Is France Willing to Work?
Arson is a form of commentary favored by the French left, so at least 1,000 vehicles were torched by disappointed supporters of the Socialist presidential candidate Ségolène Royal after she was defeated53 percent to 47 percent by Nicolas Sarkozy. Last spring, rioting was the left's economic argument when the government proposed, then retreated from, legislation that would have made it somewhat easier for businesses to fire younger workers in the first two years of employment. The idea behind the legislation was that employers would be more likely to hire workers if it were not a legal ordeal to fire them. The rioters were, of course, mostly young.
France's unemployment rate is 8.7 percent, nearly double the U.S. rate of 4.5 percent. Among persons under age 25, a cohort that supported Royal, the rate is 21.2 percent, and it is apt to stay there unless Sarkozy can implement reforms that irritate rioters.
Sarkozy has a mandate from an 84 percent turnout. Seen, however, in the flickering glow of smoldering Peugeots, his chances of fundamentally reforming France seem fragile, and his idea of fundamental reform -- he remains an ardent protectionist -- seems pallid. Nevertheless, his attempt merits Americans' attention because he is confronting, in an especially virulent form, a problem that is becoming more acute here. The problem is the cultural contradictions of the welfare state.
Two decades ago, the sociologist Daniel Bell wrote about "the cultural contradictions of capitalism" to express this worry: Capitalism flourishes because of virtues that its flourishing undermines. Its success requires thrift, industriousness and deferral of gratifications, but that success produces abundance, expanding leisure and the emancipation of appetites, all of which weaken capitalism's moral prerequisites.
The cultural contradictions of welfare states are comparable. Such states presuppose economic dynamism sufficient to generate investments, job creation, corporate profits and individuals' incomes from which comes tax revenue needed to fund entitlements.
But welfare states produce in citizens an entitlement mentality and a low pain threshold. That mentality inflames appetites for more entitlements, broadly construed to include all government benefits and protections that contribute to welfare understood as material well-being, enhanced security and enlarged leisure.
The low pain threshold causes a ruinous flinch from the rigors, insecurities, uncertainties and dislocations inherent in the creative destruction of dynamic capitalism. The flinch takes the form of protectionism, regulations and other government-imposed inefficiencies that impede the economic growth that the welfare state requires.
So welfare states are, paradoxically, both enervating and energizing -- and infantilizing. They are enervating because they foster dependency; they are energizing because they aggravate an aggressive (think of burning Peugeots) sense of entitlement; they are infantilizing because it is infantile to will an end without willing the means to that end, and people who desire welfare states increasingly desire relief from the rigors necessary to finance them.
Twenty-five years ago, President François Mitterrand, a socialist who had won election by promising to "break with the logic of profitability," was keeping that promise and, in the process, killing socialism. He promised stimulative spending through expanded entitlements, a short workweek with no reduced compensation, job creation through public spending and higher taxes on the investing classes. So productivity fell and unemployment -- it has not been below 8 percent since 1981 -- rose.
Statism, the inevitable concomitant of government attempts to administer France's three ideological incompatibles ("liberty, equality, fraternity"), continued. And 47 percent of the French electorate just voted for Royal's promise of much more of it, even though France's 2006 growth rate was lower than that of 21 of the then-25 members of the European Union.
Sarkozy wants to lower taxes, including inheritance taxes, and eliminate the tax on overtime work. That tax, along with government snoops patrolling companies' parking lots to detect antisocial industriousness, enforces the 35-hour workweek. He wants to do what Margaret Thatcher did after she was elected in 1979 because Britain was weary of being governed less by parliament than by unions. Even before Sarkozy was elected, public-sector unions -- government organized to pressure itself to fatten itself -- threatened a paralyzing national strike because he opposes allowing 500,000 employees of government-controlled companies to retire earlier than private-sector employees and with larger pensions.
During the 25 years that the French left and some right-wing nationalists have spent reviling "cold, heartless impoverishing Anglo-American capitalism," France's per capita gross domestic product has slumped from seventh in the world to 17th. Sarkozy's task is to convince the French that their government's solicitousness on behalf of their security and leisure explains the work they must now do to reduce their insecurity.