France’s Economy and Communications
France ranks fourth among countries in terms of its economy, with a gross domestic product (GDP) of around $1.5 trillion. Per-capita purchasing power is the equivalent of about U.S. $24,500 per year (compared with the U.S.'s $34,100 in 2002).
France is an agriculturally favored country—60% of its land is arable and over half is cultivated—and produces prodigious quantities of food. It is the only country in Europe to be self-sufficient in basic food supply (although importing tropical products such as cotton, tobacco, and vegetable oils). Further, France is one of the continent's leading food exporters (especially of wheat, beet sugar, wine, and beef). Yet despite its importance, agriculture employs only about 2.6% of the labor force, reflecting a sharp decline since 1970—by as much as half in the case of small farmers—and contributes less than 3% to the gross national product (although food-processing is an important industry). France resists bigness, and its foodprocessing plants tend to be too small to be efficient in the world marketplace. Therefore, most of the country's food exports are unprocessed or only partially processed.
France's agriculture has been somewhat slow to modernize, and farmers have frequently demonstrated against quotas and low crop prices resulting from surplus production and foreign competition. They long depended heavily on various subsidies, many of which have been recently reduced or eliminated under the EU's Common Agricultural Policy, or CAP, which aims to eliminate surpluses and supports.
One problem that has affected French agricultural efficiency is that of farm fragmentation. Traditionally, peasant farmers wanted to have a variety of types of land in order to raise a variety of kinds of crops and animals for subsistence. This desire generated individual family holdings in the form of multiple scattered parcels, rather than a pattern of large single blocks of farmland as is usual in the United States. Then, after primogeniture (inheritance by the eldest son only) was abolished in 1804, inheritance among the several offspring led to breaking up of the already multiple parcels into ever more numerous and ever smaller ones. Eventually, an original small number of modestsized plots became hundreds of tiny, scattered plots. All this made for decreasingly viable and efficient farms, especially for contemporary commercial, mechanized, and chemically managed farming of one crop as opposed to subsistence farming of a variety of products. In recent times, there have been efforts to consolidate fragmented parcels into fewer, larger ones, or to establish overall management of extensive areas in which ownership remains fragmented. Under this consolidated management, individual land parcels can be bought and sold as investments in the larger operation, like shares of stock. There are some 680,000 farms in France, many of which are small; although half of the farmers and their spouses also hold other jobs, they form a much larger percentage of the working population than in the United States. Average farm size today is about 100 acres—half again as large as a decade earlier, but still not terribly efficient.
Contemporary agriculture, with its heavy use of fertilizers and pesticides, is productive, but has taken an environmental toll. Principal crops are wheat (for famous French bread, croissants, pastry, and pasta), barley, oats, maize (corn), sorghum (as animal feed), sugar beets (for sugar and alcohol; France is the world's second-largest grower), flax (for linen and linseed oil), rapeseed (for oil), potatoes, and wine grapes. France is the world's fifth-largest producer of grain and of meat, and its sales comprise one-quarter of those of the European Community's CAP countries. Market gardens are prominent in the major river valleys near cities.
Livestock is of prime importance, largely for meat, milk (France is the world's fifth-largest producer), and hide production. There are 20 million cattle, 16 million swine, 9.8 million sheep, a million goats, and many horses (horseflesh is eaten, though declining in popularity); poultry and rabbits also play significant roles. Dairy products such as cheeses (nearly 300 varieties), yogurt, and butter figure importantly in French cuisine, as do eggs, but milk is drunk only by children.
Although underdeveloped, the seafood industry is also notable, and includes not only the taking of wild fishes, crustaceans, and shellfish, but also much aquaculture on the Atlantic coast (oysters, mussels).
France's mineral resources and mining and its electricalpower industries were described in Chapter 2. Construction and civil engineering are also highly important, and France's Bouygues is one of the largest construction companies in the world.
In manufacturing, France ranks fourth among the world's countries, after the United States, Japan, and Germany, and this activity accounts for about a quarter of the GDP. Slightly over one-quarter of the labor force is employed in manufacturing, which is very diverse. Owing to major destruction during World War II, France built modern plants afterward, but these are aging today. Geographically, factories are concentrated around Paris, in northern France's old coal basin, in Alsace and Lorraine (where there is still iron ore and coal), and around Lyon and Clermont-Ferrand. The French preference is for middle-scale, innovative, and high-quality manufacturing, rather than mass production.
Although still important, the French steel industry suffered much during the economic crisis of the 1970s and has declined owing to cheaper foreign sources and to substitution by aluminum and plastics.
Machinery is a leading product of French factories. France remains the third-largest producer of automobiles, although foreign competition has been eroding its market share.Michelin is the world's leading manufacturer of tires. France ranks fourth in chemical manufacture. The country is a leading producer of sophisticated aircraft as well, such as Mirage fighter planes and various commercial aircraft, such as the Airbus, built by Matra-Aerospatiale. France also produces and exports Exocet missiles and other military equipment. Additional leading industries include pharmaceuticals (fourth-largest producer), perfumes, cosmetics, electronics (including telecommunications and information technology), textiles, and food processing. Saint Gobain is the globe's leading glass producer, and Bic supplies the large majority of the world's ballpoint pens, cigarette lighters, and razors.
France's industries have been comparatively tardy in becoming involved in domestic and international mergers to expand companies' reach.
Despite widespread suspicion of globalization, several French corporations, including those manufacturing automobiles, are important on the international scene. One may mention AXA insurance, the Carrefour grocery-store chain, and the Thales defense and electronics industries. France is the world's fourthlargest exporter of goods and the second-largest exporter of both services and agriculture (first in Europe in the latter). The country usually has a trade surplus.
Leading French exports include capital goods (machinery, heavy electrical equipment, commercial ground-transport equipment, aircraft), consumer goods (cars, textiles, leather), and unfinished products such as chemicals, iron, and steel. Notable specific exports include nuclear technology and subway systems. In turn, France imports fossil fuels and ores, metals, machinery and equipment of various kinds, chemicals, and a variety of consumer goods and foodstuffs. Nearly two-thirds of France's foreign trade is with other EU countries.
SALES AND SERVICE INDUSTRIES
In France, over 70% of the working population is employed in the service sector. Some 35% of the work force is employed in government and related services; some 17% is involved in the wholesale and retail trades and hotels; approximately 11% is involved in providing real estate and financial services; and 7.4% is engaged in other areas.
Service industries include banking (France is third in the world), insurance (world's fourth largest), securities (seventh largest), and the like. Government work includes taxation, administration, education, public research, transportation, social services, and medicine and public health. Businesses associated with entertainment include the media, sports, and tourism (e.g., hotels and restaurants).
France has always been known for its small shops: the grocer's, the butcher's, the bakery, the boutique, the dry-goods shop, the tobacconist's, the little hardware store, and so forth. These still exist in large numbers, but since 1957, the spread of supermarket chains such as Auchan,Casino, and Intermarche has badly eroded the small-business landscape, and today huge, inexpensive chain emporiums such as Carrefour, Prisunic, Monoprix, BUT, Mamouth, and several others, are extending the damage.
Tourism and Leisure
With 70 million foreign travelers a year, France is the world's top tourist destination, with Paris being a particular magnet. Tourism expenditures are a major part of the French economy, especially in less agriculturally or industrially favored regions. The bulk of foreign tourists are from other European countries, but visitors do come from the world over. There is much internal tourism as well. France is the home of the global vacation-village chain, Club Mediteranee.
The French enjoy watching and participating in sports, and physical education in the school system has been improving in recent times. French people tend to prefer sports of skill to those of brute force. In terms of membership in sporting federations, the favorites, in order, are: soccer, tennis, skiing, judo, basketball, rugby, gymnastics, horseback riding, and golf. Interestingly, most of these sports are of foreign derivation. On a less formal basis, there are thousands of lawn-bowling players in every region, especially in the warmer, drier south.
French folks enjoy sports spectacles—the drama, the atmosphere—and play with typical French flair. In fact, in contrast to Anglo-Saxons, in team sports French athletes tend to play more as individuals than as coordinated teams. The national spectacle of the Tour de France bicycle race catches the imagination of almost every French man and woman. Its itinerary circles the country and celebrates France's rich diversity. An American, Lance Armstrong, has won several consecutive recent Tours.
Although individualists, the French are social creatures and tend to be joiners: there are some 800,000 associations in the country and nearly half the population belongs to at least one. These groups support specific sports, cultural interests, hobbies, social fellowship, self-help, causes, and so forth.
COMMUNICATIONS AND MASS MEDIA
France has long had an efficient postal service, which comprises part of the PT (Postes et Telecommunications) established in 1889. Telephone service was archaic for a modern country until the 1960s; but now, France Telecom (although debt-ridden) is as sophisticated as any such organization in the world. Most businesses and households now have phones. Public phones are activated by “smart” telecartes, rather than by coins. Cell phones are everywhere. Also widespread is the minitel, a home or office videotext terminal that allows, for a fee, visual display of current information and entertainment of various kinds, as well as the free telephone directory. Home computers, e-mail, and surfing the Net are becoming increasingly popular, although less so than in the United States.
Television is also almost universal, although cable is not well developed. As in the United States, many criticize television for having damaged social life—but just about everyone watches it. While reducing the isolation of rural life, radio, television, and films have also had the effect of eroding regional languages and dialects—despite instruction in Alsatian, Occitan, and Breton in regional schools since 1980. Television news has also contributed to the decline of newspaper circulation, especially of the traditional Paris-based national newspapers such as Le Monde and Le Figaro. Regional newspapers have declined less, partly because of being aimed at a mass audience and partly because of their detailed sports coverage.
Radio and television stations and channels were once the monopoly of the state (comparable to the BBC in the United Kingdom) and had relatively elevated content. Since the 1970s, many private ones, tending toward the less intellectual material, have been allowed to come into existence. The popularity of American shows such as Dallas and Dynasty a couple of decades ago has been replaced by a much greater quantity of, and interest in, (government-subsidized) homegrown fare, both in television and the cinema.
Paris is the center of book publishing and magazines, as well as home to the National Archives and National Library, with 13 million books. The country's universities have large libraries as well, and there are many hundreds of local public libraries. France is also a leading player in computer-software development and data-processing.
In premodern times, France's roads were poor and overland transportation—by coach, wagon, animal-back, and on foot—was slow and uncomfortable. Long ago, France put its rivers to use for boat and barge traffic, and built canals connecting the major streams. The country now has the densest network of navigable waterways in non-Russian Europe. Where available, water transport was far faster, easier, and cheaper than land transport. Today, there are some 9,300 miles (14,966 kilometers) of navigable waterways, of which 4,330 miles (6,968 kilometers) are heavily used.With a couple of hundred merchant ships, France is also moderately prominent in marine transport. French ships carry about half of the country's imports and exports. France's shipbuilding industry is technologically very advanced.
After Great Britain, France was one of the first countries to develop a railway system; and though somewhat reduced in mileage since its heyday in the mid-twentieth century, the nearly 20,000-mile (32,186-kilometer) system is still vital to the transport of freight all over metropolitan France. The railway network has been state-controlled since 1937. In contrast to the situation in the United States, passenger rail traffic is still quite important, a situation given a boost by the development since 1981 of the world's fastest train, the TGV, which averages 155 mph (249 kph), cruises at 190 mph (305 kph), and is capable of 320 mph (514 kph). The TGV is much more economical than flying and links Paris, Bordeaux, Lyon, Marseille, Montpellier, and Strasbourg with each other and with Brussels, Amsterdam, Lausanne, Bern, Cologne, and London. The 31-mile (50-kilometer) Calais-to-Folkstone Channel Tunnel (“Chunnel”), completed in 1993 by the British-French consortium Eurotunnel, links France and England. The rapidity of travel from all corners of France has reinforced the focus on Paris. The Paris Metro is only one of several subway systems in France's larger cities.
France's roads and highways are also very extensive—well over half a million miles (804,650 kilometers) paved, some 21,000 (33,795 kilometers) of those being national highways. France possesses the world's densest high-quality road network. Some 6,150 miles (9,900 kilometers) of turnpikes now link major cities. Traffic is heavy, and speed limits are ignored. The automobile accident rate is horrendous, much of which is contributed to by drunk driving.
There is bus service throughout the country, although the French still prefer their private autos. The days of large numbers of people getting around by bicycle, moped, or motorbike are over. Car ownership has come to be almost universal outside of the densest urban areas, with Renault (which now owns Nissan), Peugeot, and Citroen being the major car manufacturers. France has 268 airports with paved runways. Air France is the state-controlled international airline, and there are two major private airlines. In addition to ordinary jet aircraft, Air France helped pioneer the supersonic (and super-expensive) transatlantic Concorde. The plane, built with British partnership in 1976, was retired from scheduled service in late 2003.
Paris remains the transportation hub, and even today much travel between distant parts of the country must pass through the capital, even when the latter is far off of the crow-flight route.
Nearly half the population of France is employed, although unemployment stands at about 9%. The country has a minimum wage. Over half the work force is white-collar, and 30% is employed by the state.
Although they have declined, labor unions figure fairly prominently in France, although only about 8% of the labor force is unionized (under open-shop rules). France has the lowest EU union membership rate, which is concentrated among public companies and the civil service. Strikes—usually brief, but often crippling—occasionally occur, including road blockages by truckers and train operators. Many strikes, however, are not union organized; rather, they are coordinated via the minitel.
As late as 1965, married women could not take a job or open a bank account without permission from their husbands. As of 1985, though, they have had full equality in the family. Genderrelated job discrimination was outlawed in 1972, but persists against women (and sometimes men) in a number of areas of work. Still, women are now very prominent in education, health, and law—but not politics.Many women hold part-time posts. Unemployment is highest among the youngest and the least skilled. The state maintains (re)training programs for first-time job seekers and the unemployed.
FINANCES AND TAXES
France was a pioneer in finance. The country has the full range of banks, insurance companies, and the like, as well as a lively stock exchange. The bank Credit Agricole is the world's fourth largest.
Owing to high government expenses—public spending accounts for 56% of the GDP—French taxes are rather high (44% of the GDP). There are both modest progressive individual and corporate income taxes, which yield about 20% of tax revenue but which, traditionally, French citizens have endeavored to evade to the extent possible, as they have evaded taxes on large fortunes. Then, there is the newer, harder-to-evade valueadded tax (TVA), which usually exceeds 20% and which applies to nearly all sales and services, at both the wholesale and the retail levels (compare to U.S. state sales taxes of from 5 to 8%, on retail goods only). Some do evade the TVA on labor by hiring workers who are paid off the books. There is also a capital-gains tax—again, widely evaded in part—not to mention local real estate, property, habitation, and business taxes. Both national and local taxes are collected and disbursed by the national treasury. Overall, the French pay a much higher percentage of their income in taxes than do Americans, but they also gain many more services. Since the 1970s, efforts to even out discrepancies in wealth among the regions via subsidies have fluctuated.
Inheritances are much more rigidly prescribed in France than in the United States. Children are favored and estate taxes are high, but especially so for those who are bequeathed a legacy, but are not in the direct family line. In 1999, France's GDP growth rate was 2.9% per year, and there was a large trade surplus; the inflation rate was approximately 1.3%. It's interesting to note that 10% of the wealthiest families possess 54% of gross assets.
- Economic History
- Development, Economic and Social
- Large Corporations, Political Regulation, Fordism, Mass Production, and Economies of Scale
- Measuring Business Services in National Economies