Welfare and State Power

I was wondering what Bernie Sanders has to say about the rioting in France. Sanders, after all, wants to remake America to look a lot more like France. Taxes in France are over 50% and the government accounts for most of the economy. Exactly the formula Sanders is recommending for us. So why are French schools so crummy that the students took to the streets to protest? One would think that in a semi-socialist country that taxes the hell out of its citizens the schools should be wonderful modern structures filled with well-paid and highly motivated teachers. Instead, if reports are true, French schools are crumbling buildings filled with dilapidated equipment where teachers routinely fail to show up and don’t teach much of anything when they do show up. Sounds a lot like the crappy American schools that are concentrated in Democratic controlled cities  where powerful teachers’ unions can select the mayor of their choice (such as Brandon Johnson of Chicago, a former teachers’ union rep). Sanders, wisely, has kept his trap shut about the riots in France up to now.

But there is a bigger problem in France than just the schools. Riots are not an uncommon feature of French public life ever since the storming of the Bastille. But the current riots seem different. They are not only more destructive than in the past, they appear to be designed and orchestrated to attack civil infrastructure and to undermine democratic governance while condoning wide-spread looting of small businesses. The students have been relegated to the sidelines as hard-core leftists and professional criminals dominate the streets. French presidential politics plays a major factor in this disturbance as rioters are egged on by Jean-Luc Mélenchon of the leftist La France Insoumise (LFI)(“France Unbowed or Unsubmissive”) while Marine Le Pen of the right-wing National Rally Party promises to reinstitute order on the streets. It appears that the French people are about to experience a far more authoritarian government regime in coming years no matter who wins the election. The only question is whether it will be an authoritarianism of the left or the right? One could say that the United States may face a similar dilemma in 2028. If that is the case, then there are lessons that we must learn from the current situation in France and develop a plan of action on how to avoid it.

The Sanders solution to social problems such as those faced by France is to increase taxes on the wealthy in order to fund benefits for the less wealthy. He is always raging about how the great wealth of billionaires and oligarchs is unfair (as if that wealth was extracted from the poor as Marxist ideology asserts rather created by offering innovative products and services to consumers). Bernie wants to increase taxes on the billionaires. France did too! France attempted to impose a wealth tax on its billionaires but the wealthy voted with their feet. France now has the number of billionaires per capita equivalent to that of Eswatini (an obscure South African country that I had to look up). France’s neighbors (Monaco, Liechtenstein, and Switzerland) have many more billionaires per capita than France. I wonder why?

But even a country where most of the wealth generated by the entire economy is confiscated by the government can’t generate enough money to satisfy the insatiable demands of a population dependent on government handouts. Of course, when most of the wealth of a country is dedicated to welfare benefits, there is little capital left to reinvest in productive activities. So state dominated and socialist economies are slow growth economies (US growth has outpaced France for decades). And because all the resources taken by the government are not sufficient to meet the demands of its people, France has had to borrow vast sums of money such that government debt to GDP is around 130% (even higher than that of the US) and debt service exceeds spending on national defense or education (thus the crumbling schools).

Insufficient government largesse means that some sectors of the public receive less benefits than they think they deserve and the arbitrary division of limited resources just drives dependent identities further apart, thus the rioting and pillaging. Perhaps this problem can be resolved in small homogenous populations such as in Sweden or Finland, but it is a much more difficult problem in large diverse countries. Much of the current problems in France are attributed to the large immigrant populations that have increased across Europe in recent years. But such problems (slow growth/insufficient resources/growing demand) are inherent in large state dominated economies. Unassimilated immigrant populations just make matters worse.

Given these circumstances, governments have little recourse but to utilize the power of government to control a restive population. Whether Marine Le Pen’s right-wingers or Jean-Luc Melechon’s left-wingers come out on top in next year’s presidential elections, the new government will be required to use the power of the state to keep the population under control and off the street. This has been the solution of kings, emperors and dictators throughout history. These riots may signal the denouement (a good French word) of the Fifth Republic of France.

The UK and much of the rest of Western Europe may be in for a similar fate (Eastern Europe to a certain extent has been able to resist this impulse probably because the oppression of the Soviet Union still resides in the living memory of many of their citizens). And the US is not far behind. The US has been able to avoid the high taxes common in Europe because of our greater borrowing power, but the loss of agency among our citizens parallels that which is occuring in the European welfare states.

This is the inevitable fate of the modern welfare state (as predicted by President John Adams long ago). Social unrest unescapable. Riots are inevitable. Revolution probable. Resolution impossible. For the benefit of our American society and our fellow citizens within it, we must find a better way. Luckily we already have the solution. We have always had it. A free market economy supported by a government whose power is limited by a constitution. A democracy only works when it is the people who have power – the power to follow their own dreams. Of course it takes work. A lot of work. If we want to have agency over our own lives we must make sure we use that agency responsibly – not frivolously. Freedom without moral responsibility will lead us down the same path as a seemingly generous but actually bankrupt welfare state.  France may already have passed the tipping point between freedom and autocracy. America still has a chance but there are forces in the US advocating a more autocratic future for us to resolve our current problems. Those forces are wrong. The UK, Germany, Spain and Italy may be following France down the same path. But in America there is still hope. Just as there was at our Founding.