Timmy elsewhere

France attempts a high tax economy but with dirigiste direction of the economy – not leaving room for the free market to innovate and grow because of the thicket of regulations. This does not work. It’s just not one of the mixtures that ever will work. France therefore needs to move in one of two directions (or, best of all, follow both paths a la Hong Kong). Either lower the state’s portion of the economy to allow growth to happen, or blow up the regulation to allow the innovation. The Anglo Saxon and Nordic models both work in their own ways, the French does not. Thus, France has to choose.

26 thoughts on “Timmy elsewhere”

  1. What you say actually matches Pryce’s comments.

    Yes, the French still sell lots of Louis Vuitton, perfumes, cars and wines. But those are century old industries. They’re not really doing much that’s new. If you look at the recent additions to LVMH, they’re nearly all foreign.

    I love the place, but I rarely sense much innovation going on.

  2. The Other Bloke in Italy

    I suspect that some countries, like this one, are saved from total stagnation by the black economy.

    However, the innovation which Anon refers to must usually take place in plain view. If the State will then jump on you for high taxes and regulatory opportunity, then why bother?

  3. You could read “blow up the regulations” both ways, BTW, and a French reader would be at particular risk of getting the wrong message.

  4. “We are having trouble showing you adverts on this page, which may be a result of ad blocker software being installed on your device.”

    You should drop a friendly word into the ear of whoever’s running the City A.M. web content that *lying* to your potential eyeballs isn’t a good thing to do.

    They’re not ‘having problems’ delivering content because of ad blockers, they are *choosing to withhold content* from those who haven’t whitelisted them.

    Forbes does it right – be frank, be honest, be firm.

  5. Bloke in Germany
    August 1, 2016 at 10:59 am

    In what sense does the Anglo-Saxon world have either low taxes or low regulatory hindrances?

    Its all relative.

    Compared to the French, the Italians, Greeks, Russians, Chinese?

  6. “As French growth grinds to a halt, is the country’s economic model fundamentally broken?”
    Tim Worstall & Vicky Pryce

    Would this be THAT Vicky Pryce? Did bird for lying through her teeth?

  7. Obn the other hand, she’s not wrong about the French economy. The bits she’s cheerleading. Airbus Industrie. defense, French foods & wines. All the bits where regulations are gamed in France’s favour to the detriment of everyone else.

  8. I’ve been hearing this story since I was a nipper, and yet France still hasn’t collapsed. Not even a whiff of collapse. Whatever its faults, it’s not corrupt like Argentina; the state doesn’t dominate too much like Brazil or India; they don’t even over-regulate hairdressers like the Americans.

    Then there’s this:

    Productivity levels there have remained some 30 per cent above those in the UK.

    You (and others) usually claim that this is because French labour laws effectively exclude the least productive workers from the economy. But mathematically that simply can’t account for a 30% difference. It’s too big a gap. There must be other factors in play.

  9. However, the innovation which Anon refers to must usually take place in plain view.

    The French think innovation will come via the existing behemoths. See here for example.

  10. I am somewhat puzzled to be told that France has overtaken GB to be the fifth largest economy in the world given that it has a lower growth rate.
    If I knew how to overtake people whilst going slower than them I might actually win a few races.

  11. But mathematically that simply can’t account for a 30% difference. It’s too big a gap. There must be other factors in play.

    There is: the GDP calculation assumes that each Euro spent by the state is a Euro of value added. Therefore, it assumes those armies of state employees in (say) the prefectures and La Poste are adding value equivalent to the cost of employing them, whereas this is laughable to anyone who has had the misfortune of dealing with either institution. If a productivity calculation assumes state employees are productive, a country with armies of state employees will look very productive indeed, even if said employees are lying about sleeping all day.

  12. Bloke in North Dorset

    According to the latest BigMac index the £ is undervalued against the US$ by about 20%. It would also be interesting to see how a French currency would fare if it wasn’t using the Euro which is kept high by Germany.

    On innovation and France, I remember reading somewhere, might have been here, that they are world leaders in supermarket point of sale technology, driven by the high cost of employing checkout staff.

  13. Bloke in Germany,

    “In what sense does the Anglo-Saxon world have either low taxes or low regulatory hindrances?”

    The biggest one is French law on redundancies. It’s not like “sorry, here’s you’re cheque, bye”. It’s notice of termination, creating a job preservation plan, retraining employees, consulting with unions and various busybodies. And it kicks in at 11 employees.

    So, France is full of lots of “artisan” businesses. Want some romantic lingerie? It’ll be that little shop in town run by a local woman. And they have plenty of that. But you won’t find the equivalent of Ann Summers or Bravissimo, new chains doing a particular thing and some scale. The chains France has are mostly antiquated like Monoprix (1932) or Printemps (1865).

  14. Monoprix (1932)

    Which is a weird mix between BHS and Tesco. Half the shop is dressing gowns and granny’s lingerie, the other half groceries. It’s really weird.

  15. Is there an English language blog anyone knows of written about business life in France (or just life generally but more about economics and politics and so on, not just about pastis and boules)? May be too esoteric, but just wondering.

  16. Tim Newman,

    All their department stores aren’t much cop. And that’s about competition, I think. I popped into a Monoprix and a Nouvelle Galleries last year and the latter reminded me of a BHS about 20 years ago.

    A lot of people in this country (mostly bien pensant types) complain about our high streets and how they’re full of chains, and yes, it’s nice to go into more individual shops sometimes, but the result is either expensive boutiques, or really grotty shops.

  17. BiND,

    You just reminded me that I was seeing barcode readers (pen type, at that time) in French supermarkets in the early 1980s, years before such innovations were noticeable in the UK – makes sense if your staff costs are so high that it’s worth investing in hardware instead…

  18. All their department stores aren’t much cop.

    I find their supermarkets a bit shite, to be honest. Slightly grubby (especially Auchan), understaffed on the tills and understaffed on the restocking/shelf stacking. Unlike British supermarkets, they tend to stack shelves in the middle of the day and not at night. All of this points to high staff costs.

    That said, I find Darty okay and Costarama a lot better than B&Q.

  19. Tim Newman,

    Yes. They always feel like that. UK supermarkets tend to keep things cleaner and tidier, and in better maintenance, even the cheaper ones like Asda.

    I mostly go to France for the weather and beaches now.

  20. Bloke in Costa Rica

    I worked in a Tesco in-store bakery a couple of summers when I was 16/17. It was a bit like the army in that standing around looking gormless would attract unwelcome attention. An NCO (read: junior supervisor) would ask rather pointedly why you weren’t sweeping or keeping your station clean or out on the shop floor seeing if any shelves needed re-stocking or rotating. The whole place gleamed.

  21. @Agammamon, August 1, 2016 at 11:23 am
    “We are having trouble showing you adverts on this page, which may be a result of ad blocker software being installed on your device.”

    You should drop a friendly word into the ear of whoever’s running the City A.M. web content that *lying* to your potential eyeballs isn’t a good thing to do.

    They’re not ‘having problems’ delivering content because of ad blockers, they are *choosing to withhold content* from those who haven’t whitelisted them.

    I have no problems with viewing ad-free content on City AM or Forbes.

    .

    Re French supermarkets

    How do they compare with Swedish ones which are about 30 years behind UK?

    P

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