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We’re often told European countries are better off thanks to big-government policies. So why is the U.S. beating France in many important ways?

Veronique de Rugy

reason.com

A man protests in France during a yellow vest demonstration (Telmo Pinto/ZUMAPRESS/Newscom)

It’s fashionable to claim that the free market ideas of Nobel laureate economist Milton Friedman have failed the country, and that it’s time for new policies. Campaigning in 2020, Joe Biden declared that “Milton Friedman isn’t running the show anymore.” More recently, New York Times columnist David Leonhardt noted that people like Friedman promised that the free market “would bring prosperity for all. It has not.”

This is nonsense. For one thing, I wish we lived in a world fashioned more fully by Friedman’s ideas. Sadly, while his insights have indeed influenced some U.S. economic policies, particularly during former President Ronald Reagan’s administration, the extent of their implementation has been quite limited.

Friedman, for example, would be appalled that federal debt is now roughly the size of annual gross domestic product (GDP), having grown like a kudzu vine since registering at around 25 percent in the early 1980s. Taxes remain lower since the Reagan revolution took place, but our incomes are often taxed multiple times. Nearly every aspect of our lives is regulated by various agencies—local, state, and national. And—no surprise—cronyism is alive and well.

Still, Friedman’s critics are right to treat him as a monumental figure. His ideas helped make trade freer and school choice mainstream. His clarity in contrasting markets with government opened many eyes to the benefits of capitalism. We are immeasurably better off for it. If you don’t believe me, look at my native France, where Friedman has had almost no influence.

The French economy is weighed down by one of the heaviest tax levels among wealthy democratic nations, with regressive taxes and social security contributions representing a significant portion of GDP. This tax haul funds France’s extensive web of social welfare programs, including health care, education, and pensions.

French regulation is also comprehensive, covering many aspects of employment, business operations, and environmental protection. The labor code is particularly onerous. Additionally, its government plays a direct role in the economy, with a significant number of partially state-owned enterprises and interventionist policies intended to safeguard employment and prioritize equality and social cohesion.

Let’s see how they’re doing.

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