by Jerome a Paris
Fri Mar 24th, 2006 at 07:21:03 AM EST
Philip Stephens, one of the smartest editorialists of the FT, but also the clear standard bearer of the establishment in power in London, weighs in on the protests in France. He is much less caricatural than the other commentators on France, but he still relays a number of misconceptions that I'd like to debunk.
Follow me below the fold.
Philip Stephens: France must change or live in fear
France is a nation afraid. As students and trade unionists take to the streets in defence of the past, the elites look on with a weary fatalism. What you must understand, I heard a member of Dominique de Villepin’s government lament the other day, is that people “are fearful of everything”.
I thought it strange that a minister would speak in those terms about his own country, even though the comments were not for attribution. Here was a seeming admission of the failure of political leadership alongside a transparently lame explanation for the government’s retreat into protectionism. But France has been that sort of place since the voters’ rejection last year of the European constitutional treaty. Talk to the alumni of the nation’s grandes écoles and one has a sense of a collective nervous breakdown.
He is right about that diagnosis. Fear. Failure of political leadership. Lame excuse for retreat into populism (I don't buy that "protectionism" meme and will not validate it either).
Where we will differ is on the causes of that situation.
Divisions between insiders and outsiders are growing wider. They were visible at the extreme during last autumn’s violent rioting by young, jobless immigrants in the banlieus. [sic - can't they get people that actually speak French to check what they write when they use a French word? That's so sloppy and unprofessional. Sigh. JaP] But there are other ruptures. One lies between the postwar baby boomers who grew prosperous in security and a new generation of young people taking to the streets to demand the same protection. Another is found between those cosseted in the service of the state and those employed in businesses exposed to the harsh forces of global competition.
Again, true, and a point I have flagged myself a while ago. France did make the choice 30 years ago, when unemployment first struck, to protect those in the work market and have flexibility borne by a small subset of the population: the old, the young and the immigrants. It has been trying to reverse course ever since, but the behaviors incentivised then (in particular, the preference by companies to invest in machines rather than hire people, while asking for more deductions on labors taxes and yet more freedom to fire people) have remained. The very real flexibility in the labor market thus leads only to precarity for those who bear that flexibility, without the concomitant easiness to be hired (other than in unstable, short term positions) that should go along.
The demonstrations against Mr de Villepin’s planned reform of French labour law have not yet marked a descent into anarchy. The tradition of violent protest is part of France’s genetic code. The television pictures have exaggerated the chaos.
Yes, again, correct.
Each time I visit, I am reminded of France’s contradictions. For a nation in decline it seems remarkably prosperous. What struck me most about Paris last week was the fur-coated tranquillity of the middle classes strolling on the city’s right bank even as the demonstrators gathered on the other side of the Seine. For all the talk of economic collapse, French companies still compete with remarkable success in global markets. This week Gordon Brown, Britain’s chancellor of the exchequer, boasted of the economic liberalism that has seen Britain leapfrog some of its rivals in the international productivity league. But it still lags behind statist France.
All true, and in need of being said.
Mr de Villepin’s proposals seem distinctly modest. He wants to introduce a flexible labour contract for those under 26. The aim is to reduce youth unemployment levels of 20 per cent and more. If employers are allowed to change their mind during a two-year probation period they are more likely to take on more workers. The government has already introduced a similar measure to encourage small companies to recruit. And it seems to be working.
I'll take an exception to that last sentence. A first study estimating the impact of the CNE, the existing measure for small companies, shows that net job creations appear to be minimal.
The new law, though, has become emblematic. The gathering storm on the streets speaks to a deepening aversion to change at the very moment it is becoming impossible to resist. It testifies also to a legacy of inertia. The political classes are as much to blame as the unions. One énarque – a graduate of the elite Ecole National D’Administration – told me only once in the past 25 years had a French political leader fought resolutely for economic and social reform.
That was Alain Juppé, Jacques Chirac’s prime minister in the mid-1990s. Mr Juppé’s attempt to overhaul France’s social security system ended in enforced retreat followed by electoral defeat. My interlocutor recalled that Mr de Villepin, at the time a senior adviser to President Chirac, had been almost alone in backing Mr Juppé. Perhaps that explains the prime minister’s resolve in recent weeks.
Here, we start getting slowly into ideological territory. The casual assertion that change is "becoming impossible to resist" enters the long list of unsubstantiated pronouncements on the need for "reform". This is reinforced by the notion that the only kind of reform is the liberalisation kind (that pursued by Villepin or, before him, Juppé).
Why gloss over so casually over Jospin's track record? He also set to reform the labor markets, and by all objective criteria, he succeeded. France created 2 million jobs in 5 years, unemployment went down from 12.5% to 8.5% in 4 years.
It's much too easy to say that he took advantage of world growth. The world is experiencing similar growth today, and that's obviously not enough. Why, again, is that period ignored? Because it was not "reform"? It worked!
France’s problems are not unique. The causes of its discontent are apparent across Europe. The accelerating erosion of state power by globalisation – never really admitted by the continent’s political leaders – has sparked nationalist reactions elsewhere.
State power is eroding because current leaders choose not to exercise it, for ideological reasons. Again, it's a
choice, not an inevitable trend.
The Netherlands joined France in rejecting the constitutional treaty. Germany remains strongly resistant to changes in its social market model. Spain, Poland and Italy are among others dressing up protectionism as patriotism.
Who's missing in that list? One country that has no problems?
I sense a dawning realisation among Europe’s young people that they will not enjoy the assured prosperity and security of their parents. Yet, if the young are expected to eschew jobs for life, they must pay for the generous pension entitlements their parents have granted to themselves. There is something wrong with that bargain.
Yes, that generational conflict has yet to be resolved.
As ever in France, you can find another bundle of contradictions. Some of the young people who have failed to find work at home are prospering in the more flexible labour markets of London and New York. They exult in the precarious opportunities of Anglo-Saxon capitalism. But they are appalled at the idea that the same practices might be applied at home.
Let's please debunk the meme that jobs are going from France to London. As I have posted previously, France, like Germany, but unlike the UK, has a
net brain gain
But of course, bankers are the poster boys of our globalised world, and it is true that these jobs are heavily concentrated in London. But there is more to our economies than finance!! (I should know)
France is a victim of its exceptionalism. More than anywhere else in Europe, the nation’s identity, its sense of itself, is invested in the authority of the state. A weakening of the state threatens the very fabric of the nation. The outcome of the referendum on the constitutional treaty testified to a crisis of confidence. If it could no longer set the direction of Europe, why should France continue to back the project? Globalisation makes it harder still to remain at once different and relevant.
Again, the French State has given up its authority, because French elites have been lured by the money promised to them, as part of the elites, in the globalised financial world. They've tried to keep the power and legitimacy the French State gave them, and grab the money they "deserve" as elites (on the back of the people) - and then they act surprised that the people, that used to have less power but a better access to wealth in France, are unhappy about that obvous breach in the French social contract?
Where all this now leads is less certain. Yesterday, perhaps under pressure from Mr Chirac, Mr de Villepin seemed to yield some ground. In any event, the consensus of the political establishment seems to be that, win or lose on this particular issue, Mr de Villepin’s presidential hopes have been irreparably damaged.
Nicolas Sarkozy, his rival for the candidacy of the right in next year’s election, likes to present himself as moderniser. But he is also an opportunist. On the employment contract he has presented himself as at once for and against Mr de Villepin. Some of the smart betting in Paris has now shifted to Ségolène Royal, at present bidding for the Socialist nomination. She could well take the crown in next year’s presidential poll. Yet her party is in disarray and few have a sense of how Ms Royal would govern.
Ségolène is no liberaliser, so it's interesting to see her endorsed like this. Maybe Stephens believes the hype about her "approval or Blairism" (in fact, she said that he was unfairly demonised as he spent a lot more money than is usually acknowledged on public services, hardly a ringing endorsement of globalisation)
I heard no one in Paris say it is possible or desirable to turn back the economic tide.
Hear me, Mr Stephens!
The protectionism practised by the French government in its effort to close the door to globalisation is as futile as that of those on the streets.
Why tar this otherwise fine article with this - again - unsubstantiated statement?
The students have a point. The burden of insecurity is being unfairly distributed – as between those in work and those in the jobless queues, and as between the generations. But it is too late to reclaim the past.
That remains true. But the solution is not where he sees them. What is needed is a more confident, but more modest elite, to rebuild the old social compact that worked, and that will be still necessary at a time when an energy crisis looms (and the foresight of the French State in that sector will be thanked by all) and economic turbulences are very likely.
Now's not the time to give up.
Earlier deconstruction and CPE stories:
Language deconstruction of the day (vol. 1) (Ghost of August 1914 spooks EU)
Article Deconstruction (vol. 2) - EU energy regulator
Debunking the EU official line
Contrat Première Embûche
Article Deconstruction (vol. 3) - Student protests per IHT
Article deconstruction (vol. 4): French farce
It's the same fight
Triple Play (US articles on French protests)
IHT sees the light on French student protests
French employment and unemployment
