A choice between Colbert or Turgot is a choice of life or death.

Colbert or Turgot? The Choice That Haunts France

France is again at a crossroads: She has to choose between the policies of Jean-Baptiste Colbert and those of Anne-Robert-Jacques Turgot.

 

András Toth

Hundreds of thousands of people wearing yellow vests are protesting against tax increases. Paris has been burning for weeks. France has not seen such mass protests, violence, and destruction for decades.

The sudden outbreak of waves of protest shows that the most destructive course of action is to pursue an economic policy that on one the hand promises to liberate the economy from state shackles and is based on hopes for and faith in individual ingenuity, and, on the other hand, introduces handsome tax hikes, which expand the burden on private economic actors in order to increase the revenues of the state budget. Macron took away with his left hand what he intended to give with his right. The program of decreasing the role of the suffocating, over-regulating, and overtaxing state is irreconcilable with tax increases.

The basic narrative of these events is well-known. Emmanuel Macron was elected with a program that promised to ensure France’s leadership position in Europe by enhancing the competitiveness of the national economy through liberalization reforms—a kind of “Make France Great Competitive Again” program to ensure that France would not be dependent on the goodwill of Germany. He enjoyed some support among the electorate (about one-quarter of the voters), and a larger pool of voters half-heartedly accepted his proposal given that his arch-rival campaigned under the banner of Frexit—leaving Europe completely.

His steps toward reform were not very well-liked, and his popularity went into free fall. Nonetheless, the reform process was not scuttled by violent resistance from the unions, a fate that undermined the reform attempts of his predecessors, including the left-wing François Hollande and the right-wing Nicolas Sarkozy.

Paris has been burning for weeks due to an unexpected and shockingly large wave of protests against Macron.

Paris has been burning for weeks due to an unexpected and shockingly large wave of protests against Macron—a wave of protests that involve most of France and that enjoy wide popular support. There has been nothing like this in France for several decades.

The wave of protest was provoked by a large tax increase on petrol, not by the reforms aimed to make the French economy more like a free(er) market economy.

France's Long History of Intervention

If there is an example of a dirigiste, interventionist state, then that is France in Europe. France was the birthplace of the mercantilist, absolutist monarchy in the early modern period. The Bourbon Kings had perfected the practice of mercantilist protection and monopolization of key industries, including the state-mandated “industrial development policies” in the 17th and 18th centuries. To the detriment of France, the French state chose the silk industry and suppressed the textile industry.

Under the rule of the famous finance minister, Jean-Baptiste Colbert, textile manufacturers were heavily persecuted. This mistaken policy allowed Britain, which opted for policies allowing more freedom to industrialists, to be the birthplace of the Industrial Revolution. The modern French state is the stepchild of the political culture of the Bourbons. It is the prime example of dirigisme.

While Britain developed to become the workshop of the world, and their fleet ruled the waves, France sank into a series of crises and lost her preeminent position in Europe. The great-grandchild of the Sun King paid with his head for the crisis of the dirigiste state of his time.

The modern French state is the stepchild of the political culture of the Bourbons. It is the prime example of dirigisme. It redistributes as much as 56 percent of annual GDP and imposes the highest tax burden in Europe. The French state directly manages key industries and sustains one of the largest welfare states in Europe. It also imposes complicated bureaucratic red tape on economic actors, trailing way behind the Scandinavian states and Germany as far as ease of business is concerned.

France is nevertheless also a great power and one of the key states in Europe, and it harbors great European and geopolitical ambitions.

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