The French Have It Better?

As I keep saying, facts matter. Facts matter more than ideological consistency if you want to know. That’s why I keep comparing us with the other society I know well, France. I am up-to-date on it, a task facilitated by the fact that I read a major French newspaper online every day, by the fact that I watch the French-language Francophone television chain, TV5, nearly every day, and by occasional recourse to my brother who lives in France. My brother is especially useful as a source because he is well-informed by French standards, articulate, and an unreconstructed left-of-center statist. I suspect he has never in his life heard a clear exposition of how markets are supposed to work. He is a typical Frenchman in that respect.

I almost forgot: I must admit that I watch a French soap opera five days a week at lunchtime. And finally, I spy on my twenty-something French nieces and nephews through Facebook. I never say anything to them so they have forgotten I am their so-called “friend.” I almost forgot again: Until recently, I went to France often. Every time I was there, I made it my duty to read local newspapers and newsweeklies and to listen to the radio and to watch the news on television. I said “duty” because it was not always fun.

So, those are my credentials. I hope you find them as impressive as I do.

And, incidentally, for those who know me personally, mostly around Santa Cruz, the rumor that I am a guy from New Jersey who fakes a French accent to make himself interesting to the ladies, that rumor has no foundation. In fact, the accent is real. French is my first language; the accent never went away and it’s getting worse as my hearing deteriorate. I like to write in part because I don’t have much of an accent in writing. Got it?

I found out recently that the French national debt to GDP ratio is about 85. That is, French citizens, as citizens, owe 85 cents for every dollar they earn in a year. The debt is a cumulative total, of course, And “national debt” refers to what’s owed by the national government of a country. The private debt of the citizens of the same country is an unrelated matter. Another way to say the same thing is that, should you reduce the national debt of your country down to zero, it wouldn’t help you directly with your personal credit card balance. (It might help you indirectly to some extent because you wouldn’t be in a position anymore to compete with the federal government for credit. This competition raises interest rates.)

The national debt also does not include the debts of states and local governments. In this country, the aggregate of these non-federal government debts is also high because of our decentralized structure. Let me say it another way: The national debt, associated entirely with the federal government, is a relatively small fraction of the total debt US citizens owe by virtue of the cost of their overall system of government. It’s relatively small as compared to the same quantity for France, for example. The French national debt includes most sub-debts that would be counted as state debt and local debt in this country. Accordingly, the French national debt is overestimated as compared to ours. If French accounting were like ours the French national debt would be considerably less than 85% of GDP.

Well, you ask: What’s ours, our national debt as a percentage of GDP? Fair enough:

It’s about 100% of GDP, 15 points higher than the French percentage. We are closer to Greece than France is in that respect.

This pisses me off to no end. The divergence between the directions taken by French society and American society occurred during my adulthood. I witnessed that divergence in concrete terms through my French relatives and directly, through my visits to France, and the occasional longish sojourn there, and so forth. So, let me summarize what I saw in France during the past thirty years.

The French eat better than Americans. They always did but their food could have become worse under “socialism.” Even the children who stay at school over lunch eat good meals for a nominal sum. School lunches in the average French town taste better than the fare of a better-than-average American restaurant, in my book.

The French have longer vacations than Americans. That’s all of them, all Americans, including civil servants and bricklayers’ union members. Five weeks is the norm in France. You read that right: 5!

In many French municipalities – I am tempted to say “most” but I have not done the research – children go skiing at public expense one week each year or more. There are also many subsidized “initiation to the sea” summer camps.

It’s also true that Americans have bigger houses and bigger cars than do French people. Personally (and I am a kind of small expert on the topic) I think French universities are not nearly as good as their American counterparts. I mean that the best French universities don’t come close to the best American universities and that the worst American universities maintain standards absent in the worst French universities. Elementary and secondary French schools seem to me to be about equivalent to American schools. They also turn out large numbers of functional illiterates. But, there is more.

The French have universal health care that is mostly free. It hurts me a lot to say this but I saw it at work several times, including under trying circumstances, and the French national health care system performed fine every time. (There is an essay on this topic on this blog, I think.) I know this is only anecdotal evidence but the raw numbers don’t contradict my impression. In point of fact, French males live two years longer than American men. I realize this superior longevity could be due to any number of factors (except genetic factors, both populations are very mixed). However, it is not compatible with a truly horrendous “socialized medicine” system. And, yes, I too would like to credit Frenchmen’s longevity to regular drinking of red wine but it’s not reasonable. If it were, a health cult of red wine would have been launched by the wine industry in this country a long time ago.

The French collectively spend about half as much as we do on health care.

I can hear my virginal libertarian friends howling: The French can afford all those tax-based luxuries because they are less likely than Americans to become involved in military ventures. (And I would add, they cut out earlier, as they are now doing in Afghanistan.) But the numbers have to jibe: In the past thirty years, the US never spent more than 5% of GDP on the military. In most years, it was under 4% . Both figures include incompressibles such as veterans’ benefits that aren’t really spent to wage war, now or in the future. Those costs, about ¼ of the military budget in the average year, would be more or less made up elsewhere if they did not exist. So, it seems to me that higher military budgets cannot begin to account for the fifteen percentage points the French have over us in their national debt relative to GDP.

I am a small government conservative who would call himself a libertarian if I did not see the word as associated with pacifism. Yet, I cannot look away from these simple facts. I wish I had an answer to the quandary they pose but I don’t. Any ideas?

Some reflections on the Right to Private Property

[Editor’s note: the following is an essay by Dr Tibor Machan, professor emeritus in the department of philosophy at Auburn University, and current holder of the R. C. Hoiles Chair of Business Ethics and Free Enterprise at the Argyros School of Business & Economics at Chapman University in Orange, California. He is also a research fellow at the Hoover Institution at Stanford University, an adjunct scholar at the Cato Institute, and a former adjunct faculty member of the Ludwig von Mises Institute. Machan is a syndicated and freelance columnist; author of more than one hundred scholarly papers and more than thirty books. We are extremely grateful for his generosity in regards to sharing this article.] 

Private Property Rights

The first step in the destruction of capitalism must be the abolition of the right to private property. Marx and Engels were clear about this in The Communist Manifesto. And many who sympathize with his idea of a socialist political economy agree. This is one reason many such thinkers and activists are champions of land use, eminent domain and related legal measures that render even the most personal of real property subject to extensive government control.

Of course, there are others who have argued that the right to private property is not only the basis for vigorous commerce but also the foundation of other individual rights, including freedom of speech, freedom of religion, and freedom of the press. It is arguably, in a somewhat roundabout way, the conceptual foundation of the right to freedom of political participation. Without some safe haven, one’s private domain, to return to after the vote has gone against one’s way, one will be vulnerable to the vindictiveness of the winners! And political advocacy without exclusive jurisdiction over one’s domain is difficult to imagine since advocacy, support and such political activities could not be carried out independently of other people’s permission.

Accordingly, it is no mere academic curiosity whether the idea of private property rights is well founded, sound, or just. Within American political and legal history there has been some confidence in the soundness of this principle but the basis of it has not gone unchallenged over the last two centuries. One need but consider the recent work by Liam Murphy and Thomas Nagel, The Myth of Ownership, Taxes and Justice (Oxford University Press, 2001) to appreciate how vulnerable is that confidence. Indeed, it is mostly members of the discipline of economics who see merit in the idea of private property, and then not as a feature of justice but more as a feature of an efficient system of resource allocation.

Yet, there is reason to think that the right to private property is a good idea, that everyone should be understood to have this right and that the institutions built upon it should be preserved. Indeed, they should be extended into areas where other ideas have held sway (for example, environmental public law). Let us consider this idea, then, and see whether we can be confident in its validity as a sound political-legal concept. 

From Mixing Labor to Rewarding Good Judgment Continue reading

Italy and National Debt and Everyone Else

I have been inactive. Some catching up to do. I will go straight to the Italian situation because I don’t see it addressed in the media with anything resembling insight based on good information. I am it by default.

It’s human nature I suppose to want simple solutions to complex problems and easy solutions to hard problems. Italy is out of the swamp and therefore, the Euro is saved and therefore, the sterco is not going to hit the fan on this side of the Atlantic. Reason: Old bad boy Silvio Berlusconi resigned. Not much analysis, not much going below the surface by the American press. I have to do their elementary work for them.

First, I suspect there is a monstrous confusion in the minds of many in the media between the accounts of Italy, the state, the Italian republic on the one hand, and the figures pertaining to the Italian economy, on the other hand. The Italian economy comprises a few highly visible major corporations such as Fiat and myriads of small businesses.

The Italian Republic is in debt. The Italian economy is doing well. It’s on the healthy side of economies of developed countries. It’s a lot better than Japan’s for instance. It’s also true that, as elsewhere in Europe, the budget of the state is large relative to the national economy. My bet is that it is smaller than say, in France, or in Sweden, or even in Germany, because the black economy in Italy is so large. The Italian government is just not able to get its grubby little hands on much of what’s generated within Italy. Nevertheless, it’s true that the government budget and the private sector economy influence each other in Italy, as they do elsewhere. That’s not excuse to confuse the one with the other. My wife and I influence each other. It does no mean that we are one and the same. (For one thing, she is both attractive and intelligent.)

Berlusconi did not accumulate the large sovereign debt of the Italian Republic. The debt goes back a long way, some say to the aftermath of WWII. Successive governments just left it alone or they contributed to it. Continue reading