Selected Skirmishes: French Lessons
Jospin removes laissez faire from the vocabulary.
The French countryside offers classical treats, sur-la-mer is paradise in a can, and Paris is the quintessential cosmopolitan mecca. France is a splendid and romantic country filled with idyllic settings, culinary masterpieces of astonishing deliciousness–and always a tasty red or white with which to wash it down.
And then there are the French people–an annoying lot who, when discussing the affairs of state, abandon civilized norms and become a species quite apart from Western Man. Their geopolitical aim is, by revealed preference, to play host to the German Army while spewing an unending stream of expletives at their allies and liberators. Indeed, the French have become so obsessed with reviling everything Yankees love, and vice versa, that they now devote a substantial portion of GDP to shooting down American phrases that cross into their air space.
In politics, too, the children of Charlemagne march to a different drummer, celebrating the triumph of markets and the collapse of Soviet communism by making a hard left turn into the dustbin of history. The government elected last June is an unabashed coalition of Socialists and Communists, a merry band of statists who promise the working man salvation in a shorter work week at full pay and who insist that the term private industry be put on that list of banned foreign expressions. Radicals led by Lionel Jospin swept into office to restore that bright shining commune on a hill.
Well, that was the plan. Unemployment remains a double-digit demon terrorizing the French economy–indeed, it has not dipped below 12 percent for three years. This is a great mystery to the French left, true believers who no doubt assume that a vast, right-wing conspiracy is shrinking their just society's employment base to punish the activists for their kind hearts and noble nature.
In fact, the republic has instituted what amounts to a series of Job Elimination Acts: Jobless benefits rival the wages of low-skilled work, while labor law has made the act of employing workers as joyful as a trip to the dentist. The state extracts huge sums in payroll taxes and lets the bureaucracy drill on any employer who attempts to terminate a labor contract prior to death by natural causes.
And don't forget the really serious commitment to high minimum wages in France. In 1993, the cheapest French worker cost employers $9.50 per hour, with workers receiving $7.10 in wages. (The U.S. minimum wage at the time was $3.65.) Economists are shocked–shocked –to find French unemployment running 12.4 percent.
Still, truth be told, Jospin has turned out to be something more than a real Socialist–he is a real politician. Since gaining office, he has felt little compunction to actually deliver the menu of left-wing policies which he had so flawlessly ticked off on the campaign trail. His first act of solidarity was to sic riot police on comrades who occupied government welfare offices to protest the high unemployment rate.
He has bent to the European Community on monetary stability, aware that the old inflationary pump priming has run dry, and has presided over the largest withering away of the state in French history. French Communists–seeing their own government sell $7 billion of France Telecom and 49 percent of Air France–must have struck the famous Native American pose, tearfully watching their beloved habitat despoiled by evil modern forces.
That's not to say Jospin has severed his left hand. As The Economist notes, "When he makes one of his more blatant u-turns, he invariably mollifies the left by giving them some symbolic ideological bauble to play with." Socialist intellectuals really like these toys. To wit, the government's ongoing commitment to squeezing 39 hours of pay out of 35 hours of work. Perhaps next they'll legislate 27 hours to the day, with the increment designated for "family leave time."
Indeed, despite grudging attendance at weekly meetings of fiscal 12-step programs, French politicians remain loyal to statist credos on the left (Marx), in the center (de Gaulle), and on the right (Le Pen). Given its national penchant for haute couture and haute cuisine, France will be able to lag the world's post-communist renaissance in relative style and comfort, drawing down its store of capital–and well-stocked wine cellar–for decades into the 21st century.
Taxes are even now being increased, massive labor stoppages are a regular tourist attraction, and the odd Spanish grocery truck driver is beaten to a pulp by a mob of angry French farmers. View these as spasms of denial. Watching collectivists howl at the gale-force winds of economic competition, globalism, and efficiency as their ideology sinks beneath a rising tide of modern prosperity–damn those conspicuous consumers!–is becoming one of the great spectator sports of the fin de siècle.
Rudi Dornbush, a noted MIT economist who watches foreign markets, opines: "European policymakers are torn between common sense and a myopic denial of reality." Torn? In France, they're not even mildly bugged yet. They tout "myopic denial" during the campaign, then accommodate "common sense" in office. In the good ol' U.S. of A, we have learned something about international bond markets taming the left-side twitches of Large Leaders and their significant others. In the end, even socialists enjoy their capital gains. And take credit for ours.
Contributing Editor Thomas W. Hazlett (hazlett@primal.ucdavis.edu) teaches economics and public policy at the University of California at Davis.