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A Cautionary Note from French Economists

Posted By Anthony B. Kim On May 4, 2012 @ 1:48 pm In International | Comments Disabled

Voters in five European countries—France, Germany, Greece, Italy, and Serbia—go to the polls on May 6. Election outcomes, particularly in France and Greece, are likely to ratchet up uncertainty about the future of the European Union.

In a somber, warning tone, a group of concerned French economists penned a public appeal [1] for an informed decision on the country’s critical Sunday election. Making a strong case that France “should know better than to elect François Hollande,” they remind voters:

Socialism has never succeeded in its extreme form, communism. As the past several years in Europe have shown, it does not work in its milder form of social democracy either. If European history teaches us anything, it is that prosperity is closely correlated to economic freedom… Growth cannot be decreed: It is the result of unpredictable decisions and actions by countless individuals, all capable of effort and imagination. And growth can only come if these countless individuals’ impulses are not paralyzed by regulations, taxes, or dependence on the state. 

Europe’s decades of high social welfare spending and stifling regulation have combined to reduce economic and social dynamism. For governments increasingly constrained by budget deficits, rising debt, and flagging competitiveness, the gap between their past political promises and their economic capability to fulfill them has become too wide to sustain. With government’s basket of effective responses empty, a fundamental rethinking of the social contract—the basic relationship between government and citizen—is no longer just an intellectual exercise. It is an urgent matter of economic survival.

The cautionary note from the French economists is a pragmatic reminder for voters around the world, including those in the United States who will go to the polls this November, that greater economic freedom is the proven path to a more prosperous future.


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[1] penned a public appeal: http://online.wsj.com/article/SB10001424052702304743704577381673645798942.html?mod=googlenews_wsj

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