Claims about France

From Henry Samuel, reporting some claims by Jean-Philippe Delsol:

More than half of the active French population is living off the state, according to figures in a new book by a tax lawyer seeking to explain why so many of his clients in private enterprise are leaving France.

With the country on the brink of nationwide tax revolt, Why I’m Going to Leave France, published this week, has thrown more fuel on the fire by suggesting that 14.5 million people out of the country’s 28 million-strong workforce are — one way or another— making a living off taxpayers’ money. To reach the figure, the author begins with France’s or civil servants, of which there are 5.2 million and whose number has increased by 36% since 1983. These represent 22% of the workforce compared with a European average of 15%, leading him to conclude that France has 1.5 million too many “fonctionnaires”.

He then adds the 3.2 million unemployed people in France relying on state benefits, another 1.3 million taking low-income handouts, a further two million in the “parapublic” sector — majority state-owned companies — and more than a million people in state-funded associations such as charities. Under the current Socialist government, there are 750,000 state-subsidized jobs and the author includes a million people in the agricultural sector who rely largely on contributions from European Common Agricultural Policy subsidies.

He said that the figures in his book were only logical. “When you consider that public spending in France now accounts for 57% of gross domestic product, it’s only natural that more than half of the active workforce are paid with public money,” Mr Delsol told The Daily Telegraph.

A simple theoretical first cut at these numbers suggests they bring greater cyclical stability in the short run, inferior growth over time.

For the pointer I thank the excellent MacroDigest.

Comments

Government-owned/linked companies are not necessarily subsidized, or the Republic of Singapore would have most of its country's workforce also "making a living off taxpayer's money". The question is whether the GOCs/GLCs are profitable.

In Europe, market integration between the large economies has proceeded via countries mutually and cautiously privatizing in order to gain access to each other's markets - e.g., Deustche Bundespost getting partially privatized into Deutsche Telekom AG, which then allows it to acquire private subsidiaries like T-Mobile in other countries. So it is not rare for such companies to have large shares of state ownership, even majority stakes, but nonetheless operate identically to a typical publicly-listed corporation. The German federal govt still owns a large chunk of Deustche Telekom AG, but it would be obviously ridiculous to count the number of American employees of T-Mobile and argue that all of them are wards of the German state.

Not to mention DHL.

As for including farmers/farm workers as 'state employees' - hilarious, considering that the subsidies are EU wide. And easily matched by those provided to agriculture in the U.S.

"And easily matched by those provided to agriculture in the U.S."

Uh not quite. EU gives about 39B euro in direct farm subsidies compared to $20B in the US. So roughly twice as much.

EU has 2x more population....

Not sure when 500 became twice 300....

And the size of the agricultural sectors are pretty similar in GDP terms, certainly not double for the EU.

I'm curious - are you factoring in the extremely low rates for water that many western farmers rely on? Or the extremely low rents paid to use public lands for such things as raising cattle?

And here are some quick numbers which tend to have a bit wider view -

'The U.S. Department of Agriculture distributes between $10 billion and $30 billion in cash subsidies to farmers and owners of farmland each year..1 The particular amount depends on market prices for crops, the level of disaster payments, and other factors. More than 90 percent of agriculture subsidies go to farmers of five crops—wheat, corn, soybeans, rice, and cotton.2 More than 800,000 farmers and landowners receive subsidies, but the payments are heavily tilted toward the largest producers.3

In addition to routine cash subsidies, the USDA provides subsidized crop insurance, marketing support, and other services to farm businesses. The USDA also performs extensive agricultural research and collects statistical data for the industry. These indirect subsidies and services cost taxpayers about $5 billion each year, putting total farm support at between $15 billion and $35 billion annually.' http://www.downsizinggovernment.org/agriculture/subsidies

A lot of American support tends to be 'indirect' - as noted above.

Right - just cause some one is on the government's payroll doesn't mean they are less productive to the economy than if they did the same job working for a company. In these days of foreign ownership, they might be better - but only with good management. That put's the private one out in front - but only by a nose.

Yeah, but the question for the half of the population that is paying for the other half is: "Are the government jobs doing something for me?"

Not everyone needs a WIFM for everything, but they damned well want their money's worth from 40% of their gross income.

Oh yes, I absoulutely agree. It's just that the statistics never seem to get at this question: what do I get for my tax money. I might get a whole lot of pointless regulation, various huge direct and indirect subsidies to corporations (including lots of guns), and lots of advertising and other tomfoolery. Of you might get good services, clean and serviceable roads, efficient energy, and good healthcare. I wish I saw good statistics about which governments are providing which, instead of just total tax dollars...

It is overhead. Necessary overhead, but in the same category as paper clips and IT spending; useful, can't do business without it, but it absorbs resources rather than generating them. At one point it gets far too expensive, and these costs are only supportable if the government borrows money to pay for them.

"A simple theoretical first cut at these numbers suggests they bring greater cyclical stability in the short run, inferior growth over time."

And yet France has the same growth rates as Britain, Germany, and the USA over the past few decades. The PPP adjusted hourly wages for a college graduate are similar to the USA, though there are many fewer hours worked per person.

Maybe that theory needs revision. Or maybe a careful accounting would find that the USA has a similarly large public sector once state managed, regulated, subsidized, licensed, and controlled industries like health care and housing are included.

I think most observers agree that France's future growth expectations are far worse than Germany, the USA, and Britain at the moment. Maybe their growth in the last few decades was driven by unsustainable expansion of the public sector (36% increase in public servants since 1983).

I agree that the US government is larger than it might first appear, once you account for the indirect way in which some sectors are regulated. However, there is no way its size approaches France.

"France’s future growth expectations are far worse ….": yeah, but guesses aren't data.

Well, you could apply plenty of data to this using various measures of the current state of the economy. It's far more than a "guess" that France's economy is in worse shape than the others right now--and it's hardly jumping to conclusions to suggest that matters for the future.

Thank you for saying this. There is a lot of confusion between data and perceptions of data on this site. Growth projections have a lot more to do with political ideologies when it comes to France than it does when it comes to the U.S. or another country. As Krugman points out (cue some idealogue's snarky comment about Krugman being Satan Hitler), there is a lot of hate against France for resisting fiscal austerity.

I probably overstated my case. But is there any real dispute that France is the worst off of the four right now? They have the highest unemployment by a significant margin and are the only economy out of those four that is not growing.

OK, but 30 years ago, France was richer than Germany and quite a bit richer than the UK. Leviathan has a track record.

Was France actually richer than Germany, or at least than West Germany?

Going to the Penn World Tables suggests that France might have had a slight edge over Germany, but the figures for "Germany" pre-reunification include both prosperous West Germany and stagnant East Germany. French GDP per capita relative to West Germany's was almost certainly lower.

most observers agree that France’s future growth expectations are far worse than Germany, the USA, and Britain at the moment

Do they really agree on that?

I mean, it would totally fit in with my priors, so I want it to be true, but it's the facts one wishes to be true one needs to be the most skeptical of.

France does not have the same growth rates as USA
http://www.bls.gov/ilc/intl_gdp_capita_gdp_hour.htm#chart03 table 1.a

since 1990, US GDP grew by a factor of 1.314, France grew by 1.23
Britain grew by 1.44 and Germany grew by 1.4

France is the worst one of the 4.

And from a lower level, when you start at 3/4 of the GDP per capita of the US you should have a faster growth rate just to keep the absolute distance in GDP per capita constant.

Sweden is 1.8 though which tells us that simplistic divisions between "socialism" and "no socialism" show low to zero correlation with actual gdp growth

OK, so stop with your simplistic divisions...

Yeah, but Sweden became much less socialistic almost right at the start of that period. Changes matter.

true that, but still it's much more socialistic than Britain or Germany yet it's growing faster. Levels matter :) I think the key is they are socialistic where it's not detrimental to growth and capitalistic where it does
whereas France is socialistic across the board which is bad :)

I am not sure whether Sweden is that much more socialistic than Germany anymore. Sweden has turned remarkably more libertarian in many parameters in the last 20 years.

How long has France had a relatively large state sector? Since Bonaparte? Louis XIV?

Julius Caesar

Meanwhile, another French guy, Gabriel Zucman of the London School of Economics and UC Berkeley, has a new book out (in French), called La Richesse cachée des nations. Enquête sur les paradis fiscaux: The hidden wealth of nations, an investigation into tax havens. By his estimate, 8% of the world's households' financial assets, or 5,800 bn euros, is stashed away in the paradises, with France accounting for 350 bn out of that amount. Tax evasion: 130 bn euros a year worldwide, 50 bn in the EU, 17 bn in France. Proposed solution: elimination of bank secrecy.

Tax havens only "steal" money from the government: what would they do with it? increase spendings even more!
17bn€ is not that much: deficit alone is 3,6x more.

However, these numbers don't work: how can 350bn€ only account for 17bn€ in tax evasion?
Let me tell you: revenue is taxed WAY MORE in France.

It's not revenue, it's savings. Make 35 bn a year, evade (say) a 50% tax, repeat for a decade, job done.

This makes for a convenient blame-shifting mechanism, but I think it is more a symptom than a cause of their problems.

High taxes encourage evasion, and massive bureaucracy engenders the complex web of laws and regulations that create opportunities to game the system.

I make good money in private enterprise, not enough to be able to stop paying tax, but enough to live comfortably and indulge in a few foolish luxuries. I don't live in the USA nor in France but if I had to choose one or the other, I wouldn't hesitate to live in France. Increasing my income by a factor of 10 wouldn't induce me to live in the USA.

I am guessing you haven't been to many places in the US.

What I have seen of France is really nice, but really? A factor of 10?

I really like the US and I really enjoy going there a few times a year.
Moreover, as a tech guy, i just can't skip the bay area.
But obsession about guns, religion, crappy health insurance system and the overall bad food (even though there are obviously some excellent restaurants) would prevent me from moving there permanently.

Fair enough, but at 10 times the income you would almost certainly enjoy better food and healthcare in America than France. Which means that the monetary value you place on not hearing annoying American opinions must be extremely high.

For 10 times I might switch :)

"at 10 times the income you would almost certainly enjoy better food": it's good news that food in the US has improved so much. If true.

You can easily go a year without seeing a single gun in the US (besides what is on a cop's belt). Even in the south.

Even critics of the US's health care system think rich people have it well here, so a factor of 10 increase in income would take concerns of that off the table.

I think you really have to go out of your way to hear people talking about that stuff. Like most places, people in America are more concerned with things that directly affect them than with politics in the abstract.

I am obviously only speaking from my own very subjective point of view, but you might underestimate how pervasive religion is in the American culture.
(I am coming from a culture where it would seem very very strange to talk about religion at the diner table, and a professional mistake for a politician to talk about their personal religious beliefs.)
About guns, the special security even in the most mundane places (seriously, in a liquor shop?), the TSA paranoia, and the regular mass shooting heard on the news are enough to make me feel uncomfortable.
Another thing I find difficult to get used to, is how so many people define themselves by their race.
But anyway, as I said, I really like the US, despite poor food, poor health insurance system, poor art de vivre, you have great literature, great thinkers, great universities, great technology and a faith in the future that makes me jealous.

Pierre,
You have to be kidding :)

1. Guns. As an American, I'm usually a little put off by the high number of gendarmes milling around Paris and transportation hubs with their machine guns.

On the other hand, it makes perfect sense for a guy who owns a liquor store in a crummy area to protect himself. I especially would in France, which seems quite a bit more prone to regular rioting and looting in its many crappy slums.

2. Race. Again, the regular rioting and looting seems to have a strong ethnic/religious component. There's a clear cultural segregation, and it's basically mutually enforced. I find that that the French often enforce it to the extent that they don't even think of all of those folks in France as "French", and thus, they say things like "France doesn't have those sorts of tensions.

3. Food. This is largely a function of knowledge and time. If you walk into the average touristy restaurant in Paris, you're not going to get a good meal. Likewise in the US. Finding good food requires understanding what to look for. I enjoy my trips to Europe, but I'm usually frustrated by the fact that 90% of restaurants have a typical "menu" by the country. I know what will be on a menu in France, Belgium, or Italy before ever going in. To some extent that's true in the US of course, but I understand the topology of restaurants a lot better, and there's generally a much wider variety. Where I live, I can get very good food from many different cuisines. The Belgian food I can get in Indianapolis, IN, is pretty good. Not as good as I'd get in Belgium, but the Mexican or Thai food I get here at home is notably better than I'd get in Belgium.

4. Health. My mother in law always warned us not to get sick in France. Statistically, people in the US receive better health care, it's offset by our frequently worse behavior.

I am not sure, Pierre, whether making your opinion on any country from its mass media is the right thing to do.

Should I rely on them here in Prague, I would think that France is continually on strike with violent clashes between the unionists and the police, while Afro-Arab youths burn whole streets at a time and kill anyone wearing a yarmulke.

Yet I travelled from Perpignan to Nice recently and saw nothing of that kind, with the possible exception of Marseille, which really had some dangerous look.

2) Pierre, guns are just inanimate metal objects. Have your served as a conscript in the military?

3) That said, I didn't like the view of heavily armed gendarmes in Marseille, Montpellier etc. either. Not because I dislike guns (I have no particular emotions in this regard). But it is absolutely senseless to equip any street police officers with machine guns, it is only good for intimidation of normal citizens. If something really happens, what will they do, start shooting around full-auto in a panicking crowd?

Mike, this could be a very long conversation :)

1. About guns, yes, police officers are armed, and we have soldiers with machine guns in transportation hubs since the US had the brillant idea to mess up the whole Muslim world by invading Iraq. But guns are strictly controled and it is far more likely to be killed in the US than in any other rich country. (http://en.wikipedia.org/wiki/List_of_countries_by_firearm-related_death_rate)

2. I am not saying there are no racial tensions in France. I was saying that the fact that people present themselves as African-american, Asian-american, etc. makes me uncomfortable. The French Republic was built upon the idea of a country free from any religious or ethnic affiliations. When I see advertisement for dating website for black people only in SF, I feel the same discomfort as many Americans when they hear about laws banning muslim scarves in French schools. The US loves their absolute religious freedom, France loves the freedom of not being locked in skin color. I can't find the data right now, but I remember that inter racial wedding rate is much higher in France than in the US. (By the way, the president of the French Senate as early as 1958 was black (http://en.wikipedia.org/wiki/Gaston_Monnerville) it was only 3 years after Rosa Parks dared to sit in front of a bus in the US. ;) )

3. What I meant is that down my street, I have a farmer market, 3 cheese shops, 4 butchers and 2 fishmongers that sell high quality products that would demand much more effort to be found in the US (from my small experience.) And for roughly half the price. Maybe I am biaised, but I have trouble finding that tastiness easily in the US. But I agree with you, ethnic food is usually better in the US. (Better supply chain I guess.)

4. According to the WHO, French health care system is number one, American system is 35. http://www.who.int/healthinfo/paper30.pdf

The firearm death rate argument is a bit misleading. For me, the real number is the firearm murder rate. "Deaths" include both suicides (notoriously culture-heavy, see Hungary, Japan) and justifiable homicides, when someone shoots a burglar etc. On the latter, opinions may vary, but many people will argue that this is really the main purpose of civilian gun keeping.

As for the murder rate, it is extremely varied across the USA and if you avoid ghettos in about 6 large cities, the overal security is suddenly on European levels. In rural areas probably a bit better, there are whole counties which go without a murder for years.

Marian, I was just stating a few reasons why I can't imagine living in the long run in the US. I made my opinion from spending about a month per year there for the past 7 years.
Once again, I am not saying that France is better than the US, just that I still prefer to live here in Paris :)
I have nothing against guns, my grand father was a police officer and a hunter, so I am used to them. But I prefer to live in a country with a lower murder rate. And I think the very loose gun regulations in the US might be one of the reasons for those high rates.
I agree machine guns are pretty useless for public security. I will ask my cousin who used to be in charge of the units in Gare du Nord why they have to carry such big guns.
And to be completely sincere, I have many French friends in the tech business who moved permanently to the Bay Area or New York and are perfectly happy. (Except for the lack of cheese and wine.) (And even those friends, when they are sick, come back to France to get health care.)
It is just a subjective and personal feeling.

Marian, and yet, you have an increasingly growing number of mass shootings that happen almost everywhere, not only in ghettos.
I have heard from friends in the US that they were looking for a "safe neighborhood" to raise their children. I am not saying there are no dangerous places in France, but I have never heard similar concerns here.

Pierre on race I think that you need to take in a soccer game in southern France with Thierry Henry playing.

Obsession with guns and religion? Puhlease!

While we might be a country filled with gun and Bible toters, I'll bet my bottom dollar you hardly saw either during your brief stay. I own about ten guns and I can easily go months without seeing any of them. Other than gun shows, I don't recall ever seeing a private citizen with a gun in the workaday world, even in places where concealed and open carry are legal. In my experience, you practically have to look for guns to find them in America. If seeing them in a display case in Walmart bothers you, you've got a problem. Even in France, it is legal to hunt. It is far easier to find a strip club in America than a gun shop or firing range.

As far as religion goes, are you distressed about finding a Bible in your hotel room or about having a co-worker inviting you to church?

I also have my doubts that you have tremendous experience with hospitals and insurance. Ive had nothing but good experiences with both.

Get real and get over it. The fact is that you are obsessed with controlling other people and being around people who think and act just like you. The reason Americans dislike the French so much is your arrogant intolerance for others. The problem with France is that it's full of French.

Wow Willits.
I am saying they are a few things that would make me uncomfortable if I had to live permanently in the US, and your reaction is screaming "French people are ALL arrogant, intolerant and the problem is that France is full of French."
Take your pills, pal.

As I said numerous times, I have many American friends, great people, and this their right to love going to church or having guns. I really don't care. It just means I feel better and safer in my own country in the long term. Period.
I didn't insult your country, which I admire for many reasons.

I don't hate Americans for being American, but it seems you hate the French for some mysterious paranoid reasons.

I'm paranoid? You are the one with the grossly exaggerated fear of death by firearms in the US.

It is not surprising that you love the (SF) bay area so much since they are your kind of people. Note well that the strictest anti-gun laws in California have not stopped murders in our largely democrat cities. It is the race-obsessed people and least religious people who seem to be exposed the most to violent crime.

The US has had nothing comparable to the Paris riots in recent decades - the last I recall is the Rodney King riots. Same group of people.

You're made "uncomfortable" by talk about religion at dinner, yet you probably don't care about the things that make us uncomfortable when you say them. And Im sure you have great sport talking about religion when you and your atheist/socialist friends are deriding it. You did insult our country; you practically repeated Obama's 'clinging' speech. While about half the country voted for him in a two-person race, far more than half the country would take insult with that sentiment. Neither my guns nor my Bible ever did you harm or threatened to do so.

It is easy for me to maintain the French stereotype when you slip it on every morning when you wake up.

I have 4 times more chance to be killed in the US than in France. (http://en.wikipedia.org/wiki/List_of_countries_by_intentional_homicide_rate)
That's statistics, not paranoia.

I am a conservative raised in the deep French catholic countryside. I went to catholic school until I was 18 and never made fun of religious people in my life. You have no idea of who I am.
You are just fighting a strawman, the mythical Frenchman who is supposedly the embodiment of everything you hate: atheism, socialism, etc.

Why can't you accept that some people disagree with you? Just expressing my disagreement on some typically American features is offendning you so much that you feel the need to insult 70 million of French people?

Well argued on all sides, especially Pierre and Willets. This is a great example of why I love MR.

Pierre is being outstanding, Willits is being a total prick. He's not always so, but he's clearly so in this thread. He's raging in hair-trigger stereotype-based grievance at a guy stating really bland opinions in a very respectful way.

I basically agree with you msgkings but I think both guys did a good job of explaining why they feel the way that they do.

And I do think it is a little silly for Pierre to think that the average rate for homicides in America is the rate that would apply to a French tourist or immigrant. That is a bit like an American visitor worrying that he would be caught up in Muslim rioting in France.

Pierre,

Your statements regarding food in France vs. the US may be true 30 years ago, but the last 20 years has seen the quality food access in the US explode and, in my informed opinion, surpass French.

I lived several very recent years in Paris and travelled elsewhere in France regularly; I also worked in the restaurant industry and as such spent a good deal of those years buying food or eating in restaurants. I would easily choose the American food scene over the French.

Someone above said "If you walk into the average touristy restaurant in Paris, you’re not going to get a good meal." Very, very true. In fact, if you walk into your average restaurant in France period, you will not get a good meal. It takes research and local knowledge to get a good meal at a decent price, even in Paris. Getting a good meal at a decent price in the US, especially in the Bay Area, on the other hand, has become easier. Everywhere you look there are new small restaurants opening, even our food truck culture is booming. My focus has been on Oakland, but I've seen so many quality new places open in the last couple of years, keeping up with them is daunting. I keep up with the restaurant scene in Paris through colleagues and there is simply no comparison to the recent activity in the Bay area.

I found farmer's markets in France as common as in the US, but the produce in the US to be far superior. We have a much, much greater access to variety and quality. When I have French friends visiting the area and invite them to my home they are always blown away. They can't remember eating a tomato that actually tastes like a tomato, they cannot imagine the incredible variety of green vegetables: kale, what's kale? bok choy, never heard of it... how many varieties of squash do you have? seedless grapes with a balanced taste? and the obscene variety of apples, they never realized they were a crisp fruit... peas and corn so sweet they can be eaten raw... etc. ). I am comparing farmer's market produce to farmer's market produce, not supermarkets. Safeway apples are just as bad as Champion apples.

What shocks me is that you claim to have lived for long stints in the Bay Area, one of the premier regions for exceptional foods and restaurants in America and you write about it like you never left the local fast food joint. Like every place in the world, yes even in France, you often have to do a little research to find the great spots. I recommend chowhound.com .

My experience in Paris was generally bad overpriced produce, excellent albeit very expensive poultry, middling overpriced beef, and average pork. Beef and pork in America are simply superior products. Fish and seafood in general was to be had at obscene prices, far out of reach for the average person, and generally less fresh than in the US. Cheese was better in France than in America, but expensive and you had to know what to look for and stay away from supermarkets. Today I can get a lot of decent french cheese here in the states and there is an nascent artisanal cheese industry that competes easily with french cheeses. A nice portion of this industry is on the west coast, so your French friends there need to get out a little more and take a look (try Andante Dairy, Cowgirl Creamery, Point Reyes for blue, and so many more). French wine is generally better too. I would prefer, however, to pay a little more for imported French wine (yes, much more accessible in the Bay Area than in the center of the country, try JJ Buckley or Premier Cru or Kermit Lynch), than to give up all the rest.

PS. I've seen gendarmes toting machine guns since my first time in France, 1999, well before Iraq. I too was shocked.

It takes a lot of people to run the French empire. The way France have learnt to keep the DOM TOM in check is to hire a lot of people as fonctionnaires and development agencies employees. The charity work in Africa is good way to keep all ex-colonies under France influence. When assessing France, mind the socialist discourse and look at how the empire works. The day they lose the control over DOM TOM, lose the ability to make Africans buy their goods and use Africa as a secure commodities source, like uranium, they'll just be another Portugal.

How many of those fonctionnaires are just to keep people from revolting against the government?

Wow. And were are your data to support such foolish claims?
1. DOM TOM are economically useless and we keep them only for historical reasons. Seriously, who gets rid of their territory? But even the richest DOM TOM, Réunion, is poorer that the poorest Continental French region, Limousin. (http://en.wikipedia.org/wiki/List_of_French_regions_and_overseas_collectivities_by_GDP)
2. Africa accounts for 6% of French exportations. (http://insee.maquettes.cndp.fr/comext/qui/quiexport.htm) Africa is the region in the world to which we export the least, except for the middle east. French exportations are only 30% of its GDP. Which means that exportations to Africa are responsible of roughly 2% of France GDP.
3. Most French commodities come from parts of the world that never were parts of any French Empire. (http://lekiosque.finances.gouv.fr/Appchiffre/Etudes/tableaux/apercu.pdf)

It's worth noting that peripheral and economically underdeveloped regions across the world frequently have heavy state investment--Atlantic Canada comes to mind. It's not obvious that keeping the DOM-TOM French has been an economic asset for metropolitan France, but as Pierre notes below, they are seen by the French as by the DOM-TOMs' inhabitants as being French territory, full stop. Martinique is as French as Hawaii is American, and for the same reasons.

African states may depend heavily on France, but it isn't necessarily the case that France depends heavily on African states. The relationship is one-sided; France, as a global economic power, trades globally to an extent that much poorer African countries don't.

“A simple theoretical first cut at these numbers suggests they bring greater cyclical stability in the short run, inferior growth over time.”

One might add to the above observation: the public choice theory implications of the numbers pointed out. How so?

Beyond the many implications public choice theory would uncover given the above French example; at what point does the concept of “diffused cost and focused benefit” become non-diffused and merely equal? That is, the cost is no longer diffused as the cost begins to approach the benefit on an individual‘s basis. Hence a process is in motion, the action phase as it were, where tax T on recipient group R becomes exactly equal to benefit B received by recipient group R.

“Government is the great fiction through which everybody endeavors to live at the expense of everybody else.” - Frédéric Bastiat

I would be interested in knowing how many people in the DC area make a living - in one way or another - at taxpayer expense.

Which way do you count a lobbyist?

Obviously, both tenured professors that are responsible for this blog must be included in that total.

Or are the Commonwealth of Viginia's taxpayers getting good value for what they contribute to the Commonwealth's coffers, and thus they don't really count?

Wow, you never miss an opportunity to beat that dead horse. Did Tyler steal your girlfriend or spurn your advances 20 years ago or something?

Snark aside, p_a clearly has a personal problem with Tyler, and we may never know what it is. Maybe Tyler got him fired or something?

In the blogosphere you just have to tolerate or play whack a mole with these jerks.

Actually, to the very best of my knowledge, I have never met or had any dealings with Profs. Cowen or Tabarrok, neither while a GMU employee, or afterwards. (I have had dealings with various Econ Dept. professors, in several capacities, such as Prof. Williams and Prof. Boudreaux, not to mention Dean Manne and his Law and Economics pony show. And with S. Fred Singer, a true giant in when it comes to a certain flavor of self-interest that permeates so much of this part of the GMU world)

This is just an easy place to express my disgust at having been paid to promote much of the same duplicitious information which is so easily hidden behind a veil of apparent academic virtue.

MRU is a great example - though oddly, the self-promotion here seems to have died down. Sort of like how Walmart's India plans have, too. Though the combination of a real GMU class with supplemental materials at MRU is a fine example of using that academic virtue for a likely longer term goal. The one where a real university class will be conflated with its 'supplemental' online materials in the future.

And the amusing thing is, both of the professors are state employees with a life long job - and Prof. Cowen, for one, seems to feel that a future servant class will be something that will unavoidably exist. With a web site comment section that often seems rabidly opposed to state employees with life long jobs.

The cognitive dissonance so resembles working in PR, where one knows the truth, but does one's best to ensure that outsiders don't.

I find it fun.

So you used to work in PR, and regret it so much that you attack a couple of people you've never met every day on their website?
Surely there are people far more committed to marketing and advertising and lying that you could annoy them instead? These guys are academics, not monsters.

In other words, grow the fuck up.

The way I see it, I save you guys money. :-)

Yes, the government shutdown was debilitating, wasn't it?

I am a French taxpayer who just sent his latest check to the government this morning and i am married to a civil servant.
It seems to me that biggest problem is not the relative size of the public sector, but its quality.

1. Over the years, the wages of civil servant have grown slower than inflation, which lead many of the top talents into the private sector.
20 years ago you could find the brightest engineers serving the state, today they are working mostly for private corporations.

2. The decentralization doctrine brought much power to the local governments, that tend, at least in France, to be more corrupt that the central government.
As a consequence, a lot of useless and underqualified civil servants were hired to please the local voters. Public choice at its worst.

If Americans had to send checks to the government, as opposed to having money withheld, things would change RADICALLY around here.

I can attest to this, I had a relative who lived over 20 years on "unemployment" (recently passed away)

The return on that tax money is important. Matt Welch, editor at Reason, describes his experience with the French health care system. Of course, I doubt that all of the French bureaucracy works so well, but it does illustrate some advantages of the French system.

http://reason.com/archives/2009/12/07/why-prefer-french-health-care

Steve

And let's just quote a bit from that 2009 article, from someone with experience of both the American and French systems. (Personally, I prefer Germany's system to France's, at least as explained by a Swedish/German mother of two who married a Frenchman and lived in Paris for more than a decade, including using the French system for her children's births and later, kindergarten/child care).

'To put it plainly, when free marketers warn that Democratic health care initiatives will make us more “like France,” a big part of me says, “I wish.” It’s not that I think it’s either feasible or advisable for the United States to adopt a single-payer, government-dominated system. But it’s instructive to confront the comparative advantages of one socialist system abroad to sharpen the arguments for more capitalism at home.

For a dozen years now I’ve led a dual life, spending more than 90 percent of my time and money in the U.S. while receiving 90 percent of my health care in my wife’s native France. On a personal level the comparison is no contest: I’ll take the French experience any day. ObamaCare opponents often warn that a new system will lead to long waiting times, mountains of paperwork, and less choice among doctors. Yet on all three of those counts the French system is significantly better, not worse, than what the U.S. has now. '

Nothing like experience to reveal the illusions so many Americans hold on to. Especially this single central reality - 'What’s more, none of these anecdotes scratches the surface of France’s chief advantage, and the main reason socialized medicine remains a perennial temptation in this country: In France, you are covered, period. It doesn’t depend on your job, it doesn’t depend on a health maintenance organization, and it doesn’t depend on whether you filled out the paperwork right. '

Obamacare is something very different from the French system, which, as far as I have heard, is well above average in the worldwide set of public healthcare systems. Therefore, arguments of its opponents cannot be judged by the experience with the French system.

Given the cultural proximity, USA would probably end up with something similar to Canadian or British health system, which aren't anywhere as good as the French one.

Every first-world public health system covers more people at a lower cost than the U.S. system. Pick your model - Britain's NHS, Germany's public-private, Switzerland's mandated non-profits, Canada's single-payer. They all deliver pretty good care, too. The French system is very good, but it's not a statistical anomaly.

As for your second point, I'm scratching my head. Canada and Britain's systems seem by far the least likely model for the U.S. to follow, because they're both highly socialized.

Obamacare is sort of a crappy imitation of Switzerland's system. I think a higher-functioning U.S. system might end up looking a little like Germany's model - although I believe there are some cultural factors that go into that system that wouldn't be replicable in the U.S.

Murphy, Schleifer and Vishny (AER Proceedings 1993) must be smiling at this.

It is not 50% pays the other 50%, public workers also pay taxes, even unemployed people pay taxes! ... So if you fire these 1.6 million....Besides the indirect effects (stores going out of business, because these 1.6 million people have no money) , you will have automatically another budget hole...

I wish someone would develop a more sophisticated approach to these sorts of studies that gets at the underlying (lack of) exposure to competition that's really killing growth over time.

Yes, we can predict that a bigger share of government leads to lower growth, but this is because it's a proxy for slower and less efficient allocation of resources than people would individually choose if given the freedom to do so. How about doing some legwork to define how far from the market allocation the French are?

I don't understand, then, why France's population is doing better than the other countries in Europe. Also, I know this website does not like to post academic papers that don't agree with the Austrian/Koch worldview, but here's a recent paper comparing France with the US: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2013-38.pdf .

The American obsession with growth is greatly misguided. Since the 1980s growth in America has gone primarily to the wealthy.
The French have a far better quality of life than the majority of Americans. They make a conscious decision to make a social compact where everyone (by and large) has a good life. They are willing to sacrifice some growth in absolute terms to allow the majority to live comfortable and to be insulated from the "market" that so dominates America.
Most of the comments here seem to miss the forest for the trees.
Are there problems in France, yes. Entrepreneurs leaving is not one them. Problematical relations with recent immigrants certainly is as it is here.
The sub machine guns present at the train stations are mostly when the trains are returning from soccer matches. They happen in Germany as well. But even with that the murder rate is a fraction of the US, as well as far less crime overall.
The criticism I read here are of the order of "I saw somebody buying a roast with food stamps in front of me at the grocery store. Let's eliminate food stamps!" Most of the political commentary is anecdotal based and very limited in value. I reference the person who remarked they knew of someone who lived on unemployment for twenty years in France. How well is our unemployment system working right now?

They are willing to sacrifice some growth in absolute terms to allow the majority to live comfortable and to be insulated from the “market” that so dominates America.

But long term growth disparity will mean even America's 'poor' will be better than the French average. You are arguing in favor of a short term gain for a long term loss.

"The American obsession with growth is greatly misguided. Since the 1980s growth in America has gone primarily to the wealthy.
The French have a far better quality of life than the majority of Americans. They make a conscious decision to make a social compact where everyone (by and large) has a good life. They are willing to sacrifice some growth in absolute terms to allow the majority to live comfortable and to be insulated from the “market” that so dominates America........ Most of the political commentary is anecdotal based and very limited in value. "

Glittering generality trumps anectodally based political commentary.

Okay:
France's poverty rate: 7.2 GINI coefficient: .29
US's poverty rate: 17.3 GINI coefficient: .38
Healthcare per World Health Organization:
France ranking 1 spending 4th
USA ranking 38 spending 1st
Their growth rate visavi the US has been discussed by others

" France’s poverty rate: 7.2 GINI coefficient: .29"

Benthamite utilitarian BS in a statistical format.

With the country on the brink of nationwide tax revolt, Why I’m Going to Leave France, published this week, has thrown more fuel on the fire by suggesting that 14.5 million people out of the country’s 28 million-strong workforce are — one way or another— making a living off taxpayers’ money.

That doesn't seem that different from the USA, especially if you consider the very highly regulated and more than 1/2 paid for USA healthcare sector as pretty much Government which I do.

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