The United States and France have a long and storied love-hate relationship, and enjoy a reciprocal fascination. Their similarities are fundamental and historic: They are the birthplaces of twin revolutions that shook the world, and both lands went through explicit re-foundings based on universalist Enlightenment ideals. Their differences are no less profound. One country is Anglo-Puritan, the other Latin-Catholic; one, an expansive upstart conglomeration of immigrants, the other boasting a history and people that stretch back to the Roman Empire. The French and the Americans have tended to see in each other a kind of fun-house mirror. Ever since Chateaubriand and Tocqueville toured the United States and Benjamin Franklin lived in Paris, the two countries have used each other, with great intellectual profit, as a means of national comparison.
In recent decades, the focus of this mutual study has been economic: France has long been considered an exemplar of European social democracy, and America a beacon of capitalism. But as the United States has expanded and centralized its federal government, particularly during the presidency of Barack Obama, many observers have stopped talking about the two economies as cartoonish opposites. Instead, a new question has emerged: Is America, at last, becoming France?
As a Frenchman engaged in the national pastime of America-watching, I offer my considered response: Yes, the United States is, not irreversibly but steadily, turning into France. But this transformation is political only in part. Its more significant dimension is cultural. Ultimately, what sets France apart is not that it is a statist society. After all, many countries have high taxes and intrusive regulations. France is unique, rather, because it is a status society. And in this regard, American culture is heading unmistakably Frenchward.
In France, what ultimately defines a man’s worth is that he have some official status, whether it’s conferred by a degree from a prestigious institution, a secure civil-service job, a protected economic rent (an extra sum earned from the use of or access to a resource), or even a taxi medallion. Big government therefore becomes necessary not as an end in itself but because it distributes the rents to its subjects—and gives handouts to those who are left behind, lest they upset the apple cart, as has happened a few times in our history. Additionally, a free market must be limited to the degree that it threatens status. Thus the state becomes, in the 19th-century liberal philosopher Frederic Bastiat’s terrible phrase, a “fiction by which everyone lives at the expense of everyone else.”
This is the legacy of the French monarchy. When the bourgeois revolution began in the 17th century in the Low Countries and in Great Britain, France was under the reign of the absolute Sun King, Louis XIV. His government realized that the technological superiority of other nations in manufacturing was imperiling his own capacity to wage war and fill state coffers, so he did the only thing that he could: He created a government program. His minister of finance, Jean-Baptiste Colbert, set out to create a French manufacturing base by raising tariffs and using the public purse to build manufacturing sites and other public works.
The very word corporatism comes from Colbert’s own policies: He built the economy on corporations, which functioned like powerful cartels. Each industry was dominated by a corporation of handpicked manufacturers who had control of their sector, and each was protected from foreign markets by tariffs and was also under the heel of draconian regulations.
Today’s French business and economic elites are modified versions of their Colbertiste progenitors. There is a “deep state” of alumni of France’s civil-service school, ENA, who move between jobs in government and the country’s biggest companies. France’s largest bank, its largest telecommunications company, its biggest utility company, and many large industrial companies are run by former high-level civil servants. The problem with the French economic system is not to be found in its regulations or tax-and-spend schemes, but in the fundamental belief, ingrained in almost every French economic actor, that at the end of the day the master conductor of the economy is the state. So long as the state conducts, the people play what’s in front of them, and the concert continues.
The United States is headed down a similar path. The list of business and industrial sectors under direct or indirect government control is growing. Where once there was only a military-industrial complex to fear, today such complexes are in abundance. The government is deeply invested in everything, from the automobile industry to the energy sector, to big finance, to health care.
As in France, the primary danger is not the size of government spending as a percentage of GDP, the size of the Federal rulebook, or the level of taxation. The larger, more irreversible threat is that America is slowly becoming a kind of aristocratic society, in which success and status are attained not through merit but by the favor of the sovereign. The federal government’s throwing of more than a half billion dollars into the bankrupt-bound solar-panel company Solyndra was not only a financial travesty (and a scientific and technological humiliation). It was also, and remains, a check on America’s historically unique potential for human progress. When the royal court bestows outsized gifts upon only those industries and parties that fit its definition of virtue—in this case, giving huge sums to green-energy insiders—then meritorious achievers of no official status suffer. And as the government’s definition of virtue becomes institutionalized via laws, “czars,” and all manner of executive action, the status system is made permanent and self-reinforcing. Louis XIV would be impressed.
For their part, the beneficiaries protect the integrity of the status structure through a massive lobbying body that itself constitutes a kind of elbow-rubbing aristocracy. A little-noticed house advertisement on Bloomberg television sums things up nicely. The station boasts that its anchors have “access” to “Wall Street, K Street, and the world”—K Street being the center of Washington lobbying efforts. Evidently, the idea that Wall Street and K Street drive the U.S. economy is not a scandalous proposition, but an accepted fact.
And so achieving favored status becomes a necessary corporate goal. In October 2012, ABC News reported that the White House successfully leaned on Lockheed Martin to delay scheduled layoff announcements (required by the recently passed Worker Adjustment and Retraining Notification Act) until after the presidential election so that Obama’s record on job growth would not needlessly suffer. The headline—“At White House Request, Lockheed Martin Drops Plan to Issue Layoff Notices”—practically treats the president as part of the company’s corporate structure. Lockheed’s largest client is in fact the Pentagon, and only in a corporatist economy, with a calcified public-private nexus, would such pressure tactics be conceivable. Naturally enough, this story mirrors French reports that Nicolas Sarkozy publicly “summoned” the CEOs of energy company Areva and automaker PSA after they announced layoffs during his presidential campaigns, and a union leader claimed that senior management of large companies received weekly phone calls from the president’s office urging them to delay layoffs.
American Francification was accelerated by the 2008 financial crisis and its resultant recession. In fact, the “new normal” that many now talk about in America has been the old normal for quite some time in France. Low economic growth leads to increased unemployment, which leads back to low growth. Such stagnation means increased public debt, as the main variable affecting the deficit is economic growth. Low growth is also a boon to crony capitalism because the government tries initiative after (failed) initiative to kick-start the economy, and businesses, unable to find growth in the marketplace, appeal to the state to fill shareholders’ wallets. These are all hallmarks of France’s political economy.
American demographic trends are also looking rather French these days. In France and now the United States, population growth has slowed and birth rates have dropped below replacement levels. With the American fertility rate at 1.93 (babies per female) and the replacement rate at 2.1, the workforce is due to shrink. As Baby Boomers head into retirement, pension systems will be greatly strained since there is not enough human capital to keep them afloat. Meeting the needs of the aging Boomer population means redistributing public resources—that is, taking from the young and giving to the old. Public care of the elderly is difficult ethical terrain to negotiate, but the plain fact is that another limit is being placed on American potential so that the status of a preferred group is protected.
Funneling resources away from the young could not come at a worse time. Now in America, as has long been the case in France, youths are facing a bleak professional forecast, and more and more are living with their parents in an extended adolescence. The mechanics of each country’s youth crisis are different, but they both owe a large debt to the increased premium placed on the credential as an official mark of status. In this case, the credential is the academic degree.
In France, a white-collar job is almost unthinkable without a master’s degree. This takes five years of study after the end of secondary education. But because public universities are not allowed to practice selective admissions, they are overcrowded and poorly run. Owing to such conditions, most students simply find it necessary to repeat one or more years of their education. The grandes écoles operate outside the official French education system and are better run. But degrees are delayed there because most curricula include a mandatory year of interning. Further, many students take the competitive annual entrance exams to the écoles more than once—a recipe for waiting in an even longer state of semi-aimlessness.
And then, once a French youth obtains a degree, he finds jobs hard to come by. The overall French labor market is depressed, but particularly so for the young. Graduates spend a very long time searching for a job while trying to make ends meet. They typically pad their résumés with superfluous degrees (after all, university is free) and internships, chasing the holy grail of the steady job and its strong legal protections and benefits. This zero-sum arms race becomes self-reinforcing: If every person applying for an entry-level job has three master’s degrees, students with only one will need to get more.
Meanwhile, given enormous legal restrictions on construction and renting, French youth find most housing unaffordable. All of this means that in France, at any given point there is a “lost generation” of twentysomething perpetual students, still in their childhood homes and stuck in a limbo of internships, odd jobs, and questionable graduate study. Here again, the French status system rears its head. A middle-aged person’s status depends on his owning profitable land, and therefore he resists free-market policies that might depreciate his property. As a result, Paris real estate is among the most (artificially) expensive in the world.
The American problem is more straightforward. In the United States, higher education is simply becoming too expensive. Students graduate with ever-more crushing burdens of debt only to find that the Great Recession and the information economy have devalued their degrees. Stories of out-of-work graduates moving back in with their parents are now legion. ObamaCare supports this stultification by allowing children to be covered by their parents’ health insurance until their 26th birthday. Today’s children will stay dependent on their parents for much longer than will have any previous generation. This is hardly the American way—and it’s certainly reminiscent of France.
The French credential culture has long held sway. In published writing, educational pedigrees usually come right after bylines. When François Hollande was elected president, the front-page headline of Le Monde, the newspaper of record, described it as a victory for his prestigious alma mater, Hautes études commerciales de Paris, seen as now dominating French politics and business (Disclosure: It is also my alma mater.) And given how much has been said about the fact that graduates of the senior civil-service school École nationale d’administration (ENA) hold all the key levers of French society, it’s worth noting that Hollande is also an ENA graduate, bien sûr.
In the United States, such pure credential-worship is new. One of the most disturbing features of the Cult of Obama that gripped the nation’s elite early on was the notion that being president of the Harvard Law Review was a particularly strong qualification for being president of the United States of America. Of course, the Ivy League has always had a strong grasp on the American imagination, and in previous eras the situation was in many ways much worse than it is today. But in its unique fashion, America always had a way of transcending boundaries imposed by things like degrees. Just imagine the odds of a man like Harry Truman getting into the White House today without completing college. It’s doubtful he could have made it into the Senate.
The higher education system has become very efficient at sifting and sorting high-school graduates by IQ (using SAT scores by proxy), and the most prominent institutions that pride themselves on hiring the smartest people, such as consulting firms and investment banks, recruit at only a small number of schools. With the pressures of the globalized economy and the now-questionable value of a middle-of-the-road B.A., the race for spots at the top has intensified in a way never seen before. (And because this race is so intense, an elite-school B.A. is no longer enough: More and more people get graduate degrees they don’t need, just because everyone else is doing it, just as in France.)
In large part, the collective faith in credentials is behind enormous government failures such as the ObamaCare rollout: The technocrats who currently run the country are so sure of their competence that they couldn’t imagine being blindsided by ordinary technical problems.
As the HealthCare.gov fiasco shows, in the end, status culture and statist culture tend to converge once the elites close ranks. Tocqueville was most enthusiastic about American democracy, but he was not deluded about its potential dangers. Among them, he noted, was a propensity for the overconfidence that comes with success. Once such overconfidence manifests itself, further successes become more rare. Such is the threat that America now lives under.
Failure, on the other hand, is a great inducement to change. Fittingly, if Americans now take a peek in the fun-house mirror of France, they might pick up on something curious: budding, perhaps cosmetic, signs of Americanization. Hollande recently announced his intention to cut taxes and cut spending as a way of reviving the French economy. If the cuts are real, and not symbolic as many believe, they could begin to threaten the system that has made French status culture a sclerotic political reality. May he stay true to his word, and may Americans and the French keep looking across the ocean to learn about themselves—especially by noting each other’s mistakes.