Tuesday, June 8, 2010

The French Exception

The recession has hit higher education hard across Europe, but France is an exception, according to the European University Association:

France and Germany, continental Europe's dominant economies, are notable exceptions. Both countries have announced major new commitments to higher education and research, although Mr. Estermann emphasized that they represent two very different scenarios. In Germany's federal system, higher education is more the preserve of the 16 states than the national government. The states are facing a "diverse" economic picture, but the federal government has increased its support of higher education and research institutions, Mr. Estermann noted. In France, the government's pledge to commit billions of euros more to higher education predated the onset of the economic crisis, and "it is one of the countries that has actually kept its promise," said Mr. Estermann. "It is more the exception than the rule."

"Mainstream"

A rare thing: an untranslated French book has been noticed in Newsweek. It's Mainstream, by Frédéric Martel, an expert on the "global culture industry" that is the book's subject. The book has been a bestseller in France and is currently being translated into a number of other languages.

The Way Forward

"Prediction is hard, especially about the future." The well-known wisdom of Yogi Berra is once again right on the money. A year ago, Keynes was back. Today, Jeff Sachs is attempting to drive the last nail into his coffin, and the Germans, never very keen for stimulus, are now debating their Sparpaket, or austerity with a happy face. Germany and France are so out of step on la rigueur (a word that French ministers are not allowed to use) that Merkel postponed a scheduled dinner with Sarkozy for a week in the hope that a way might be found to paper over profound differences. It's true that Brad De Long thinks that Sachs has gone off the deep end, but despite support from Paul Krugman, Mark Thoma, and other heavyweight econ bloggers, the Keynesians seem to be in retreat for the moment, as governments weigh the theoretical benefits of future deficits against the palpable woe of mounting debt.

Sachs, though wrong about the irrelevance of Keynes, isn't quite as benighted as De Long makes him out to be, however. What he's recommending is not a return to monetarism and deregulation but a long-term transformative policy based on green rather than greenback economics:

The talk of a green recovery, in which the fall in consumer spending would be offset by investments in sustainable energy, made sense and still does. Yet it was quickly undermined by the politicians' insistence on "shovel-ready" projects. The shift to sustainable energy systems is a vital but long-term task. It could never be a short-term jobs programme.

Indeed, this could be the basis of an effective Left-Green alliance in France. The emphasis in the panicky post-crash days was on quick and timely spending, but what is needed ultimately is a push toward a new global equilibrium. China has taken the first steps by permitting substantial wage increases. Higher wages in China will mean more domestic consumption, lower exports, and a reduced current account surplus. Green industrial policy in the advanced economies could mean reduced oil imports and therefore lower current account deficits. A sustainable equilibrium will clearly not come tomorrow, but it is good for the soul to think about the long run from time to time, even if, as Keynes of course said, we are all dead by the time we get there. But as Yogi Berra also reminded us, "The reason why we go to other people's funerals is so that they will come to ours." Between the long run of the moralists and the short-to-medium run of the unrepentant Keynesian theorists, there is room for some creative politicking. If the Socialists and the Greens don't pick up on Sachs' advice, there is a good chance that Sarkozy will. There is always rhetorical potential in les lendemains qui chantent, but there are also useful things to be done, as shrewd politicians should recognize.