Sunday, March 19, 2006

After all, the first verb to learn in French is "to surrender"

Previous entries on France:
Hardly something France should be proud of
Nice unemployment if you can get it
French winemaker terrorists
What would Bastiat say? Part II

I haven't yet blogged about the latest riots in France (what a sad state of affairs that one uses "latest" to describe those violent "protests"!), one of many stories I've wanted to discuss but just haven't had time for. I've again been getting extremely fatigued and have been needing increased amounts of rest.

The latest news is that French police used water cannons and tear gas to subdue the latest episode of the riots. Young French, afraid of a new labor law, have been rioting for a couple of weeks now. Such "protests," regardless of who and why, will continue until French authorities learn that they must subdue rioters immediately and without mercy. The regular strikes (especially by public workers) are one thing, but French police are not reacting quickly and effectively enough to quell real violence. Whoever riots next will know that they can do more than block streets, and that they can largely get away with it. They can torch cars and shops for a few days while police think of what to do, and they can barricade themselves in the Sorbonne and merely be "chased" out. Perhaps "react" in French has the implication of verbal condemnation for the first several days, before you actually do something. To be fair, though, I was critical of the LAPD's slow response to crack down on "Rodney King" rioters, who even then-mayor Tom Bradley described as opportunistic hoods.

Instead of reinforcing that the right to protest does not include the right to destroy others' property, will the French government give in and promise more social programs, like it did after last fall's Muslim protests? Such capitulation will merely perpetuate France's economic and social stagnation. Or, to apply some Austrian economic thought, should France be recognized as an economic failure? Permitting it to die, then, would not be a bad thing. Liquidating much of France's government, and selling it to private investors who could set the country straight, would go a long way.

And why are the students rioting? They fear the new labor law that will make it easier for employers to fire people younger than 26. Unless the government again surrenders by withdrawing the proposed law, then possibly as soon as April, French law will finally recognize the employer's right to fire someone they don't want to keep, for any reason. Young employees' first two years will be a kind of probationary period, meaning they will actually have to work their fesses off to keep their jobs. Is there any wonder why French unemployment is still around 10%? As the article notes, which was obvious to anyone who understands real economics, French employers are afraid to hire. But I think it's not just fear of hiring young people who turn out to be bad workers, but employers' lack of confidence in France's future.

Take a half-kilo of Gallic reliance on social services, throw in a clove of government-enforced "job security" and other labor laws, then add just a dash of government capitulation after every riot. Until last year, you could use a pinch of the government-mandated 35-hour work week. The beauty of this dish is that it also adds its own synergetic flavoring: all the seasonings interact to create a new one, economic stagnation. The recipe used to call for letting the mixture sit and turn rancid, but in recent years, it's been heated by Muslims who burn synagogues (long before last fall's riots).

Alex Tabarrok was too kind in his analysis at Marginal Revolution, though he did give a great quote: "In my opinion, the Sorbonne students need a little less Foucault and a little more Bastiat." Actually, all of France could use more Bastiat, and a heavy dose at that. Who knows, some of these students, since they're destroying stores as well as cars, might think their actions will boost the economy. I suggested last November that Krugman could write about the economic boom that would result from France's riots last fall -- after all, he's the one who talked about an economic boom from rebuilding after 9/11. My slight twist of his words, which do not at all alter what he originally said, hold true for the latest events:

It seems almost in bad taste to talk about dollars and cents, or in this case, euros, after an act of mass rioting. Nonetheless, we must ask about the economic aftershocks from the last several days' horror.

These aftershocks need not be major. Ghastly as it may seem to say this, the rioting -- like the original one in 1968, which brought an end to France's illusions about its society -- could even do some economic good. But there are already ominous indications that some will see this tragedy not as an occasion for politican reform, but as an opportunity for political profiteering in the name of national unity. About the direct economic impact: France's productive base has not been seriously damaged. Its economy is sufficiently large that the scenes of destruction, awesome as they appear in news photos, are hardly a pinprick. Nobody has a euro figure for the damage yet, but I would be surprised if the loss is even a calculable fraction of a percent of France's annual economic output, let alone wealth -- hardly comparable to the material effects of a major earthquake or hurricane, such as we've seen this year.

It's not easy being so hard on France, but at least for me it's genetic. Through my father's parents, I am one-fourth French and one-fourth German. I like to joke that, every so often, part of me likes to beat up one of my other quarters.



Anonymous Brad Warbiany said...

You may want to check out this entry at Coyote Blog... If nothing else, he gives a new name to what the Europeans are trying to create: Indentured Employertude. If you make the mistake of hiring someone who is a detriment to your business, that's too bad, because you're not allowed to fire them. Is it any wonder they're so afraid to hire?

Tuesday, March 21, 2006 11:36:00 AM  

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