The background graphic above was from a protest in Aug 2012 (you can see the small peak in AUST1--see the Operational Definitions in the Notes below--in the overlay time series plot). Emmanuel Macron took office in 2017, right after AUST1 hit bottom. His government has been riding the AUST1 Recovery wave since then. From my Business-As-Usual (BAU) model of French Austerity (here), AUST1 can be expected to peak in the next few years and decline after that. However, the decreasing Cycles of AUST1 will continue well past 2150.
Austerity is a difficult component of Neoliberal Theory (see below). Especially, the dominant controller, AUST1, depends on external forces such as US Military support and the Russian-Ukrainian War which is forcing military expenditure up and creating the budgetary crisis with Health, Education and Welfare.
For an understanding of why Austerity has become such an issue in France, keep in mind that the Economy of France is becoming a Steady State Economy (see the FRL20 Model). One interesting hypothesis is that cyclical processes such as Austerity become more important as the system reaches a steady state and the dream of unending exponential growth (Techno-Optimism) is over. Promises can no longer be made that growth will solve Social Inequality problems. The New Axis of Evil can be used to motivate increased military expenditure but, to avoid reducing Social Expenditure, Debt will have to be used to drive the economy, creating another focus for Protest and wide-spread civil unrest.
You can experiment with the FR_AUST model here. For more information about how the models are constructed see the Boiler Plate.
Notes
More reading:
- Six Futures for France
- French Debt, Collapse of the Government, and COVID-19
- Shefner, 2015 here and here.
- Macron has No Good Options
- How Does the Economy of France Work?
Theoretical Considerations (it's bigger than just Austerity):
Austerity, as a theoretical concept, is part of Neoliberalism (see the graphic above and Shefner, 2015 here and here). I will explore the other aspects of French Neoliberalism in future posts.
The data for the AUST index is taken from the World Development Indicators (WDI). The indicators and definitions are listed in the table above. NOTE: AUST is entirely measured by budgetary categories as percentages; the cyclical nature of the index is a result of percentages hitting up against limits [0%,100%].
The AUST index contains three components that explain 94% of the variation in the indicators.
AUST1 = (0.433 GED + 0.4571 MIL - 0.4477 G - 0.393 GE - 0.4701 GH)
AUST2 = (0.822 GHE - 0.357 GED - 0.377 GE)
AUST3 = (Overall Growth)
AUST1 and AUST2 are historical feedback controllers for the budgetary categories defining Austerity. AUST1 focuses on controlling Education, Military expenditure, Overall Government Expenditure and Health Expenditure. AUST2 focuses on controlling Health and Education Expenditure.
In the Economy of France, Austerity, Debt and Globalization (KOF) are closely related. The relationship can be seen from the Measurement Matrix above when DEBT and WorldGlobal (KOF) are added to the model. In future posts, I will investigate all the indicators of Neoliberalism in France.
The state space of the French Economy is dominated by three components explaining 98% of the variation in the underlying indicators:
FR1=(Overall Growth)FR2= (CO2+EF-KOF)FR3=(LU-L-N)
FR2 and FR3 are Historical Feedback Controllers regulating Environmental Impacts of Globalization and Unemployment, respectively. EF is the Ecological Footprint and KOF is the Index of Globalization.
