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The Blind Decades

The Blind Decades: Employment and Growth in France, 1974-2014

Philippe Askenazy
Translated from the French by Susan Emanuel
Foreword by Richard Freeman
Copyright Date: 2015
Edition: 1
Pages: 280
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  • Book Info
    The Blind Decades
    Book Description:

    France is often described as one of the last Western economies unable to reform itself in the face of globalization. Yet its economy has not fallen by the wayside and has even resisted the great recession that began in 2008. By interlinking historical, economic, and political factors and by comparing France with other nations, this book explains the puzzle presented by the development of France. Understanding France's economy requires downplaying the usual policy injunctions—demands for less state control and less rigidity in the labor market—and instead stressing the importance of constructing a long-term industrial strategy.

    eISBN: 978-0-520-95995-8
    Subjects: Economics

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. FOREWORD Tout arrive en France
    (pp. vii-xvi)

    The way workers and employers interact in the labor market and the way governments regulate labor markets are highly idiosyncratic. The institutions and rules that govern labor reflect the culture and history of a country more than product markets, where multinationals dominate sales worldwide; financial markets, where banks and brokers operate similarly around the world; or international trade, where global agreements set the rules for all countries. In the world of labor, the Nordics are famous for high rates of unionization and collective bargaining, active labor market policies, and low levels of inequality, while the United States is famous for...

  4. Introduction
    (pp. 1-8)

    France has long been presented as a curiosity, with its workweek of only 35 hours and its 36,700communes—organized into an elaborate state apparatus. In the image of its museum-like capital, many of its institutions seem to exist outside of time. Though it produces the Airbus and serves as the headquarters of many multinationals, its economy is said to escape the logics of globalization even now. France is usually seen as vulnerable, in the middle of a European continent stuck in crisis. TheEconomistdevoted an issue to France (November 17, 2012), with the headline “The Time-Bomb at the...

  5. CHAPTER ONE Four Decades of an Industrial Revolution
    (pp. 9-37)

    In both common perception and from the perspective of much modern economic history,¹ a historic shift stands out in the industrialized world: three decades (1945–1973) were marked in the major market economies by strong growth and full employment, and followed by decades when crises and booms alternated, before they all crashed into the Great Recession in 2008. In France, the first period has been nicknamedles trente glorieuses(the Glorious Thirty), after a book published by Jean Fourastié in 1979. On top of economic prosperity came a modernization of the country’s economic, social, and cultural structures. The second period,...

  6. CHAPTER TWO 1974–1981: The Creation of Mass Unemployment
    (pp. 38-71)

    The seven-year term (1974–1981) of president Giscard d’Estaing saw unemployment settle in for the long haul at the top of the agenda of French political preoccupations and social fears. Henceforth, the obsession with full employment would not disappear from the public scene; it would eventually come to characterize the French theme in the symphony of industrialized countries. The policies applied during this period not only illustrate a distinct failure to fully understand the problems of the day, but also contributed to aggravating the situation for a long time to come. Successive governments would bequeath to those that followed them...

  7. CHAPTER THREE 1981–1986: The Socialists Try
    (pp. 72-97)

    At the start of 1981 a tight election race opened in France. The outgoing Giscard-Barre team stressed its successes—the stabilization of public finance, the relative solidity of the franc—and proposed to pursue its employment policy by opening two new paths: part-time work and a reduction of working time in industries that benefited from gains in productivity due to electronic technologies. On the other side, the Common Program of the Left (Socialists, Communists, radical leftists) proposed a massive stimulus package, an increase in minimum social benefits, and job-sharing of working hours.

    The victory of the Socialist candidate François Mitterrand...

  8. CHAPTER FOUR 1986–1993: From Hard to Soft Economic Liberalism
    (pp. 98-121)

    The failure of the Socialist government to control French capitalism, followed by the turn to rigor, would liberate the field for new ideas. Economic liberalism would flood into this vacuum. It triumphed with the re-election of Margaret Thatcher in Great Britain, and of Ronald Reagan in the United States, and the victory of the liberal—conservative coalition of Helmut Kohl in Germany. The liberal wave that struck France occurred in two phases. During the first one, a Right converted to hard liberalism came to power; the second wave confirmed the Left’s abandonment of the economy to the market(s). This double...

  9. CHAPTER FIVE 1993–2002: “New” Effective Policies?
    (pp. 122-159)

    A few days after François Mitterrand’s “we have tried everything” (chapter 4), the right-leaning government of Edouard Balladur inaugurated a new employment policy. It relied essentially on lowering the cost of labor to the neighborhood of the minimum wage. The election of Jacques Chirac in 1995 would accelerate this process. Then, as if to contradict the deceased president (Mitterrand would die in January 1996), the left-leaning government of Lionel Jospin, winner of the 1997 Assembly elections, added a sort of return to the original Mitterrandism by applying an ambitious reduction in working time, coupled with a series of innovative provisions....

  10. CHAPTER SIX 2002–2007: The Decay of French Economic Policy
    (pp. 160-183)

    The first decade of the twenty-first century opened with bad news: the bursting of the Internet bubble and the attacks of September 11, 2001—the latter, a human tragedy that triggered a geopolitical cataclysm. Paradoxically, these events would strengthen belief in the solidity of a capitalism capable of absorbing major shocks and sustaining rapid global growth. This optimism would then implode in 2008.

    However, none of this prevents us from detecting the consequences of new national employment policies in Europe—policies that were devised precisely because of the stability of the macroeconomic context at the start of the 2000s. In...

  11. CHAPTER SEVEN 2007–2014: From Optimism to the (Not So) Great Recession
    (pp. 184-226)

    At the beginning of 2007, the world economy was running full tilt, but France remained partially on the margins of this prosperity, which reinforced French lassitude after twelve years of the presidency of Jacques Chirac. Nevertheless, a new president of the same political stripe would be elected, at a time when an alternation of parties had become the norm in major European countries.²

    The election of Nicolas Sarkozy came with enormous expectations due to his promise of a return to forceful political action. Yet within two years unemployment had once again become the prime preoccupation of the French, or rather...

  12. CHAPTER EIGHT The State of France: Four Decades After the First Oil Crisis
    (pp. 227-248)

    After four decades of struggling against unemployment and adapting to globalization, where does France stand these days? Reading theNew York Timesor theEconomist,the answer is categorical.¹ France is the sick man of Europe—as was the United Kingdom in the 1970s and Germany in the 1990s. France is too big to be saved; it is burdened with a spendthrift state; the French people do too little work and are addicted to their advantages; the citizenry is averse to reform. Even academic studies see French society as distrustful and unhappy.² In this chapter I offer a portrait of...

    (pp. 249-252)

    France furnishes a remarkable laboratory in which to study political trouble in the face of transformations in capitalism and paradigm changes in economics. Since 1974, the country has never been able (unless for a transitory moment) to escape from mass unemployment. It has proven incapable of maintaining durable growth or of fully grasping the opportunities implicit in the regular reconfigurations of the world economy. Yet, at the same time, France has maintained from year to year its status and its credibility, even amid the Great Recession and the European sovereign debt crisis.

    The step-by-step analysis developed in this book has...

  14. INDEX
    (pp. 253-260)