Olson’s paradox is one of the simplest and most powerful theorems in political economy. It tells us that individuals may wish to achieve a collective goal but never succeed because no one wishes to bear the individual cost. I often indulge in an experiment when I give a lecture. I ask who in the public thinks that there should be more housing in France to facilitate access to property for the youngest. Nearly 80% of the room usually raises their hand. Second question: who is in favor of building a building in its immediate vicinity? The proposed answers are reversed. In fact, our mayors are confronted with the paradox of Olson. The French want housing, but far from home. It is easy to understand the impossibility of this proposition if it is applied literally.
Olson’s paradox is also rife in industry. Today there is an intellectual and political consensus around the need for the country’s reindustrialisation. Finally ! Because, in truth, France has lost for fifty years a gigantic part of its industry. In 2021, it represented less than 17% of our GDP, a halving since the 1970s. France has deindustrialized more than its neighbors, including Spain and the United Kingdom. In addition, the general context should force us to make a massive reindustrialization effort.
I recalled in a previous column that we had moved into a new age of globalization, dominated by geopolitics. To put it schematically, the previous phases of globalization, in particular from the 1990s, were marked by a predominance of economics over geopolitics. The terms of the debate have reversed. Globalization is shrinking, dominated by the balance of power, international tensions, sanctions, the need to rearm. This is what, in theory, obliges us to produce carbon-free energy, agricultural commodities, innovative medicines, semiconductors according to our comparative advantages, that is to say our skills and our natural endowments. (for example, the extraordinary richness of our soils or the density of our engineering schools).
Local elected officials need courage
To respond to this, France has put in place sensible public policies. From the research tax credit to lower production taxes and apprenticeship, the direction is generally the right one. The first results have appeared. Industrial investment projects are at their highest and employment in industry is increasing. These signs are encouraging, but they are only signs. Because there is an obstacle: the French want industry but they don’t want factories. It is enough to browse the pages of the regional press to be convinced of this. The local media are full of articles echoing petitions and even demonstrations against industrial establishment projects. It takes particularly courageous mayors and regional presidents (fortunately, they often are) to resist popular pressure.
Things go wrong when these manifestations assume a form of decline. It happened a few weeks ago against the extension project of an STMicroelectronics factory (semiconductors) in Crolles, in Isère, under ecological pretexts. This project is supported by France 2030 and the Chip Act of the European Union. The first of these programs aims to strengthen innovation made in France. The second subsidizes the production of electronic chips, today produced almost entirely in Taiwan. Honestly, both of these programs are just common sense.
The demonstrators opposed the growing water needs of the plant. Very good, but there are technical answers to this problem: recovery of water, fight against leaks, differentiated payment for water according to use… We are really faced with a societal choice that is not only theoretical: industry , they are factories. If no one wants it anywhere, we might as well tell our children right away to leave the country, to go and succeed elsewhere.