Wednesday, June 8, 2011

French Neoliberalism

Henry Farrell, borrowing from Pepper Culpepper, makes a good point:


This [the idea that France has a relatively large state-owned sector in its economy] isn’t exactly wrong – there is still a quite significant state-owned sector in France. But it isn’t exactly right either. Pepper Culpepper tells the story in Quiet Politics and Business Power. His argument goes as follows. First – the 1980s saw the beginning of a large-scale privatization of state owned companies in France. This did not lead to an immediate embrace of neo-liberalism, but instead to the construction of networks of firms with cross-ownership – so-called noyaux durs – to resist foreign takeovers. However, these networks effectively collapsed in 1998 and 1999 leading to a major change in the organization of French business.
The result has been not only an openness among the French business elite to hostile takeovers that would be unimaginable in Germany, but a desire to open up other European markets for corporate control so that predatory French firms can more easily expand internationally. As Culpepper argues:
These interlocking French shareholdings among large French firms were replaced by the growing weight of foreign (mostly British and American) institutional investors, which by 2003 owned more than forty percent of the outstanding shares in CAC-40 companies. … As Michel Goyer has demonstrated, the influx … has been dominated by mutual and hedge funds, not pension funds.
French politicians like nothing better than to proclaim their opposition to free markets … Yet the reality of markets for corporate control is often far removed from the rhetoric of political leaders.

RSA Won't Go Away, and the Younger Generation

When Laurent Wauquiez launched his trial balloon about modifying the RSA to require work in exchange for welfare, I said I was sure that a smart fellow like Laurent wouldn't have gone off the reservation on his own. And so it seems: he didn't. Significantly, it's Jean-François Copé who has picked up the political football and run with it, after Wauquiez was tackled by Fillon. So we can see this episode now for what it really was: another skirmish in the war for control of the UMP post-Sarkozy. There is no love lost between Fillon and Copé, and Wauquiez has apparently decided to sign with Copé's team. That's his business, though if I were Wauquiez, I wouldn't buy a used car from Copé, if you know what I mean, but I'm not sure either that I'd buy a new car from Fillon, who of course would never dirty his hands in the used car business. If you're going to make a career on the right, you have to take it as it comes, however, and Copé, alas, is incontournable.

My own preferred jeune espoir for the right is Bruno Le Maire, who has been making his way quietly over at Agriculture. I enjoyed his memoir of life between Villepin, Sarkozy, and the high German literature he prefers to read in the evening. He managed to portray himself convincingly as a pol who hadn't yet sold his soul for un maroquin, which probably means that he will never become president--it's that "fire in the belly" thing, as we say in America. In French, it's all about quand on se rase le matin. Wauquiez evidently spends more time shaving than Le Maire. On the left, the inveterate shavers are clearly Valls, Montebourg, and Hamon, who, oddly enough, all bear a certain resemblance to one another. Curiously, Le Maire and Wauquiez are énarques, while the three Socialists are not. I say curiously because the PS has been dominated for a generation by graduates of the ENA, whereas Sarkozy's animus against the school is not always concealed.

Anyway, back to the RSA: Le Figaro runs down the practices of other European countries in regard to what political scientists like to call "labor-market activation," a polite euphemism for making life for the unemployed even more unpleasant than it already is, in the hope that they might not hold out quite so long for their preferred line of work or desired wage level.

Comparatively speaking, it's fair to say that Copé's proposal is fairly mild. But the principle of the thing is still galling--these are the people in France whose lives are "most precarious," as Fillon pointed out in his rebuke to Wauquiez. Principle aside, there is the question of efficacy. For moralists of the right, it may seem only right and desirable to punish the unemployed for their idleness, but if punishment not only fails to get them back to work because there are no jobs but also costs the state (an estimated 1.8 billion annually for Copé's proposal) to do jobs that wouldn't seem important enough to pay for if there weren't so many long-term unemployed, then perhaps it's not such a good idea. Calling the mandatory work requirement an "insertion contract" doesn't guarantee that insertion actually awaits at the end of the line; on the other hand, comparing it to the STO, the labor conscription practiced by the Germans under the Occupation, as Mélenchon has done, strikes me as a tad rhetorically excessive in the other direction. A little imagination might help to reduce the sting: in the 1930s the American WPA employed the unemployed to, among other things, compile a wonderful series of guide books to every state of the Union. Just sayin' ...