Monday, Oct. 03, 1960

The Call of the Future

"All economic progress is essentially an incessant struggle between the call of the future and the defense of the past." So said French Economist Jacques Rueff last week as he presented the report of a 16-man government committee appointed last year to find out what is hampering France's efforts to expand. The committee, guided by Rueff, architect of the successful franc devaluation in 1958 and a fervent apostle of free enterprise, and Louis Armand, postwar boss of the French nationalized railroads and later first president of Euratom, found that plenty ails French business--much of it a legacy of protectionism and special privilege from the past. The Rueff-Armand report called for a sweeping liberalization and restoration of free enterprise in French economic life, from the way bread is made to the number of taxis in Paris.

Too Many Laws. Encumbered by too many laws and overlapping rules, France relies too much on faith in paper regulations, not enough on enforcement. Cartels that restrict competition are all too blithely tolerated, says the report, recommending U.S.-style restraints on monopoly. There are far too many subsidies supporting inefficient businesses, e.g., in the alcohol, sugar and flour-milling industries. Farms are often too small to reap the harvest of mechanization, and inefficient tenant farmers are kept in business by state grants. The food distribution system is archaic, encouraging low turnover and high profit margins. The report's solution : a telecommunications system to create a nationwide produce market in which prices can respond to supply and demand.

The professions and trades are full of abuses. Qualifying exams for licenses and permits are often run unfairly by those already in the closed circle, and even those candidates who pass must frequently buy their way in. The bakers run a tight, tough trade association, and in preserving the "little shop'' also perpetuate obsolescent, often unhygienic baking methods. The report recommends the introduction of large-scale industrial baking, and real competition in bread pricing.

Too Much Pressure. Since the report steps on nearly every Frenchman's toes--except the consumer's--and since nearly every French worker or businessman belongs to an organized, articulate pressure group, the cries of outrage were predictable. Sniffed the Confederation of Small and Medium Enterprises: "A perfect insignificance and a complete platitude, a collection of all the commonplaces."

At week's end Premier Debre scheduled the first ministerial committee session to debate the report and draw up parliamentary bills. No French official believes the Rueff-Armand recommendations have any chance of complete adoption, but even piece by piece their gradual enactment would signal a far-reaching stride toward a freer, more productive French economy.

This file is automatically generated by a robot program, so reader's discretion is required.