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PARTISAN REVIEW
governments. Over-all industrial production passed the 1938 level in
1948, and by December 1952 was 13 percent higher than in 1929,
France's best pre-war year, and nearly 50 percent higher than in 1938.
On the social side, France now has a welfare system which is as
well developed as Britain's, and in some respects superior (e.g. family
allowances). The birth rate is high for the first time in many decades,
and the growth of population is having a stimulating effect on con–
struction and the consumer industries. By every normal test the economy
ought to be booming. Yet, owing to the stagnation of exports, France
has a permanent deficit with the European Payments Union; the level
of industrial production, despite an annual investment of nearly a
fifth of the national income, is now stagnant; prices are among the
highest in Europe; and the Budget runs at a steady deficit of about two
billion dollars in an eleven billion total, despite a tax rate unequaled
in the whole world.
(It
is another popular misconception that the
French pay no taxes. In fact, as Adlai Stevenson was told to his sur–
prise during his stay in Paris last summer, taxes take over 33 percent of
the national product, against 27 percent in Britain and 26 percent in
the United States.
If
social security payments are added, the French
government collects and spends nearly half the national income.)
The thought naturally suggests itself that it is precisely this mon–
strous growth of taxation which is at the bottom of the trouble. Since
1913 public expenditure (in real terms, i.e., leaving inflation out of
account) has increased fourfold, largely owing to the cost of two
wars and the establishment of the welfare state. Suspicion tends to
fasten on this factor. There is, however, a different explanation, to
which some publicity has recently been given by M. Bertrand de
Jouvenel in two articles in the
Manchester Guardian,
(July 6-7, 1953):
while most of the additional expenditure since 1913 has been unavoid–
able, the necessary revenue has been raised in such a way as to penalize
the more modem and efficient sectors of the community, while exonerat–
ing small farmers and shopkeepers. Only three million people, mainly
salaried employees, pay income tax. Five million small farms and small
businesses manage on the whole to escape very lightly. How then is the
fantastic tax burden being met? Principally by forcing industry and
commerce to pay up. To quote M. de Jouvenel, "... as the load of
taxation has been increased it has been more and more shifted to busi–
nesses, away from individuals, who would never have stood for so
heavy a load had it been laid upon them directly, and who stilI fail to
see the relation between high prices and the fact that 28.7 percent of
business receipts are paid into the public exchequer." Big business in
