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Economic system: France performs very poorly

The views expressed in opinion items are strictly these of the creator and don’t essentially replicate these of the editorial employees.

Posted on September 18, 2022


That is the conclusion that may be drawn from the publication by the United Nations Statistics Workplace of a examine on the evolution of GDP per capita in numerous nations, examined over a protracted interval. That is additionally not stunning as a result of it’s clear that each one the indications of the French economic system are crimson, and that the debt of France continues to develop, from 12 months to 12 months. And we see the inhabitants always demanding an enchancment of their buying energy.

Observing knowledge over the long run

To look at the efficiency of the French economic system, we are going to discuss with knowledge from numerous sources, in regards to the evolution, in numerous nations, of GDP/capita, balances of commerce balances, and hourly productiveness, all this for a protracted interval :

As might be seen on this desk, the French economic system has been performing very poorly for round forty years, a lot decrease than that of different European nations. It creates much less wealth than its neighbours: the GDP per capita of the French has multiplied by 3.03 in forty years whereas Denmark has multiplied it by 4.13 and Switzerland by 4.61. And a rustic like Israel has achieved even higher, to not point out the USA.

There may be one other method of judging the efficiency of the French economic system: to watch that nations which, as was our case, frequently recorded a deficit of their commerce steadiness within the Nineteen Seventies have managed to redress the scenario, whereas the France was unable to take action. That is proven within the desk under:

All of the nations showing on this desk have managed to redress their overseas commerce steadiness by creating their exports, besides France which not solely nonetheless has a overseas commerce deficit, however can also be seeing its commerce deficit worsen. In 2021 it was at -3.4% of GDP, a colossal deficit at a degree by no means earlier than recorded!

Lastly, one other commentary, ensuing from a examine by the Financial Evaluation Council, on the evolution of productiveness in numerous nations:

We see that within the first interval the figures for France have been very respectable, whereas on the finish of the interval they turned decrease than these of neighboring nations.

However what occurs then? Curiously, economists don’t appear to have regarded into this drawback, which is obscure, this query being important to reach redressing the scenario.

Regular decline of the commercial sector and impoverishment of the nation

Trade performs a key function within the creation of wealth, which is straightforward to focus on by inspecting the connection current, in numerous nations, between their industrial manufacturing and the GDP per capita of the inhabitants, the GDP/capita being the indicator normally utilized by economists to measure the wealth of nations.

That is proven within the graph under the place, on the x-axis, the explanatory variable is the nation’s industrial manufacturing calculated per capita (which is rarely achieved, economists all the time reasoning as a proportion of GDP) and, on the ordinate, the GDP/capita of those nations.

As for the information on industrial manufacturing, that is data offered by the IBRD which incorporates building in trade, industrial manufacturing being measured right here in worth added in keeping with the information from the nationwide accounts of the nations.

Correlation graph of business manufacturing/capita and GDP/capita

On this graph we see that with a low industrial manufacturing of 6,432 {dollars} per inhabitant, France has a GDP/capita of solely 39,030 {dollars}; with a significantly better ratio of 12,279 {dollars} the GDP/capita of Germany quantities to 46,208 {dollars}; with a file determine of twenty-two,209 {dollars}, Switzerland has reached a GDP/capita of 87,097 {dollars}, the very best in Europe.

Rising public spending and suffocation of the nation

The French industrial sector has continued to say no for the reason that finish of the wonderful thirties, which explains the low degree of business manufacturing per capita proven within the graph above.

France has develop into probably the most deindustrialized nation in Europe, Greece excepted. Its industrial sector now solely contributes 10% to the formation of GDP, whereas it needs to be a charge of round 18%. On the finish of the Wonderful Thirty, the commercial workforce of the nation amounted to six.5 million folks: at present they’re solely 2.7 million, whereas Germany is at almost 7 million. The secondary sector has shrunk during the last forty years, inflicting a gradual relative impoverishment of the nation.

Below the strain of well-liked calls for, the general public authorities have thus been compelled to frequently enhance their social expenditure.

These have reached a degree a lot larger than anyplace else: 33% of GDP, in comparison with 18.7% in the USA and 16.7% in Switzerland, the typical for OECD nations standing at 20%.

Therefore the ever-increasing public expenditure, and consequently ever-increasing obligatory levies, significantly larger than in all the opposite OECD nations. We are actually at 45% of GDP, towards 34% on common in OECD nations. These extreme levies are suffocating the nation.

The irony is that they’re by no means ample, which forces the State to resort to borrowing every year. France has thus reached an exterior debt which has develop into better than the quantity of GDP, and it continues to extend frequently.

In line with Nicolas Dufourq, director of the BPI, interviewed by The gallery after the financial conferences of Aix-en-Provence:

“The commerce union/social/political world, this bubble that manages the welfare state, has develop into Keynesian. »

Blind public authorities let the nation sink

The explanations explaining why our elites didn’t react to the regular shrinkage of the commercial sector stem from the truth that they relied on the regulation of evolution of the three sectors of the economic system which they have been taught at Sciences Po and on the ENA, throughout the framework of the work of Jean Fourastié reported in 1949, his well-known work The Nice Hope of the twentieth Century.

A creating society essentially passes from the first sector, agriculture, to the secondary sector, trade; then, from the secondary sector to the tertiary sector, that of providers, so {that a} trendy society would now not be constituted solely by actions referring to providers. It subsequently appeared fairly pure to the French leaders that the commercial sector was steadily shrinking, a really signal of the modernization of the nation.

They didn’t bear in mind that Fourastié had apprehended the phenomena of the evolution of societies by way of jobs, and never of added worth.

It took the covid disaster for them to lastly understand the issue of the intense deindustrialization of the nation. Even the Yellow Vests disaster that erupted in November 2018 didn’t open their eyes although it was the proper illustration of all the implications of the nation’s deindustrialization phenomenon. Now, all political leaders are satisfied of the necessity to proceed with the reindustrialisation of France. However once more we come up towards their lack of foresight.

Within the article of The gallery quoted above, Nicolas Dufourcq tells us:

“The share of trade fell from 20% to 10% of GDP between 1995 and 2015. We misplaced half of the roles: how will we obtain such a poor efficiency? The entire society has to become involved. We delayed telling this story, as a result of we’re all responsible.

In her current normal coverage assertion to the Nationwide Meeting, Elisabeth Borne listed her priorities, that are 5 in quantity.

However the reindustrialization of the nation just isn’t included.

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