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The French Illusion
Independent Institute ^ | April 12, 2006 | Alvaro Vargas Llosa

Posted on 04/12/2006 6:22:29 PM PDT by RWR8189

You would think, by looking at the images of millions of French people in the streets of Paris carrying banners saying "We shall never surrender," that France was on the verge of suffering an invasion. And yet the massive mobilization is all about a law that would allow companies to fire workers under 26-years old within two-year period of being hired.

Big protests have taken place for weeks around the country. Many of them have been extremely violent due to infiltration by the "casseurs" (thugs who specialize in trouble-making) and they have been joined by a broad spectrum of society that feels something precious is in peril. It is not surprising that the European press has devoted enormous attention to this social agitation for the last four weeks. More significantly, even the American press, not usually too concerned with matters from overseas unless they have direct relation with U.S. interests, has thought the issue relevant enough to give it ample coverage.

What is really happening in France is the breaking up of a cultural illusion. For decades, the French have lived under the pretense that their parasitical social model could last forever. It's basically a model in which a small segment of society produces wealth and a much larger segment lives off that wealth through a vast system of government transfers that millions have come to take for granted. In the recent demonstrations, one of the words most frequently used was "security." For most demonstrators, "security" means the continuation of a social model in which you either work for the government or you work in a private job that is heavily protected by the state, while you receive a wealth of social services and cradle-to-grave entitlements that come pretty easily to you.

This model was born out of the political and social platform of the "Résistance," the underground resistance movement against the Nazi occupation, which was very heavily influenced by the Communist party. In the 1950s and 1960s, the period of heavy industrialization, this welfare model was affordable because of the great expansion of France's economy in a dynamic European context. But the "glorious three decades," as they are called, came to an end in the 1980s. Ever since, France has been living a fantastic illusion. There are now close to four million people without a job, and unemployment among young people is as high as 25 percent. In the poorest neighborhoods around the big cities unemployment reaches 45 percent. The public debt has gone from 20 percent of the nation's GDP to 66 percent in just fifteen years. Although the big corporations continue to be successful worldwide, millions of small and mid-sized companies, the ones that create jobs in any economy, are suffocating under a labyrinthine regulatory system and a mountain of taxes.

In the last few years, there have been many signs that the illusion was at breaking point. The riots in the French "banlieues" last year were one of those symptoms. Today's massive protests are another. What these events mean is that the first victim of the French social model is "security"--the very concept those who desperately want to cling to it brandish in their demonstrations. In a society with a real sense of security, a timid measure like the one taken by the French government would not cause much of a stir.

The problem faced by would-be reformers is two-fold: entire generations have been brought up to believe their model was untouchable and, as usual, the benefits of the present situation are more concentrated than the costs so those who feel threatened by attempt at reform are quicker to organize and take to the streets than those who are producing the wealth that the system is squandering.

It is unclear at this point whether the government will carry on with the reform or whether, as President Chirac has hinted, the authorities will dilute its most important provisions. Ultimately, France should have the same set of rules for everybody without having to create a special law for young workers. But the level of resistance to any reform is such that it makes sense to start somewhere. This reform will actually offer much greater "security" to young French men and women, because it gives companies an incentive to hire more young workers. That alone could reduce the current average unemployment rate that now stands at 10%. "I want to buy things on credit; I want to be able to rent a good house; I want an indefinite contract in order to lead a quiet and secure life", said an 18-year old girl during one of the demonstrations, according to the Spanish daily El País. That, precisely, is what the social model she is fervently defending is denying her.

 

Alvaro Vargas Llosa is a Senior Fellow and director of The Center on Global Prosperity at the Independent Institute. He is the author of Liberty for Latin America.


TOPICS: Business/Economy; Editorial; Foreign Affairs; Government; News/Current Events
KEYWORDS: eu; france; french; frenchriots; riots

1 posted on 04/12/2006 6:22:33 PM PDT by RWR8189
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To: RWR8189
"...images of millions of French people in the streets of Paris carrying banners saying "We shall never surrender,"

Shouldn't this be posted on the FR Sci Fi section?

2 posted on 04/12/2006 6:30:58 PM PDT by Radix ("So long ago" My German neighbor complaining about people remembering the Holocaust.)
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To: RWR8189
So employment is hard to come by for minorities and security blanket jobs are the right/priviledege of the better educated and better connected.

This sounds like a way to keep the muzzies from assimilating. As in muzzies go home. A delicate balance but effective- nevertheless.

The most important thing about living in france is to be heavily insured. Porperty damage is the fallout for the current status quo.

3 posted on 04/12/2006 6:31:54 PM PDT by x_plus_one (Wensleydale is best)
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To: RWR8189
this welfare model was affordable because of the great expansion of France's economy in a dynamic European context.

Over here we call it a giant Ponzi scheme. - tom

4 posted on 04/12/2006 6:33:06 PM PDT by Capt. Tom (Don't confuse the Bushies with the dumb Republicans - Capt. Tom)
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To: RWR8189
It's basically a model in which a small segment of society produces wealth and a much larger segment lives off that wealth through a vast system of government transfers that millions have come to take for granted.

That sounds very very familiar

5 posted on 04/12/2006 6:35:55 PM PDT by Graybeard58 (Remember and pray for Sgt. Matt Maupin - MIA/POW- Iraq since 04/09/04)
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To: RWR8189
That, precisely, is what the social model she is fervently defending is denying her.

How much does France suck.

As much as we do today.

Like a black hole.

6 posted on 04/12/2006 6:36:02 PM PDT by mmercier (of liberality and niggardliness)
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To: Radix
Shouldn't this be posted on the FR Sci Fi section?

Whether you are a an EVO or a CRIDer, this clearly is an example of self-extinction! It has to be on the Crevo threads ;)

7 posted on 04/12/2006 6:48:48 PM PDT by freedumb2003 (Don't call them "Illegal Aliens." Call them what they are: CRIMINAL INVADERS!)
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To: RWR8189
"I want to buy things on credit; I want to be able to rent a good house; I want an indefinite contract in order to lead a quiet and secure life"

classic isnt it? no wonder the legacy of the froggies is hands in the air - only the hands from this loser are palm up and out horizontally versus vertically.
8 posted on 04/12/2006 6:53:07 PM PDT by Zrob (freedom without lies)
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To: RWR8189

There is no France. It's just a big country of people whom Chuck Norris has scared so badly, they surrender to everything.


9 posted on 04/12/2006 6:53:17 PM PDT by pcottraux (It's pronounced "P. Coe-troe.")
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To: RWR8189
Good analysis by Vargas Llosa. France should be alarmed that public debt is 66 percent of GDP. So should we. The USA's public debt is 65 percent of GDP (2004 est.) Both countries are spending beyond their means. The difference is that the USA does not have the same structural rigidities that France has, and the USA has at least some recognition (and growing) of the Islamist threat.
10 posted on 04/12/2006 7:13:23 PM PDT by Malesherbes
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To: mmercier

What you say has a lot of truth in it.

We like to laugh at the French, but we (America) have also grown incredibly soft.


11 posted on 04/12/2006 7:13:50 PM PDT by keats5
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To: RWR8189
For decades, the French have lived under the pretense that their parasitical social model could last forever. It's basically a model in which a small segment of society produces wealth and a much larger segment lives off that wealth through a vast system of government transfers that millions have come to take for granted

Perhaps 10% unemployment is not enough of a lesson for the French and especially the demonstrating unemployed. Perhaps 25% unemployment amongst the young is not enough for the French to know that their socialist economic model is badly flawed.

So, I would encourage their leaders to go ahead and surrender to the ignorant unemployed demonstrators. Perhaps one or two years from now, when the unemployment rate in France reaches 15% or 20% they'll realize that some very drastic measures need to be taken. But, if the lessons even then have not been learned, then France and other EU countries that think like the French should be allowed to sink into 3rd world status.
12 posted on 04/12/2006 7:16:31 PM PDT by adorno
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To: RWR8189
tokhe straav'

Which, for those of you not Star Trek fans, is Klingon for 'willing slave'

13 posted on 04/12/2006 7:56:25 PM PDT by Fatuncle (Of course I'm ignorant. I'm here to learn.)
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To: RWR8189

The $64000 question is... are WE going to learn anything from this, or will we keep going down the same path - we're not that far behind.


14 posted on 04/12/2006 8:20:59 PM PDT by aquila48
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To: RWR8189

France today is Like Britain in the 1970s during the winter of discontent. Far, far too much union power and an attitude from the population that the state owes them a living. They need a Thatcher figure to shake society to the core if they are going to really be able to compete in the new millenium.


15 posted on 04/13/2006 1:21:49 AM PDT by Brit_Guy
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