Monday, April 30, 2007

No Pain, No Gain For France?

I see via P.J. Anders Linder, that Matthew Parris has written a article in The Times where he argues that free market advocates should root for Segolene Royal.

A seemingly bizzare idea given the fact that Royal is a radical statist who believes that France's already statist economy should become even more statist with even higher levels of regulations, government spending and taxes.

But the idea that he launches is that as Royal's economic plan will ruin France's economy, this will finally put France in the mood for radical free market reforms, just like the deep British crisis of the late 1970s with 20% inflation and growth far below that of all other countries put Britain in the mood for Thatcherism. This is also why he as a Iraq war opponent rooted for Bush in the 2004 election and is glad that Bush has put the "surge" strategy in action, as its inevitable failure will forever discredit neoconservatism.

There are however, several problems with this reasoning. First is of course the argument from Linder that we don't just live in the long run, but in the short term too and a Royal victory would mean more short term suffering. Secondly, and perhaps more importantly, while the likely crisis after Royal's policies are put in place will strengthen the free market case, statists will certainly come up with excuses for their failure. The ECB will certainly be blamed for not inflating enough (as both Sarkozy and Royal already argues). And Royal supporters will certainly argue that the policies weren't pursued zealosly enough, particularly not after the French general assembly likely stops some of her proposals. As implausible as these excuses might be, the people who want to believe them will believe them.

In 1981, Francois Mitterand pursued similar policies, but after the economy worsened, he was forced to change policies somewhat. But this failure haven't deterred the French from believing in statist policies. Just as the current failure of the "surge" (with more than 100 American soldiers being killed in April) isn't deterring neocons from believing that one day, Iraq can be transformed into a Western democracy.


Blogger Libertyfirst said...

I also wouldn't expect pre-election propaganda to become reality. People like to hear demagogues, but demagogues are not always so fool to put in practise their propaganda. I don't know much about French politics: but in Italy, for instance, the anti-rich/anti-war new government has begun with a military expedition and with a tax increase on low-wage workers. The worst thing that can happen to French is to have a leftist government which is more consistent than their italian counterpart, but I don't believe they will see a real difference after elections between Left and Right.

7:44 PM  

Post a Comment

<< Home