France can firmly be categorized as a “mixed market economy” with significant social protection and elaborate social programs. However, it is a predominantly capitalist economy with socialist elements incorporated within that structure.
With some terming this as a “hybrid model,” it would be possible to term this as a social democratic form of governance. That being said, the French model has more socialist elements than many other nations that may be described similarly.
The Economic Freedom World Index, a metric by which the freedom of the market within a nation may be adjudged, gives France an overall score of 65.9.
This places it as the 52nd nation in terms of market freedom in the world.
This would thereby show that while the economy may indeed be called capitalist, it has a heavy indent of socialist policies.
Capitalism vs Socialism
Definition of Capitalism
Capitalism is predicated on three tenets. These are that of wage labor, working for an earning, and private control of the means of production.
Places such as factories or offices are owned by individuals or corporations (not the people, represented by the government).
In a perfect capitalist system, the market remains free from all forms of control, including governmental interference. Market forces alone are allowed to determine the course of the economy and any entities within.
Free market ideology is often embraced in tandem with related notions such as that of competition and entrepreneurialism.
Definition of Socialism
Socialism instead calls for governmental control and public administration.
It is based less on an idea of market freedom and more on a communal holding of the means of production and the provision of essential services to all individuals within a society.
These services may include healthcare and education, and resource extraction.
A more radical and, to some, extreme form of socialism is that referred to as communism.
Here, wealth and capital will be majorly redistributed in society, with complete public ownership of the means of production.
This would come to mean that the government would be the arbiter of how capital is to be produced and how it is to be distributed, with Marx’s famous saying holding true, “from each according to his ability to each according to his need.”
Is France Socialist?
With the significant influence of socialist ideology on the economic framework of France, there are numerous examples where we see this in play.
These are often where the market alone cannot be allowed to determine itself at the cost of individuals living inside society.
The following are some of the more salient instances where we see the socialist tilt in France.
1. Universal Health Care
Although it took quite some time for France to develop a framework to provide every individual with healthcare, the contemporary system is effective and efficient.
It not only provides universal coverage but has been in the process of expansion for quite some time, with a comprehensive overhaul coming during Prime Minister Juppe’s tenure in 1996.
In January 2000, the French government succeeded in expanding coverage to everyone in the country, including the last one percent that was left.
It offers a public-private system of healthcare and caters to the needs of a population that is comprised of a great number of elderly individuals. With no gatekeeping and the possibility of supplementary coverage, it is evident that the system is commendable.
As the market alone could not be allowed to profit from the sickness and disease of individuals, the healthcare system is a manifestation of socialist ideology.
2. Education System
It is compulsory for children in France to attend school for a certain period of time, and the country boasts an impressive 99 percent literacy rate, often attributed to the fact that public schools are free of cost and compulsory.
The scale of the education project can be witnessed by the fact that twenty-one percent of the national budget is allocated annually to this purpose.
It may be seen that this is one of the socialist services that are considered essential to society and must hence be rendered free of charge to all individuals, particularly children.
3. Unemployment Benefits
For those individuals that find themselves incapable of finding work, France also offers unemployment benefits.
This contrasts with capitalist ideology, wherein one must always work to earn a wage in the market.
The benefit is calculated in accordance with a set criterion and cannot fall below a minimum threshold. Furthermore, wherein the unemployment benefit is construed as not meeting a certain limit, it enables the individual to seek the provision of other benefits, such as housing aid.
Such governmental aid is a direct result of the influence of socialist ideology in France.
Is France Capitalist?
Despite the above facets of socialism in France, it would be remiss not to include the capitalist influences on France’s economy, as it forms the primary structure for the framework.
Below are relevant examples that showcase such capitalist thought.
1. The Housing Market
Individuals in France are able to buy and procure and sell their own houses and are thus capable of owning private property en masse.
This is a repudiation of socialist housing ideologies and is firmly capitalistic. The government, in these instances, is not the sole entity capable of procuring residential housing units and then redistributing them. French citizens can do it themselves, with more than a million sales being recorded in 2021 alone.
2. Freedom of Incorporation
France does indeed function on many characteristics of a free market, meaning that it is possible not only to create companies but to engage in trade and commerce.
This is evidenced particularly by the presence of monolithic corporations within France, which are firmly capitalistic in their processes.
These include global companies such as the AXA Group and Carrefour.
3. Privatization Programs
Recently, the French government, under the helm of Emmanuel Macron, embarked on a series of privatization proposals that would cede governmental control over a number of industries and place them within the capitalist market.
This is completely at odds with socialist ideology in that the government is actively giving up control over their industries and are instead relying on private organizations and individuals to take up control.
This is a representation of capitalist tendencies within the nation, particularly in regards to certain areas such as the energy sector and aerospace.
Socialist Political Parties in France
The Socialist Party of France was historically held to be the herald of socialist politics within the framework of governance in France. However, even this party embraces elements of capitalism.
Capitalist Political Parties in France
The En Marche party, a political party founded by Emanuel Macron, and the National Front, founded by Le Pen, are some of the examples of Capitalist ideology finding its way into the political consciousness of the nation.
It may be argued that whilst, like the rest of Europe, France too, has its fair share of Socialist notions incorporated within its economy. Europe’s social-democratic traditions stem from post-WWII social contracts designed to help people recover from the ravages of war.
But it is also evident that capitalism heavily infliences the French economy. Hence, we will call this a mixed economy system.