France is a home of great museums, cuisine, wine, culture and beauty. But in 2016, the Fifth Republic is also a realm of economic gloom.
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The overriding problem is France’s long flirtation with a dystopian ideology: socialism.
Providing hyper-regulation alongside efforts to grow a sclerotic government, French socialism has required high taxes on the most productive private businesses. But in recent years, business owners have increasingly decided to close their doors and move abroad. Consequentially, France’s capital generating capabilities have diminished, while its structural inefficiencies have grown.
The statistics reflect this. France’s youth unemployment rate is near 25 percent. Its labor participation rate is a paltry 56 percent (the U.S. rate — poor enough to raise major concerns — is better at 62.5 percent). Government spending accounts for a massive 57 percent of France’s GDP. Over the last 10 years, France’s economy has grown at a pathetic average annual rate of 0-0.5 percent. Last but definitely not least, France’s debt-to-GDP ratio is now 96 percent, and is forecast to top 100 percent next year.
But now reform efforts are underway. Introducing economic-growth focused programs, President François Hollande wants to empower businesses to hire and fire. Still, not everyone is happy. Protesters have blocked fuel depots, shut down parts of the transport network, and fought pitched battles with police officers.
France’s General Confederation of Labor (CGT) orchestrates the demonstrations and work stoppages. The CGT is a union of immense power and ideological intransigence. With roots in communism, CGT leaders not only oppose free market competition, they believe that competition is a mortal sin. But in more selfish personal terms, CGT leaders want their members to retain high wages and barriers to external competition. They don’t care that the cost of this choice is France’s decline. And immensely powerful, the CGT may yet succeed.
It is CGT’s active potential to bury a great nation’s future to which Americans should pay notice. As Opportunity Lives has shown, both Bernie Sanders and Hillary Clintonpromise that if elected president, they’ll dramatically boost the power of big unions like the Service Employees International Union.
So let’s consider what that would mean for the economy. For a start, consider those states like Illinois and Pennsylvania, where Americans are already subjugated to a union’s right to receive fealty. They speak to the damaging federal economic course a President Bernie or Hillary would chart. Big Union states already require individuals to pay compulsory fees to access employment. This is the enforcement of toll booths against individual opportunity. And contrary to union claims of supporting workers’ rights, these tolls represent modern feudalism.
Of course, this is not to say that worker rights do not require government protection. On the contrary, we must ensure individuals have recourse to recover unpaid wages, and to have contractual rights upheld, and (absent explicit consent) to find protection against dangerous working conditions. It’s also true that unions have done well for America. Indeed, while the early industrial era brought wealth and opportunity to the West, our labor laws were often too weak. Contemplate how too many boys and young men suffered in the chimneys of Victorian England.
But arguing that the historical role of unions is similar to the situation today is simply wrong. In Texas, for example, it is easy enough to do business and pursue profits that the state has weathered the oil price downturn. Texas continues to attract investment and talent because the state does not throw up obstacles to individual aspiration. And it’s a trend that understandably concerns politicians in California!
Similarly, in South Carolina, tax incentives to attract high-skilled manufacturing jobs have led to a boom in associated professional services firms, employment opportunities and economic growth.
Then there’s Wisconsin. Long a bastion of big union power, Republican Gov. Scott Walker has attracted national attention by shaking up the state’s labor laws. His ambition is to lower outlays for taxpayers, to improve access to employment, and to induce outside investment. And while it will be a matter of years until the statistics show whether Walker’s policy is working, there is no doubt that he’s already scored a major victory for Wisconsin. That’s because no Wisconsinite is now compelled to pay union dues in return for a job. If nothing else, Walker is keeping hundreds of dollars in the hands of families and out of the hands of union bosses.
All of this means that while the fight against poverty is far from over, right-to-work states prove that workers and business owners can best prosper via mutual support rather than conflict. Correspondingly, the notion that individuals seeking work must kneel in supplication to the throne of union dominion is inherently immoral. As in today’s France, that path allows self-interested union leaders to enrich their membership against all others in society. Moreover, as the current chaos on French streets attests, where the rights of some rise above those of others, social fracture is inevitable. The story goes that Marie Antoinette met Parisians starving and without bread, she remarked, “Qu’ils mangent de la brioche.” Let them eat cake. And while the authenticity of that statement is questionable, the morality of the words rings true in 2016.
In France, we’re seeing the rights of common men and women in contest against perverse union power. It’s a lesson to which all Americans should pay heed.