French Take to the Streets to Preserve Their Economic Fantasy

By Steven Pearlstein
Wednesday, March 22, 2006

Ah, springtime in Paris.

The sight of riot police outside the Sorbonne.

The smell of tear gas wafting along the Seine.

The sweet sounds of hypocrisy floating from the National Assembly and the Elysee Palace.

And, next Tuesday, a national strike, perfectly timed to create a four-day weekend.

What inspired this season's revolutionary festivities is a radical new law that would give employers up to two years before deciding whether to give new young employees the kind of lifetime job security conferred by French law.

To those of you brainwashed by Anglo-American market capitalism, this might appear like the sort of labor market flexibility they babble on about at meetings like this week's European summit -- the kind that might actually entice a French company to create a new job.

But when viewed through the dark prism of the French imagination, these aren't real jobs -- they're "garbage jobs" and "slave contracts" meant to undermine the birthright of all Frenchmen to be shielded from all economic risk. Give in on this, and who knows what could go next? The 35-hour workweek? The six weeks of paid vacation? State-mandated profit sharing? Retirement at age 60?

What's so galling about the French is that, in the name of equality and solidarity, they are well on their way to creating not only one of the least vibrant economies in the industrialized world, but also one of the least equitable.

The "insiders" of this economy consist of a shrinking pool of older, middle-class workers who enjoy the full panoply of worker protections. Most of them are in the public sector or heavily regulated private industries, with the rest in a dwindling number of competitive private firms.

And then there are the "outsiders." This growing pool includes the unemployed young men of the mostly immigrant suburbs who went on a rampage last year, throwing rocks and burning cars. But it also includes the children of "insiders," who tend to hang around the university until they are 24 or 25, then drift between unpaid internships, temp jobs and welfare for another five years before finally getting "inside."

You'd think that, with all that time they spend chatting away in cafes, these young "outsiders" would have figured out by now that this system, which protects and cossets the "insiders" at all costs, is sucking the innovation and vitality from the economy. But rather than supporting the reforms that might generate more jobs and more income, the outsiders have bought into the nostalgic fantasy of a France that once was, but can never be again, making common cause with the very "insiders" whose selfishness and pigheaded socialism have left them out in the cold.

That said, you can hardly blame the kids for being confused about their economic predicament.

After all, the supposedly center-right government that pushed through the new youth-employment contract is the same government that adamantly refused to give up subsidies for farmers, stepped in to prevent foreign takeovers of French companies and, just last week, demanded that Apple iPods accept music downloads from iTunes competitors (read: French competitors). But having declared, in effect, that markets cannot be trusted to generate socially and politically acceptable outcomes, the same government is now shocked to find that it doesn't have much credibility when it asks workers to trust markets when it comes to the terms of their employment.

This sort of calculated hypocrisy among the French political elite, which likes to "talk left, act right," has now completely undermined support for market capitalism. A telling poll released in January by the Program on International Policy Attitudes at the University of Maryland found that only 36 percent of French respondents felt that "the free enterprise system and free market economy" is the best system. That's the lowest response from any of the 22 countries polled and compares with 59 percent in Italy, 65 percent in Germany, 66 percent in Britain and 71 percent in the United States.

Perhaps it's no surprise, then, that Forbes magazine's latest list of global billionaires includes only 14 from France, without a single new entry this year. Germany, a country not twice its size, has four times as many, while Britain, which is about the same size, has 24.

Indeed, when you ask French university students who is the Bill Gates of France, they look at you blankly. It's not simply that they can't name one. The bigger problem is that they can't imagine why it matters, or why that has anything to do with why they can't find a good job.

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