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On Monday, France’s Interior Minister, Laurent Nuñez, admitted that police have “lost control” as some cities continue to see massive waves of looting and mayhem. Social media brims with images of stores being ransacked, cars burning and mask-wearing goons running wild. In Limoges, the beautiful Hotel de Ville was burned to the ground.
But the chaos, as is so often the case, began peacefully. And many supporters and leaders of the protests have condemned the violence. I think that violence has more to do with France’s miserable record of assimilating immigrants from North Africa and the Middle East than with budget cuts. Call me cynical, but I don’t believe the goons pillaging Louis Vuitton stores are planning to resell the handbags to buy better school supplies or to bolster their teachers’ salaries.
The initial protests were about budget cuts, primarily in education. As allied groups joined in — socialist and communist parties, labor unions, etc. — the argument expanded to generalized complaints about France’s “austerity” policies. In short they argued, as they have for generations, that the government should spend more on pensions and other entitlements.
The problem is that France can’t afford it. It’s borrowed money to pay for its lavish government sector for a very long time. It has run consecutive budget deficits — i.e., took in less than it spent — for more than half a century. In 1974, public debt was around 15% of its gross domestic product. Today it’s at 116%. Government spending now makes up 57% of the GDP and France spends three times as much on “social protection” — including pensions and family benefits — as does the United States, and more than any other country in Europe and the Organization for Economic Cooperation and Development.
Naturally, the blame for this sorry state of affairs, according to some supporters of the protests, is on capitalism. French economist Thomas Piketty says the country’s woes are the result of the state pursuing the “capitalist logic” of not investing enough in the public sector and not taxing the wealthy quite enough. In terms of personal income taxes alone — France has massive payroll and consumption taxes as well — the top 10% of French taxpayers provide 74% of the revenue. The top 1% provide a third. France also has the highest corporate tax rates of any OECD country.
I’m hard-pressed to see how just a bit more taxing and spending will solve France’s problems.
I have real sympathy for the nonviolent French youth. Their economy is moribund in large part because retirees have a stranglehold on the state’s finances, consuming 14% of GDP. One reason education spending is so tight: A third of the education budget goes toward Education Ministry pensions.
I don’t think retirees should be thrown to the wolves, but such a system is objectively unsustainable. Yet, in 2023, when French President Emmanuel Macron introduced reforms to bump up the retirement age to 64 from 62, the resulting protests paralyzed the country (that modest reform was suspended last month). France is now caught in what economists call the “dependency trap,” producing too few workers to pay for the lifestyles of its older generations.
When protesters talk about feeling “hopeless,” what they often mean is that the gravy train will run out before they get to partake in it. I don’t blame them for being resentful, but it’s difficult to see how this is a failure of capitalism or “neo-liberalism.” As Margaret Thatcher famously said, “The problem with socialism is that you eventually run out of other people’s money.”
The most obvious answer to France’s problems is economic growth — much easier said than done, of course. The reason that’s so hard for France isn’t because the government is “unresponsive” to the people and their concerns, it’s because it’s too responsive. For decades, the French have demanded the economic policies that got them into this mess, and the government appeased them.
France is an outlier in its poor economic performance and lavish social spending, but its problems are recognizable across the West, including in America. The U.S. economy has grown twice as fast as France’s over the last quarter of a century, but the demands for less “capitalism” from young Americans echo those protesting in Paris.
France has the sort of universal health insurance many insist would solve everyone’s problems here. It hasn’t spared France from political turmoil. Our own Social Security and Medicare aren’t far from insolvency, but demands for higher benefits and “Medicare for All” only grow louder.
The French canary in the coal mine is a good reminder that the best solution to some crises is to avoid them in the first place.
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Ideas expressed in the piece
- The column argues that France’s fiscal problems stem less from capitalism than from decades of deficits and commitments to public spending that the economy can no longer comfortably sustain. It contends that raising taxes or spending further will not fix the underlying problem, while stronger growth and spending reform are difficult but necessary. Recent reporting likewise describes France as facing a costly welfare state, high debt and weak growth.[1][4]
- It presents pension costs and resistance to reform as a generational squeeze: spending on retirees, the column argues, leaves less room for education and burdens younger workers. The 2023 proposal to raise the retirement age from 62 to 64 met strong opposition, and the reform has since been delayed.[2][3]
- The column also argues that governments have been too responsive to demands for benefits and public spending, making politically difficult changes harder to enact. It warns that American calls for less capitalism and expanded benefits should take France’s fiscal strain as a cautionary example.[9]
- On the unrest, the column suggests that looting and disorder are better explained by failed immigrant assimilation than by budget cuts. That is the column’s interpretation; coverage of the protest movement has also documented its origins in school conditions and its expansion into broader economic grievances.[5][8]
Different views on the topic
- Students and educators offer a different account of the immediate cause of the demonstrations: they describe overcrowded classrooms, absent teachers and deteriorating school buildings, and say public education needs more resources. Student representatives have called for substantial additional investment in schools and universities.[5][7][10]
- Some union voices reject the claim that austerity is simply a response to unavoidable scarcity. A union representative interviewed by CNN argued that resources and wealth are being directed away from public services and workers, and criticized spending priorities while schools and other services remain underfunded.[6]
- Opponents of pension reform argue that raising the retirement age places an unfair burden on workers, especially women and people in physically demanding jobs. French unions and left-wing opponents have also argued that higher taxes on wealthy people and employers could help fund pensions without requiring workers to retire later.[12][13]
- More broadly, protesters’ reported concerns include inequality, living costs and declining public services—not only demands for larger pensions or rejection of capitalism. That framing challenges the column’s emphasis on excessive entitlement spending as the central explanation for the unrest.[8][11]
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