France’s Economic and Political Troubles

You have to feel a bit sorry for France’s president François Hollande—how does a socialist refrain from tanking his country’s economy? In 2012, Hollande threatened to punish the rich with 75 percent marginal tax rates—causing many of the nation’s most productive people to leave or consider leaving.

Apparently Hollande thought it better not to decimate France’s economy, so earlier this year he made a “pro-business shift” (as the Wall Street Journal puts it), complete with “tax and spending-cut plans” (the details of which I know not).

But France’s socialists are unhappy, as the Wall Street Journal reports today. They wanted Hollande to tax businesses more, raise government spending, and tax consumers less (directly). In response, Hollande has “dissolved his government” and plans to announce a new cabinet, the Journal reports.

Observe that statists view the economy as their plaything, on which they can experiment at will. But a large economy—the sum total of countless private relationships and transactions—is not like a Lego set that can be taken apart and reassembled by bureaucratic whim. In the real world, people need time to plan their lives, and they are unable to plan to the degree that politicians loot their revenues or threaten to do so or hamper their ability to associate voluntarily with others.