Book Review: Travail Flexible, Salaries Jetables

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Travail Flexible, Salaries Jetables: Fausses questions et vrais enjeux de la lutte contre le chomage – Michel Husson (ed.)
Editions La Découverte, Paris, 2006

Over the past decade, France has displayed something of a split personality when it comes to political orientation. On the one hand, there have been impressive mobilisations against neo-liberalism: the big public-sector strikes of 1995, the defeat of the EU constitution ten years later, and the movement of workers and students against the CPE labour law in 2006. On the other, conservative presidents have held sway at the ballot box: 2002 saw a run-off between the right and the ultra-right, while Nicolas Sarkozy won last year’s poll comfortably on a programme that combined none-too-subtle appeals to the racist constituency of Jean-Marie Le Pen with a warm embrace of the Anglo-American brand of capitalism.

The contrast between social resistance and political regression is not quite as puzzling as it may seem. Like just about every European country, France lacks a credible left-wing alternative to neo-liberalism that can challenge for power in the short term. The once-mighty French Communist Party has fallen off a cliff since 1980, displaying woeful tactical judgement and strategic thinking and shedding half a million members along the way – its performance in last year’s presidential poll, winning less than 2% of the vote, was a fair index of this precipitous decline. Its Socialist rival / partner has fared much better, at least in electoral terms: the humiliation of 2002, when Lionel Jospin was out-polled by the National Front leader, must be set against the solid performances of Jospin and Ségolene Royal in 1995 and 2007 respectively, while Jospin also headed a ‘plural left’ majority in parliament from 1997 to 2002.

But the Socialist Party has lacked a project to set against the triumphalism of the free-market right since the ideological retreat of the Mitterand government in the early 1980s. Having made a decisive turn away from Keynesian economic policies, nationalisation and state intervention, the Socialists found themselves in an awkward half-way house, where they remain to this day. No Socialist leader has been willing to go as far as Tony Blair and Gordon Brown in his or her embrace of Thatcherite ideology, but in practice they accept the basic assumptions of neo-liberalism. The Socialists have done their best to take advantage of social movements against right-wing policies, but they cannot place themselves at the head of those movements with any real conviction.

Meanwhile the ‘left of the left’ (a useful phrase which is commonly used in the French media) has gone through a phase of re-groupment and re-composition, with the decline of the Communist Party matched by the emergence of new forces such as the post-Trotskyist LCR. The radical left was able to forge an alliance with dissenting Socialists like Laurent Fabius[1] and Jean-Luc Mélanchon for the duration of the EU referendum campaign, demonstrating some of the potential which exists for a revitalised left that combines radicalism with flexibility and smart tactical alliances. But the momentum of the successful ‘No’ campaign did not carry over into the presidential elections, where a fragmented radical fringe proved to be less than the sum of its parts[2].

Judging by the events of the past decade, if there is to be a strong challenge to neo-liberalism in Western Europe, it is more likely to come from France than anywhere else. Even after the triumph of Sarkozy, there is enough evidence to show that a dynamic left-wing alternative to the present-day consensus could win the support necessary to put its ideas into practice. This would require the fulfilment of two conditions: the emergence of a credible political vehicle (not just an electoral force – the forging of a coalition of social movements with the capacity to mobilise people outside the routines of parliamentary politics is essential); and the articulation of a programme for social change that appears convincing and realistic.

This collection of essays put together under the direction of economist Michel Husson aims to clear the way for the second of those conditions, by tackling and refuting the orthodoxy which holds that French unemployment can only be remedied by labour-market ‘reforms’ (‘counter-reforms’ is a more accurate term) that move France closer towards the Anglo-US model. As such, it is also a very useful resource for left activists outside France who will be used to the idealisation of that model and its supposedly miraculous job-creating potential.

Setting capital free

Some of the arguments deployed on behalf of the neo-liberal case will be familiar to anyone who has heard Mary Harney or Michael McDowell in action. Laurence Parisot, the head of France’s business federation MEDEF, argues that ‘liberty stops when the labour code begins’ (Gérard Filoche retorts that if we were to apply the same ‘liberty’ desired by Parisot to the road network, ‘there would be ten thousand deaths within a day’). Others have a distinctly French quality: Parisot’s rhetoric assumed a world-weary, philosophical air when he told Le Figaro that ‘life, health, love are precarious – why should work escape this law?’, while the industrialist Serge Dassault went one better during the anti-CPE protests with his impish comment ‘la précarité, c’est la vie’.

Perhaps best of all is Parisot’s attempt to replace the stigmatised term ‘precarity’ with the more agreeable ‘separability’: ‘Today in France it is very difficult – one might almost say painful – to separate, for the employer and for the worker. Should we not invent a way of separating by mutual consent, as we have done for divorce since 1975 …?’ The image of French workers labouring under the burden of a permanent job, desiring nothing more than a painless way to exit their unhappy ‘marriage’ to the firm, is daring to say the least. Little wonder that one company executive got a little carried away during a debate in Lyon and compared the French labour code to sharia law …

So much for the rhetoric. What about the substance? According to champions of labour-market ‘liberalisation’, workers will benefit if employers find it easier to hire and fire staff. There will be more openings, especially for young workers, and short-term jobs will prove to be a pathway towards more stable employment. In the opening chapter, Pierre Concialdi scrutinises the latter argument: ‘Is precarity a stage, a temporary crossing-point allowing one to reach a more stable position, or does it lead instead to the formation of a parallel labour market from which workers can no longer exit?’

He demonstrates that casual and part-time employment is already an established and growing feature of the French economy. Just under 65% of workers have a job with a full-time, permanent contract: there is a significant gap between men (71.9%) and women (55.4%) in this regard. Of all the four million new jobs created between 1983 and 2005, two and a half million are classified by Concialdi as ‘precarious’ – over 60%. France is part of a broader European trend in this respect: between 1980 and 2004, the share of temporary employment in the EU 15 went from 5% to 13.6%.

Table 1 – frequency of low-paid work or unemployment in the French labour market during three-year periods*

1983 – 1985

1990 – 1992

1998 – 2000

Unemployed or in a low-paying job at least once

19.6%

22.6%

30.1%

Always unemployed or in a low-paying job

7.3%

9.3%

16.7%

Including: always in a low-paying job

3.5%

4.8%

7.8%

Periods in and out of low-paying work

1.3%

2.3%

3.5%

Always unemployed

2.5%

2.2%

5.4%

* % of workers present on the labour market for three successive years outside of apprenticeship and training / low-paid work is defined as any job which pays a salary below two-thirds of the median wage

As Table 1 shows, more and more French citizens have found themselves falling below the level where employment offers a decent standard of living. Concialdi argues strongly against the optimistic view: ‘Precarious employment, far from being a passage-way to more stable and lucrative forms of work, tends to lock workers in a position of insecurity.’

According to Gérard Filoche, France has already seen two decades of an employers’ offensive against the rights of workers. This offensive has encompassed several goals: the reduction of any role by the French state in regulating employment conditions; attacks on the principle of collective bargaining, especially at a national or industry-wide level – employers prefer to negotiate contracts at the lowest possible rung of the ladder, ‘where the relationship of forces is least good for the union, and thus for the worker’; the promotion of sub-contracting; and the steady erosion of the long-term CDI contract which still determines the status of most French workers.

The government of Dominique de Villepin moved towards the latter objective by drafting three new employment contracts: the CNE, which allows firms employing fewer than twenty workers to sack workers without any cause during their first two years on the job; the CPE, granting all firms the same right to fire workers under the age of 26 in the first two years without having to give a reason; and the CDE, a fixed-term contract for workers aged between 57 and 60 years. As Filoche puts it: ‘The CDI was thus attacked from every side: small businesses, young people, ‘seniors’.’

This project hit an unexpected snag in 2006, when a highly combative social movement uniting students and trade unionists defeated the CPE law. But the CNE remains in place, and the broad out-lines of de Villepin’s plan will undoubtedly be revived by conservative forces at the most opportune moment. Elsewhere in the book, Michel Husson describes this approach as seeking ‘to besiege the standard work contract, for lack of a relationship of forces permitting a direct frontal assault’.

Filoche also supplies useful information about the working hours of sections of the French working class, demonstrating that the much-criticised 35-hour law has had little effect on the experience of many workers. 750,000 catering workers are on the clock for an average of 55-60 hours every week; for the 1.1 million employees of the construction industry (where sub-contracting and exploitation of immigrant labour is rife) the typical working week is 45-55 hours; while 240,000 French lorry drivers chalk up 56-65 hours. Neo-liberal pundits might do well to consider the list of positive proposals Filoche puts forward to beef up employment legislation: it includes such outlandish demands as a call for two consecutive days of rest during the week for all workers. Surely the champions of labour-market ‘flexibility’ would be happy to do without such entitlements themselves?

In his contribution, Christophe Dejours recalls that the current obsession with ‘flexibility’ would have surprised a previous generation of experts: ‘In the years 1960-1970, many analyses were dedicated not only to absenteeism, but also to turn-over, then held to be a scourge insofar as instability of the work-force was considered to be incompatible with quality of work, personal security, the prevention of accidents and safety of installations.’ The change of heart cannot be attributed solely to intellectual fashion, still less to progress in management techniques: as always when questions regarding economic production are discussed, this is fundamentally a matter of class[3].

Dejours underlines this point by giving the example of EDF, the French electricity company, where he has carried out field research into working conditions. Since the 1980s, EDF has pursued an aggressive policy of sub-contracting: ‘This strategy was not based on any economic motive, since EDF was and remains amply profitable. And the recourse to sub-contracting – as many authors have shown – did not bring about any reduction in labour costs. The real motive of this strategy was, in fact, political: the rationalisation and expansion of domination.’ The new policy enabled management to break the powerful unions in the firm and create a new work-force, divided between full-time and temporary staff, which would be much harder to organise.

This experience hammers home a point that should never be forgotten by the Left when it challenges the arguments of neo-liberalism. Efficiency, growth, productivity – these may be the stated objectives of business and its political allies. But underlying all of these goals is an unstated but critical requirement: that efficiency, growth, productivity etc. must be achieved in a way that preserves ‘the right of management to manage’, or to put it another way, that leaves the basic hierarchies of capitalist production unchallenged. Most employers will consider the existence of strong unions with the power to influence management decisions to be an affront in itself, even if the firm is making healthy profits.

Britain, the USA, Denmark – examples to follow?

That goes a long way towards explaining the attraction of the British and US models for MEDEF and its associates. They haven’t made a technical judgement that the Anglo-US approach offers the best potential for remedying unemployment – it’s the prostration of trade unions in both countries, their inability to mount a serious challenge to the power of capital, that sets managerial pulses racing. The pragmatic arguments about cutting the jobless rate are little more than a façade for this agenda – so Florence Lefresne and Francisco Vergara are to be thanked for helping to clear away that façade with their discussion of the two Anglophone societies.

Britain and France can be easily compared, as their working-age populations are very similar, and Lefresne begins by noting that the UK has indeed done a better job of creating jobs over the past decade than its Gallic neighbour: between 1993 and 2004, there were 3.1 million new jobs in Britain, 2.4 million in France. Before we attribute this to a dynamic private sector, freed from the burden of restrictive labour laws, she goes on to point out the key role played by the British state in nurturing employment: two-thirds of jobs created between 1998 and 2005 were in the public sector.

Since the Labour government was elected in 1997, there have been significant increases in public spending (transport and education spending has practically doubled, while health budgets have expanded by two-thirds). As Lefresne comments:

‘If Tony Blair extols the virtues of liberalism, we may note that he applies them discerningly in his own domain, granting his country freedom of manoeuvre with regard to monetary and budgetary policy that is lacking in states that have signed the Stability Pact.’

The picture of Britain escaping the neo-liberal shackles of the EU so that it can raise public spending would be a nice one for Tory euro-sceptics and Sun leader-writers to contemplate, in the doubtful event that any of them chose to read a book published in French.

Another secret of Britain’s unemployment rate is to be found in the re-classification of the jobless so they don’t form part of the active population. Between 1993 and 2004, male employment rose by 907,000, while inactivity among men aged 15-64 rose by 408,000. As long as people out of work are receiving incapacity benefit instead of the dole, they don’t show up in the unemployment figures. The former group overtook the latter in the early 1990s, and there are now 2.7 million people receiving incapacity benefit – more than twice the number of people signing on as unemployed. Lefresne tells us that ‘according to the official statistics, one million recipients of incapacity benefit are in fact long-term unemployed (former mine workers being a typical case).’

She concludes with a defiant rejection of the conventional wisdom: ‘It is not economic liberalism but, on the contrary, the elements of re-regulation of the labour market (minimum wage, restoration of collective bargaining, public investment), still quite insufficient to be sure, which together with an economic policy set free from the constraints of the Stability Pact currently represent the true strengths of the British economy.’

Francisco Vargara sets out to address the persistent claims that, if Europe wishes to cut its unemployment rate, it will have to imitate the labour-market policies of Ronald Reagan. The first problem with this theory is demonstrated by Table 2.

Table 2 – growth of employment in the United States and Europe (%)

1977 – 1986

1987 – 1996

1997 – 2006

USA

1.9

1.4

1.2

EU 15

0.2

0.5

1.2

Euro-zone

0.2

0.6

1.2

Since the allegedly triumphant reform programme of the Reagan administration, job creation has steadily decreased in the USA, while Europe has risen from a low base to converge with the US level. If we take account of the fact that employment is more cyclical in the US than it is in Europe, reaching higher and lower points on the scale as the economy expands and contracts, another useful comparison can be made: ‘Between 1994 and 2004 (the last two ‘peaks’ on the European unemployment curve) the European rate of unemployment retreated by 2.3% (going from 10.4 to 8.1%), as much as that of the United States between 1982 and 1992.’ Vargara naturally asks by what logic we define the same fall in unemployment as a ‘miracle’ in the case of Reagan’s America, ‘euro-sclerosis’ on the other side of the Atlantic.

Nevertheless, the total rate of unemployment is still lower in the US than it is in the EU 15 (although the gap closed between the mid ‘90s and the half-way point of this decade – from 4.5% to 2.7%). Vargara quotes a report by US government specialists which reminds us of the perils of employment statistics: ‘The unemployment rate is a handy and well-known indicator; however, if we focus on it alone, we can have a distorted vision of the economies of other countries, compared to that of the United States .. other indicators are necessary if we want to interpret the respective situations on different labour markets in an intelligent manner.’

He goes on to suggest a number of social, political and demographic factors that may contribute to the employment gap. The rate of activity has a substantial impact on unemployment figures in any society – people who aren’t considered economically active won’t affect the employment rate. In this respect America and Europe have diverged since 1990 – while the rate of increase in the active population has stalled in the US, even falling slightly, it has continued to increase in the EU 15. There was a gap of 7.4% in 1994; now it is just 2.5%.

Another crucial factor is the size of the prison population in the USA. Vargara notes that even during the Great Depression, the incarceration rate barely exceeded one prisoner for every thousand citizens. Since the 1970s, it has sky-rocketed, and the US state now keeps 2.2 million people behind bars – 7.4 per thousand. This is six times higher than Canada, eight times higher than the rate in Germany or France and twelve times higher than Japan. There is no way of quantifying precisely what impact this has on the unemployment figures, but Vargara cites a study from California which established that just 35% of prisoners had a job before they were sent to jail. The freer the market, the bigger the prisons – or so it would appear.

Denmark is another country whose economic record has infatuated the French political class in recent times. Thomas Coutrot demonstrates that the Danish model is not as impressive as many think – between 1991 and 2004, its rate of economic growth was barely higher than France’s, while the French economy did a better job of creating jobs (0.3% was the annual increase in France, 0.1% in Denmark). More effective in reducing the rate of unemployment has been the decrease in the active population, thanks to extensive take-up of early retirement and long-term sick leave.

He goes on to note some of the specific features of Denmark’s social model that usually aren’t considered by French pundits. The Danish economy is dominated by small and medium-sized firms, with a very limited role for trans-national capital: this reduces the pressure for incessant ‘down-sizing’ to appease the financial markets. The trade union movement is strong and well-organised. It is indeed easier for companies to fire workers in Denmark than in France, but this is not the only difference worth mentioning. Unemployment benefits are more generous, and the unions play a major role in administering the social security funds. There is an active policy to encourage unemployed Danes to find work, in which coercion plays a very limited role.

Most citizens of the Nordic states are apprehensive about the future of their social policies in the current environment, according to Coutrot:

‘The populations of the Scandinavian countries are well aware of the specificity and the fragility of their model in the face of the neo-liberal wave which sweeps the planet: it is no accident if they voted ‘no’ in referendums on entry to the Euro in 2000 (Denmark) and 2003 (Sweden), in spite of strong pressure from the media, the employers and the social-liberal parties. This is because the neo-liberal temptation is very strong among the Scandinavian economic elites, who can ill bear to remain hindered by the constraints of a domestic social consensus.’

He concludes by arguing that if France wants to honour the ‘right to work’ established by the 1947 constitution, it should compel firms to justify all redundancies before committees representing workers, consumers and other sections of civil society. Lay-offs should only be permitted if the firm can show their necessity for its survival. A mad suggestion, of course – it’s far more rational that firms have to demonstrate to investors on the financial markets that every time they don’t sack workers, it’s essential to safeguard the productive health of the company.

Challenging neo-liberalism

In his own chapter, the book’s editor Michel Husson challenges the usual rationale for making it easier to lay off staff. He insists that such an approach will merely increase the cyclical peaks and troughs of employment: ‘The creation of jobs would be greater when demand increases, but the destruction of jobs would also be greater during phases when demand slows down or falls. The profile of the productive cycle would be changed but there is no reason to postulate an overall positive effect on job creation in the medium term.’

Husson also notes a back-handed admission by the OECD that it finds it hard to establish a link between ‘flexible’ labour markets and strong employment creation: ‘The way in which some countries manage to reconcile strict regulation and a low rate of unemployment has not been cleared up.’ He deplores the cynicism of the argument which holds full-time workers with decent salaries responsible for the predicament of those on the economic margins, whose precarious circumstances are really the outcome of labour-market policies that employers have been demanding insistently for years.

An Irish variation of this theme will no doubt rear its head when the next round of pay talks begins: having successfully undermined the pay and conditions of many private-sector workers, IBEC and company now lecture the ‘privileged’ employees of the public service on the need for similar concessions. In this sense, and this sense alone, the spokesmen of the business class are very much in favour of social levelling.

The final essay by Dominique Plihon gives a good condensed summary of developments in the world economy since the 1970s: the growing power of finance capital, the globalisation of production networks, and so on. These transformations have helped shift the balance of power between labour and capital strongly in favour of the latter, undermining the Fordist consensus of the post-war era. One of the main consequences has been a diminution of labour’s share of the cake, as Table 3 shows.

Table 3 – share of wages as % of GDP

Country

1970s

1981

1980s

1990s

2004

USA

70.0

69.4

68.7

67.5

66.5

EU 15

74.2

75.3

71.5

68.4

66.7

France

73.6

76.4

71.6

67.1

66.0

Germany

72.2

73.1

69.5

66.4

64.2

United Kingdom

75.0

73.9

74.4

73.7

73.9

Italy

72.2

71.7

69.9

64.6

61.6

Taking a broad look at the trends in the global economy over the last three decades, it’s clear that neo-liberal capitalism has not been delivering the goods. As Robert Brenner noted recently, the economic performance of the developed world has stagnated since the 1970s:

‘Historic bull runs of the financial markets in the 1980s, 1990s and 2000s – with their epoch-making transfer of income and wealth to the richest one per cent of the population – have distracted attention from the actual long-term weakening of the advanced capitalist economies. Economic performance in the United States, Western Europe and Japan, by virtually every standard indicator – the growth of output, investment, employment and wages – has deteriorated, decade by decade, business cycle by business cycle, since 1973.’[4]

Set against this background, proposals to tackle unemployment by attacking the rights of workers seem akin to throwing a few deck-chairs off the Titanic. Neo-liberalism should not be seen as an arbitrary set of policies that can be embraced or discarded by national governments according to taste – rather, it is best understood as a whole phase of capitalist development, unfolding since the 1970s, and rooted in a series of political, social and economic factors, from the explosion of financial speculation to the collapse of the USSR. Over-turning this frame-work in order to launch a new phase is the essential pre-condition for any progress towards achieving full employment and the elimination of poverty, even in the wealthiest states.

As Plihon concludes:

‘The degradation of the situation of workers – mass unemployment, flexibility, precarity, loss of purchasing power – is the direct result of neo-liberal globalisation which has the goal of putting workers from North and South in competition. To escape from this infernal logic implies a rupture with the principles which determine this process of globalisation … this essential change of the rules of globalisation can certainly not be achieved other than by a transformation of the relationship of forces between labour and capital, which requires a strengthening of social movements at the international level.’

This leaves open the question of what should replace neo-liberalism: a revived version of Keynesian / social-democratic economic management, or a democratic socialist alternative to capitalism based on social ownership of the key economic sectors? The neo-Keynesian argument has been made recently by David Harvey and Naomi Klein in powerful books[5], while the latter view remains that of many left-wingers (including this one). At any rate, the Left should be confident enough to say that neo-liberalism is a failed economic model. As the financial crisis sweeping the economies of the West demonstrates once again the perils of allowing capital to regulate itself, we need political movements that can drive home the message: it’s broke, and we need to fix it.

____________________________________________________

Footnotes:


1] The role of Fabius in the left-wing ‘No’ campaign was a nice historical irony: when he became France’s youngest-ever prime minister in 1984, replacing Pierre Mauroy, he was strongly associated with the right turn of the Socialist government. After the presidential elections of 2002, Fabius began arguing for the party to shift back towards the left of the spectrum, and earned himself venomous hostility from other party leaders when he broke ranks to campaign against the EU constitution. The apparent vindication of his position by the French electorate cut no ice with the membership of the Socialist Party: he was comfortably defeated by Royal in the primary to decide the party’s candidate.

[2] For contrasting perspectives on the failed attempt to agree a joint candidacy of the ‘left of the left’, from two members of the LCR, see articles by Murray Smith and Francois Duval. The LCR has launched fresh efforts to build a new anti-capitalist party since the presidential poll, and achieved some solid performances in the recent local elections. Its best-known leader Olivier Besancenot is now an established figure in the French media with a strong following among young people.

[3] As the British economist Andrew Glyn recalled: ‘When Thatcher was elected, many on the left argued that monetarism was completely irrational. I disagreed. The rationale of monetarism, as a broad economic philosophy replacing Keynesianism, was to re-establish that the market rather than union militancy should determine wages, and that mass unemployment was a price that would have to be paid to restore profitability and ensure a healthier capitalism. … of course there was much wringing of hands about the rising unemployment but its effect in putting labour on to the defensive was welcomed.’ Rob Hoveman: ‘Will we face a dystopia in which very large numbers of less qualified and poorly paid people exist to service the consumption needs of the rich?’ Socialist Review July 2006

[4] Robert Brenner – ‘Devastating Crisis Unfolds’ International Viewpoint January 2008.

See also the comment of William Tabb: ‘Manufacturing employment … is at its lowest level in more than half a century. Between 2001 and the spring of 2006 worker hourly productivity rose by 24 percent so fewer workers are needed to produce more output. But output has not been rising as fast as in the past. This is not only because of greater global competition but also slower global growth in demand. If demand had increased at levels seen during the early post–Second World War era, millions of additional jobs would have been created in manufacturing for U.S. workers.’ William Tabb – ‘Wage Stagnation, Growing Insecurity, and the Future of the U.S. Working Class’ Monthly Review June 2007

[5] David Harvey, A Brief History of Neo-liberalism (Oxford, 2005); Naomi Klein, The Shock Doctrine (London, 2007).

Another writer put the question in these terms: ‘Given the evident failures of unleashed capitalism and the equally evident limits of leashed capitalism during the Golden Age, should the left not be again advancing a case for full-throttle socialism? My own view is that this is unrealistic, even while desirable as a longer-term vision of how to construct a just society. The problem is that, at this stage in history, we really do not know exactly what a socialist economy would look like, nor do we know how to move from our current reality of neo-liberal ascendancy to something approximating one’s vision of a socialist economy … the left needs to figure out how to make a revived version of leashed capitalism workable. Putting capitalism back on that leash will, among its other virtues, enable us to see more clearly what a democratic socialist economy might look like in a world where the political forces advancing egalitarianism have gathered decisive strength.’

Robert Pollin – ‘Resurrection of the Rentier’ New Left Review July-August 2007

Photo shows an Anti-CPE march in 2006. Taken from The Space and Culture Journal.

 

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