Acton Commentary

French 'Security' and Economic Reality


French students took to the streets again this week in a show of solidarity with themselves. These are the Gallic rites of Spring — protests and demonstrations. Student unrest comes and goes, but the disturbing thing about the student demonstrations this year is that they represent deeper and wider problems that extend far beyond a few cities in France: the spread of economic ignorance and moral apathy.

The French student demonstrations were sparked by Prime Minister Dominique de Villepin’s proposal to amend existing labor laws and implement the “first job contract,” a less restrictive labor policy for young, inexperienced workers. The measure would apply to those under the age of 26 and allows French companies to fire these workers within the first two years of employment.

Existing labor laws in France make it difficult to fire anyone for almost any reason — even during a period of economic downturn. It also discourages hiring during times of economic growth because employers know that hiring a new worker can cost millions of dollars in salaries and benefits over time. Those who suffer the most from this rigid labor law structure are the young and inexperienced. That helps explain France’s high unemployment rate of about 10 percent. For young people it is closer to 20 percent, and in the poor neighborhoods unemployment hovers around 40 percent.

Students from all over France, including elite universities like the Sorbonne, are protesting Mr. de Villepin’s “first job contract” because, they claim, it takes away job security and exposes them to precarite – a French word that means something like precariousness or instability. In plain English, it means risk. Apparently, French demonstrators fail to recognize that their potential precarite translates into actual unemployment and insecurity for others — most notably the underclass.

The Financial Times reported that Mr. de Villepin expressed regret at the “misunderstanding and incomprehension” of his ideas by the public. Incomprehension is right: They don’t understand economics. The strict labor laws remove incentives for companies to hire, and are a dis-incentive for entrepreneurs who need flexibility to cope with the uncertainty of a new enterprise.

But there’s more to it than merely an ignorance of economics. The preoccupation with the self and the obsession with securitythat leads young people to protest productive labor laws in the streets reflect deeper problems in society. This preoccupation, while pronounced in France, exists in other countries as well, including the United States. Here are a few of the problems:

Failure to recognize trade-offs. French protesters and their sympathizers don’t understand trade-offs in economics. They want it all: job security, full employment, economic growth, universal prosperity, and entrepreneurial innovation. Paradoxically, they are unable to understand both scarcity and economic growth. They incorrectly see the economy as a zero-sum game, yet are simultaneously unwilling to accept trade-offs as a consequence of scarcity.

The lack of prudence . I mean prudence in its classical understanding: the ability to see reality as it is and act accordingly. This flight from reality explains the inability to see trade-offs is part of a larger economic problem.

Failure to take personal responsibility. This is an interesting paradox in France, the home of existentialism. A central message of the existentialist doctrine is freedom and no excuses, yet French young people want the state to be responsible for their future.

Lack of an entrepreneurial spirit. The unwillingness to tolerate risk and creatively launch new businesses is rooted in a cultural problem. This was pointed out by Samuel Gregg, director of research at the Acton Institute, in an editorial in the European Wall Street Journal last year. A lack of entrepreneurial spirit, he said, is connected to a lack of hope which, in turn, is a result of the practical atheism that dominates Western European life.

Boredom. French young people, like so many others, are just plain bored. People need something to live for besides security, six weeks vacation, and the pursuit of hobbies. Young people, especially, need opportunity, risk, and the possibility for heroism. But in a culture that relegates truth, beauty, and goodness to subjective whims, and ridicules classical virtues as arcane, it is not surprising to see young people taking to the streets looking for meaning.

French poet and dramatist Paul Claudel once wrote that youth is a time for heroism and sacrifice, not pleasure seeking. You wonder how he would view the student demonstrations in France today, and the youthful cries for more government protection. The false security of the nanny state drains commercial activity of its energy and appetite for risk, which are central to the entrepreneur; and hope and the will to seek for higher, transcendent truths, which are central to a flourishing human life. In a desperate fear of precarite , humanity loses its joie de vivre