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[Editorial] France Chooses the Market Economy and Globalization

[Editorial] France Chooses the Market Economy and Globalization

Posted May. 08, 2007 07:46,   


France chose Nicolas Sarkozy in the presidential election runoff. President-elect Sarkozy promised to carry out market-oriented reform characterized by a more flexible labor market, lower tax, and a smaller public sector, gaining 53.1 percent of the people’s support. Ségolène Royal of the Socialist Party promised to defend the French social model with more labor market protection and government intervention, but failed to win a majority vote.

This French presidential election is meaningful in that it can be seen as a historic proxy war between pro- versus anti-globalization, market versus state, and growth versus distribution. In the world’s sixth largest economy, one out of seven people works for a foreign company, but still many people are against globalization and the market economy, because the idealism and state-centric view developed from the French Revolution continue to strongly influence its people.

Under the government-led economic policies, France was able to catch up with the U.S. until the 1970s, but further growth and innovation has not been possible with that approach. That is why France has fallen to the level referred to as “a patient of Europe,” with two percent economic growth rate and a nine percent unemployment rate. However, France has maintained the traditional social model of the 35-hour work week and generous unemployment benefits, lowering its GDP from the world’s seventh largest to 17th in just 50 years.

President-elect Sarkozy emphasized that “small government and big market” are inevitable to become competitive in today’s globalized world. He made clear that only freer labor market and policies to encourage longer working hours will create investment, jobs, and national wealth, thereby winning the people’s support.

France shows that the leftist ideology - that government should lead the market through regulations and heavy taxes - can not coexist with globalization and informatization. It is still possible that president-elect Sarkozy may submit to the resistance of the public organizations and trade unions, and become a Populist. However, it is difficult to survive with an anachronistic ideology in today’s world. The conservatives in Korea who try to resist the changes of the world should learn lessons from the French presidential election.