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What Social Animals Owe to Each Other

Tuesday, March 28, 2006

Final Thoughts (Maybe) on the French Situation

If I were a young would-be worker in France, knowing what I know now about economics, ethics, and politics, would I be protesting the law that permits employers to fire young workers without cause during their first two years on the job? Absolutely not. (Just as I do not oppose repeal of minimum-wage laws in the U.S.) But I would be pointing out that this legal change doesn't begin to scratch the surface of the deeply entrenched French corporate state, which benefits an elite at the expense of everyone else. In other words, libertarians shouldn't hope that the new French law is repealed, but neither should we think this is a significant liberalization of the French economy. Thus I differ somewhat from Roderick Long's position here, in which he argues that in the current (corporate-state) context, removal of the firing restriction does not constitute a move toward liberty. This is not obvious to me. The order in which government restrictions are removed may be relevant to the justice of, or libertarian position on, any particular removal, but it is by no means easily determined what that order should be. I don't see the French case as one in which things are grossly out of order. As Mark Brady has pointed out, the restriction on firing has hurt people other than the privileged elite, so its removal will help others than that elite. Long's example of deregulating the S&Ls while the taxpayers were still on the hook for losses through deposit insurance is a much more clear-cut case where order mattered.

Economic theory teaches that repeal of the French restriction on firing will help young French workers find jobs, especially the youngest and those without work records. Barriers to firing are in themselves barriers to hiring. Moreover, this demonstrates that the interests of all workers are not identical. Obviously, the oldest among young workers and those with employment records are less harmed by a "no firing without cause" rule than the youngest ones with no records.

My bottom line: No libertarian should naively assume that freeing employers to fire without cause will liberate the French corporativist economy. It won't by a long shot. It may not even lead to a next step in that direction. But it will make it easier for young French workers to find jobs and earn incomes. Libertarians can be of help by pointing out what ought to be the target of protest in France: the myriad privileges that constitute the corporate state. Our message should be this: free and unprivileged competition maximizes workers' bargaining power.

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