As France goes through another day of protests, the coverage in the US press is so appallingly bad that I thought I’d take advantage today of my posting rights to give you another version, to explain what’s described as irrational behavior by the French.
Let me say it as directly as I can: most of the coverage I have seen is either wilfully ignorant or purposedly lying, and they repeat a number of falsehoods about the French labor market that are, quite simply, shocking.
Let me try to correct the record.
Again, this should preoccupy you guys, because the underlying message is: progressive economic policies are failures, and only further “reforms” (read pay workers less and give them fewer rights, bust unions and cut taxes to corporates) will work. If even Us progressives buy that (as evidenced by a number of comments on my threads at the Orange place), what hope is there to change things?
Today’s culprits:
The LA Times (Rift Emerges Among Young Haves and Have-Nots in France)
The NYT (Four Ways to fire a Frenchman)
The Guardian (De Villepin stands firm on law as France heads out on strike)
Here are some of the lies they are spewing:
Riots are ongoing
It would seem, reading the US press, that Paris is burning (again). It wasn’t last October, and it isn’t now. Most demonstrations are peaceful, family affairs – people exercising their democratic right to free speech and demonstration.
These rallies have been marred, on the sidelines, by very small groups of criminals that take advantage of the crowds to steal form people and to attack the police form the safety of the crowds. These are still isolated incidents, despite all the images you may see – and they have very little to do with the protests themselves.
The protests are not violent, and they can in no way be described as riots. Go and read Alex at Toulouse‘s diary over at eurotrib: he was in one of the protests himself and took pictures. See for yourselves what most demonstrations look like.
The youth unemployment rate is extravagantly high
I’ve already written about this, but would like to be even more explicit about this. The unemployment rate for the under 24s in France is indeed 23%. But you have to remember that the unemployment rate is the ratio of unemployed to active population (i.e. those working or seeking work). Counted as a ratio to the overall youth population, unemployment is only 8%, just like in the UK or the US.
The right column id the proportion of youth that are unemployed (as a fraction of the whole age class). The left column is the employment rate: the proportion of youth that work. It is much lower in France, but this is explained to a large extent by the fact that a lot of the youth are students, and they do not need to work to pay for their studies.
See this graph: that’s the portion of youth that have to work while being students.
Students are not “active” in France, and thus the active population is higher, and thus the unemployment rate appears correspondingly higher even though the number of youth unemployed is no higher than, say, in the UK.
That makes the whole “France is in crisis” much less convincing when you start comparing 8.1% to 7.6%, right?
Note, US numbers can be found here:
Employment rate: 66.2% (as comapred to France’s 30.4%)
Unemployment rate: 11.3% (as compared to France’s 23%)
Unemployed: 7.6% of the total number of under-25s (as compared to France’s 8.1%)
It’s impossible to fire people in France
The biggest lie that’s been spouted is that it’s impossible to fire people in France. That’s simply untrue.
The NYT article is shamefully wrong on substance, and I encourage you to read the thorough debunking done by afew here
Here are a few more facts.
From Jean-François Couvrat, a labor market expert
(my translation)
Eurostat indicates that the main indicator to assess the flexibility of a labor market and the mobility of workers is the proportion of workers who have been in their job for less than 3 months. That proportion is 6.7% in France, higher than in the UK and than the 4.9% EU average…
From Blanchard (a well known MIT economist)(pdf):
The labor market is characterized by large flows–high rates of separations from firms, and high rates of hires by firms. In France for example, 1.5% of all jobs are destroyed each month and roughly as many are created– interestingly, this is about the same percentage as in the United States. As there are many reasons other than job destruction why a worker may separate from a firm, the flows of workers are typically much higher. In France, they are of the order of 4% per month (Pierre Cahuc and André Zylberberg 2004).
So France churns jobs just as fast as the USA. How’s that for “flexible”?
France does not create jobs
This is simply untrue, again. From the above Couvrat article:
French companies never stop creating jobs. In 1993, the worst recession year in a long time, they hired 3.6 million people; the number was 4.8 million in 2003, a year with weak growth, and 5.4 million in 2000, a boom year.
More striking, according to the OECD, France has actually created more jobs than the supposedly flexible UK and UK economies! (click for bigger – “Royaume-Uni” = UK, “Etats-Unis” = USA))
or this:
The full line is the total number of jobs; the other is the total number of hours worked. They both grew at a record pace precisely during the 3 years when the 35-hour week law was put in place (it is widely credited (pdf, in French, with abstract in English) with having created 300-500 thousand jobs) and the socialist government put in place a jobs programme for the youth – both measures have been since cancelled by the right wing government which, strangely enough, came to power in 2002.
So France actually created more jobs than the USA in the private sector, and more jobs both overall and in the private sector than the UK – precisely at the time when supposedly irrational measures like the 35-hour week were in force.
So, please, be extremely careful when you read article about the “rigidity” of the labor market, the “jobs for life”, and the unwillingness of French companies to create jobs. Most of it is, quite simply, untrue.
This is not to say that everything is perfect, far from it, but the problem is much smaller than everybody (including in France!) is led to believe.
Students are “privileged activists”
One of the nastiest narratives in that context is that presenting students as “privileged” people trying to keep their “lifetime employment” away from the banlieue immigrants (see the LAT article for that line). Nothing could be further form the truth. University students are low or middle class (the privileged go to the separate – and really elite – Grandes Ecoles system), and they are the main victims of today’s existing labor flexibility.
The real problem in France is that you do have an insider/outsider system. Students (like older people thrown out of companies when they lay off) are outside, and the new law keeps them even more on the outside. They already have the temp jobs, the short term jobs, they are already the first ones to be fired when companies get rid of workers. They already provide all the flexibility the system needs (and has, as pointed out above).
One solution would be to make everybody bear the flexibility, i.e. make it as easy to hire and fire middle aged males as it is for youth. That’s where everybody is pushing, and IT DOES NOT WORK in practise. The other solution is to bring back the youth into the fold, by giving them more stable prospects, like the Socialist Prime Minister Jospin did with the youth jobs programme in 1997 (5-year contracts to work in the social sector, i.e. help in schools, associations, NGOs, libraries, etc..) – it demonstrably worked.
The new jobs contract will help immigrants
The flip side of the argument about the “privileged” students is that they are keeping jobs away from the poor oppressed immigrants. No. They are in the same situation, and the banlieue youth are even more against the new contract, because it will make it even easier to discriminate against them. No restrictions to firing in the first two years means including for reasons of race, opinion, gender, etc…. Be fully compliant or you can be fired at any time, and get fired anyway after 2 years because who will give you a fully protected status then when they can fire you and get a new compliant kid instead. Lots of jobs don’t require such skills that you cannot be replaced easily by an equally well trained kid.
So please, please do not believe all these articles that say that French students are fighting a pointless battle against reality and globalisation, that France is hopelessly rigid (and violent) and its workers shamefully protected and that this reform is “necessary and useful”. It is neither.
This is an ideological fight. It’s a fight of the progressives against the relentless march of the logic of focusing only on short term corporate profits.
I don’t know how many of you still pop up over at eurotrib, Bomman’s sister site, but here are some relevant links:
Contrat Première Embûche
Article Deconstruction (vol. 3) – Student protests per IHT
Article deconstruction (vol. 4): French farce
It’s the same fight
Triple Play (US articles on French protests)
IHT sees the light on French student protests
French employment and unemployment
Four Ways to Fire a Frenchman (debunking the NYT)
Emerging common wisdom: Villepin reform flawed + my counter proposal
So, what does this ‘contract’ actually provide for?
It’s a normal work contract, except that the trial period (i.e. the period during which you can fire without priving any reason) lasts 2 years, with no indemnities to be paid. And it applies only to under-26-year-olds.
sound like another law with unintended consequences, hurting the very people it purports to help. Kind of like rent control.
on a flight from London to Madrid, I sat next to two businessmen, one French, one English. They were on their way to Spain to try to solve some labor problems in a plant there. Workers were being extra fussy about the length of their breaks and the intervals between them; they did not want to be asked to work overtime (35 hrs. a week was enough); they resented the factory’s call for “increased productivity,” and had unddertaken a work slow-down in response.
Naturally, the factory’s position and these two managers’ was that in order to stay competitive and remain in operation, a longer work week and more productivity were necessary. In the global economy, one’s only response can be, “Well, duh!”
But the problems described above, according to the Frenchman, were exactly France’s too, combined with a “who you know” over “how well you’re qualified” hiring tradition that hasn’t been broken despite globalization demands. Both men admitted that the American concept of work — 40 hrs. per week, an eagerness to get ahead that requires lots of voluntary overtime, limited or (even) no vacation times or time taken, and a much more equitable tradition of hiring, plus a much more favorable to the employer firing practice than either Spain or France has — will keep those two countries lagging behind the competition.
They told me that the only hope was that worker attitudes change. Especially, the attitude that clings to the 30-35 hr. work week and the 4-6 week vacations per year that are standard for the non-parolee or non-temp worker. But, they said, realistically, change would be resisted because workers are pleased with the status quo (naturally) and are well-organized.
Their words. Not mine. And I agree with them.
I’m sorry, but that is ALL a load of crap.
How about the management/investor class adjust their unreasonable expectations? How about business realize that to make a PROFIT is enough, that it’s not necessary or healthy for society to squeeze out MAXIMIZED PROFIT at all costs? How about we realize that many of the problems with the current business climate are due to corrupt corporate practices and a small-minded unwillingness to consider the needs of workers and their families? The neo-feudalism that the nationless monied classes insist upon breeds instability and conflict.
The kind of orthodoxy you describe is just a narrow-minded way of viewing the way we do business. It doesn’t work, and creates hosts of problems for everyone, INCLUDING business.
Your “load of crap” is out of their “horses mouths.”
This is a report of an encounter not a proposal for a solution to capitalistic abuses. Nuance can be difficult to grasp before noon.
Nuance? Really?
In other words, workers need to work longer hours for less pay and take less vacation time. Spend less time with your family, more time with the Company. But don’t expect more money for it!
You claim to support the above position 100%.
them in the tenor of our discussion then and this discussion now. In order for Spain, France, and probably other countries in Europe to be competitive in a global economy so that the citizens and workers can continue to enjoy a good standard of living beyond today they will need to work harder and produce more at lower cost.
I don’t support the conservative position of maintaining the status quo for the sake of how “nice” things are for workers this week and how “nice” things have been in the last 30 years, when doing so likely implies doom to that standard of living.
Evidently, you disagree?
Firstly, to come back to the case in point, as Jerome notes above:
So France actually created more jobs than the USA in the private sector, and more jobs both overall and in the private sector than the UK – precisely at the time when supposedly irrational measures like the 35-hour week were in force.
France is just as competitive as the US, job-wise – even with 4-6 weeks vacation and universal health insurance!
More generally, the global economy as currently constituted could bear some scrutiny. The promise economic globalization was that if we – the citizens of the West – accepted some dislocations (such as the offshoring of manufacturing) we would all become more prosperous. I don’t see that happening, do you?
I have found discussion and reports that call into question what is asserted above. As any bloggee/er knows there are “damned” statistics abounding. I will not imply that mine are more accurate than the diarists; I will only refer you to the alternative assessments one can easily find by Googling France “net job creation”
here;
here;
and here to name the first three. All dispute the above claim historically,.
On the other hand, a rosier picture can be obtained here.
One may conclude that those “damned” statistics can tell any story the interpreter desires, depending on which statistics one chooses to regard and which to disregard. Much the same phenomenon exists in opinion polls, as we’re all well aware. How the question is phrased exactly can pre-determine the responses in a desired direction. Hooray! Support for my point of view.
Frankly, the historical trend of unemployment figures for France from the Index Mundi might be more telling. 10.4% in 2004; 9.7% in 2003; 9.1% in 2002; (2001 missing) 9.7% in 2000; 11% in 1999.
One can naturally comment, with all that touted job creation, not much of an impact on unemployment, is there. Then one must ask, are the French “better off” or even “well off” under their current worker-protected system.
Since it’s late in my timezone and I’m no longer tracking as well as I would wish, just a few remarks:
With respect to unemployment figures, we need to be careful to adequately account for the differing tabulation standards. This diary is a very lucid survey of the reasons why the US unemployment rate is most likely higher than reported.
Also, the unemployment rate must be viewed in conjunction with the labor participation rate – and this seems to have fallen somewhat in the US in recent months, while remaining constant elsewhere.
Finally, most of the links you cite are prior use pre-2000 data, and thus do not necessarily reflect relative economic strength today.
This is not to say that the European system is without problems (here’s an interesting discussion of that same issue). But what it does do is ensure that the job-holding population are citizens with rights, and not merely commodity goods.
These issues are a lot more complicated than you are portraying them. There are consequences to giving an employee six weeks of vacation. I’ve never seen an mid-level employee that was worth his salt that could afford to be away from the job for six weeks and still maintain their indispensibility within a project.
It creates enormous inefficiencies because someone needs to be able to do your job in your absence.
This isn’t just about the level of compensation, or time with the family. This is about how to run a project and do it efficiently.
There is a correct balance. Finding the correct balance is a job for both the government, and for individual project managers in consultation with their labor force. Everyone asks for the moon, and gets somewhat less than that.
It’s messy. But it is not as simple as you make it out to be.
I have 8 weeks of vacation per year. (and I blog a lot) My job is done just fine.
Believe me, I am happy for you.
But, I still think granting you that much off-time necessitates training someone to do your job in your absence, which would not be the case if you had 2-3 weeks of vacation time.
So, the question becomes, does your extra 4-5 weeks off increase your productivity to the point that it pays to give it to you. I don’t have an answer to that, but it is not a moot point.
oh, I absolutely believe that they said it, and that they believe it, but that neo-liberal economic POV is just a matter of faith, it’s more ideological than anything else. Markets are just man-made systems, like big huge games, and pretending like there is some “natural” market that one can study like a science is one of the great delusions of the 20th Century. Societies can set the rules on their markets however they want, based on what that society values.
That capital is of so much more importance than workers’ needs, their dignity and security, is a sign of a broken system, IMHO, and the kind of coverage that Jerome is counteracting in this post serves to show that the “news” is used to push a particular set of values without enabling a counter-argument to be heard.
are considerable issues. “Needs,” in the first case — workers need jobs. Please see my response above (Arguable Statistics).
“Dignity” is an issue that will remain volatile, depending on so many variables; it’s difficult for folks to agree what is meant by the term as it changes not only from individual to individual, but also over time, and probably from culture to culture, among just a few variables.
“Security” is something French workers who have jobs have in abundance. French people who are willing, able, and seeking employment face a tougher challenge to get that security than workers in this country do simply because of the defenses employed and organized workers built into their version of capitalism. Perhaps the degree of job security and benefits they enjoy and French companies increasingly can ill-afford to provide explains, at least in part, why unemployment remains high regardless of job creation.
Obviously, job creation in France hasn’t fixed what we in the US believe it’s designed to fix — unemployment.
People need jobs to live. What’s so great about being employed if you’re still dirt poor? Should we look at poverty rates? Life expectancy?
I don’t think it is a load of crap at all.
I think it is a solid starting position to have a conversation about these issues.
If I decide to take some of my money and invest it a project, I expect the project managers to return me a maximum profit. I expect them to do that without resorting to unethical practices, such as using slave labor, endangering employees, or breaking the law in any way.
The shareholder has a right to question whether 6 weeks of vacation is beneficial or detrimental to the overall profitability of the project. And they have a right to question the 35 hour work week, versus the 40 hour work week, etc.
At the same time, labor has the right to make their case and push for laws that limit their work burden and maximize the compensation.
The only problems arise when distortions are introduced into the mix. It is unseemly, to say the least, for the government to give out tax abatements and other corporate welfare at the same time a corporation is opposing labor demands and is operating with triple digit profitibility.
There is good debate to be had here, but not by calling one side’s position a load of crap.
Actually, Limelight’s saying that 40 hours of work week + unpaid overtime + no vacation is a good thing. Not just from the perspective of the investor class, but for everyone.
The shareholder has no right to demand “maximum profit”, any more than the worker has a right to demand “maximum wages”. This is especially true since demands for “maximum profit” inevitably lead to abuse of employees, illegal behaviour, and environmental pollution. “Maximum profit” is a net harm to society.
that’s a definitional problem, otherwise you are begging the question.
A shareholder always has a right to maximum profit.
However, you have to maintain all appropriate caveats to that.
Mainly, the caveats are about abiding by the law, and hopefully beyond that, to ethical standards that go beyond the law.
In reality, since corporate lobbyists write more law than labor lobbyists, the law is inherently biases against the worker.
But it is a process. You can’t dismiss it all as a load of crap.
well, no, he/she doesn’t. A shareholder has a right to a share of the profits/losses equal to the amount of shares he/she owns. In no way, shape or form does that shareholder have a “right” to MAXIMUM profits. This is a great lie that has been propagandized for several decades now.
Seeking to maximize profits on a shorter and shorter time frame has led to a host of problems. Once stable companies have been hollowed out. Towns destroyed, workforces decimated, small investors harmed because they didn’t have access to the same information that the locust-like investor class has.
I was in college in the early 80s when this new orthodoxy really took hold, during the Reagan years. I remember when friends with business majors when from talking about profit to talking about maximized profit, from talking about sustainable markets to increasing market share. This has been enormously damaging to our society, and shows in the stagnating wages and job prospects of the greater majority of Americans, and workers in the world over.
In effect, the monied class that has pressed forward this take on markets has forced a boom/bust system on the rest of us. Growth follow by bubbles bursting, while insiders cash in on both the upswing and the downfall.
There is no reason why the markets can’t operate in more rational ways, ways that take into account more values than just maximizing capital.
Again, that is a definitional problem.
Shareholders have the right to expect decisions will be made to maximize the return on their investment.
What you are objecting to are the consequences of that expectation.
Here’s the problem as I see it. The investor class is going to put its money somewhere. Ideally, they will put it somewhere where value will be added, and there will be benefits for the whole society.
They will seek to get the maximum return on their investment, just as every shmo does when they allocate their 401(k) investments.
There is nothing wrong with this.
The problem is that the pressure to produce god quarterly returns distorts the market and leads people to break the law, and even to change the laws at the expense of labor.
You are making an argument that has validity, but it doesn’t address the real issue.
Whether France had a 35 or 40 hour workweek is only relevent to the question of what will produce the best return to the investor. That’s capitalism.
The only limit on that is probably a strawman. If you determined that it was more productive to pay people squat and work them to death, then you would have a human rights issue. And that could trump profitability. And in some industries this is a real issue. But overall, the hours in the workweek, and their relationship to productivity is an empirical matter. And both sides distort the empirical record to make the best case for their clients.
The local community that wants to keep its factory despite its lack of productivity, has to provide solutions to the shareholders that will satisfy them.
Otherwise, you wind up holding people’s capital hostage and investment will dry up completely.
It’s the government’s job to provide social security and health insurance, not shareholders.
Socialism should enter in an insurance, not as an interference in capital investment.
I think your focus is wrong on this.
but that’s just it, to say that economic arguments can only be on the terms of the investor class is to distort the argument. There are more ways to describe/drive a market than merely increasing capital as much as possible.
Why do we celebrate the Wal-Mart method of doing business (cut costs as much as possible, maximize profits) while relatively ignoring the Costco model (which seeks steady growth and market penetration, all while maintain higher wages and security for employees). BOTH are valid ways of organizing a business, in a cold-blooded sort of way, but if you measure them ONLY by capital growth, then the Costco model would naturally be frowned upon. To insist that all international trade follow the Wal-Mart values is to court instability and boom/bust cycles. This is VERY bad for people, bad for communities and bad for a predictable, sustainable business climate. The Wal-Mart model serves primarily those with insider knowledge and large amounts of liquid capital. That makes no sense to me.
To say that people will only invest if they can be assured of maximum returns is another distortion propagated by the financial industry. People invest for a lot of reasons, and maximum returns isn’t the only one. There is a question of comparative risks to those returns. One thing I’ve noticed, talking every day to investors, is that more and more of them are being brainwashed into feeling like suckers if they don’t get 20% returns every year. Those same investors are crying two years later when that hot fund or stock has collapsed, while the investor who took into account risk chugs along, not suffering the same crashes.
Someone who opens up a sole proprietership on your corner and sells you bread is happy when he’s turning a profit. He might want to up that profit, but the first goal is to build a sustainable business and assure steady, predictable returns. He can experiment after that, if he’s got the stomach for the risk, but not everybody does. The great majority of businesses, of markets, are little investments like that, NOT traders and professional managers squeezing out every maximized percentage point before they squeeze an enterprise dry.
The right wing is interested only in serving the demands of the investor class. They are not the only economic actors who matter.
these are all anecdotal arguments.
you are having a definitional argument with me.
Both CostCo. and Wal-Mart operate to assure maximum return to their investor. They have a different philosophy about how to accomplsh that.
You are using different definitions. I can’t argure economic theory with you when you do that.
I’ll wind up sounding like a heartless bastard, when all I really am saying is that regulation needs to be done on one end and not the other.
no, I see that, and I don’t mean to imply that you’re a heartless bastard. What I’m trying to point out, and what I was taking from Jerome’s criticisms of the US media’s coverage, is that the arguments over labor and what not are all presented based on the pro-investor class set of definitions, and presented as though that is the only way a market can run. When you start from those definitions, OF COURSE the workers look selfish, etc, because “selfishness” is defined based on maximizing capital as being the definition of “selfless” or “good”.
The assumption that is driving all of the coverage, all of the neo-liberal market “reforms”, demands that we accept their definitions. My argument is that doing so cooks the books. It removes labor’s needs from the equation. It makes workers NOT actors in the market, but rather commodities. To regulate only that one end of the equation reduces workers to commodities. That’s the whole problem.
I don’t mean to pick a fight, but how you define things matters a great deal more than we give it credit … and for nearly half a century the right and the monied classes have set the definitions.
Right, but we do have to make sure we know what we are saying to each other.
From the point of view of the investor, and the market, the worker is a fungible commodity. But that is not, in and of itself, a problem.
The question is, at what point does the worker get his rights, his respect, his security?
And that should be at the legislative level, where the worker has a portion of his earnings taken away from him for his own good. The money goes toward unemployment insurance, pension, health care, etc.
It can be done as a payroll tax, or an income tax, or a sales tax, doesn’t matter.
The point is that the investor’s money should not be held hostage to provide for the security of the worker. Their earnings can be taxed for that purpose, but their outlays should be secure, and their business decisions should be unencumbered by such considerations.
My point is that socialism can be overlaid on top of capitalism, but it needs to done the correct way. Interfering with capital investment decisions is not the right way.
Bush uses this rhetoric about “it’s your money” to get people to resist any program that pulls out a part of their earnings to provide economic or health security.
But that is precisely where the regulation should come in. By all means, tax dividends, capital gains, income, and estates, but don’t tell investors they have to continue to operate their plant in Akron because it is the patriotic thing to do. That will backfire in the end.
I see what you’re saying. The problem is managing to get those protections legislatively in a world where state-less big money is able to buy off rightwing governments. Even if investors treat workers as fungible commodities, they aren’t fungible commodities, they are economic actors. If the international investor class is leveraging legislative action through political contributions, the workers are perfectly within their rights to remind everyone that they ARE actors, not commodities, and the way to do that is to withhold their work. Investors threaten to “strike” against communities all the time, dropping promises that they will withhold investments if they don’t get their own version of welfare, through tax breaks or favorable laws. If these deals harm workers, workers are perfectly within their rights as economic actors to punish the investors through slowdowns, strikes or political reprisals.
You’re insisting that the investor’s money is some kind of primary value, instead of just one element in the equation. It is fundamentally unworkable over the long term to swing the economic pendulum too far to either labor (Marxism) or capital (neo-liberalism). There is no reason why markets can’t be arranged through the political process to treat both sides as equally important economic actors.
Here is what I am insisting…
You can make any laws you want, but you can’t make someone invest in a company that makes cars for $3,000 with a $1,000 profit over a company that makes cars for $2,000 for a $2,000 dollar profit.
To attempt to do so is absurd.
If Ohio can’t make a competitive car then they shouldn’t make cars.
Now, a city in Ohio, and its workers are going to have several gripes with that viewpoint. And they are legitimate gripes. So, how do we address them without telling the investor class that they better not invest in Ohio or their money will be held hostage there if things turn sour?
Do you see what I’m saying?
The Ohio car makers need to have security against sudden unemployment, they need health care, they need money for re-training.
That money needs to be raised somehow, and it needs to be set aside where it can’t be used to bomb Teheran. But the solution is on one end, and not on the other.
Nevermind … I give up. You have completely swallowed the idea that no economic activity happens without fluid capital, which is funny, considering there has been centuries of economic activity based on various economic models. I refuse to accept that only the neo-liberal version of a modern economy is possible. Not all investors invest only with maximum profit in mind (going back to my bread store owner). Some want to contribute to their communities. Some just want a sustainable living without scorching the Earth. The idea that ALL investors care ONLY about maximizing profit is a lie told by the modern financial services sector. It will destroy this country’s economy eventually, as it is just a modern version of the Robber Baron’s rapacious exploitation of nature, workers and society. It is warping people’s economic decisions. It is seriously scary that even “liberals” buy into this lie, this distortion.
you should give up, because you aren’t making any sense.
I never said maximum profit is the sole determinant of how someone will invest. For example, Akron’s citizens could band together to invest in a tire producing corporation that was committed to staying in Akron.
You seem to have some kind of disengagement from economic reality.
Obviously, investors seek out opportunities to get the best return, and they will fire someone that refuses to make a good-faith effort to provide that.
If you think this is a scorched earth mentality you are just being hysterical.
I am talking about the proper place to provide regulations to mitigate against the scorched earth potentialities.
I never said I was opposed to capitalism.
You’re wrong on this point. It’s easy to “make” somebody invest in the $1000 profit company, by putting up tariff barriers that prevent the $2000 profit company from participating in the local economy. If you have some money to invest you invest in the best AVAILABLE option, which may not be the best option across the global economy. America already does that with its 25% duty on imported light trucks, for example.
Ah, you are complicating matters.
Yes, American legislators can protect American businesses by artificially raising the cost of production for foriegn based manufacturers. And that is okay provided investors are aware of the added cost.
But, that is somewhat of a separate issue than what is being discussed here, which is whether or not the CEO of a publicly owned corporation has a duty to maximize profits (and whether the shareholders have the right to expect the CEO to fulfill that duty).
saying anything of the kind. I am saying — in general summation of specific points I’ve made previously — that France needs labor law reform in order to get a grip on unemployment, for economic growth (historically less than 2% annually), and to compete in the reality of today’s world-based economy.
And I did’t even begin to talk about how France needs to reform its agricultural economy! Count yourself lucky. <grin>
Let me get this straight. You’re saying that employers treating their employees like indentured slave labour is a good thing?
Jerome’s numbers say you’re full of it. France isn’t “lagging behind” anyone. The only thing the “American concept of work” does is make the workers miserable and easier for management to push around. It doesn’t improve profits or productivity, it doesn’t reduce unemployment, and it doesn’t have any other benefit.
Thanks so much for providing some balance/context to the coverage.
This is an ideological fight. It’s a fight of the progressives against the relentless march of the logic of focusing only on short term corporate profits.
Not only is it a fight of ideas, there is little factual evidence to show that what the conservatives want actually does show up in short-term corporate profits. Extreme flexibility has transaction costs in outsource contract management, human resources administration, delays in filling jobs, and so on that are routinely overlooked by those executives who think they know how to run an economy. Short term profits become more volatile and might even net out as losses if accurate accounts were used instead of cooked books.
Thank you so much for this. I am appalled at the coverage here.
Even Jon Stewart spread the MSM lies last night on the Daily Show.
Hey Jerome, thanks for putting up this diary here. I admit to not following this that closely but it doesn’t surprise to hear once again how the MSM is really screwing up the coverage of this story.