Who Is Wealthiest, France or America?

Slow growth in France is benefiting public infrastructure, but purchasing power is sluggish. In the United States, booming growth is a windfall for individual consumers, but the collective is suffering. Two countries, two unique sets of contradictions.
© Antoine Moreau-Dusault/France-Amérique

The French economy has always puzzled Americans. I remember Milton Friedman, the most famous free-market economist of his time, pondering the discrepancy between what he considered the worst policies – those adopted in France – and their generally positive results. “You should be poor,” he told me. “But you’re not. In some respects, you live even more comfortably than Americans.” This question remains unanswered, garnering attention even recently in the U.S. press. The Wall Street Journal observed that, since 2008, the American economy has grown by a third in terms of per capita income, compared with barely 5% in France. But while spectacular, this difference is not obvious at first sight. Americans visiting France are astonished by the quality of our public services such as transportation, our well-maintained cities, and the healthcare system which, far from being perfect, is accessible to all. Americans are also struck by the absence of mass poverty, which can be seen in some major U.S. cities. How can we explain this mysterious reality in light of the statistics?

It should first be said that growth in the United States is indeed faster than in France. This is largely due to demographics. The American population is growing faster than the French because families are bigger and immigration is higher. In the United States, the workforce is constantly expanding, whereas in France it is stagnating due to shrinking families and our resistance to immigration. Americans also work a lot more each day, and for more days a year. It would seem that the French don’t want to develop their population and implicitly prefer vacation time instead of work. The consequence of this supposed preference – which is assumed but rarely measured – is that France’s purchasing power is growing slowly, if at all. Another explanation for the differences in growth figures is America’s taste for innovation. Every year, more or less willingly, U.S. workers leave low-productivity jobs and move into new, higher-productivity businesses, mainly in the tech sector. France is competing in this race, but is lagging. The French economy is mostly driven by old resources such as tourism, transportation, luxury goods, and weapons – all legacies that date back to the time of Louis XIV.

However, quality of life in France is equal to or better than quality of life in the United States, despite meagre gains in purchasing power. This essential distinction (one that strikes Americans the most) comes down to taxation. Almost half of everything the French earn goes to the government. This redistributive system allocates half the nation’s resources to public infrastructure and a seemingly free healthcare system. While the French keep only half of what they earn, Americans keep two-thirds. As a result, federal and state authorities lack the same means and are unable to allocate such considerable resources to the same services. The result is dilapidated infrastructures, unequal distribution of healthcare access, and declining life expectancy – an astonishing contradiction given rising wealth in the United States.

What’s more, the U.S. government allocates almost twice as much to military spending (as a share of GDP) as the French government. This funding – which France indirectly benefits from – means that resources are not allocated to schools, healthcare, or transportation. Any comparison between France and America’s economies should therefore be based on historical and sociological factors, instead of just economic ones. It may be true that unregulated capitalism in the United States brings extra growth, but not necessarily extra well-being, which statistics cannot measure. In Europe, which has what could be called a social market economy, the collective good is favored over individual consumption choices – something that Americans would find very hard to accept.

Each system therefore has its contradictions, inherited from a long history. France is a nation of centralized government, which is something the United States fears. Have U.S. and French citizens really chosen between personal purchasing power and the common good? Not really, as this choice has never been presented to them. This lack of choice likely stems from the power held by public officials in both countries. In France, these elites dominate and decide what is good or bad for the nation, regardless of political affiliation. In the United States, which has no comparable public technocracy, elected officials are under the immediate control of the people. This difference in the way democracy works also explains the French preference for the collective good and the American penchant for personal consumption.

Is comparison even useful? Writing a letter from New York City after his arrival in 1831, Alexis de Tocqueville outlined the book that would become Democracy in America. I will try to understand the United States, he said, and to understand, one must never compare. A good maxim, but one that Tocqueville never followed himself. Even when comparison is impossible, we cannot help but indulge in it.

Editorial published in the October 2023 issue of France-Amérique. Subscribe to the magazine.