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That France Vote

May 30, 2005

Tags Big GovernmentTaxes and SpendingU.S. Economy

The fallout from the French vote of "no" on the EU constitution includes a sign that Tony Blair may scrap plans to hold a similar referendum--which effectively kills, for now, the whole effort to create an overarching government charter. The spin, which often has little to do with reality, is where it gets interesting. Did it represent a blow to the idea of liberalized markets in Europe? A rejection of centralization? Or was the whole event used by voters as a chance to punish the presidency of Jacques Chirac? No matter which interpretation you accept, the main problem remains: France's bloated welfare state and regulated economy that is out of sync with modern times.

In an effort to appease the public sector workers (25% of the French workforce) and the leftist trade unions (all recipients of generous benefits and pensions), the moderate, supposedly "right-wing" President Chirac has come out with some pretty self-contradictory statements. Here is one excellent example: "Liberalisme serait aussi desastreux que le communisme." Quoted in Le Figaro, March 16, 2005 This translates to: "The free enterprise doctrine would be just as disastrous as communism."

This weather vane action is not surprising. In spite of some very ambitious reform plans on the part of Chirac's party and his ministers, France is still one of Europe's best examples of a socialist quagmire. In reality, the Chirac government continues trying to spread equality as every French administration has done since DeGaulle. Back in the 60s, the French began to have hopes of seeing their dream of a perfect society materialize. The government expanded control over the health system, the education system, the social security system, the transportation system (see their latest and most admirable splurge), the infrastructure system, the corporate and tax oversight systems, etc.

As marvelous state-run services began to increase, they were consumed; and because they were "free," the people went on a binge. Each finally could plan on having the right to generous salary and vacation benefits, frequent doctor visits, support for unwed mothers (the numbers are on the increase - after all it's a pretty well paid job), free child care, glorious retirement pensions, extensive public transport networks with supersonic trains, occasional sojourns in the company- or nationally-owned mineral bath spas, long state-paid years of higher education (whether or not they're useful; for example, it is possible to get a doctorate on the physiological intricacies of the golf swing), etc. Privileges began to pile up. Life was beautiful. Finally, equality seemed about to arrive - up to a point.

The only problem is, they don't seem to have figured out that someone has to pay the bill. That someone turns out to be the diminishing number of wealthy people, and after them, those who are healthy and who still want to work to pay the increased taxes, and/or who can't find an excuse to stop even though stopping is getting easier. All one needs is an obliging underpaid doctor, or perhaps an unemployment office accomplice who still believes in the gospel of solidarity and does as little as possible to propose a job "outside of one's field," or "incommensurate with one's salary expectations," or "away from home."

Throughout the 80s and 90s, the financial crisis in France has been growing, and the line of collaborating pigs at the trough of this suicidal mission has become literally endless. The rich long ago began siphoning their income offshore, others hiding it through undeclared cash transactions on the black market - the only free market that is now thriving, as is the bureaucracy that polices it. Employment opportunities continue to shrink as entrepreneurs are increasingly penalized and taxed. Recently, the government had the engenius idea to force the diminishing number of workers to agree to reduced pay for a lighter 35-hour workweek - "to help improve unemployment figures," they said. Anyone can understand why that law found little resistance. After all, who would want to waste valuable leisure time for so little net pay? Of course, the effort backfired, and the 35-hour workweek has begun to erode as French companies fall behind in European Union competition. Meanwhile, the government continues to obscure labor statistics by encouraging many jobseekers to accept low paid and temporary dead-end "apprenticeship" positions, and to sign up for off-the-radar subsidized job training programs.

Today, paralytic tenure has set in on all fronts. Government receipts continue to shrink, and public debt has become chronic. Read here about how unions have become the blackmailing Mafiosi of French daily life. Fortunately, public apathy cannot last forever. The good news is that even in France, there comes a point when reality begins to sink in, as it is trying to do now. Sensible voices are emerging, even if they have to put up with being arrested by Chirac's secret service (see the article in a French magazine called VSD).

The problem is that the growing number of public employees, state beneficiaries and unions have almost criminal control of the purse strings, and apparently even the sympathy of the public. The punch line is that France is an excellent example of what America will be like in 20 years if we continue on our present path, and there won't be any French vacations, cuisine or mud baths to soothe our aches and pains.

Although France has been trying for the last few years to reign in socialist excess, they find themselves incapable of instituting the slightest reforms. There is always some special interest group objecting to their excessive privileges being repealed and blackmailing the acquiescent public with the threat of national paralysis. The strikes are endless: the truckers union, the teachers union, the federal employees union, the once-nationalized electricity company's union, the pilots' union, the Force Ouvriare union (an old Communist relic), the CFDT, the CGT (both workers' unions), and on and on it goes - and violence, both at these manifestations and elsewhere, is more and more commonplace. As it stands, the various unions are now in cahoots to snub Chirac by defeating the European Union's constitution vote, not out of fear of what is written in it, but of the effect ratification might have on their future perks and job security.

May France wake up before it is too late, and before we have to watch the bloody consequences splattered all over the news; and may America take heed and avoid the same destiny. Just as in prewar Germany, and according to the scenario so clearly described by Hayek in The Road to Serfdom, the French must either collectively wake up and bite the bullet, or watch the nation collapse into fascism or revolution. France now seems paralyzed by political Locked-In-Syndrome, aware of the coming crisis but unable to do a thing about it.

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