You’ll never guess what kills welfare states, but here’s a hint: Margaret Thatcher. Give up? Per Thatcher, welfare states run out of other people’s money to spend. That’s what’s happening in France and across southern Europe now. From Pater Tenebrarum at acting-man.com:
Hollande Threatens to Ban Protests
Brexit has diverted attention from another little drama playing out in Europe. As of the time of writing, if you Google “Hollande threatens to ban protests” or variations thereof, you will find Russian, South African and even Iranian press reports on the topic. Otherwise, it’s basically crickets (sole exception: Politico). Gee, we wonder why?
They don’t like him anymore: 120.000 protesters recently turned Paris into a war zone. All Hollande wanted to do was to loosen a handful of labor market restrictions (it’s too little too late of course). France’s labor legislation is among the most convoluted and restrictive in the entire nominally capitalist world. It has created enormous institutional unemployment and is a major contributor to France’s inexorable economic decline (see “France’s Sacred Labor Code” for details). Photo credit: Benoît Tessier / Reuters
Given that France is under a “state of emergency” since last year’s terror attacks in Paris, it is presumably easy for Hollande to ban demonstrations by decree, from a legal perspective at least. It seems unlikely though that a ban would actually stop the protesters. What is Hollande going to do if they just continue to strike and hold demonstrations? Invade France? Arrest hundreds of thousands of people?
These protests have been going on for more than a month now. What makes this confrontation so interesting is that Mr. Hollande himself started out as a devoutly committed socialist. Upon coming to power, he immediately introduced a 75% “super-tax” on the rich (causing a number of them to simply pack their bags and leave) and let loose his far-left industry minister Arnaud Montebourg, who’s job it apparently was to spout outdated Marxist slogans and micromanage France’s industries – especially the dying ones.
For a reminder of the days when a gung-ho Montebourg set out to show the world that socialism works after all (if only it is done right!), see “Moving France toward a Command Economy”. Somehow, he failed to deliver the desired results though. Big surprise! The whole world was vastly astonished.
Unemployment in France – even at the peak of the boom, unemployment never fell below 7%. It is fairly typical for an extremely over-regulated welfare state to have a high rate of institutional unemployment, but France is certainly a standout.
Once Mr. Hollande’s popularity had fallen to such a low level that one would have arrived at a round 100% by adding his approval rating to Vladimir Putin’s (Putin scored 87%, Hollande 13%), he apparently decided he no longer had anything to lose. Montebourg and a number of other cabinet members were kicked out and replaced with more centrist “technocrats” who were tasked with getting the French economy out of its rut.
The attempt to slightly reform the “code du travail” is part of the new program. The proposed modifications are already a compromise, the result of backtracking under the pressure of all sorts of interest groups in Hollande’s own party. It took the new cabinet an eternity to even get to this point. The reforms are halfhearted market liberalization measures that can at best be called “better than absolutely nothing”.
To continue reading: How the Welfare State Dies
Reblogged this on The way I see things … and commented:
As you read note that they are talking about France — America’s future!
“People have become used to the idea that the State is their sugar daddy. Many apparently believe that it has some undisclosed, infinite stash of resources at its disposal which it can shower them with at will. The reality is unfortunately different.”