiority of your own social model? As simple as that, I think. With the added bonus that both French and American tend to think of their own model as universal.

    Kevincure: “I think, if one is talking about economic performance, that a better measure would be GDP/working-age population.”

    Nothing beats the good ol’ GDP per capita in terms of relevant economic indicators but you’re right that looking at the working age population (usually defined as people between 15 and 64) makes sense if you’re comparing raw economic performances. Obviously, on that front, France is at the bottom of the European league. The problem about using this indicator is that it also shows that the European and American records in terms of economic growth has been roughly equal recently (The Economist has been quite good in highlighting this fact; the American press, less so…).

    Klaus: “The AEI brand is a red flag to me, signalling ideological entrenchment.”

    Yeah, I agree. Though the dirty little secret about AEI is that some (not many, admitedly) scholars there are surprisingly good. Like Norman Ornstein, for instance. I’ve also once attended a conference on U.S. politics with John Fortier. I expected to see the kind of dishonnest hack that is the trademark of the AEI but he came out as a thoughtful and reasonable analyst. That was a bitter disappointment… ;-)

    Anyway, the link to Kevin Hasset’s tripe was of course ironic on my part.

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