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March 29, 2006

Entitlement in France, Growth in California

Bloomberg’s Amity Shlaes has written a column on the contrast between France and California that’s so good I wish I had written it. And no, it's not about wines.

Read it in its entirety here; an excerpt follows:

Adam Smith, the philosopher, wrote that in a growing economy, "the great body of the people seem to be the happiest and the most comfortable." Life was, Smith noted, by contrast, "hard in the stationary, and miserable in the declining state." Baron de Montesquieu, one of Smith's French counterparts, wrote of a related phenomenon: "Everywhere there is commerce, there are gentle mores."

. . . several centuries after he put it down, Montesquieu's thesis is proving itself anew in his homeland. After World War II, France seemed to grow just fine. Real per capita income rose. In 1973, unemployment was less than 3 percent in France, well below the 5 percent in the U.S.

All that growth and employment put France, and Germany for that matter, in a sharing mood. People born in the 1960s and 1970s had the impression that France would grow forever. Back in 1985, France hosted one of the friendlier and most pro-immigrant events in the history of the world, a concert for hundreds of thousands whose theme was opposing racism. The motto that year was "Touche Pas a Mon Pote" --"Don't touch my buddy," the immigrant. Gentler mores would have been hard to find.

But then France became "stationary," to use Smith's term. As the government grew, and competition from developing nations increased, growth slowed. Unemployment began to range consistently higher than that in the U.S. Youth unemployment moved into the 20 percent range. By 2000, almost half of all unemployed Frenchmen had been out of work for more than a year.

In a statement more terrifying than any made by students, the Archbishop of Paris last week told demonstrators that "Honestly, I do not believe that anybody can guarantee you this security, no more than guarantee that you will have a standard of living comparable to your parents." Small wonder the French students are not in a sharing mood. The archbishop is telling them that growth isn't their birthright, after all.

The California experience is the opposite: citizens of the Golden State, including Hispanics, are increasingly confident that growth is indeed their birthright. California unemployment came within a hair of 10 percent in the early 1990s, a period when anti-immigrant nastiness increased as well. Since the mid-1990s, despite whatever spending lawmakers in Sacramento did, unemployment has gone down; in February it was 5 percent.

The state Department of Finance shows California's per capita income rising every year since 1988 -- and always exceeding the U.S. average. For as long as teenagers can remember, there has been growth and there have been jobs. They don't merely feel entitled to entitlements. They also feel entitled to growth, which is different.

. . . the crowds in France keep taking to the street. And their demonstrations remind us that growth has effects in other areas of our lives, including politics. U.S. Republicans, for example, have found numerous times that anti-immigrant nativism backfires; people are doing too well to see the appeal.

In an enlightening new book, "The Moral Consequences of Economic Growth," Benjamin Friedman, a Harvard University economist, posits that morality and growth are related: "Economic growth not only relies upon moral impetus, it also has positive moral consequences."

It's all worth considering as smoke from burning cars wafts around the Eiffel Tower. In the end the French troubles reveal not the selfishness of the students, but that of their parents and Mother France. They are the ones, after all, who hurt their own children rather than harm the large French state.

Posted by John on March 29, 2006 8:32 AM

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