Wednesday, April 04, 2007

Debloque Box

Anthony de Jasay has a 'retarded child' named France on his hands:

For 14 years under Mitterrand and 12 under Chirac, all governments leaned left in constructing, completing and embellishing with bells and whistles the proud "French social model", reputedly the envy of other nations. It had two mainsprings. One was an almost laughably elaborate labour law, a code of over 2,600 pages which came close to giving the worker a right to his job. By making it very difficult to fire, it has spread a fear of hiring.

The other, and probably more destructive, mainspring of the "model" was a comprehensive system of insurance against sickness, old age and unemployment, financed mainly by paying workers only about 55 per cent of their earnings in cash and (by legal fiat and with union complicity) withholding the remaining 45 per cent, calling it "employers' and employees' contributions" to social insurance. ....

The comic side is the length to which the rights of the unemployed have been pushed. For instance, genuine or self-styled actors, actresses and other show-business personnel are entitled to year-long unemployment pay if they can prove just a few days of paid employment—a proof that can be procured for a little love or money. It should surely cause no surprise that over the 13 years of the scheme, the show business population drawing benefits from it grew from 41,000 to 104,000 and its cost rose fivefold.

....M. Chirac declared the "social model" sacrosanct, "Anglo-Saxon" liberalism as bad as communism and always dreaded confronting the unions. A deeper reason, though, was the "retarded child" mentality of French collective opinion.

There is a subconscious belief in France that the state does not pay Paul by taking the money from Peter. It just gives it to Paul, and Peter is not made worse off. This is so because the money sits in an imaginary reservoir and the state can "unblock" it (debloquer is the French word used to describe this happy event). Consequently, when a group gets a costly favour, when "generosity" prevails toward the needy and when 35,000 young people are hired to oversee schoolchildren and dissuade them from running riot, some gain and nobody loses. The money needed has been "unblocked" and that, surely, is what public money was for. There is always enough left in the reservoir, waiting to be debloqué.

This amazing failure to understand the realities of public finance—indeed, to understand reality—explains why in France the move of one pressure group to grab resources or "rights" is hardly ever countered by the resistance of other pressure groups that would have to bear the cost. Polls say that endlessly recurring rail strikes are approved by the majority of commuters who suffer great inconvenience from them. When tobacconists claim, and get, compensation for falling cigarette sales, everyone thinks that this is the least the state can do, and when imports make food too cheap, it is thought only fair to French farmers for the state to make it dear again. In the process, France, potentially so rich, is becoming a poor country "trying to travel first class on a second-class ticket" and feeling bewildered that the attempt does not quite work.

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