NCPA - National Center for Policy Analysis


September 29, 2009

French President Nicolas Sarkozy recently said he wanted the nations of the world to stop using gross domestic product (GDP) as the main measure of their economic performance.  He wants them instead to work up another metric that takes into account not only economic production but such things as environmental quality and even time not spent in traffic -- a sort of gross national satisfaction index. 

France has excellent reason to suppress GDP statistics, say Brian Domitrovic, a professor at Sam Houston State University and author of "Econoclasts: The Rebels Who Sparked the Supply-Side Revolution and Restored American Prosperity," just out from ISI Books:

  • Since 1982, among developed nations, France has been a clear laggard in GDP growth.
  • In the quarter century following 1982, France's GDP growth rate was a mere 2.1 percent per year in comparison to the U.S.'s 3.3 percent.
  • Thus the U.S. grew at more than a 50 percent premium to France per year during that span; when the quarter century elapsed, Americans were one-third richer than the French.


  • France lagged Britain, which over the 25-year period grew at 2.8 percent per year.
  • Germany matched the French rate of 2.1 percent, but it had a good reason -- a few years in, it had to absorb the post-communist economic basket case that was East Germany.
  • About the only thing France can say about its GDP performance since 1982 is that it beat Italy's, which came in at a measly 1.8 percent per year.

France's poor GDP showing over this period was in stark contrast to the 1950s and 1960s, when it had long stretches of GDP growth at 6 percent per year.  By the early 1980s, its GDP per capita was nearly that of the United States.  In other words, France achieved prosperity equal to what was enjoyed in America and then lost it, explains Domitrovic.

There is a clear reason the inflection point was 1982.  At that time, France chose not to participate in an international wave and transform its economy with a free-market revolution.  In the early 1980s, Margaret Thatcher in Britain and Ronald Reagan in the United States shed governmental regulations on the economy, cut taxes, committed to not manipulating their currencies, and encouraged global trade.  Their economies boomed, as did the economies of countries that followed their lead, such as South Korea and Taiwan, says Domitrovic.

Source: Brian Domitrovic, "Gross Domestic Happiness? Why the French want to redefine economic growth," Wall Street Journal, September 29, 2009.

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