The French Economy: Productive and Equitable

According to Post columnist Steven Pearlstein, the French "are well on their way to creating not only one of the least vibrant economies in the industrialized world, but also one of the least equitable."

Actually, nothing could be further from the truth. As Paul Krugman pointed out in the New York Times last July, the main difference between Anglo-American market capitalism and the French social model is priorities, not performance.

Take the issue of jobs. Between 1994 and 2004, the number of jobs in flexible, market-friendly Britain grew by 11%. Over the same period, the number of jobs in sclerotic France grew by . . . 14%. Youth unemployment? In France it is a modest 7.8% once you account for the many French youth who are in college and not active in the labor force. Labor costs? French labor costs are actually 4.4% lower than those in the United States, according to a recent KPMG study, while labor productivity in France is some 7% higher than the American level according to the OECD.

What about the alleged inequity of the French economy? This is nonsense: the United States has the highest levels of wealth and income inequality in the industrialized world. Not only that, but Europeans find it much easier to climb the economic ladder than do Americans, according to a recent study by Britain's Sutton Trust and the LSE. Europe (and France) also outdoes the United States in terms of indicators of health, educational attainment, stress levels, and environmental sustainability.

So the idea that the French social model is headed for history's junkheap is a myth.