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Anthony de Jasay: socialism has made the European worker impotent

Somehow I came across this article written by Anthony de Jasay for the Library of Economics and Liberty, which I know best as the site that publishes EconLog, the blag of Bryan Caplan, Arnold Kling, and David Henderson. Jasay’s article was written in 2006. It details some consequences of socialist economic policies on the labor market, specifically labor unions, rendering workers and worker unions powerless to make many demands because they are so desperate for more jobs and more job security.

An ever more elaborate system of ‘workers’ rights’ was promoted until the labour code grew to several thousand pages—a happy hunting ground for labour lawyers, a minefield for enterprises. Trade union power came to be based, not on workers recognising that union membership may serve their interests, but on legislation, government sponsorship and the patronage afforded by the immense administrative machinery of the various social insurance schemes.
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The future historian of these apparent triumphs over economic reality will very likely single out two phenomena that loomed more and more ominously and in fact began to signal that no matter how the battles went, the war was beginning to be lost. One was the growing severity of job protection policies that made firing employees so difficult and expensive that employers were frightened away from hiring them in the first place. New job creation fell to levels last seen in the Great Depression, for offering employment except on short-term contracts has become an act of reckless audacity. (One small but significant breach in job protection came just the other day when the highest French court of appeal ruled that terminating employees may be permitted not only when the enterprise is making losses threatening its survival, but also when terminating employees is necessary to prevent such losses).

The other ominous phenomenon was that the high level of unemployment, which would have seemed abnormal a decade ago, has come to be seen as a fact of life. It has resisted the multitude of attempted therapies governments of both Right and Left tried to apply to it. The diminishing band of diehard defenders of the ‘European social model’ still mutter that unemployment is high because the model is not ‘social’ enough, or not European enough, and all will be well when it is made more social and more ‘harmoniously’ European. Meanwhile, it is starting to be noticed that chronically high unemployment has almost wholly drained away the bargaining power of labour in the private sector. Union militancy is now confined to the public sector—essentially, to public transport workers, teachers and government clerks. Thirty-odd years of socialist economic policies have reduced the mythical, red flag waving ‘working class’ to passive impotence.

An anecdote bears eloquent witness to how workers ‘benefiting’ from the ‘special model’ now stand compared to those who are exposed to the ‘caprice of the market’. Two years ago Toyota set up a car assembly plant in the industrially derelict region of Northeast France. More recently, the president of Toyota visited the plant, expressed his satisfaction and explained that the company has chosen to locate in France rather than in England (which was the runner-up candidate location) because ‘English workers can afford to talk back, but French workers cannot’.

I wish Anthony de Jasay was a more active, or at least more high-profile, writer or even blagger today because his magnum opus The State is so good that more people need to read about him. He still writes articles for the Library of Economics and Liberty, so I guess I should actually read them regularly and accept that as good enough for an 85-year-old.

Posted in Economics, Socialism