The strikes in France

The press reaction to the strikes in France is sort of amazing. In the depression of the 1930s, people thought that strikes and protests were perfectly natural. In fact, most of the social benefits that governments provide — both in the US and in France date from that period: think of the Social Security Act and the National Labor Relations Act, for example.

The press reaction has been along the lines of ‘Those silly French – why don’t they want to postpone retirement?’ Similarly, I heard one commentator on NPR mention that the last Socialist government in France had tried to move to a 35-hour work week, which the commentator thought that France ‘obviously’ couldn’t afford. (I know, I should give names and citations, but i was listening on a car radio while driving and didn’t get the details).

Just think about it — in a period of high unemployment, what would be the result of shortening the work week? More job! Less unemployment, as the amount of work available was spread over more people. That’s not unaffordable indulgence, it’s about solidarity.

The more basic issue is who should pay for the crisis. Investment bank executives continued to pay themselves huge bonuses after their banks went broke. Right now in the US, the right wing is arguing that we can’t afford to let the Bush tax cuts for the rich expire — in other words, that higher incomes for the rich help the economy.

In fact, it’s just the other way around. Higher incomes for the rich just fuel speculative investments, like the recent bubble in mortgage-backed securities that triggered the crisis when it burst. It can’t fuel productive, job-creating investment, because there is no demand for the additional products that such investment would produce.

On the other hand, higher income for working people would generate increased demand, since it would put more money into the pockets of people who are struggling to get by, and therefore spending everything they take in. That’s precisely what is needed now.

Earlier retirement spreads the existing jobs around, and it puts more money into the hands of working people — so it’s just what is needed in this crisis. The French strikers are right.

Reference: For a good analysis of the causes of the crisis, see Martijn Konings, ed., The Great Credit Crash (London: Verso, 2010).

4 thoughts on “The strikes in France”

  1. Please define your terms. What are “rich” and “working people” ? There is a lot of rhetoric around these terms that tend to mostly focus on wages but that might not be the best descriptor of wealth. I venture to guess the billionaire who lives across the street from us probably pays less in income taxes than do we so how do you account for that in your construction of rich ? On the other hand, he also goes to work every week so how do you deal with that in your construction of working people ?

  2. A reasonable question — though I want to point out first that the main points I was trying to make do not depend on the definition. To recap, those points were:

    1. It is odd that we are hearing today that “we” (the nation, France, the world”) cannot afford to maintain the present level of social welfare, given the bad economic situation, while most of those social welfare policies were adopted in the 1930s because it was thought that they would help improve the similarly bad economic situation.

    2. If one accepts the view (and this is debatable, of course) that the crisis is basically a crisis of insufficient consumer demand (very briefly: as industrial jobs in high-wage countries were moved to low-wage countries, consumers had less to spend, threatening recession; this was staved off by a huge expansion of credit, especially credit card debt and loans against homes; when the housing bubble started to burst, the latter suddenly became problematic, leading to a collapse of the credit system) then redistribution of wealth and income from the top to the bottom can help solve the crisis. Similarly, things like a shorter work week or earlier retirement help cope with high unemployment by freeing up jobs for the unemployed. There are debates about all this, but this point of view is not getting sufficient attention.

    So, definitions: I was trying to use basic concepts of class without getting bogged down in theoretical debates among Marxists–hence my use of the broader “working people” rather than “the working class” or “the proletariat.” So, yes, wealth is certainly more important than income. Probably everyone with a lot of wealth has a lot of income (dividends and interest), but not everyone with a high income has a lot of wealth. What I really mean by the rich is “capital” – at one approximation, those whose income comes more from investment than from labor, but more accurately an abstraction: a lot of capital is not actually owned by individuals, but it still functions as an economic and political force.

    But if we want to put it in terms of people, I think what I am saying holds across a variety of definitions — if we want to define the rich as the top 1 percent or the top 10 percent of the wealth distribution.

    The practical policy debate in the US is (among other things) about letting the Bush tax cuts lapse for “the rich” — which means, in this case, for those with taxable income above $250,000 a year, and those realizing capital gains. I’d agree that the first group is an inaccurate definition of the rich, but it will probably do as a basis for making policy, given the technical difficulty of basing income tax on a more accurate one.

  3. I agree about the oddball response of the American media in particular to the French strikes. I particularly like the notion that is presented that all people in Europe retire at these ages or that doing so is somehow mandatory.

    I am very much a believer that the governmental responses to the banking crisis in the USA and elsewhere showed exactly who governments thought their real constituents were and remain just as does the failure of the Democrats to incorporate the other half of the definition that the $250,000 came from: “a million dollars in assets” was the other, now unmentioned, half of it. They’re not planning to bite the hand that feeds them financially really anymore than are the Republicans (the Dems got piles of money from the financial services industry and wealthy entrepreneurs all of whom are happy to tax wages as long as it doesn’t hurt their corporate and more asset based personal bottom lines) and that’s why none of them are promoting serious taxation of capital or, particularly, things like a Tobin tax or other taxes on financial services transactions. The Dems are just promoting taxation of upper income professionals who historically, with the exception of 08, have been more likely to vote Republican in recent years so that they can then do transfer payments to a more likely group of voters for them and that makes them, again, exactly like the Republicans.
    Next up will be the Obama Administration’s bipartisan commission on spending and the debt that excluded military spending. I can’t wait for its results, I don’t think they’re going to propose a bigger social safety net.

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