The Online Library of Liberty

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• Introduction
• Part 1: Rights, Property, and Markets
• Property Or “property Rights”? *
• “design Faults” In Locke’s Theory of Property Taint Ownership With Guilt *
• Is Ownership a Myth? *
• How to Get a Free Lunch? Just Apply For It *
• The Problem of Contract Enforcement *
• The Public Goods Dilemma *
• Trying the Free Market *
• The Statist Legacy *
• Part 2: The Common Sense of Non-economics
• The Yakoubovich Syndrome, Or Lies, Damn Lies, and Economic Policy *
• Winning Policy Battles But Losing the War Against Economic Realities *
• Paying Ourselves More of Their Money *
• The Doctrine of “unequal Exchange” the Last Refuge of Modern Socialism? *
• Corporate Managers Are They Going to Kill Capitalism? *
• When the Economy Needs Morals *
• The Political Economy of Force-feeding *
• Hostile to Whom? *
• Mannesmann’s Courtesy Could Prove Rare *
• Part 3: French and Russian Tragicomedies
• Can Putin Build a Real Economy From Oil and Rigor? *
• Russia and the New Europe Growing Apart *
• Russia Hopping Along On Clay Feet *
• The French Tragicomedy *
• How the French “social Model” Could Self-destruct *
• A Little Bit of History Repeating *
• There Is No French Exception *
• The Hobbling of Private France *
• Part 4: The Capitalism They Hate
• The Capitalism They Hate *
• Striving to Get Richer and Poorer *
• “bread and Circuses” In the Modern Welfare State *
• Who Minds the Gap? *
• Float Or Sink? the Millstone of the “social Market” In Germany *
• How Germany and France, the Sick Men of Europe, Torture Themselves *
• Shall We Borrow From the Children? *
• Low Pay *
• Freedom to Strike Or Right to Strike? *
• Part 5: Creating Unemployment
• Stamp Your Feet and Demand a Fair Deal *
• Paternalism and Employment *
• The Things Labor Unions Are Up to *
• The Instability of the Welfare State *
• Some Bad News Could Be Good News *
• Built-in Unemployment Social Protection Costs More Than It Is Worth *
• Let ’s Throw This Model Away *
• How to Stifle Employment By “social Protection” *
• Workable Alternatives *
• A Tale of Two Models *
• A Vicious Circle of Social Kindness *
• Part 6: The Future of Europe
• The Economic Consequences of a United States of Europe *
• A Giant Free-trade Area Or a Political Counterweight to America? *
• European Crosscurrents and the Federalist Drift *
• How Confederacy Could Turn Into a Federal Superstate *
• Majority Rule By Any Other Name *
• What Now For “europe”? Why the People Failed Their Masters *
• Free-riding On the Euro *
• Some Democratic Economics *
• The Soviet Legacy *
• A War of Attrition Between Economic Reality and Political Dreams *
• A Brightening of the Economic Skies Over Brussels? *
• Turkey Knocking On Europe’s Door *
• Turkey and the Eu Club *
• Europe More Secular and More Islamist *
• A Bill of Rights Europe Did Not Need *
• Europe’s Social-democratic “government” *
• Power Corrupts, So Let ’s Make It Less Absolute *
• Part 7: Economics, True and False
• On the Economics of Protecting Employment *
• The Costly Mistake of Ignoring Opportunity Costs *
• “globalization” and Its Critics Mutual Gain Vs. Cloud-cuckoo Land *
• Are High Oil Prices a Form of Exploitation? *
• Immigration What Is the Liberal Stand? *
• More Nonsense On Stilts Mr. Bentham Is At It Again *
• Risk, Value, and Externality *

THE HOBBLING OF PRIVATE FRANCE*

In the lengthening list of French scandals involving money and influence-peddling—whose perpetrators tend to come to little harm—the case of Jacques Attali is among the least grave but the truest to form.

Mr. Attali was, and remains, a leading “ideas man” of the Socialist Party, having authored some thirty or so books about every imaginable subject, but mainly about what passes for philosophy and economics in Paris. He’s also a most agile denizen of the corridors of power.

Fairly early in his career, he was found to have lifted large chunks from Ernst Juenger’s Hourglass and deposited them into his own 1982 work, History of Time, without the benefit of quotation marks or attribution. Anywhere else, plagiarism of such audacity would have earned him derision and dishonor first, obscurity afterward. In France, people just shrugged. His publishers went on publishing him. A confidant and close aide of then president François Mitterrand, Attali continued to enjoy an ever-growing role and influence.

When he got too close to Mitterrand for the latter’s comfort, he was kicked upstairs into one of the prize positions in the international bureaucracy. His alleged lavish spending of public money for private luxuries, serious questions about his expense account and about his reign in general, finally led to his resignation as head of the European Bank for Reconstruction and Development. Opinion outside France regarded him with outrage, within France with indulgent indifference. The scandals at the EBRD have done him no more harm than the earlier plagiarism. Though belonging to a Socialist Party clan that’s not exactly at the center of power at the moment, he is still part of the political establishment. Most recently, he has been advising the government on how to reform the country’s elite graduate schools.

COLLECTIVIST SUBMISSIVENESS

Mr. Attali’s invulnerability to discredit and dishonor is not untypical of the way France, in contrast to most other civilized countries, treats its public men. No illusions are harbored about their devotion to the common good, no high standards are set for their probity. It is well understood that sitting on the seats of power confers privileges, and believed that honesty in a politician changes things only marginally if at all. There is in France an astonishing readiness to treat the arrogance and corruption of the ruling elites with indulgence and the exorbitant weight and authority of the state with acquiescence and indeed with positive approval. This collectivist submissiveness of a people that likes to think of itself as individualist is odd. Why does the private France so willingly put up with the public one?

For private France is bright, has better than average skills, taste, and manners, and a civilized life style. It is sober, thrifty, and hardworking. Despite its limited understanding of the outside world, it is doing remarkably well in international competition. Labor relations are as good in the private sector as they are ghastly in the public one. The private France carries on its back a largely parasitic political authority that maintains its power by extensive redistribution, siphoning off and spending half of what the private France produces. Costly social provisions bring forth the national shame of chronic double-digit unemployment. The unemployed, living on the dole, swell the battalions of public France, securing a built-in majority for ever more social provision. All this private France must bear.

There are deep historical roots of the enduring relation between a burden-bearing and yet vital private, and a parasitic public, France. Power in France has been gravitating from the provinces to the center, from subject to king, at least since the thirteenth century. Cardinal Duprat, the Duke de Sully, Cardinal Richelieu, and Jean-Baptiste Colbert are but the outstanding names in an unbroken line of strong centralizing ministers. When the country was bled white and impoverished by the wars of Louis XIV, a potential turning point and a revolutionary situation was reached. State power under Louis XV and XVI began to weaken. It was at this point that the wrong turn was taken. While the English revolution of 1688 and the American one of 1775 shifted power from the king to the individual, the French Revolution of 1789, whether by accident or by “historical necessity,” did the exact opposite. With great violence, the revolution forced society back into the great and age-old centralizing, collectivist mold of the Valois and the previous Bourbons. There have since been no independent structures of countervailing private power in France; the monopoly of state power is undisputed.

History dealt one further blow to the chances of a freer society emerging in France. From the late seventeenth century to its final defeat at Waterloo in 1815, France fought a second Hundred Years’ War for supremacy in Europe (which at that time meant world supremacy). This autocratic design, pursued by a great administration and great armies, was cruelly frustrated by the ships and the money of prosaic England, the incipient liberal free-trader.

Craving greatness and admiration, the French have never forgiven the English and perhaps never will. For some obvious and some less obvious reasons, this resentment was soon extended to America. The need to rely on English and American help in two world wars has not helped matters either. Much of the antipathy against the “Anglo-Saxons” is reflexive, visceral, and hardly conscious. Its effect, however, is that “Anglo-Saxon” ways are automatically opposed as a matter of patriotic self-assertion, and “liberalism” has become a near-obscenity.

FOISTING FREE TRADE

With a straight face, Maurice Allais, the only French Nobel Prize-winning economist, has asserted in a recent series of articles that the cause of unemployment is the trade liberalization that he says has been foisted upon France since 1975. With an equally straight face, others (though, to give them credit, not all economists) assert that the compulsory shortening of the workweek will reduce unemployment. Liberal arguments and policy proposals are seldom understood, let alone accepted, in this environment.

The effect of having a huge, monopolistic state hovering above civil society, feeding on it, yet being accepted by it, is manifold and often veiled. Some aspects, though, stand out clearly enough. There is, as Marxists like to put it, an “internal contradiction” between the private and the public personality of the country. The private one would like to get on with its life, prosper as modern countries with reasonably free economies generally do, keep what it earns, be rid of the intellectual terrorism of political correctness, and send its children to decent schools of its own choice.

This same private France clings however to obsolete beliefs about the indispensable role of the state in protecting national independence from the evil forces of global caplitalism and wants the state to see to it that the weak are not “trampled under” by the strong. This mission is concocted from second-rate theories, but the first-rate ones do not go down well in France. Once the mission is entrusted to the state, up springs the public France, subjecting all to the priorities of dirigisme and its attempts at redistribution.

Swept along by the present worldwide upswing, France for the time being manages to eat its cake and have it too. It makes some inglorious U-turns but comes to no major grief. No law of nature tells us that this talented country cannot go on muddling through, “internal contradictions” notwithstanding. It is a fair conjecture, however, that anything better than muddling through can emerge only from a passage through the purgatory of failure, humiliation, and disgust. It was this type of experience that led to the rejection of dysfunctional political regimes in Britain in 1979, the United States in 1980, and the Soviet ex-satellites in 1989. Does one always have to put one’s hope on despair and calamity?

PART 4

The Capitalism They Hate

[* ]First published in the Wall Street Journal Europe, April 4, 2000. Reprinted by permission.