Family Capitalism and the French Problem with Work
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Review Article
Family Capitalism and the French Problem with Work Nicolas Ve´ron Bruegel, Rue de la Charite´ 33, Brussels B-1210, Belgium. E-mail: [email protected]
In Le Capitalisme d’he´ritiers (heirs’ capitalism), economist Thomas Philippon convincingly challenges the received wisdom according to which longer working hours, less powerful unions, and less state regulation are what France needs to thrive. In the picture he paints, French company owners and managers are not victims but rather key actors of a low-trust equilibrium that combines dismal levels of cooperation between employees and employers, widespread family control, confrontational unions, and hierarchical management. Breaking this vicious circle is hard, but would be essential to unleash France’s economic potential. French Politics (2007) 5, 354–362. doi:10.1057/palgrave.fp.8200132 Keywords: industrial relations; working time; management culture; Nicolas Sarkozy; reform
Introduction France, it would seem, has a problem with work. Ten years ago, Lionel Jospin’s socialist party unexpectedly won the general election on a platform whose central item was the 35-h week, and, having pledged to ‘do what he said he would do’, duly reduced the legal working time in the following years. The side effects, wage moderation and additional working time flexibility, played a big part in the socialists’ severe defeat in the 2002 elections, in spite of a record surge in private sector employment. Then this year, Nicolas Sarkozy won the presidency by committing to restore ‘work as a value’ (la valeur travail) and to allow French workers to ‘work more and earn more’ with financial incentives to overtime. Conventional wisdom has a long-standing interpretation of why work is such a contentious issue in France. The problem, the interpretation goes, combines labor regulation, union power, and an overgenerous welfare state, which distort working relations and depress economic activity (e.g., Baverez, 2003; Alesina and Giavazzi, 2006). It would be fixed by giving more freedom to hire and fire, lowering payroll taxes, trimming unemployment benefits, and reforming the legal framework for collective bargaining by reducing the
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entrenched privileges of hardline incumbent unions, such as the ex-communist Confe´de´ration Ge´ne´rale du Travail (CGT) or its postwar offshoot Force Ouvrie`re (FO). But look more closely, and this received answer gets less and less helpful when it comes to concretely tackling France’s problems, or even to understanding them. Even with a strong mandate, policymakers seem unable to use the conventional wisdom as guidance for reform. After the 2002 change of majority, then labor minister (and now Prime minister) Franc¸ois Fillon made a number of adjustments to the working-time framework, but did not increase the legal working time (the reference on whose basis overtime is calculated) from its 35-h level. Nor did Sarkozy in 2007, in spite of the considerable amount of political capit
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