TCS Daily


Fed Up in France

By Hans H.J. Labohm - April 7, 2006 12:00 AM

Fed Up. That is how the title of a book just published in France, Ras le Bol, translates into English. Its subtitle explains: "The imminence of the new revolution in France." The book's author is Denis Castel, a pseudonym for someone who works in the French financial sector. It is a novel, but at the same time it is a vivid x-ray snapshot of the disease that has plagued French society for so long, as well as a sort of primer on the do's and don'ts of public finance.

Ras le Bol tells the story of a middle class bookkeeper, Puysange, in a small enterprise who tries to make ends meet for his family and who commutes daily to the city. When confronted with the umpteenth public transport strike, he loses his temper. He mounts a scaffolding at a local train station in one of Paris' suburbs, crying out his rage about the civil service and its trade unions with their excessive claims, which the government does not dare to resist. The next day, the TV tracks him for an interview, after which he becomes the darling of the media. At the same time he loses his job because of a merger of his company with a foreign competitor. Subsequently, he establishes a new political party, "Movement for a New France", which gets massive support when the government is not able to service its debts anymore. The financial problems become so serious that the state has to impose an extra tax on all its citizens, which gives rise to widespread strikes. In the turmoil, the president resigns. The second French revolution becomes reality when the populist Puysange succeeds in winning the elections -- without any bloodshed -- and, by cutting expenditures, putting France's public household in order again.

Perhaps Castel's book is too populist for French intellectuals and the media, which are predominantly left-wing. That is probably why it has received hardly any positive response in the Paris press. However, it was reviewed favorably in regional newspapers.

In his book Castel captures the feelings of uneasiness which haunt the ordinary French citizen, squeezed between declining living standards and job insecurity on the one hand and high taxes and social security contributions on the other. Economic growth is low. Public debt has shown no inclination to go down. Instead, it has incessantly gone up. For 30 years running, the public sector spends 10-20 percent annually more than it collects in taxes. France is a state suffering from obesity.

There are signs that Castel's novel is being overtaken by reality. The government has acknowledged that France's debts are more serious than what is reflected in official statistics. Finance Minister Thierry Breton recently declared that the French public debt amounts to more than €2 trillion. This figure also includes the pension liabilities for 5 million public servants. That is 120 percent of GDP, instead of 66 percent (the previous estimate), which works out to some €36,000 per head. However, the bad news does not end here, because we have the awkward habit of deceiving ourselves by expressing public debt as a percentage of GDP. No private citizen would do a thing like that. He or she will always compare personal debt with (annual) personal income. Since the debt has to be serviced only from government revenues and not from GDP as a whole, this custom understates the real public debt burden. In the case of France, public revenues amount to approximately 50 percent of GDP. So, following this line of reasoning, it could be argued that the real national debt burden is twice as high: 240 percent.

Castel particularly addresses the civil service ("service publique"), which in France by far exceeds that in many other countries, and includes employees in public transport and many state-owned industries, as well as many big private companies that enjoy special status. Castel describes the employees working in this sector as an over-privileged class, who unlike those employed in the private sector are shielded from competition, do not face the persistent threat of being sacked, and enjoy (indexed) pensions guaranteed by the state. Despite all of this, they are prone to strike.

The French boast about their special social model. But its costs and benefits are unevenly distributed. The employees of the public sector benefit disproportionately from it. Ultimately it is the private sector, exposed to (global) competition, which has to foot the bill for all those who enjoy the protection of the state or government-sponsored (quasi-) monopolies. In the past the "acquired rights" in the public service offset the lower wage level which prevailed in that sector. But now the public sector wages are higher than those in the private sector for people with similar qualifications. Perhaps even more importantly, however, the French social model is almost bankrupt.

So it is inescapable that France needs its own Thatcher revolution in order to curb the power of the trade unions, especially in the public sector, which are abusing their political clout to keep the French economy in a stranglehold. But there is no political force in sight which can deliver the goods. The demonstrations now crippling French cities -- sparked by a relatively minor labor reform -- show what happens when one tries.

The author of this article worked in Paris and lived in one of its suburbs for many years.

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3 Comments

Yet another...
sad page in the history of socialism. It never, ever works.

Actually, I probably shouldn't say it never works. I should clarify that it works quite well at destroying a nation's wealth, society, and happiness.

Will they turn this way?
Unfortunately, I think the french electorate will not turn to economic liberalism. The most likely contender will be the neo-faschists of Le Pen, who was the contender to the presidency last time around.
Sad, but look at all those bright frenchmen abroad: they do not feel at home in france (surely they will not stop to love france, but rather not live in it). They want to build a new and better world, but at home they find nothing but socialist, gaullist, and Le Pen. The "misery-technocratic" mood has france in a strong grip.

I wonder...
if GW and the spendthifts in congress will read the book?

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