On Monday, France’s Interior Minister Laurent Nuñez admitted that police have “lost control” as some cities continue to see massive waves of looting and mayhem. Social media brims with images of stores being ransacked, cars burning, and mask-wearing goons running wild. In Limoges, the beautiful Hôtel de Ville was burnt to the ground.
But the chaos, as is so often the case, began peacefully. And many supporters and leaders of the protests have condemned the violence. I think that violence has more to do with France’s miserable record of assimilating immigrants from North Africa and the Middle East than with budget cuts. Call me cynical, but I don’t believe the goons pillaging Louis Vuitton stores are planning to resell the handbags to buy better school supplies or to bolster their teachers’ salaries.
The initial protests were about budget cuts, primarily in education. As allied groups joined in — socialist and communist parties, labor unions, etc. — the argument expanded to generalized complaints about France’s “austerity” policies. In short, they argued, as they have for generations, that the government should spend more on pensions and other entitlements.
The problem is that France can’t afford it. It’s borrowed money to pay for its lavish government sector for a very long time. It has run consecutive budget deficits — i.e., took in less than it spent — for more than half a century. In 1974, public debt was around 15% of GDP. Today it’s at 116%. Government spending now makes up 57% of the GDP (compared with 23% of GDP for the U.S.), and France spends three times as much on “social protection” — including pensions and family benefits — as does the United States, and more than any other country in Europe and the OECD.
Naturally, the blame for this sorry state of affairs, according to some supporters of the protests, falls on capitalism. Famous French economist Thomas Piketty says the country’s woes are the result of the state pursuing the “capitalist logic” of underinvesting in the public sector and undertaxing the wealthy. In terms of personal income taxes alone — France has massive payroll and consumption taxes as well — the top 10% of French taxpayers provide 74% of the revenue. The top 1% provide a third. France also has the highest corporate tax rates of any country in the Organisation for Economic Co-operation and Development.
I’m hard-pressed to see how just a bit more taxing and spending will solve France’s problems.
I have real sympathy for the nonviolent French youth. Their economy is moribund in large part because retirees have a stranglehold on the state’s finances, consuming 14% of GDP. (Social Security and Medicare account for 9.4% of U.S. GDP. One reason education spending is so tight: A third of the education budget goes toward Education Ministry pensions.
I don’t think retirees should be thrown to the wolves, but such a system is objectively unsustainable. Yet in 2023, when French President Emmanuel Macron introduced reforms to bump the retirement age from 62 to 64, the resulting protests paralyzed the country (that modest reform was suspended last month). France is now caught in what economists call the “dependency trap,” producing too few workers to pay for the lifestyles of its older generations.
When protesters talk about feeling “hopeless,” what they often mean is that the gravy train will run out before they get to partake in it. I don’t blame them for being resentful, but it’s difficult to see how this is a failure of capitalism or “neoliberalism.” As Margaret Thatcher famously said, socialist governments “always run out of other people’s money.”
The most obvious answer to France’s problems is economic growth — much easier said than done, of course. The reason that’s so hard for France isn’t because the government is “unresponsive” to the people and their concerns. It’s because it’s too responsive. For decades, the French have demanded the economic policies that got them into this mess, and the government appeased them.
France is an outlier in its poor economic performance and lavish social spending, but its problems are recognizable across the West, including in America. The U.S. economy has grown twice as fast as France’s over the last quarter-century, but the demands for less “capitalism” from young Americans echo those protesting in Paris.
France has the sort of universal health insurance many insist would solve everyone’s problems here. It hasn’t spared France from political turmoil. Our own Social Security and Medicare aren’t far from insolvency, but demands for higher benefits and “Medicare for All” only grow louder.
The French canary in the coal mine is a good reminder that the best solution to some crises is to avoid them in the first place.
Jonah Goldberg is editor-in-chief of The Dispatch and the host of The Remnant podcast.
