Monday, March 20, 2006

France: The First Employment Contract Protests

I have not yet decided if the French are merely stupid, or if there is some moral taint to be attached to their particular brand of stupidity.

I am not speaking about all French, of course. I am only speaking of those who are opposed to the proposed to changes in its First Employment Contract Law and have taken to the streets to engage in arson, vandalism, mayhem, and all of the other typical trappings of a riot.

[Except killing. I must compliment the French for having adopted such an aversion to killing and maiming others that their riots, though destructive to property, tend not to kill and wound people. Seriously, this is a commendable cultural trait.]

Do not get me wrong; the arson, vandalism, and mayhem are clearly crimes. However, I have written enough about these wrong in the context of promoting the rule of law as a way of ensuring that only the guilty are punished and the innocent are allowed to live in liberty and security. I do not feel compelled to cover that subject again in detail.

Here, I question is the moral quality of the stupidity upon which the criticism of the proposed changes are built.


Assume that you were wanted to lease a car. You are in a country where leasing contracts typically start at a particular rate and go up as time goes by. Furthermore, these are lifetime leases. Once you sign a lease, you must continue to pay for that car (or to arrange for somebody else to pay the lease) until you die, or the car dies.

Regardless of what happens in your life -- you go blind, you get married and have a huge family that needs a larger car, the government passes a law requiring that all cars use an environmentally better type of fuel, the type of fuel your car uses runs out -- no matter what happens, you must continue to pay the lease on this car.

You can cancel the lease if the car is destroyed, but intentionally destroying a car is considered the moral equivalent of murder.

How many cars would you buy? How long would you rely on public transportation before you buy a car?

The French First Job Contract law is much like this. When an employer hires an employee, he agrees to pay for that employee until that employee quits or dies. Yet, intentionally killing employees in order to get out of his First Job Contract is considered a moral faux pas in many circles.

French youth are faced with a staggeringly high 25% unemployment rate -- double the national unemployment rate. Those who are most badly in need of jobs face unemployment rates approaching 60%.

Businesses are reluctant to create new jobs in France where they have to sign these legally required employment contracts. They would rather create jobs in countries that have more flexible labor rules -- such as India, China, and the United States.

To deal with this problem, the French government proposes a change in the law. A company can hire an employee under 26 years of age for up to 2 years without being obligated to provide salary for life. If the employee makes it through two years, the lifetime guaranteed employment option kicks in. The hope is that this flexibility will allow France to attract a few more jobs (and tax revenue that can then be used to provide medical care and education to the citizens of France).

French youth -- those same people who have no jobs -- are rioting over this change. They want to keep the promise of employment for life. Only, what they are defending in fact is widespread unemployment.


Imagine that you own a car that has qualified to enter a major race. Before the race begins, you are required to program your car with the specific instructions determining all of the car's changes in course and speed before the race even begins. Everybody else in the race uses a driver with the authority to change course and speed as the racing conditions change. However, you are prohibited from using this method.

I am not talking about using some sort of artificial intelligence that will read such things as road conditions, the position of the other cars, and available fuel in deciding what to do. I am talking about a computer in which you write in every all changes in course and speed, and the car must follow those instructions no matter what happens during the race.

If the pre-programmed car does not crash outright, it will almost certainly be lapped time and time again by all of the other cars in the race -- ones that have drivers given the liberty to make decisions and change course as conditions change.

The French law guaranteeing employment has the same effect on the French economy as this computer that locks in course and speed changes. Because it cannot change with changing conditions, more flexible economies are going to leave it in their economic dust. Businesses are going to send their jobs to countries like India, China, Taiwan, and South Korea, leaving the French worker sitting at home with nothing to do.

I can easily imagine this leading to a case where France ends up begging nations like China and India for economic development assistance. Those countries would see no reason to make such a poor investment. Without economic reforms, they would see little sense in investing in the French economy. They would require that it become a bit more flexible first.


On the issue of employment assurance, I would prefer to see something like national job-training campuses. Those who cannot find jobs would be permitted to move their families into these campuses where they would be given shelter, medical care at the campus clinic, and nourishing food in the campus cafeteria, so long as they make satisfactory progress learning new job skills. The campus would also have placement specialists that would help its residents find employment.

How would I pay for these campuses? Well, by taxing the rich, of course. The idea that nature is infused with some sort of “property right” that makes it permissible for a guy with a truck full of water that is his property to dump it into the sand while others nearby die of thirst is simply absurd. Nature has no such property. It is perfectly legitimate to redistribute the water wealth from those who have what they do not need to those who need what they do not have.

This does not argue that there is no argument for private property or free markets. Indeed, this posting itself defends having a free market because a free economy is a flexible economy, and a flexible economy can perform better than one that is made rigid through legislation such as the First Employment Contract law.

Only, there are limits. Where free markets have people pouring what they do not need into the sand while those who need that thing to thrive are left to suffer, it has stepped beyond its moral limits.

Job training campuses, when compared to the lifetime employment requirement, support a society’s flexibility rather than hinder it. Through these campuses, a society react even more quickly and efficiently to changing conditions – making it a country that can win the economic race for its people.

Finally, a couple of words need to be written as to why this economic growth is important. For one thing, the 60% of the people in French ghettos who cannot find a job cannot afford medical insurance or the quality of education that can get them out of that trap. In order to pay for social services such as medical care and education, the economy needs a surplus. In order to have a surplus, it needs to be efficient. In order to be efficient, it needs a set of rules that allow flexibility and a people who are economically free.

Without this, the availability of social services such as public housing, health care, and education are themselves less than they would otherwise be.

The Desire Utilitarianism Link

I have described desire utilitarianism as a moral system where people are encouraged (through praise and reward) to adopt attitudes that are generally beneficial (desire-fulfilling), and discouraged (through condemnation and punishment) from adopting attitudes that are generally harmful.

Flexibility and freedom are positive values; something that people have reason to promote a fondness for through their tools of praise, condemnation, reward, and punishment. So, I write this blog entry in condemnation of those in France who show insufficient love of freedom and an excessive love of rigid rules that prevent a country from changing.

The French government is in an unenviable position that results when an irrational population makes contradictory demands. Late last year, there was rioting that was largely attributed to the frustrations of youth who could not find work or opportunity in France. The revisions to the First Employment Contract would make jobs and opportunities available -- yet it draws riots as well.

If these people were harming only themselves, one may be tempted to say, “Let them be and let them be the source of their own suffering.” However, they affect others. Their actions this year will determine if their younger brothers, sisters, nieces, and nephews will grow into a situation where they can hope to find work in a robust French economy, or if they live in economic hopelessness surrounded by stagnation.

When one’s actions involve others – and in particular when those actions harm others who are not able to defend their own interests – it is appropriate to conclude that there is a moral dimension to the subject.


Anonymous said...

The idea that nature is infused with some sort of “property right” that makes it permissible for a guy with a truck full of water that is his property to dump it into the sand while others nearby die of thirst is simply absurd. Nature has no such property. It is perfectly legitimate to redistribute the water wealth from those who have what they do not need to those who need what they do not have.

I completely agree with this, but I find it hard to determine where the line should be drawn. Compared to a very lage portion of the world's inhabitants, I live a pretty posh life, even though it is considered middle class here.

Many live in simple huts. My house is 2,000 square feet and would probably bring $200,000 if I sold it. That's neither huge nor expensive by the standards of where I live, but I could get by on much less (as hut dwellers do). But what if I lived in a million dollar house? Would that be excessive? How about 10 million, or, as I have heard in a rumor about Bill Gates', a 750 million dollar house? What sort of house is analagous to the man who dumps water on the ground?

Alonzo just went to Las Vegas. I'm going there later this week. I have a feeling I will be somewhat appalled by the energy, material, and financial resources devoted to glitz and entertainment in Las Vegas. Is it okay for such places to exist while much of the world goes hungry?

Alonzo Fyfe said...

On the issue of line drawing, I am quite comfortable with the idea that some lines are simply difficult to draw with precision. This is one of those facts we have to learn to live with like the fact that some day our sun will blow up and Earth will be destroyed, or the fact we will die. We work with these facts the best we can.

Bill Gates' house is $50 million, by the way.

I will not begrudge him this luxury. Bill and Malinda Gates have donated $21 billion to charity over the past 5 years. Bill Gates has said that when he dies his entire fortune will go to charity.

I think it is quite sufficient to tell people with property that they can enjoy it while they are here, but leave it to charity when they die.

That is my intention. I have decided that, whatever my estate is worth when I die, I will leave it to some institution that will promote the teaching of basic propositional logic to children. I believe that this is the best contribution one can make to others.

Lesley and I put a fairly substantial portion of our income into that fund. (About 25%) Given the amount of money (and equity in the house) that already make up that estate, the trip to Las Vegas was not all that much.

Anonymous said...

I agree that this line will always be fuzzy.

I certainly reject the notion that, since there is poverty and starvation in the world, no one else should every indulge in some luxury and entertainment. But, I'm sure there are those who would. Have they no case? Is there any weight at all to the idea that we should consume just enough to be safe, healthy, and reasonably comfortable, and use the rest of our resources to helping out the needy? (yes, I know "reasonably comfortable" would itself be a source of debate...)

This issue is something I admit I really struggle with. I really have no idea how much luxury is okay. I guess, as you say, I'll have to learn to accept the fact that there is probably no clear answer.

I wasn't implying that you should not have gone to Las Vegas. I just know when I'm there, these issues will come up for me, as they did, incidently, when I was in Europe and saw the great number of cathederals and learned about the great expense that went into building them. Ditto for the opulence of the Vatican.

Thanks for clearing up the cost of Gate's house.