The real solution to the Yellow Vests’ woes can only come when the French government is dramatically downsized and decentralized. From José Niño at mises.org:
With the gilets jaunes (yellow vests) protests raging for more than three months, the European Union’s viability as a political entity has come into question.
Indeed, the EU has gone through a whirlwind of economic and political upheavals since the eurozone crisis of 2009. In 2016, the EU experienced a political earthquake when the Brexit referendum occurred, and British voters decided that it was time for the UK to leave the EU.
To a certain extent, the Brexit vote was a manifestation of British populism. Now, the French populists have made themselves known in the form of the yellow vest movement.
But what are the implications of this?
France’s Out-of-Control Leviathan
France is not exactly in the best economic shape. The unemployment rate has hovered around nine to ten percent during the past decade. The cost of living has risen considerably thanks to government regulations. So, Macron’s failed gas tax proposal, which would have hurt the working class pretty hard, only exacerbates France’s sub-optimal economic situation.
And this is only the tip iceberg as far as France’s over-burdened economy goes.
Research from the Institut Économique Molinari found that the tax burden “typical workers” in France face is higher than any of its European counterparts. Fiscal restraint has not been France’s strong suit with government spending accounting for 56 percent of GDP. On the regulatory front, France is a mess. Its Code du Travail, a 1,600 page, 10,000-article legislative monstrosity, has greatly hamstrung its labor market. According to the Heritage Foundation’s 2019 Index of Economic Freedom, France’s Labor Freedom score places it very close to the “repressed” category.
In a cruel twist of irony, France has reverted back to its monarchical political economy, dominated by an interventionist state that heavily regulates, subsidizes, and controls certain sectors of the economy.
Sadly, many of the yellow vest protestors have not comprehended the 800-pound elephant in the room that is French statism.