Economy and Society

An American in Paris: Thinking about France, Taxes and the Good Life

At a Sixteenth Arrondissement party soon after I arrived in Paris in late 1984, I was cornered by a tipsy Frenchman who repeatedly exclaimed–in a tone more resigned than angry–“You’ve won! You’ve won.”  This was all he would say, elaborations and explanations apparently being unnecessary.

Once I began to look for them, signs of American triumph were everywhere: Carl Lewis’s Olympics a few months before, Reagan’s enthusiastic re-election a few weeks before, and a sense that personal computers coming from garages in Silicon Valley would displace the tiny Minitel terminals linked to a central network for which the French had instead opted (a prescient model, but ten years before the internet could have made real use of them). After several months in Paris, I realized this handwringing was a daily theme in the Parisian press: the United States had won the economic game.

The idea was everywhere: the news detailed France’s economic crisis and America’s ascendency; top journalists and other members of the intelligentsia analyzed how France had gotten into its sad state; academics wrote books setting the crisis in world-historical context; politicians spun grandiose plans for pulling France out of its malaise. But no one took the schemes of the politicians seriously: the crisis, everyone knew, was there to stay. Thus Le Monde‘s annual report on the economic state of the world in early 1985 had on its cover a tiny boat, its sail in disarray, about to drop from the crest of a wave, and a large ocean liner placidly moving along in the distance. The dinghy flew several European flags, the steamer those of Japan and the United States.

It was not just France: the entire “old world” was implicated. It was just that: old, weary, perhaps exhausted. Many French, if it fit their current political rhetoric, were fond of pointing out that France had done better than most European countries. The French were happy that they were not the Germans, the Swiss, or even the Swedes who had beaten them this time. It was America, which is after all America, and Japan, that fascinating but incomprehensible family corporation on the other side of the world. With conquerors like these, the French launched themselves into the crisis with enthusiasm.

Today, it is the Germans again, and the French are wringing their hands harder than in 1985.The new Gallois report recommends a neoliberal response to data showing that the Germans are gaining a competitive advantage. Even faster than in 1981, a socialist President is sounding less and less socialist, with talk of more flexible labor markets and cutting state spending.

Commentators, especially Americans, make a lot of the fact that 57 percent of France’s GDP goes through the government. The Economist (17 November 2012) editorializes about “a time-bomb at the heart of Europe” and calls for Hollande to reverse “the path his country has been on for the past 30 years.” Sixty years would be more accurate, or perhaps six hundred (since some of the trends may well have begun when the French finally managed to expel the meddlesome English).

Yet, on the other hand, it turns out that the French get a lot for their tax money. I recently had the good fortune to spend two months in Paris, reminding myself why it is so many people’s favorite city. The Metro arrives every two minutes, with announcements you can understand. An entirely new network of bike lanes is being installed. Grand trees line the boulevards, and sickly ones are replaced immediately. The city’s stock of handsome buildings, many of them hundreds of years old, is constantly and expensively renovated (even though part of a good renovation is to make them look as though they have always been just so). Trash is picked up, traffic flow, and bakeries are regulated to produce the world’s best breads and pastries, reasonably priced.

The French take enormous pride in Paris, I reasoned. They pour money into its care in ways that Americans do not care for its political capital, Washington D.C., or its cultural capital, New York. In fact, most Americans detest Washington and New York, and the elites who inhabit them. New York looks good these days because the city has learned to shake down the wealthy who live there. Washington looks like hell.

But I was wrong about French pride being channeled into Paris. When my wife and I took driving trips outside Paris, I was just as impressed. The roads were perfect; signage was clear and helpful. Medieval towns and baroque chateaux that would have been crumbling in most countries were in good repair.

For decades, Americans have labeled France as “socialist.” Most Americans never leave their own country, so they can spin any kind of grim fantasies about the big-spending countries of the Old World. Stereotypes survive brief touristic visits, too. I was unpleasantly seated next to an American couple at a Paris restaurant last winter, only to listen as they acknowledged various virtues to the city, only to dismiss them with the comment, “Well, they’re socialist.” I wasn’t sure what they meant (Sarkozy?), and I didn’t want to ruin my glass of Calvados to find out, but it seemed as though no amount of good living could compensate for some state of slavery implied by socialism. It was fine to come take advantage of all that infrastructure spending, but not to admit its source, taxes.

Even serious commentators have described France’s 35-hour work week as unsustainable, its pensions as too generous, its job protections as sclerotic, its proportion of government spending at 57 percent of GDP as disastrous. What has happened in three decades of worrying?

The French work less than we do and live better. All that government spending, especially on infrastructure, makes the French the most productive work force in the world, measured per hour worked. Working fewer hours undoubtedly makes those hours worked more intense, as well. Perhaps a glass of Calvados at the end of lunch doesn’t hurt.

France has some serious problems, including youth unemployment and a large immigrant minority that is not welcomed. But these are not problems of a large government sector. In fact, who is more likely to solve them: a neoliberal, hands-off state, or a state with extensive social programs and public spending? The means of fixing these problems are there, just waiting for the will.

The French are good at economic crises.  Their national identity and pride do not rest directly on commercial prowess. They are the guardians of Western Culture, including both the Arts and, perhaps even more, the art of living well.  The French are proud of their painters and their musicians, but nothing matches their unshakable confidence in their cuisine and their oenology.  They are proud of Paris for its churches and palaces, but they believe it is the world’s greatest city because of its life and excitement.  France’s proudest achievements are in living well, and this skill is rarely, let’s face it, compatible with dealing well. Hence the French are partly proud of not being good businessmen–like Americans and Arabs–and partly resigned to this fault as a necessary accompaniment to Culture. And culture, in both upper and lower case C, is what distinguishes France from most other advanced industrial nations. But in the end, none of that is innate. It is there because of government policies, and the taxing and spending to back them up.