axilla

France has the highest social welfare spending as a share of GDP on earth Their budget to GDP ratio is 57 percent They spend more than the EU average in absolute and relative terms on schooling They couldn't spend more lavishly on welfare if they tried

having tried my best to intuit the motives of the protesters in France today, I am struck by the fact that two of the most treasured pillars of the European postwar order are colliding: 1. unfettered immigration, especially from former colonies, justified by historical obligation and postcolonial guilt 2. protecting pensions and the elderly at all costs, even to the point of extreme fiscal strain now you have first and second generation immigrants, as well as young native french people, taking to the streets because the french state is hell-bent on extracting whatever it can and feeding it into the maw of boomer luxury communism. the younger generation is being asked to accept a deteriorating deal: pay more, receive less, and abandon the expectation of matching the living standard of their parents or grandparents. the young immigrant newcomers have even less incentive to accept any kind this bargain. they are not bought in to the french social contract. they have no common identity with the french boomers they are being asked to sustain. they resent the fact that the entire machinery of the state is designed to exploit the young to serve the old. the old do not care about the immigrants enough to trade away any of their entitlements for them. they have the advantage as they wield the franchise reliably and their share of the electorate is only growing, so they won't accept a decline in their own standard of living to fund a future they will never live to see. now these two groups are on a collision course. ironically, immigration was intended to ameliorate the worsening fiscal picture brought about by a demographic transition. but this did not happen. studies have repeatedly shown that immigrants do increase aggregate GDP (by simple brute force, by adding to population), but not the fiscal picture [1]. the most comprehensive paper using real-world data [2] segments immigrant types to France and finds non-EU immigrants to be persistently fiscally negative. EU immigrants by contrast are the most fiscally positive group, meaning that studies that consider immigrants as a whole are masking the negative impact of non-western immigrants (and Algeria, Morocco, and Tunisia rank #1 and #2 and #4. Africa accounts for 50% of the 8 million immigrants living in France today.) immigration has not caused France's fiscal crisis. but it hasn't bettered the economic picture at all – it has deteriorated it somewhat – and it has created a combustible demographic that has little allegiance to the French nation. far from helping France deal with its aging workforce, immigration has added fiscal burden and created a permanent, non-assimilated disenfranchised underclass. the original justifications for immigration – labor scarcity, postcolonial obligation, and more recently workforce aging – have largely failed to manifest the promised results. the pro-immigrationist policy has been defended in Brussels as necessary to defend the welfare state, but it has expanded the population making claims on the state, without eliminating the need for fiscal adjustments. France now has an aging electorate aiming to preserve the benefits it was promised, mingled with a younger more diverse population that questions whether it will ever receive a similar deal. the young are vastly outmatched at the ballot box and so they take to the streets. the french establishment is now trying to preserve a tenuous status quo: unlimited intergenerational obligations alongside a neverending immigration regime that continually changes the composition of the society intended to honor those obligations. the immigration regime also actively worsens the fiscal picture while creating these cultural fractures and inculcating a society more prone to sectarian violence. the french state will have to renegotiate its social contract and disempower one of these groups. electoral gravity suggests that the old will continue to win until France finally reaches default and creditors renegotiate the welfare state for them. the major contenders in 27 take different approaches to this tradeoff: - the right in Le Pen looks to reduce immigration-related expenditure and focus public spending on French citizens, while resisting retirement age increases - Macron in the center aims to control immigration somewhat and reform pensions by raising retirement age - Melenchon's left, largely behind the protests this week, denies the tradeoff and aims to keep funding pensions and retirement at 60 while increasing immigration. as France has very little fiscal space it's unclear how this would be paid for whether the french social contract can be peacefully renegotiated remains to be seen. [1] For France, immigrants' net fiscal contribution averaged -0.85% of GDP over 2006-2018 when all public expenditure was allocated (and this includes ALL categories of immigrants including European, American and Asian) See: oecd.org/en/publications/int… [2] See table 4 (translated below) shs.cairn.info/revue-economi…