../../../MY_DOC%7E1/MY_DOC%7E1/ECONNEWS/South-Western%20College%20Publishing%20-%20Economics  
Liberté, Egalité, Fraternité, and Capitalism
Subject Capitalism
Topic International Finance
Key Words Capitalism, Entrepreneurs, Economic Growth, Economic Growth, Investment
News Story

France, at least up until a couple of years ago, was a country where bureaucrats and bureaucracy seemingly controlled a large part of everyday life. Strikes and demonstrations were commonplace. Taxes took over half of a person's earnings and the government attitude toward entrepreneurial innovation and business creation was not friendly. But France has changed. While there are still strikes and demonstrations, France is now a dynamic, entrepreneurial nation that is nurturing business development - and the economy is booming as a result.

The changes that have taken place in France are dramatic. One of the most striking changes has been the attitude of the French. The French used to rely extensively on a centralized government to address their economic and social ills and the government espoused many parochial ideas. For example, it charged that the Internet was a conspiracy to force everyone to speak English. Trade and business were necessary evils and stock ownership by individuals was not encouraged.

In the past newspaper and magazine articles questioned whether France was in a state of failure and described the moroseness and malaise of the French. Today, people are much more optimistic about the future. Technology is considered a vehicle of progress. Trade and business and the accumulation of wealth by private businesses is looked upon favorably.

Membership in the European Union is part of the explanation for the change in economic conditions that may have influenced attitudes. Low budget deficits, low inflation and deregulation of the airlines, telecommunications and electricity industry are requirements for membership. Another major influence has been Prime Minister Lionel Jospin. Jospin has introduced many reforms such as legalizing stock options and less rigid rules relating to work hours. Bureaucracy is still alive in France, witness the legalization of the 35-hour workweek, but capitalism is growing.

(Updated September 1, 2000)

Questions

1. Max Weber, in The Protestant Ethic and the Spirit of Capitalism, describes a capitalist in terms of his/her willingness to take risk. How would you describe Capitalism and what is meant by willingness to take risk?
2. What happens to an individual's incentive to risk their money when a government collects more than half of any additional amounts they earn?
3. What services or functions do you think are appropriate for a central government to provide?

Source Anne Swardson, "The New French Revolution," The Washington Post, July 31, 2000.

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