Wednesday, April 12, 2006

The Luckiest Generation: Why the French Can't Quit Socialism

As I observe the recent French riots and their success in defeating a new employment law, I can’t help but think what I would have done had my family decided to stay in France rather than leave for the U.S. I immigrated to America from France when I was several years into elementary school, too young to realize that the move was final and that my future lay in my new country. There was always the option of finding my way back to France, and I still maintain privileges of French citizenship. As a young family man with a career in Texas, it’s clear that I have made no attempts to re-establish myself in the “hexagone” (the shape of the French mainland). This has been the case with my other numerous siblings, even with one of them obtaining a masters degree from an elite French University (ESSEC) only to find himself working the U.K. and now in Putin’s Russia.

The barrier of entry to the world of decently paying work in France is extremely high. It’s almost impossible for any trained professional from outside the country to make a living, but it’s getting just as difficult for native French citizens. I have numerous French cousins close to my age who have yet to secure any kind of stable employment, floating from one low-paid (or un-paid) internship to the next, or going back to school to obtain another little degree in the hope of finding something. My parents and siblings constantly offer to help my French cousins by sponsoring them to live and work in the U.S. There are dozens of French multinationals with headquarter offices in Dallas/Fort Worth, and enrolling at the local university isn’t at all that difficult. You would think that my French cousins would jump at the opportunity to reinvent themselves in a place that allows individuals to achieve their full potential while benefiting from the support of their Francophone relatives. So far, there have been no takers, and family gossip from France continues to entail stories of temporary internships, new job-training programs, or unemployment. And if it’s not from my relatives, from time to time my father will receive formal letters of consideration from alumni from his elite alma mater (HEC) on behalf of their children still seeking employment or even an internship wherever they can.

Actually, such letters of consideration point to a primary way in gaining access to secure employment in France. It seems that parents have an important responsibility in creating and maintaining as many connections as possible, whether through their profession or their active involvement in civic associations. Some of my cousins have done quite well, either by completing studies in the most competitive schools or by having their parents vouch for them. Without that advantage, strangers are met with skepticism by prospective employers. Still most have average degrees from average French Universities, with parents working at state-run enterprises that are already saturated with liabilities that make them averse to hiring.

This is similar to the situation found in many rust-belt areas here in the U.S. Although the decline of manufacturing doesn’t get near the amount of government assistance as it does in France, they prospered during a time where labor was in high demand, markets were less competitive, and benefits to employees seemed to expand as far the eyes could see. This golden era of lifetime and intergenerational employment in one company that sustained large middle class communities took place in the three decades following the Second World War, similar to what was going on in France during the “Trente Glorieuses”, the roughly thirty-year span of rapid economic growth the defeat of the Nazis. The bottom fell out in the U.S. during the 1970’s only to be dealt with with uninspired political leadership that hoped that price controls and mounting regulations would be adequate panaceas. The 1980’s was the equivalent in France, and the voters had put their faith in socialist president Francois Mitterand who in turn did everything to make it even harder on the French by aggressively nationalizing many of his country’s biggest companies.

What sets the general economic course of the two countries apart is the emergence in America of a political force that is protective of capitalistic development over all else. This policy was embodied by Reagan, and in Britain by Thatcher, and prosperity and growth trumped over any concerns of deep structural changes in the economy that disrupted the happy employment stability of our manufacturing sector. France is to have never had the opportunity (nor the interest) of choosing a Reagan equivalent, settling instead with the uninspired careerist Jacques Chiraq. The high level of ‘structural un-employment’ has stayed pretty constant in France for the last generation, and there is currently no serious or creative discussion on how increase employment. The pro-market voice in political affairs, a given in our country, is considered a fringe opinion more unusual to hear than the shallow theories of Jean-Marie Le Pen. When debating joblessness, the discussion seems to be about how to tweak the existing system, either by forcing early retirement, expanding the state payroll or deporting foreigners to make room for those who won’t work such jobs.

Why is radical economic liberalization of an obviously sclerotic system not considered worthwhile in re-invigorating France? Beyond the common observation that welfare states tend to grow over time and citizens desire more assistance from the state for an ever-growing number of reasons, there is an almost deeper psychological explanation: the post-war economic boom in the West was less the status quo in the natural evolution of economies than it was a fortunate anomaly. High birthrates, large un-tapped markets with few countries able to supply them, and dormant populous countries undergoing their socialist experiments (e.g. India and China) permitted large swaths of relatively unskilled workers to acquire generous livelihoods. Compared to all the other workers who obtained advance degrees and working very hard for half the wage an average assembly line worker at an automobile plant, the latter has hit the jackpot. For those who are not driven to improve, acquire more responsibility and become more versatile in their jobs, the terms that some manufacturing workers enjoy is as good as it gets.

While this ideal state of affairs only affects a dwindling minority of American workers, such a deal exists for almost all French workers. Job tenure, generous unemployment benefits and the disincentive to perform well is as good as it can get, and has unsurprisingly become a fundamental human right. What the French fail to understand is that these so-called rights are mostly based on the most fortunate and unusual economic occurrences after the War which makes it therefore inherently unsustainable. For the French socio-economic system to continue to thrive would require high birthrates, less international competition, a dynamic job-market and continued military support from an outside power (the U.S.). Only the last factor has actually held, while the first three have not come to pass. But that obviously doesn’t stop the French youth from believing that one day soon they too will enjoy the benefits of their system. They await the next jackpot where all the stars align in their favor.

I find that a high dependence on a generous social welfare system is a lot like a gambling addiction. You could lose everything and still be convinced that the jackpot follows after the next pull of the lever. France has lost its international prestige, its competitiveness and many of its people have lost hope, not to mention its ability to work. But the recent demonstrations are evidence that the French youth are still willing to pull the lever for the chance to win it all.

My question then becomes: When you’ve finally set yourself up for lifetime employment, are you excited about the future, about all the things that could be but never will because of the permanence of your position? What can you look forward to?

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