By Andy Ford
The BBC recently aired a programme in the Bottom Line series on Radio 4, called The French Correction. It pointed out that in all respects, France is a now richer country than the UK, its workers better off as well. It contrasted British productivity with that of France.
The dire state of Britain’s economic productivity is the subject of much debate and this programme, presented by Evan Davis, explored the reasons why French productivity is 20% higher than that in the UK.
Davis began by admitting that France contradicts the received wisdom (in Britain) that the route to prosperity is through deregulation and cutting workers rights to create a “flexible labour market”. And while French workers have shorter hours, better holidays and vastly superior job security, their productivity is 20% more than it is across the British economy.
The UK economy is about the same size as the French, but the UK has a lot more people working to produce broadly the same amount of national produce. And the gap is growing – 10 years ago, the gap was 10%, now it is double that.
French state has always intervened in the economy
Olivier Morel from the ‘French Chamber of Commerce in Great Britain’ pointed out that in France the state has always led the economy, which he traced all the way back to Jean-Baptiste Colbert in the days of Louis XIV. His point was that the French state has never trusted the mythical properties of the ‘free market’. Right from the start, they used the state to protect and to plan the development of French capitalism.
Rebecca Riley, from King’s Business School Institute of Productivity, pointed out that British politicians often criticise high levels of taxation in France, but her point was that high taxes do not by themselves impede growth – if they are spent on the right things. The French public sector has invested in infrastructure such as a stable energy supply (admittedly in the form of nuclear power), high speed railways, education and skills.
Olivier Morel interjected, asking, “but is it really a high tax economy? Corporation tax will be the same from April and the tax bands are similar”. This forced Evan Davis to hurriedly interject, saying,“Ah yes, but there are a lot of taxes on jobs though”, thereby showing how the BBC, like the British ruling class, is still wedded to neoliberal economic ideas.
One result of the French state leading capitalist industry is that the public sector and private firms are more inter-meshed than is the case in Britain, with ex-ministers often serving on the boards of French private companies, and senior managers floating between the private and public sectors. All agreed that they constitute a closed, technocratic elite.
No imposed overtime is allowed
On paper, French workers have far better job security and social benefits, such as the ‘RTT’ – a legally mandated scheme that aims for no employee to work more than 218 days a year (with no reduction in pay), and imposed overtime is not allowed. Because it is harder to get rid of workers, they are treated as more valuable, and they are deployed better.
But the picture changed somewhat when the programme spoke to actual French workers. They said that the two-hour lunch break is a myth, or is reserved for le chef (the boss). Workers also felt that French companies are very hierarchical, with layers and layers of management.
In summing up, even these business contributors saw that the better productivity of the economy in France is based on significant spending on vocational skills, and more investment in buildings, infrastructure, automation and research and development. Olivier Morel even said that the City of London is simply not interested in the long term.
Investment is the key issue
In other words, it is all about investment. French capitalism invests 22% of its GDP each year, compared to only 17% for the UK, so year on year a huge gap has opened up and is increasing. For British capitalism, it is a slow motion economic car crash which is then reflected in uncertainty and insecurity in terms of living standards and an unstable political environment.
The British capitalists are never going to start investing of their own volition, whatever incentives are offered to them. Only nationalising the ‘commanding heights’ of the economy and allowing the democratic ownership and planning of the big corporations can begin to rebuild British industry.
The 30-minute programme is well worth listening to and can be found on BBC i-player, here.
