Economically, France has not fared badly; maybe we could learn something from them

Looking over a digest of recent news, a comment from last week’s Sunday Telegraph caught my eye. The government, they argued,”must begin a root and branch overhaul of public spending to cut billions. It cannot keep assuming that grands projets and government direction will propel Britain upwards: if it were that simple, France would have enjoyed a multi-decade economic boom.”

There are two parts to that.  First, there is the proposal to cut billions off public spending during a major slump.  There’s not much to say about this, beyond the obvious comment that it’s economically illiterate.  Taking demand out of a depressed economy is a recipe for a major slump.  The second part, which is rather more interesting, is the idea that the French approach doesn’t deliver.  France did, of course, have a ‘multi-decade economic boom’ after 1944, which they call the trente glorieuses.  Then they were hit, as we were, by the oil crisis.  The graph below, which I hope will show up on your screens, compares GDP per capita in Britain and France since 1980.  There’s not much to distinguish them: Britain did gain a marginal advantage in income per capita from 1997 to 2008, but that apart, the two economies are a lot like each other. The French approach doesn’t have a clear advantage over the British, but it doesn’t have a clear disadvantage either.  And at least France has had the benefits of major  infrastructure projects, which Britain could have done with.

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