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The Ravages of Neoliberal Fundamentalism

Down and Out in London vs. Paris

by MICHAEL BRENNER

There will always be an England dear to the hearts of Americans who adore the quaint – especially where the natives speak in an intelligible tongue. The Brits high regard for the United States further warms the cockles of the Anglophilic heart. Imitation being the ultimate form of respect in today’s globalized culture, the vanishing England of old (from double-decker buses to bowler hats) diminishes our affection not a whit so long as it is replaced by pop entertainment, catch-phrases, and economic panaceas with the “Made In USA” seal. That assures Americans that the voices raised to hail “the land of hope and glory” really know just what land deserves the accolade.

Ritualized affirmations of family ties crop up at random in unpredictable waves. For the past year or so, American media of all stripes are brimming with feel-good accounts of life over there where the sun never sets on Anglo-American friendship. The timing has something to do with the upwelling of usually submerged royalist sentiments on the occasion of a monarchical anniversary or birth.  It also benefits from the juxtaposition of English-speaking-thinking/feelings in moments when Americans are experiencing one of their bouts of derision directed at another European country, especially France and the French – always the object of mixed sentiments. Of course, we all learn in school that the land-of-the-free and the-home-of-the-brave would have found its providential destiny delayed were it not for the intervention of the French in our War of Independence from our then beastly British kin. And the French never burned to the ground our capital. Yet, Lafayette notwithstanding, the French are too different, too ungrateful about recent favors given, and too crotchety in resisting fulsome expressions of deference to the world’s sovereign to win the type of instinctive affection freely offered to John Bull & Associates.

Consequently, there is a long-standing tradition of reveling in whatever hard times France may be experiencing. That American version of reverse empathy correlates with compensatory expressions of goodwill toward the Brits. At present, Americans are overwhelmed with stories of Gallic gloom and doom. Our supposedly serious media pronounce that France is in decline – steep decline. That its economy is sclerotic. That its education system is retrograde.  That its indulgent social programs are bringing it to the brink of plummeting into the same abyss where we find the feckless Mediterraneans.  Hidebound  French companies simply cannot compete in today’s globalized, dynamic marketplace. The old image as France in partnership with Germany as the co-conductors of the European Union project is derided as nostalgic fantasy. As evidence of France’s current distress, graphic word pictures are drawn of the morose mood that casts a pall over the once City of Light, of a collective despondency, of lost hope in the future, of a fatalistic acceptance that la vie en rose has reverted to the grittiness of film noir.

France’s youth, we are informed, are particularly distraught. They can only grumble as they view from afar the bright opportunities that abound in the Anglo-Saxon countries. Anecdote is piled upon anecdote as the best, and most ambitious, flee to seek gold and glory where talent is recognized and rewarded. A drain of brains and energy is threatening to extinguish the intellectual lamps from Picardy to Provence.

These dire images are propagated not just from America but from London, too, the spiritual co-capital – along with New York – of free-wheeling entrepreneurial initiative. The Financial Times and The Economist, which together serve as the Osservatore Romano for the Universal Church of the Capitalist Counter-Reformation, carry the apostolic message around the world. France is stigmatized as the embodiment of the old beliefs and old institutions that resist the Reawakening at the price of their mortal national soul.

So, where lies Salvation? The living Creed is close-by; it awaits them: “ask and you shall be given; seek and you shall find.” America may be distant, but a surrogate holy site lies just across the Channel – 18 miles away.  There, the faith has set down firm roots; there it flowers in a land of milk and honey. Or so we are assured.

Surveying the Promised Land

Before the French pack their camels (or book seats on the Eurostar) for the trek to the Promised Land bar one, let’s take a clear look as what would await them.

In macro-economic terms, France and the U.K. are on an exact par insofar as DDP and GDP per capita are concerned. How about rates of growth? From 2005 – 2012, i.e. the period just before and since the great financial crisis when Britain, allegedly, saw the need for ‘reform” in accordance with the new wisdom and set down the American path of cuts in social programs, ‘flexible labor markets’ and drastic deregulation while France stayed wedded to the outdated Social Market model?

Annual Rates  of Growth

Fr:  7.2% (cumulative)     UK: 6.9%

Public Debt as Fraction of Budget 2012

Fr:  4.8          UK:   6.3

Total Public Debt as Fraction of GDP

Fr: 90%          UK: 90%

Inflation Rate

Fr:  2.2%         UK:  2.8%

Consequences

Risk of Poverty

Fr:  15.8%         UK:  25.7%

Child Poverty

Fr: 7.9%            UK: 19.6%

Income Distribution Poorest 10%

Fr: 2.8%           UK: 2.2%

Poverty Rate Overall

France: 7.8%   UK: 14%

Population Below Median Income

Fr: 8%      UK: 12.5%

GINI Coefficient

Fr:  .293       UK:  .345

The GINI coefficient measures the inequality among values of a frequency distribution (for example levels of income). A Gini coefficient of zero expresses perfect equality, where all values are the same (for example, where everyone has an exactly equal income).

How about EDUCATION where the rigidly centralized French system is compared unfavorably with the more competitive/privatizing British system? France spends more on education: 5.8% vs 5.1 % of GDP. Test results are marginally superior in the former.

HEALTH

The French health care system is widely lauded as a model; the British NHS has been riddled with scandal, disorganization and inefficiency under the stress of successive “reforms” and now faces a doctors’ rebellion. France’s health system is ranked no. 1 by the W.H.O.; the UK is ranked no. 18 France spends markedly more on health care than does the United Kingdom

Health Care Spending

Fr: $2,239 per capita                                           UK: $1,764 per capita

It shows in these statistics.

Life expectancy at 65:

Fr:  21.4                            UK: 19.7

Obesity

Fr: 9.4%                               UK: 23%

Heart Disease Deaths per 100,000 people

Fr: 39.8        UK: 122

Hospital Beds per 1,000 people

Fr: 8.4           UK: 4.1

Practicing Physicians per 100,000

Fr: 310           UK: 270

CRIME  Annual total

Fr: 3,771,850 UK: 6,523,706

Does the superior French performance as measured by social indicators come at the expense of national security?

NO. France’s total armed forces number 294,000, the UK’s total 212,000. France spends $752 per capita on defense; the UK spends $718

OVERVIEW

The French and British economies are asymmetrical. Financial services are the cornerstone of the UK’s economy. Its concentration in the City of London explains the enormous wealth disparities between the Greater London region and the rest of the country. This results in a concentration of riches greater even than exists in historically centralized France – as comparable statistics re. Paris show.  The principal attraction nowadays is the friendly regulatory environment and lenient tax regime that suit the interests of the banks and associated businesses, above all its movers and shakers.  London is a global haven for financial maneuvering of all kinds. To a very considerable extent, that financial elite in international in its make-up. The City does indeed attract wealth seekers and financial buccaneers from around the world. Government policies that produce a strikingly unequal income distribution are both cause and effect of that phenomenon.

A side effect is to make the British economy uniquely vulnerable to the destabilizing repercussions of a world financial crisis a la 2008 – all of the conditions that created it still being in place everywhere.

CONCLUSION

For a thin economic elite, the United Kingdom is a more attractive country than France. So, if your goal is to build a fortune quickly, if you are looking for unbridled steeds that can transport you to El-Dorado swiftly, if you have a shriveled sense of the public good and a dulled sense of social justice, if you draw strength from knowing that the ship of state is being steered by the dynamic posh-boy triumvirate of Cameron-Osborne-Clegg – then The City may very well be your cup of tea.

If you do not have those qualifications or requirements, then you may wish to pitch your tent on the Gallic side of the Channel.   There, you might find it salubrious to sip an aperitif at the Bourbon while reading daily your national obituary in the FT or Economist – or even in one of the French papers that feature Cassandra like predictions by those compatriots who are consumed by tax-break envy. And you could be confident in a judgment that comes of taking a clear-eyed view of reality that focuses on the tangible and the practical – rather than looking through the distorting lens of Anglo-American ideological dogma and abstract theory.

Neo-liberal market fundamentalism has two core tenets: the virtue of the self-equilibriating, efficient market and its shackling by the state. Its principle article of faith, as the now beatified Margaret Thatcher saith: “There really is no such thing as society.”

Sources: OECD, World Bank, CIA, WHO, IMD International.

Michael Brenner is a Professor of International Affairs at the University of Pittsburgh.