Revolt over France's addiction to state meddling
It is not for the state, but for profit-seeking firms, to decide where and when a niche deserves to be exploited
In 2000, France’s Prime Minister Lionel Jospin, leader of the Socialist Party and a Trotskyist in his youth, caused public outrage by acknowledging that, in the economic realm, “the State cannot do everything”.
Everywhere else under the sun, such an assertion would have been accepted as a mere statement of fact. Not in France, however, where the population has been educated to believe that the state can do more and better than the market.
Another upcoming fiasco has to do with the newly established Public Investment Bank, charged with granting financial assistance to French firms, notably medium and small enterprises, that are finding it difficult to secure financing from banks and capital markets.
Had the French government ascertained objectively why the market is reluctant to provide funding to those enterprises, it would have discovered that the problem lies in the erosion of competitiveness of the French industrial sector. An erosion that to a very large extent is the state’s own making: the smothering taxation imposed on French firms gravely impairs the latter’s ability to bring about productivity increases and quality improvements. Hence the mistrust of the market.
Fabio Rafael Fiallo is an economist, writer and former UN official. His latest book, “TernesEclats”, or “Dimmed Lights” (Paris, L’Harmattan), presents a critique of international organizations and multilateral diplomacy
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