The French Challenge: What we can learn from across the Channel

On the face of it, the French economy should be utterly dysfunctional. Millions of manhours are lost each year to strikes: as the old joke puts it, it’s more notable when the French aren’t rioting. Burdensome regulations keep productive companies small: France has almost four times as many companies with 49 employees as 50 employees because a slew of bureaucracy is imposed as soon as a firm crosses that threshold. Oppressive taxes suppress investment and encourage emigration. Outrageously generous pensions shrink the labour force and compound the tax burden. And yet, according to PPP-adjusted data from the World Bank, the average Frenchman produced slightly more than the average Briton in 2021.

Why are the French beating us? It is simply because, as Ben Southwood and Sam Bowman (both formerly of the Adam Smith Institute) have pointed out, they get the Big Things right. Houses in France, even in Paris, are cheaper and prettier. Electricity in France is both cleaner and cheaper. Transport infrastructure in France is both more plentiful and higher quality: I dare you to drive on one of France’s many privatized toll roads and disagree with me! Childcare in France is cheaper. All of this means that, even if a much bigger share of the French population is unemployed, retired, or on strike, those who remain at work can produce a lot more value. They can live in highly productive cities, rather than being priced out by obscene rents. Their employers can afford to expand manufacturing in productive industries because of cheaper power. They can get to work more quickly and more reliably. Better transport also means they can live further away from town, saving on rent. The things they make can get to their customers more easily too. And they can afford to send their kids to day-care so highly productive mothers are not stuck at home against their will. A well-functioning housing, childcare and electricity market and infrastructure system will compensate for a myriad of microeconomic sins.

Nothing should alarm any self-respecting Conservative more than seeing the revolutionary republic of France, our closest rival and occasional ally, ahead of the United Kingdom. And yet, Tory leaders since 2010 have done little to emulate the French where they do well. If the Conservative Party could fix the Big Things, then Britain’s substantial advantages – chief amongst them a flexible labour market, a free-trading attitude, and the dual inheritances of the English common law and the City of London – would allow her to retake her rightful place as the wealthiest large European nation.

This ambitious programme to beat the French – which appeals to quiet, but real, patriotism of the median British voter – would represent a positive offering to the electorate in the next general election. With this objective in mind, the Conservative Party could promise to unshackle the British economy from the tyranny of the Town and Country Planning Act, allowing homes, roads, railways, power stations, and electricity grid upgrades to be built once again. The Conservative Party could also commit to reforming childcare regulation by reducing staff-student ratios to standard European levels so that Britain wasn’t the single most expensive country in the OECD to send a child to daycare. Finally, a commitment to rational energy policy, with a particular focus on removing the barriers in the way of small modular nuclear reactors and a recognition that wind and solar impose significant intermittency costs, would allow Britain to build an affordable, green power grid rivalling that of France.

I will admit that, as a New Zealander still sore about the 2007 Rugby World Cup and the 1985 Rainbow Warrior bombing, it would be particularly satisfying to see my adoptive country establish a commanding economic lead over France. But the real reason that it should be the aim of the Conservative and Unionist Party is simple: Capitalism and the Union can only last if the average British citizen feels both work for them. Thus, we must improve living standards. The only way to do that sustainably is through economic growth. The former Prime Minister, Liz Truss, recognised this, but mistakenly attempted to fix the problem by both cutting taxes and hiking spending. The French example shows us that supply-side reform in a few crucial sectors should be the priority. After that is done, then we can (and must) cut some taxes. But, for the next election, beating the French on their own turf should be the priority of the Conservative manifesto.

Mitchell Palmer (The Whip) is a second year undergraduate reading History and Economics at New College.

Image Credit: Yann Caradec, under licence