Uneven ability to distribute benefits of growth fuels conflict ◦ Wealth becoming

more concentrated◦ Pockets of poverty in

the rural areas◦ Pockets of poverty in

the cities Unemployed

industrial workers Ethnic North

Africans

Urban decay: Paris

Overall capability high◦ Taxes levied by central government◦ Taxes levied by local government◦ Taxes levied by Social Security Association

(ASSO) Regressive taxation

◦ Percentage of income paid in taxes is higher for lower income people

◦ Indirect taxation Value Added Tax

19.6% base rate, 5.5% for food and books, 2.6% for medicine

Tax Rate US Income Bracket

Tax Rate French Income Bracket

10% 0-8350 0% 0-8252

15% 8351-33950 5.5% 8253-16461

25% 33951-82350 14% 16462-36561

28% 82251-171550 30% 36562-98018

33% 171551-372950 40% 98018+

35% 372951+

Nationalizations and post World War II “Catch up” policy

Gaullists and Socialists on same page Footprint of State control

◦ Banking◦ Energy and transportation◦ 13 of 20 largest firms ◦ 24% all workers received check directly from

government

Demands for privatization increase in late 1980’s because of poor performance by state industries

Calls by the political right for social spending◦ Modernization remains an issue

Dirigisme declines Socialism vs. liberalism

Most effective in social transfers◦ Education

18 million students (nearly 25% or population) Higher education is funded by the state 7.2% of GDP is spent on education

◦ Social security Income security Four additional types:

Illness old age family recovery

Other forms of income security

Components ◦ French Air Force ◦ French Army ◦ French Navy ◦ Force de frappe

Hervé Morin(Minister of Defense)

Attempt to Regain control over former Colonies◦ Indochina◦ Africa

De Gaulle’s withdrawal from NATO’s command structure◦ Plans for self sufficiency◦ Backdoor agreement with NATO

Socialists vs. Gaullists ◦ Socialists downplay national security◦ Chirac’s plans for defense modernization short-

circuited by Socialist victory in 1997 National Assembly elections

Current panorama ◦ Concern that France’s place in world declining

Gulf war – France made less of a contribution than Britain Balkan peace keeping reveals greater French military

weakness ◦ Focus on external power projection

Rejoining NATO’s command structure Terrorist groups in Francophone Africa Cases if Deployments abroad

Afghanistan Libya

◦ Some reduction over industry Inefficiency of state run

enterprises Remains issue of contention

between right and left ◦ Expanded with regard to

individual rights◦ Expanded in

environmental controls◦ Restrictions on individuals

of foreign origin Largely immigrants from

North Africa Religion important part of

regulatory battle

French culture/civilization still a source of pride

Cleavage of French Revolution largely healed

Ethnic consciousness growing◦ Historic minorities (Bretons)◦ Muslim immigration from North Africans

Head scarves