In a work focused on subjects of economic concern, two economists well known in the blogosphere make their discipline accessible without renouncing to make its complexity understood.
A widespread thesis in certain business circles is that France’s poor economic performance can be explained, at least in part, by the low level of the French in economics. The argument actually hardly stands up to serious examination. There is little doubt that French public opinion has incomplete knowledge of economic data and mechanisms. But this phenomenon is far from being specific to France. Americans therefore estimate on average that development aid represents a quarter of the American federal budget, while the true figure is only 1%. Much more, a survey carried out in 2009 by the institute BVA in eight European countries concluded that the French had above-average basic knowledge of economics, while the British were dead last.
Economic pessimism, a French evil
What is, however, well established is that the French are significantly more pessimistic than their neighbors, particularly on economic issues. Alexandre Delaigue and Stéphane Ménia thus mention at the opening of their book a 2009 survey showing that the French were significantly less optimistic than their European neighbors about the economic prospects for the coming decade. A study conducted at the end of 2010 established the same observation for the short term: 61% of French people thought that 2011 would be a year of “ economic difficulties », which constituted the highest proportion out of the 53 countries covered, and a figure well above the international average (28%).
This French specificity can hardly be explained by cyclical reasons. France was certainly hit very hard by the economic crisis that began in 2008, but the fall in production or job losses were less marked than in most other large developed countries. The pessimism of the French seems rather to refer to structural characteristics of French society, which economists have abundantly documented in recent years. In international comparison, the French would thus be distinguished by a low level of confidence in institutions (parliament, unions, justice, etc.) and their fellow citizens, with disastrous consequences for social relations in general, and relationships in the world of work in particular.
This French anxiety about the economy tends to provoke two main types of reactions from political and economic elites. The first consists of comparing public opinion and economic statistics, and concluding that the French are ungrateful, excessively fearful or very poorly informed. The second seeks, on the contrary, to rely on public fears to name the culprits (the euro, immigrants, globalization, relocations, welfare, etc.) and to propose simple answers, supposed to provide a rapid response to issues raised.
Taking the anxieties of the French seriously
The bet of Our economic phobias is to examine eight major economic fears of the French (on themes ranging from purchasing power to finance via unemployment or immigration) by resolutely turning our back on these two approaches. On the one hand, the authors start from the principle that the fears of the French are not simple fantasies, and that they must be taken seriously. On the other hand, they try to remain modest about possible solutions. The psychoanalytic references in the title and subtitle of the work, which one might fear would fall under gimmick of publisher, thus take on their full meaning. It’s not so much about providing answers as it is about putting the questions into perspective. To better understand, in fact, the origin of our economic neuroses in order to learn to live with them.
From this point of view, the challenge of the work has largely been won. It owes this mainly to the great educational qualities of the authors, which readers of the Éconoclaste site have appreciated for a long time and which a wider audience was able to discover in a first work published in 2008, Sex, drugs… and the economy.
The chapter devoted to the increase in health insurance expenses (“ Taking care of myself becomes a luxury “) is a particularly remarkable illustration of the effectiveness of the method. The authors take as their starting point the anxieties, quite legitimate, of public opinion about the health system: the cost of care continues to increase ; health expenses are increasingly poorly reimbursed ; the health insurance deficit continues to grow. About twenty pages and several economic demonstrations later, the reader will be more or less convinced that the increase in the cost of health and the “ security hole » are not necessarily problems in themselves, provided that the health system is properly organized. Along the way, he will have learned two fundamental concepts of insurance economics, moral hazard and adverse selection. And undoubtedly better understood the challenges of the reform of the American health system adopted in 2010.
Most of the other chapters are of the same excellent quality. “ The bankers will ruin me » thus certainly constitutes one of the best summaries available in French on the origins of the financial crisis which broke out in 2008 and on the issues of current debates concerning the reform of the financial system. “ My purchasing power has vanished » clearly demonstrates the impossibility of constructing a measure of price developments that is consistent with everyone’s feelings. And “ Unemployed or depressed » offers a very complete test of the different theories put forward to explain the high level of unemployment in France for 30 years.
Praise of complexity
The approach adopted is certainly not always without its drawbacks. The desire not to challenge common opinion too head-on sometimes results in some factual approximations. For example, it is not correct to say that French unemployment has never fallen again. below 8.5% » since the beginning of the 1980s. Even including the overseas departments, it was actually lower in 2001-2002 and in 2007-2008. Contrary to what the authors claim, French incomes have also increased more quickly than prices over the last decade: INSEE figures show an increase in purchasing power. AVERAGE per person by 12.7% between 2000 and 2010, i.e. an unspectacular but not insignificant average increase of 1.2% per year.
The extraordinary abundance of references to recent work in the social sciences, which is one of the great strengths of the work, can also occasionally disorient the non-specialist. It is not certain, for example, that the average reader knows what biased technological progress is or understands that “ the ability to build your own economy » is an allusion to a recent work by the American economist and blogger Tyler Cowen. Finally, we sometimes wish that the authors were more committed to a particular policy, when they consider the economic arguments sufficiently convincing. The chapter devoted to unemployment is thus particularly inconclusive, although we understand that the authors would rather be in favor of greater flexibility in the labor market.
A more important regret is that the chapters are not all of the same quality. Most of the time, the authors’ approach works wonders on purely economic subjects. It is more perilous when they seek to attack, with social science research in hand, the concept of gratuity or epidemics. This last chapter, which seems to have been imposed by the publisher to keep up with the news of the virus H1N1 (the work was published in April 2010, but the themes were defined in the summer of 2009), is particularly disappointing. Firstly because the multiplication of references turns into a catalog without real coherence or purpose. And above all because the authors show a regrettable insensitivity given the seriousness of the subjects and the audience targeted by the work. Mention the only accounting benefits (reduction in pension and health expenditure) of an epidemic “ particularly deadly for the elderly » thus appears clumsy to say the least. The difficult question of the monetary valuation of human life would also have benefited from being treated in a more delicate manner: the authors’ approach is orthodox but their formulation (“ if an individual is prepared to accept that their probability of survival drops by 1/10,000e for $500, that means he’s willing to die for $5 million “) may shock the unwary reader.
With this important reservation, Our economic phobias constitutes an introduction to economic issues that is much more accessible and effective than many works for which this is the primary objective. The American journalist Henry Louis Mecken wrote that for every complex problem, there is a solution that is simple, elegant and wrong. From this point of view, the paradoxical merit of this book is not so much to make economics simple as to convince the reader of its complexity.