France’s socialist president sees a struggling auto company, and shoots it dead

An Indian living in the West writes:

Here is an interesting story. France’s biggest auto-maker (and Europe’s second biggest), Peugot, is struggling very badly and losing money. The markets are predicting a 50 percent chance of bankruptcy in two years. What does Marshmellow Man, the new President of the Fifth Republic, do? He says that Peugeot will not be allowed to lay off workers. Not only that, he is in the process of passing a law that will make it impossible to fire employees in France. Isn’t that a wonderful solution?

I suppose these idiotic laws and the insane taxes will prepare the French car companies (which make sub-standard cars compared to the competition from across the Rhine) to compete even better. The French have well and truly lost touch with reality as a nation and have become a laughing stock.

LA replies:

I’m sorry to keep referring to Atlas Shrugged, but it’s impossible not to. This is exactly what happens in that novel. In order to “stabilize” the failing economy and give it time to recover, the government passes Directive 10-289 which prohibits all business enterprises from firing, or hiring, anyone, without special permission from a government board.

- end of initial entry -

ILW replies:

Yes, Atlas Shrugged has the same theme running through it. I have never read Ayn Rand but have heard a lot about it, obviously.

As a conservative at heart, I would prefer to cite Edmund Burke. When Irish farms were struggling, he cautioned the Prime Minister against trying to impose laws on land owners to regulate wages. His reasoning was so sound and so cogent that it is all that one needs to know about “regulating the economy.” Think of the mountains of bilge that are produced by idiotic statist economists every year looking for jobs in government and subsequently awarded Nobel prizes like Krugman and Stiglitz, when a truly wise ruler (or rulers for democracy) would disregard all that and listen to Burke’s simple wisdom instead.

Burke’s caution was not based on heartlessness, but on his political wisdom, which stated that these kinds of continuous intrusions create the basis for tyranny. Every intrusion has unintended consequences and compounds problems which call for further intrusions and so forth. Burke wanted men to contract and trade with each other as free men and to bear the consequences of chance and folly for that is the only true justice there is. What justice is there in a sound business being taxed to the nth degree so that some socialist oaf can keep a bankrupt business like Peugeot running indefinitely? Sadly, in France no one even asks the question. The amorality of that is never questioned.

Danny B. writes:

This French law on layoffs reminds me of something.

When I was somewhat younger, and Pat Buchanan would run for President and free trade was a big issue, I sympathized with those who opposed it, but I always thought that one perquisite to bring prosperity back to America and end outsourcing would be to remove various petty restrictions on companies imposed over the course of the 20th century. I mean, then they would be able to practice real free enterprise rather than be stapled down with a thousand staples.

It’s ironic that Obama has talked about reversing outsourcing and heavily taxing companies that engage in it. If our President really wants to reverse it, he should morph into Calvin Coolidge and reverse regulation, because his current policies are likely to lead to more companies outsourcing.

Ironic how liberal policies always end up doing the reverse of what they’re intended to do. I’m sure the same applies to Hollande.

Thor Christopher writes:

I pictured the character in Atlas Shrugged, Wesley Mouch, Senior Coordinator of the Bureau of Economic Planning and National Resources, to be a man very much like Holland. A clean, fastidious little man, but one that leaves people with the feeling of having been in the room with an unclean rodent carefully surveying the area for food. The comparison between their political positions is not exact (Hollande is “Head of State” and Mouch was an appointee until the very end of the story, but one with enormous power), but their action here is very similar.

Hollande hopes to implement indirectly at least a portion of Point One of Mouch’s Directive 10-289 that froze the labor force.

A reader writes:

The situation in France is complicated. The difficulty that companies have firing people has existed for a while (at least since 2005). De Villepin, Sarkozy’s nemesis, supported a law that would allow companies to fire after two years of employment. The reason was to help integrate the millions of Muslims and blacks that companies were hesitant to hire because of existing law. Students at the Sorbonne began protesting and actually rioting. This spread throughout France and even into the high schools, effectively shutting down the entire school system. Villepin had to back down. To my knowledge, this system in France, of preferential hiring of people with French and European names, is still extant.

LA replies:

I remember that big controversy in France at the time, and posted on it. It was so striking that in France, once people are hired, they have the job for life, and any move away from that system set off these nation-paralyzing protests. I assume that the issue in 2005 dealt with different kinds of employer from auto manufacturing companies.

Posted by Lawrence Auster at July 18, 2012 04:12 PM | Send