The political, economic and social malaise in France

the cause of fear in French companies.

updated 09/08/2011, 23/01/2016, 14/06/2020, 23/03/2023.

We could also take up the title of a famous book on French Evil. This analysis also goes beyond the French framework to concern the malaise of our organizations based on a very particular economic system: capitalism became today economic neo-liberalism as it is true that it is no longer only capitalists who direct everything but that the state, to correct the social inequalities and contradictions inherent in capitalism, intervenes even if its role is fluctuating and risky.

the root cause:

The search for a fundamental cause of this fear of employees in companies, especially French: the political and strategic choice to rely on technical capital to the detriment of employment and skills.

In mankind, fear of the stranger fueled many wars because to avoid being invaded by the foreign camp of which we did not know much, it was better to go straight to the attack. This was, among other things, the driving principle of the Roman Empire. Today in our global village under the surveillance of electronic warfare centers, everything is known and there are no more foreigners. There are cultures of different peoples, but this may not be a problem if we know how to find ways to marry cultures and build new knowledge that will ensure social progress for humanity. We will see on this website how to marry cultures.

For the time being, the issue here is to understand why the development of the liberal economy generates this social malaise and what solutions this system offers to make people safer. We will discuss these solutions with those provided by a network organization in order to clarify the terms of a civilization choice. 

Facts: 

This fear in public opinion, in France, beyond any fear or reluctance in the face of innovation that disturbs habits, has been reinforced and developed by the political choice to rely on technical capital to the detriment of the labor factor. 

Individual property rights, including means of production.

This policy choice is based on individual property rights, and employees understand that they no longer have the protection of communal or communal property. They have against them and the individual ownership of the shareholders and the technical capital: the machine no longer serves them as a protection or as a foil: it is it that imposes on them more difficult working conditions or more dangerous for their health. Collective ownership of the nation-state, on the other hand, is no longer helpful to the logic of financial profitability pursued by the leaders of the liberal economy.

The Economic and Social Situation in the Mid-1990s

The most visible and socially painful consequence has been high unemployment over the last fifteen years. This economic choice has created a social and economic blockage. The direct annual cost of unemployment in France in the mid-1990s is between CHF 300 billion and CHF 400 billion for passive expenditure. A figure of passive and active expenditure puts this annual cost for France at EUR 1 000 billion when the cost of expenditure linked to unemployment is added up with the loss of revenue for the State, the tax and social security receipts of 5 million employees.

At CHF 719 billion, 5 million people can be remunerated at a rate of CHF 8,500 per month (including CHF 143,820 per year). Why not make that effort when there was money to create jobs?

The choice to favor technical capital over employment.

Behind this question, which is so political, lies a dreaded psychological problem peculiar to our country, a question of the mentalities that decision-makers have towards the population. This choice to prioritize technical capital over employment is more than just a one-time opportunity. It is part of a long French tradition that a minority can take the right to defend its privileges without concern for others.

We remain a country in which one aristocracy takes the place of another regardless of power, and since the revolution, a private aristocracy has allied with a public aristocracy of high-ranking officials to share power in order to better preserve it.

This system of power centralized by a minority is the legacy of the monarchy, a monarchy that almost disappeared in the face of the extension of the networked organization of monastic and knighthood orders and that has since done everything to eliminate this political risk.

The ruin of the king of France and the nobility at the end of the 13th century, the prosperity of cities, abbeys, knights and people, the success of the organization in a network in the face of the monarchy and papal power have remained lessons that the proponents of an elitist and centralized power at the service of a minority of leaders have since no longer forgotten and they have succeeded until now in discarding this knowledge, prohibiting their teaching and constantly politically rejecting the citizen debate on the reestablishment of our common goods managed by common ownership, participatory local direct democracy and the assemblies the medieval period, the last flourishing period in Europe.

France has not managed to rid itself of these leaders and their system of power in order to become an economically progressive country.

In March 2023, the case, the political pension reform scandal against the opinion of a large majority of citizens, is the latest example of the will of French bosses and politicians they employ to eliminate Social Security, the folkloric idea of the National Council of Resistance to Liberation (CNR), CNR where bosses were absent just as they were absent in the Resistance since they collaborated with Nazi Germany to destroy communism.

The recent history of this cause of fear:

1) the difficult exit of the glorious 30 in the 1980s. 

Consumption growth remains high, while inflation is high and growth is falling and unemployment is rising. A revival of growth is needed. 

Unemployment is structural, and reviving the economy requires, first and foremost, modernizing the production tool, reducing demand, and slowing imports. It is an austerity plan.

Nationalizations eventually served as an accelerator for this modernization, and, from 1986 onwards, profits returned with the productivity gains made thanks to new industrial computer-based equipment: robots, programmable automata, flexible assembly lines, CAD/CAD, etc. This modernization was accompanied by waves of collective redundancies: at first, the substitution of machines for humans always led to the elimination of jobs. 

2) 1985 – 1994

correspond to the implementation of the new equipment and to the total quality movement.

All employees participate in the learning of problem-solving methods and put into practice the tools of quality circles. With the first microcomputers, it’s time for the first databases integrated in office processing, spreadsheets and dashboards are computerized to track the reduction of non-quality costs. 

But as employees carry out this transformation of the company and quality circles progress to define a new corporate culture through the company project, hiring is stopped except for new technology specialists and companies that have not been able to adapt must close.

Even in those that have modernized. Employers’ willingness to buy robots en masse, since the robots pay no social security contributions, is hampered by a lack of training in these new technologies. Indeed, working with robots without employees is possible only with teams of engineers and technicians trained in robot technology and maintenance.

In 1993, in the company where Pierre was restructuring precisely to automate the production islands that we were setting up, the supervisors had forbidden the robots from being touched by the group of employees trained in their first-level maintenance. The ABB trainer who came to follow up on these technicians every year had to report to Pierre, this implausible but very common situation at the time in French factories. The power struggle was not just among employers; it was also among supervisors whose technical skills had become outdated compared to new technicians trained in PLC electronics.

The extent of machine-induced job losses is becoming obvious, and the number of workers who leave each month more or less voluntarily is beginning to question. Unemployment peaked in 1994, when the franc’s monetary policy of preparing for the euro came on top of the social consequences of the technological transition.

3) 1995-2003

Preparing for the single currency of the European Monetary Union.

After the signing of the Maastricht Treaty in 1992, France was preparing for the single currency and, in order not to widen the gap between the Franc and the Deutschemark, it maintained a high level of interest while consumption was in crisis following the first Gulf War.

Around 1996, the franc’s parity in the new currency seems to have been achieved and there is an urgent need to revive growth by lowering interest rates. After 3-4 calamitous years, economic agents are returning to consumption and a pro-active employment policy is emerging by creating young jobs in the non-market economy and pushing companies to hire as part of the reduction in working time to 35 hours.

The peak of unemployment in 1994 was thus the price to be paid for the euro, and some writers may have written that the French unemployed were sacrificed to the cause of the single currency.

However, the continuing high level of unemployment, especially among young people, cannot be explained solely by monetary measures. The crisis is structural: the population is increasing and the participation rate (employed + jobseekers / working-age population) is increasing, while jobs are not being created at the same rate, resulting in a chronic jobs deficit. The female employment rate is one of the highest in Europe, but pushing young women out of the labor market is unthinkable, so the least skilled find themselves largely among the new poor.

Increasing the financing of non-market jobs leads to a widening of public deficits without real gains towards stable and sustainable jobs. The cause of this malaise lies, in our opinion, in the excessive search for productivity gains to maximize private profits without the state being able to intervene or else, as since 2002, with the direct or indirect help of a Liberal government which confuses economic flexibility with unbridled capitalism, deregulated.

There are two major steps in making this use of productivity gains:

• from 1985 to 1994: high productivity gains using new technologies based on programmable controllers and industrial, productive, electronic data interchange (EDI)
• after 1996: the attainment of labor-related productivity gains while the reservoir of capital productivity is exhausted because new technologies have not emerged to push the use of machines even further. On the contrary, the economic crisis hit the countries that accumulated too many machines first, and that need to be idled or retired. Japan and the US, after all, are affected much earlier than France. The robots cannot be overmultiplied because the limit of production in the capitalist system lies in the overproduction and loss at loss or destruction of unsold products.

In addition to this strategy of employers to obtain strong short-term productivity gains, in the 2000s there was a misunderstanding, hasty and ill-founded choices about the future.

The possibility of returning to full employment with the demographic shock.

A significant example is the introduction of the EPAR, the return-to-work assistance plan. Activating expenditure to combat unemployment can only succeed in this perspective of a return to full employment. To balance the UNEDIC’s books, what is spent on measures to support people’s return to work (personalized check-ups, coverage of training expenses, transport costs, etc.) will be offset by a reduction in the period during which unemployment or other social benefits are paid.

Theoretically, this would be irrelevant because most of them will have found work well before the end of this period of benefit payment, return to full employment obliges!

This policy was contradicted in practice as early as 2002 and 2003 because growth was not there to accompany this employment policy. The PARE fell at the wrong time!

The deficit of UNEDIC at the end of 2003 is more than 5 billion euros.

In order to save the system without calling into question both the EAP and the employer contribution reductions decided by UNEDIC in 2000, we know that these leaders decided to reduce the period of compensation after signing the EAP contracts. The first court decisions condemn this contractual non-compliance with the terms of the ERAP.

The bad faith and mismanagement of the leaders of the employers and trade unions reaches its peak: like the politicians, they too take refuge in the utopias of the system of power that they serve without taking into account social realities and without wanting to get out of the contradictions of their system of power. These decisions exacerbate social injustices and complicate the exit from our systems of power. 

The importance in France of the substitution of technical capital for employment between 1985 and 1994 

In hindsight, the numbers, the statistics, show the extent of these choices.

Let’s look at how from 1985 to 1994, productivity intervened to increase GDP in France, the U.S.A. and Japan

Summary table of productivity gains in these three countries between 1985 and 1994 

1) insufficient job creation: 

From 1974 to 1994, the US, with a population of 258 million, created 40 million new jobs, while Europe, with 270 million people, and despite the billions of subsidies injected into the economy, created 3 million jobs.

In 2000, in France, thanks to 35 hours and young jobs, the employment balance is positive and breaks records with about 430,000 additional jobs compared to the previous year. Will these one-off measures trigger a lasting job creation movement in our country? 

document:

Employment: these factors explain the French outage.

RTL by François Lenglet, Loïc Farge, published on 11/12/2015

According to Insee, there are 15.848 million market jobs in France. These are jobs created by private companies. This is the true indicator of the vitality of the French economy. If we look at that long-term figure, we see that our country had already reached that level of market employment, exactly, in the fourth quarter of 2001. This means that France has not created a market job for fourteen years. In the same period, France gained 5 million inhabitants, from 61 million to 66 million. The number of private jobs has not changed, while the number of inhabitants has increased by almost 10%. 

Redistribution trumps production 

Over these fifteen years, France has produced unemployed people (there are many more than at the time), pensioners (there are also more than in 2001) and civil servants and workers in the health sector, social workers in the voluntary sector (these are almost 900,000 more than in 2001). The unemployed, pensioners, civil servants, and non-profit sector workers make their living not from wealth production, but from redistribution. They are suffering it, at least the unemployed.

From the same number of employees in the productive sector, several million more people are financed. With this in mind, we understand why taxes had to be raised, and why even with additional taxes, the deficit had to be increased to finance this redistribution. 

In the period 1987-2001, France created 2.5 million jobs. What a difference! There are several explanations. First, in the late 1980s, France was over-competitive. It benefited from all the massive devaluations of the franc in the 1980’s. It was in a trade surplus. Second, Germany was on the other side of the ledger because of the reunification that took place in 1990. As a result, Germany bought us products – Renault’s, for example – instead of exporting. The Germans were consuming, to the point that they were being sold more than they were at that time. 

Secondly, globalization did not exist, there were no relocations! In 1989, Renault manufactured 4 million cars in France, compared to less than 1 million today. Moreover, at the time France worked 39 hours a week, not 35. The introduction of the 35 hours in 2000-2002, just when job creation in France was declining, had a negative impact on the country’s competitiveness, particularly since France was entering the euro at that time. Cannot devalue to correct. The 35 hours and currency union cocktail was devastating. 

The financial crisis must also have played a role in explaining the poor performance of the recent period. This is the last explanation for this huge difference. Over the past few years, we have suffered the crisis of the century, and we are still not recovered. In the first period (1987-2001), French GDP increased by 40%, compared to only 15% in the years that followed.

end of the document (which speaks for itself and confirms that the evil denounced in 1994 still exists at the beginning of 2016). 

2) the misinvestment, the main economic blockage: 

The investment rate drops over a period of 5 to 6 years, the duration of the tax depreciation. Beyond the concern to have an effective working tool, the owners of capital seem to be looking above all for the maximum depreciation, beyond the fiscal possibilities. In this mentality, the machine has to do its time, period. And management prudence is reinforced in times of economic uncertainty when demand is subdued and consumers no longer spend recklessly.

The craftsmanship of the staff will then have to do the rest while waiting for the dilapidated equipment to make it mandatory to change. This way of managing technical capital is particularly detrimental to engineers and technicians who prefer a steady evolution and not deep disruptions every five to six years. Especially since between these phases of profound change, there is no possible experience effect between one technology and another. Businesses often buy technologies that are new, but that they know little about because they are too different from the old ones they used.

This practice requires extensive adaptations and training of staff during the acquisition of new technologies every 5 to 6 years. This effort of availability is generally impossible and only an “elite” is designated by the management to update its knowledge, the sharing on the job of this new knowledge is hardly done afterwards.

It is the culmination of this process and the recognition of the misinvestment, the recognition of the widening gap among the personnel who master the new technologies and those who are forced to tinker with them. Eventually, entire groups of employees are out of the picture.

So far, the end of this process has been the early retirement of those who are overwhelmed by new technologies. A feeling of injustice comes to the top because these employees who are sidelined just like the others understand that their situation stems directly from the fault of the management, at least the deliberate choice of the latter to minimize the management of the human resources and skills of the employees.

This practice, although it has greatly diminished in large companies, remains the common lot of too many SMEs -SMIs, 2/3 of which are in a situation of subcontracting in tense flows and are content to race for deadlines and quality with the stroke of neo-taylorism.

document:

How Robots Could Save French Industry’s Competitiveness  

Challenges.fr Published on 09-11-2012 

Thus, according to Louis Gallois, the robotization of French industries is “clearly lagging behind”: “34,500 industrial robots, with a high average age, are in service in France, compared with 62,000 in Italy and 150,000 in Germany (in fact, 157,000, ndlr).” This puts industry in a vicious circle: it is falling further and further behind its European competitors in terms of innovation (i.e. non-price competitiveness), and is forced to embark on a deadly race at low costs, in order to maintain its price competitiveness in an environment where it competes with industries in Asia and Eastern Europe. 

Against this pattern, Louis Gallois called for the robotization of French factories. A way to regain competitiveness when labor costs are high. According to a study by Deloitte and Nodal Consultants in 2009, such a strategy could reduce the share of labor in the unit cost price in small and medium-sized industries to 20%. Its proponents consider it the best plan to fight relocation, as another study, by Metra Martech for the International Federation of Robotics, suggests.

It’s a matter of common sense,’ commented Vincent Schramm, CEO of the Syndicat des Machines et Technologies de Production (Symop), which represents part of the robotics companies. ‘To be upmarket and competitive, you need to have the best production tool. Robots can improve productivity, reliability and quality. They can do everything that man does, but with better repeatability, without fatigue, without the three eights, without waste.’ They are found in all industrial sectors, in particular the automotive, agri-food, pharmaceutical and perform multiple tasks (moving, welding, painting, cutting, deburring, machining, packaging, etc.). 

A robot costs 120,000 euros on average 

Large groups, which own 80% of France’s robotic fleet, have long embraced them, but French SMEs lag far behind, especially when compared to their German counterparts. ‘They have a problem with internal competence,’ explains Vincent Schramm. They’re not very complex machines, but they still require expertise.” Hence a certain timidity, which is added to the significant cost of the equipment: 120,000 euros on average, one third of which is for the robot itself, one third for peripherals and one third for integration in the production chain. 

To overcome these reluctances, the Symop proposes to accompany SME bosses in robotization. It has designed a €33 million program, called ‘Robot Start PME’, as part of future investments. The matter is currently being examined by the services of the Commissioner-General for Investment, who is none other than Louis Gallois. It should therefore be read carefully.

CGT approves Gallois

An obvious productivity fix, but do robots have a social cost? Clearly, replacing men with machines risks destroying jobs. Short-term vision, says Jean-Hugues Ripoteau, president of Fanuc Robotics. “The most robotic countries in the world have a low rate”, he notes: 3.5% in South Korea, 4.8% in Japan and 6% in Germany in 2011, compared to 9.3% in France (OECD source). “Their performance is due to the automation of industrial sites, which sustains a competitive, dynamic and job-creating activity.” This is in addition to the development of the robotics sector itself, which currently accounts for 150,000 jobs. 

Even the unions agree: robotize. “Louis Gallois is right,” says Mohammed Oussedik, leader of the CGT, who says he “does not fear” the consequences on employment. “Our industry stalled because the machine tool industry was abandoned in the 1980s. Without it, we could not do what is now called upscaling in several sectors. And they disappeared. Only the most robotic ones like the automobile survived.’ We have yet to continue the movement so that they will last for a few years. 

end of document.

3) the case of the United States 

Employment productivity in the US is the result not only of gig work, but also of a high concentration of researchers in the traditional economic sectors and innovators, particularly in intangible goods and services: patents, software, etc. The productivity of this work in designing new technologies yields very high added value. An annual average of 1.5% employment growth is sufficient to keep pace with population growth and explain the low level of unemployment during this period. 

There is also a different view of the role of wages in driving growth in the US labor market. Wage analysis shows that the ratio of extreme deciles is 1-6 in the US, while in Germany it is only 1-2, and in France it is around 3-3.5. As a result, the US has the world’s highest wage inequality.

By contrast, employment in the US rose by 49% between 1970 and 1992, compared to 9% in the twelve European Union (ex-EEC) countries. One way of summarizing this situation is to say that in the European Union, it is products that are on sale whereas in the United States, it is wages.

While the main objective of an economy is indeed to link supply and demand, wages and prices of products, it seems that these two models of economic development are not compatible or interchangeable. 

The US is still a young country, with plenty of room to develop in contrast to Europe. Values are not the same on both continents, and technological revolutions do not explain everything. Making it seem that American values regarding work and wages will soon also become the standard in Europe is contributing to the rise of fear among European employees and the spread of stress, particularly among managers.

In Europe, among our roots and core values, we have other references to organize a society. It is indeed the memory of the network organization of the time of the cathedrals that has fueled the activism of both the Protestant communities and, for example, that of the Upper Doubs coalworkers from which will emerge the movement of the Philadelphia who will work to ensure that this type of social organization permeates the new constitution of the United States of America. This source, this activism still exists in France as well as in Europe. There is always a way to make the US a fairer, more humanitarian, environmentally friendly, and sustainable place. 

4) the case of Japan

While patriotism accounts for the larger contribution of productivity gains from technical capital than in the US, America seems to have found a good compromise during this period to allow sufficient job creation to absorb population growth.

The Asian crisis after 1997 will tarnish this situation and the excess production capacity will weigh heavily on this country, which will refuse to eliminate part of its machine fleet of which it was once so proud. 

5) employment and labor force developments in the euro area between 1999 and 2010 

Document: Economic crisis: Trichet tries to rebrand the euro area. 

Economic crisis: Trichet tries to rebrand the euro area.

Astrid Gouzik – Marianne | Tuesday 9 August 2011 at 16:01

https://www.marianne2.fr/Crise-economique-Trichet-essaie-de-redorer-le-blason-de-la-zone-euro_a209198.html 

excerpts from the article: 

Another argument for convincing Euroskeptics is that Trichet talks about job creation, singing the same tune, almost word for word, as he did on Sunday, February 20, on the same radio: “Since the creation of the euro, in the euro zone, 14 million jobs have been created (…) over the same period, only 8 million jobs have been created in the United States.” But that number is relevant only when compared with changes in the eurozone’s labor force. Indeed, between 1999 and 2010, it grew by…16.5 million people. It is therefore logical that jobs have been created, as it would be equally logical to say that the euro has produced 2.5 million more unemployed since its inception. 

During the 11 years of the euro’s existence, what jobs have been created? Our second chart gives a first indication.

In 1999, one in every 6.5 employees was part-time, and ten years later that share rose to one in five, or 8.5 million additional employees. As a result, of the 14 million new jobs, 60% were part-time…

Perhaps it is the right way to avoid raising wages, the “last thing you want to do,” according to the governor of the European Central Bank. 

We would point out that the euro area does indeed include France, but the French case is identical to that of the euro area: the inability to create jobs to integrate new entrants into the labor market, mainly young people, is common to the euro area and the crisis since 2007 has further aggravated this insufficiency in job creation, given that the jobs created are 60% of part-time jobs, aggravating the phenomenon of new poor workers, mainly young people and now young graduates. 

Hourly productivity: 

The importance in France of labor-related productivity gains after 1996

source: Economic alternatives, non-series n°58, 4th quarter 2003 

Productivity per person employed depends mainly on two sources of productivity gains: the organization of work and the upgrading of the skill level of the labor force.

This is not the strong point of the French economy and the move to 35 hours, which required productivity gains to finance the increase in the wage bill of at least 10%, was met with an inability or even a refusal to undertake this reorganization of work, mainly in the tertiary sector and public or private administrations.

Productivity per person employed is thus comparable in France and the US: without going back on the use of the same neo-Taylorian methods that after industry invade the tertiary sector, we can see that the introduction of ICT does not translate into better organization of work or yet. We will not also use the argument of the rise of evaporated work or undeclared personal work, which is a sign of disorganization of work: time spent at work on the Internet for personal reasons, personal discussions at work, etc. These behaviors, however, reflect real change and to ignore it is a mistake. We see them as a new relational need not satisfied by the old organization.

The 35 hours and the effort of a reorganization of work

To return to the 35 hours and the effort to reorganize work that this reduction in working time entails, we can take the following case study: 

Example: a company with 10 employees working 39 hours produces 390 hours a week. At 35 hours, these 10 employees are more than 350 hours. In order to maintain its production volume and not leave part of it to its competitors, the company must recruit at least 1 employee: 11 employees at 35:00 then produce 385 hours per week.

But this corresponds to an increase in the wage bill of at least 10%. That is the best way to sink most businesses. The measure is therefore quite different: of course, obliging companies to recruit and invest in labor input to reduce unemployment, but also obliging companies to reorganize work and production in order to generate productivity gains capable of financing this increase in the wage bill.

We know that SMEs with fewer than 20 employees have been simply exempted from this reorganization effort, even if it means that most of them remain dead centers or weak economic actors, probably eliminated during the next crisis.

On the other hand, after 1996, productivity per hour is accelerating and the slope is steep. To achieve this, the solution here is much more simplistic: it is enough to eliminate jobs and to keep the same level of production, even better, there is the possibility of combining and reducing the number of employees and reducing the number of hours with the change to 35 hours. In economics, this strategy is called negative economies of scale for achieving productivity gains.

In positive economies of scale, the same amount of labor increases the volume of output.

In negative economies of scale, the same volume of output is produced by less labor.

This has been widely practiced in France in recent years, hence this record hourly productivity.

The employment balance shows that job losses have remained high. The example of the year 2000 is significant: with the help of the 35-hour shift, the creation of young jobs and all the employment aid measures, in 2000 the French economy created 2 million jobs, a record figure since 1945. By contrast, in 2000, 1.5 million jobs were lost, leaving only 518 000 jobs created (DARES figure). 

Since 2002 and the end of the impact of 35 hours and proactive measures for employment, the French economy has been returning to the path of the crisis of 1990-1994. Employment is of interest to firms only to the extent that a reduction in personnel costs can bring productivity gains, which is the responsibility of the state to deal with the unemployment problem, that is to say, the job applications of people whose firms do not care.

With the demographic shock of 2006-2010 approaching, the economic system’s leaders understand that some branches of the labor force will be short.

Even if a fall in unemployment may result from this demographic shock, job seekers must still accept the jobs presented. As these jobs have not been reorganized within the 35 hours, the poor working conditions and mainly the working hours have not changed.

The government always gives up on imposing a reorganization of these jobs (even the case of tobacco shops, etc.) and can only seek to reduce charges, as in the restaurant sector, to encourage employers to present more attractive jobs. In this context, the policy supports employers’ fears and introduces new obligations for the unemployed to accept “unwittingly” the 300,000 jobs that are currently unfilled and most of which do not want, mainly because of unpaid overtime and hours by small employers unable to reorganize their activities.

The EPAR and the future AMR. are designed to fill this pool of unfilled jobs as a priority. 

The question of employment is taking a new turn and the succession of these Liberal measures after so much neglect of employment in this country takes the form of a tremendous provocation to wage earners.

Fear takes on shades of panic. 

By making such an exclusive choice as to the productivity of technical capital, France has ignored unemployment, mainly youth unemployment, and this choice is indeed a political one.

The companies, through their profits, were content to pay their taxes, the burden being on the state to use them to guarantee a certain social solidarity without encroaching in the economic field on the capitalist law of the freedom to maximize profits according to the sole interests of the owners.

Politically, the sanction was the significant failure of the left in the 1993 general election.

Unemployment is at a record high in 1994 and the government is forced to intervene. The choice between a liberal and a more social policy is resolved by the early parliamentary elections of 1997 which must put an end to the strikes and the dissatisfaction of the French people in the face of the loss of growth and the drop in income.

The failure of the 2002 presidential elections was also rooted in the ultimately weak impact of all socialist employment policies from 1998 to 2001: the left-wing parties seeking in scattered order in the first round of the 2002 elections other doctrines to ensure social progress, which played into the hands of the far right to enter the second round and brought the government a liberal power. 

Consequences for France:

Where does the profit go?

There is only one certainty that has emerged over the past 20 years: the Fordism that benefited employees is well and truly over, and the priority return of shareholders to the sharing of added value is being shown without other economic and social power relations balancing this distribution of wealth.  

The share of depreciation becomes preponderant. This wealth, which returns to technical capital, finances business development, although the 5-year amortization tax rule is detrimental to technological investment. A two-year amortization would better support research and the use of technologies first in commercial enterprises and then, this amortized equipment could equip private and public training centers. Young French would thus have the same guarantee as young Germans to train on equipment between 3 and 4 years old.

The strong growth in the share of dividends after 1990 should not be an illusion. These incomes hardly go to French households and they are not supplements to household wages. This reflects the growing share of US pension funds in the capital of CAC 40 companies. Most of these dividends go to the US to fund American pensions. Confronting this reality with the conditions decided by the government in 2003 for French pensioners then takes on a whole other dimension. Similarly, when we observe during this period that capital income grew twice as fast as labor income, the refusal to associate capital income with the financing of social protection becomes a major cause of civil discord in our country.

The choice of greatly developing technical capital can be defended with the argument that a robot or programmable logic controller does not pay social security charges and that, in addition, it allows its depreciation. This does not erase the social consequence of the phenomenon. We should not forget this consequence and not complain afterwards that France is the country that has a structural handicap due to its low activity rate. Low activity rate which would make the reduction of working time to 35 hours contradictory.

This combination and omission of the deliberate choice of French companies to bet everything on machines is perfectly understood by employees. They do not accept this discourse of omission, of lies. They know that they do not have the preference of their bosses who only dream of machines and the elimination of jobs.

To come and say that the French are the ones who work the least is purely slanderous. This is another element of the current fable distilled by the management and decision-makers of our system of power. Those who remain at work have seen their working conditions become more difficult as the speed-mental load relationship has increased and it generates more fatigue and stress even though the time employees spend at their workplaces may decrease.

Today, many of them, as soon as they return home, are forced to go to bed to recover right away and then have decent moments of privacy, if they do not recover right away, they will lead to increasing fatigue.

Finally, since the distribution of productivity gains and value added is not in their favor but in favor of shareholders and technical capital, it is right that part of this wealth, if not paid back in monetary form, should be paid back in the form of a reduction in working time.

Likewise, the claim that, for the sake of pension equilibrium, workers will have to work longer hours smacks of the purest and most abhorrent hypocrisy: workers who remain in the productive system alongside machines do not have to work longer hours. The initial choice was for technical capital, we must remain consistent and go all the way to the end of this choice: the supplementary financing of pension schemes can only come from technical capital.

Instead of taxing machines, tax reform should focus on the withholding tax on value added. So the “old” taxes can be removed: IRPP payroll taxes, corporate taxes, dividend taxes, local taxes, and other taxes. Once the tax is collected, it is up to the community and its government to decide how the resources are to be distributed through the national budget.

In 2023, we can add that politicians and business leaders no longer want to remember that, after 1945, the country’s reconstruction and modernization were achieved successfully by using the French Tour du Trésor’s system of a full, debt-free currency. In 1973, under pressure from the Anglo-Saxon financial oligarchy, the French governments submitted to the neo-liberal doctrine and the obligation to borrow on the financial markets.A full currency operates without a fiscal system and without the need to transfer part of the wealth of the merchant economy to the non-merchant economy since a full currency finances the merchant and non-merchant economy and this distinction becomes superfluous, useless.

Policymakers’ justifications for refusing job creation in the non-market economy:

The explanation by the risk of wage inflation. 

The justification provided by the managers, the senior officials, bases the reason for this choice on the attitude of the employees and their wage demands. This subterfuge used to evade responsibility is understandable. It is true that the jobs created in our traditional economy to provide jobs for the unemployed must be paid at the minimum wage, unless the minimum wage is diverted through the use of part-time work (but the hourly rate will remain at the minimum that of the minimum wage). This reliance on part-time and/or precarious work is growing to the point where the working poor, who are subjected to neo-Taylorism and repetitive work, most often in an organization of production in just-in-time conditions, account for almost 20% of the employed population.

Paying people in the non-market economy, for example, for environmental cleanup, which is a low-skilled task, while higher-skilled industrial or tertiary workers are largely paid minimum wage or slightly higher wages in precarious jobs, can only exacerbate wage demands, and the entire wage structure must therefore be revised upward.

These leaders see this as a serious risk of reviving inflation, and hence interest rates.

When we now know that French decision-makers have made the almost exclusive choice of the productivity of technical capital, it is clear that in order to renew this very important technical stock, they need the lowest possible interest rates.

It is out of the question for employees to provoke inflation which would scuttle their plans and call into question the choice made in the combination of factors of production even if inflation facilitates the repayment of debts. Hence this blockage, which leads to this typically French situation of unemployment among young people and young graduates. Hence also this development of precarious work when consumption starts again, this always in line with the decision to give all priority to technical capital.

This fight against inflation continued in the early 1990s with the strong franc policy of high real interest rates to attract capital and promote a favorable exchange rate between the franc and the Deutsche Mark in preparation for the introduction of the single currency in Europe.

This policy has favored financial windfalls in companies at the expense of investment and thus has helped to maintain a high level of unemployment in France.

The Monetary Doctrine of the European Central Bank

It is also the basis of the monetarist doctrine in force at the European Central Bank, in order not to lower the policy interest rate while the euro is increasing in value and holding back our exports. This monetarist school was largely responsible for the 1929 crisis when it refused to inject liquidity into the US economy in the aftermath of the October 1929 stock-market crash.

Without running the same risks, this attitude favors savers, people who have state money. It defends the stability of the currency and prefers that the money supply does not increase to such an extent as to present risks of non-repayment of the loans granted.

The 1994 peak in unemployment is attributed largely to the strong-franc policy. Today, the strong-euro policy follows suit, protecting accumulated capital against value erosion, saving protection, and limiting risky lending.

Inequality, rising poverty, and unemployment are largely ignored, as these countries sink from any new bet on the future to strengthen their already established wealth. The pursuit of monetarist policies contributes to the rise of social fears and the sense of injustice not only among the poorest and poorest households but also among those who want to undertake and change our societies. 

The explanation by demography. 

If nothing has been done to correct this socially reprehensible choice, it is also due to the fact that senior officials and politicians know that demography will naturally solve this situation from the 2006 onwards when baby boomers retire and weaker classes of young people enter the labor market.

A new problem will then arise: how to finance pensions and the inactive with assets that have become few in number.

It remains unresolved, and the 2023 pension reform with the statutory retirement age of 64 has only exacerbated this problem, which has become a formidable political and social crisis over the years.

With productivity gains accumulated over the past 20 years at historic highs, policymakers in the liberal economic system would like to see workers increase their working hours and raise their retirement ages, thereby advancing a alienation from work that other social benefits had reduced.

The knowledge used by policymakers served a conservatism contrary to social interests, and there has been no radical challenge to that knowledge.

This expected solution of demography is not total.

A recent INSEE study indicates that 57% of these unemployed no longer wish to return to work in the market economy. They threw in the towel. In the United States, they are called “missing men,” or people lost to joblessness statistics that no longer capture them.

In view of this situation, the obvious solution is a long-term return to a training system, but is this effort aimed solely at employment in the merchant economy? And this is because demography causes a shortage of labor for businesses and administrations of the merchant economy or the public service? Are there no other motivational perspectives to enable everyone to achieve social fulfillment through work? 

Demographic change is already having a few consequences: 15 000 students leave education without qualifications to be hired by companies that are short of labor and that, after years of not hiring, do not want to integrate older unemployed workers.

Will this change lead to a resurgence of apprenticeships so that these apprentices are already partially behind the machines? Do these supported jobs for unskilled young people serve as a reservoir of precarious jobs that companies need as part of the flexibility of their production tools? Are they ways of hijacking the SMIC, means subsidized by the public authorities and our taxes?

Are we going to see a closure of technological education preparing for higher technical or managerial qualifications in favor of the generalization of vocational education, the main objective of which will be the qualification at the vocational baccalaureate level and which SMEs-SMIs organized in tense flows in their subcontracting relations are accommodating?

Is this decline in the level of qualifications acceptable in a knowledge-based economy, with initiatives and responsibility?

It is a sham to say that continuing training will then enable these employees to upgrade their initial qualifications, because it costs much more than initial training. Who will fund it when pensions are not funded?

Finally, when we have to call on immigration again to support our economic growth, will we finally train candidates to immigrate to our countries? Will the old laissez-faire attitude that disorganizes our society through the insecurity it has created continue? 

In 2004, the issue of the foreseeable labor shortage may find itself behind the issue of Turkey’s accession to the European Union.

Accepting the accession of this country is a real boon here: 100 million potential low-wage workers to fill the gaps of low-skilled workers in Europe who would benefit from the free movement of the Maastricht Treaty.

Have you compared the work performance of employees from the Maghreb countries with that of Turkish employees? Although both are overtaken by workers from South-East Asia, in a low-tech factory or company, Turkish workers are clearly ahead of the rest.

This observation is made by a HRD who has worked in several industrial companies and is shared by his colleagues in Human Resources. The organization of the Turkish communities is much better established and there are no old squabbles born of French or European colonization. Saying yes to Turkey prolongs the ‘yes’ to all technical capital and to the reduction in personnel costs: these concerns are very quickly coming together.

It is clear that the goal of cultural marriage does not exist among our decision-makers because our systems of power do not rely on such marriages. On syntheses or syncretism yes because it is then for the minority culture to settle in the values of the dominant but there is here no marriage, just a domination organized as peacefully as possible… and this domination has always generated civil or military, even religious conflicts and contaminating several nations and peoples. The rise of Islamism in Europe, and particularly in France, can thus be traced largely to this policy of employers and the choice to privilege capital over labor.

The Conservative explanation of the political class in general. 

If nothing has been done in France against unemployment it is also because politicians have not wanted, have been afraid to finance a large non-market sector, have been afraid to break the capitalist production apparatus and reduce the impact of a classical and archaic liberal economy by allowing the rise of another non-capitalist but rather mutualist economy, the quaternary economy or, alongside the private and public sectors, the rise of a third sector based on solidarity and non-market exchanges.

The reduction in working hours to 35 hours and the Youth Jobs did indeed create 500 000 net jobs in a favorable growth context (in 2000, there were 2 million job openings, a record since 1945 but there were also 1.5 million jobs destroyed, hence this balance of 500 000 jobs created in 2000), but the fact remains that the fundamental problems remain, that the inconsistencies and contradictions of the capitalist and liberal system such as the contradictions of the nation state are still there.

Every system tends to become sclerotic because its logic is incompatible with constantly updating its rules to keep pace with the evolution of mores, technologies and knowledge. These changes are naturally created in a network organization: couple, family, research communities, thinkers, leisure groups, etc. If these groups want their changes to be recognized by the political, economic and social systems of power, they must in principle agree to set aside the extreme tendencies of their movements and blend into an undifferentiated and harmless middle. By accepting this tidiness, they strengthen a society’s stasis and conservatism, if not corporatism.

The current state organization and trade unions are major obstacles to the development of jobs in the non-market economy. Aside from charity, the state has created hundreds of thousands of jobs through its bureaucracies to meet public-service needs. On the contrary, it did not hurt the merchant economy.

When, under the Third Republic, the state decided to create thousands of jobs in public education, there was no collapse of the economy. On the contrary, a better-educated and skilled workforce has enabled the rapid spread of new technologies and rapid increases in value-added by companies and governments.

But this organization has now sclerosed, with those administrations’ unions defending a perverse inaction.

For example, does improving housing for low-income people require an administration that administers housing-related benefits, or should it be abolished so that people can help each other in SELs to repair the roof of their homes, build houses, and do so without the need to use official money as an instrument for exchanging labor and goods and services?

The networked non-market economy stands in stark contrast to the state’s role in redistributing wealth through compulsory levies ranging from 45-50% of GDP. The state can act as an intermediary and facilitator in social negotiations. This is the “Rhineland” conception of the state.

The measures taken to reduce working time to 35 hours may create half a million jobs in the year in which they are implemented, but the reorganization of work in enterprises must generate new productivity gains in order to make these job creations profitable and to allow an increase in value added, a prerequisite for wage income increases.

But what can the state do about the orientation of pension funds toward corporate financial management? How can financial resources be found in the market economy to finance the needs of the inactive? Should we not at last establish a direct and complementary relationship between the market economy and a broad development of the non-market economy? And if the capitalist system that governs the merchant economy is unfit to connect with this non-merchant economy, should it not be abandoned? If the state is incapable of ending the capitalist system, should it not abolish it in order to establish another organization of power based on a networked economy that can link the merchant economy and the non-merchant economy, achieve the marriage of cultures?

Won’t the ongoing threat of financial crises that limit investment and make aberrant choices for our policymakers disappear when trade expands into symbolic currencies that are more based on people’s confidence in them than on speculators’ relentless stock-market prices? 

Another development to consider. Unemployment may fall after 2006 in France due to demographic change, but another problem is emerging.

The end of the social dumping.

Job losses in the secondary sector have been largely offset by the growth in tertiary sector employment.

This so far positive spill will suffer the productivity shock which will now affect the tertiary sector. The spread of new telecommunications and multimedia technologies will put the customer and the supplier in direct contact. Intermediate jobs will no longer have an economic reason and the productivity of the service sector depends on their elimination.

In 2023, the development of Artificial Intelligence continues this movement of job loss made possible by ChatGPT

But ChatGPT-4 is making headlines around the world, largely because it is revolutionizing the way humans interact with machines.

The system can be used to hold conversations, as well as to detect loopholes in an employment contract. He is even able to write an essay, even a novel, or a lawyer’s argument. And all in ten seconds chronos. ChatGPT-4 would make 40% fewer mistakes than its predecessor ChatGPT, released just five months ago. Tested in different fields, he even passed the bar competition to become a lawyer. 

What new sector of the economy will take back all these job losses?

The banking and insurance industries are particularly exposed to this new technological development organized from production workflow, software that completely automates administrative work.

To be sure, economists speak of the diminished use of work as currently organized. Keynes argued in 1930 that by the year 2000, people would work only about 15 hours per week to satisfy their basic economic needs. This concerns the market economy and presupposes a rigorous division of labor. It seems that the current system, which is too rigid, cannot evolve towards this organization. This remains a utopia, an unworkable system.

The jobs destroyed and not recreated in the merchant economy must lead to the development of the non-merchant economy other than one based on voluntary work. This objective directly concerns a networked economy capable by its very nature of organizing this production and distribution of personal wealth. 

All these unresolved issues through a project of society legitimize the feeling of a guilty immobilization and a dangerous conservatism, of a delay to be filled, especially in the public service.

Problem-solving methods, the right to express the Auroux Laws still do not exist in the State Administrations (even to calculate the present workforce, the workforce paid at the end of the month whereas in business, the slightest human resources manager would be fired if errors occurred in these calculations several months in a row) and the idea of believing that the solution comes from a political will relayed by the hierarchy of a bureaucracy is today part of more of an outdated fiction, or even a gross management error unworthy of such an elite graduate.

As in private companies, a change can only be made by introducing a network of employees working to improve the quality of their work and to eliminate malfunctions between customers and suppliers in order to establish win-win relationships, that is to say, here, allowing the personal enrichment of citizens to be increased in material, intellectual and spiritual terms. But is it still compatible with the role of a state? 

The example of the 35-hour laws and the reduction of working time in the non-market economy.

How, for example, can the 35-hour limit be applied to a public administration such as hospitals when, in 1997, the Juppé government, in order to limit healthcare spending, saw fit to limit the number of its prescribers: doctors, nurses, by cutting student positions, or by turning the medical entrance exam into the most outrageous and untenable competition in the entire university? Coming 2-3 years later to talk to hospitals about 35 hours without having prepared the staff needed for this change in schedule is the most shocking waste of time. In an exam copy, the student who makes this kind of mistake would fail, he would not have the average! 

How to finance the surplus of staff corresponding to the 35h shift? Using the 4 sources of productivity gains! There is no viable long-term alternative in our economic system, certainly not by increasing public payments and maintaining the tax burden or returning to 40 hours a week. If funding is no longer guaranteed to keep up with this trend, the system must throw in the towel and open up the network organization alternative: in addition to the voluntary work of the Red Cross or the associations helping the sick, whose impact remains insufficient, the associations must be able to organize the exchange of services allowing personal enrichment of each of the participants in the exchange, and this without using the state currency which is precisely lacking!

This non-market exchange in symbolic currency remains prohibited in France, the last judgment of a correctional court confirmed on appeal dates from January 1997 about an SEL in Ariège. 

We can regret that when these two 35-hour laws were introduced, it was not said that this measure had two aims: certainly to share the work to reduce unemployment, but also to force SMEs and some large groups that were lagging behind, to finally carry out the changes necessary to obtain new productivity gains now that in 1998-2000, the first deposit of the 1985 years related to the arrival of programmable automata was exhausted.

This field had seen its wealth wasted and minimized by the lack of increase in the skill levels of the staff caused by inept attitudes of many of the still too family-oriented management of companies or at the hands of business adventurers seeking money at all costs without regard for the human factor of production.

Putting an end to this mismanagement

And compel all companies to leap forward in the search for new sources of productivity

In conclusion, in the late 1990s, we had to put an end to this drift of mismanagement and force all businesses to jump ahead in the search for new sources of productivity:

• reorganization of work and elimination of unnecessary tasks,
• producing as much but with fewer hours of work which was a minimum gain in productivity but certainly imposed by law,
• research and development of new technologies, raising the level of skills and qualifications.

The point was to say that these new productivity gains, this time, would no longer be used as in Fordism for the benefit of employees, no longer for the benefit of consumers through further price reductions, no longer as in 1998-2000 it was the case, only for the benefit of shareholders who, behind the irresistible example of Anglo-Saxon pension funds, took the de facto direction of companies and the sharing of added value.

No, the idea was to say that these gains would benefit work-sharing because the level of unemployment and its cost to the community was becoming intolerable and threatened the entire social cohesion, the motivation of all employees, including managers, threatened the financing of the entire social protection system.

We say that the socialist government of 1998-2001 did not properly present this effort for a new division of labor. Prisoner of the dogmatism of the communist left and the extreme left, he did not dare speak openly of the need to obtain productivity gains to finance this social evolution because the communist ideology is hostile to these productivity gains.

This government has not been able to free itself from these outdated and completely false dogmas. Productivity gains are a reality for any production system, organized as a power system or as a network. It is a question of means, not an end point: the purpose of a power system has nothing to do with that of a networked organization. The question is not to refuse this search for productivity gains, but how these gains will be distributed, and the height of absurdity here is to refuse the search for these gains on the grounds that they are historically poorly distributed. Yes, they’re misallocated! But whose fault is it?

To be brief here because on this site we have repeated it many times, taking back Victor Hugo and the character of Gavroche: ” it is the fault of Voltaire, it is the fault of Rousseau”. The error stems from 1789 and the removal of common ownership in favor of individual ownership.

When will a socialist or leftist government in France decide to correct these gross mistakes of 1789 now that we have sufficient perspective on our history to free ourselves from the shackles of the past?

Not requiring employers to put in place medium-term strategies to secure further productivity gains is politically suicidal. Or else our leaders are hiding another truth: that of the overcapacity of the industrialized countries which implies a drop in our production levels and the achievement of productivity gains, in this context, made possible only through economies of scale, that is to say the concentration of enterprises and the elimination of jobs which have become useless.

Globalization is accelerating this phenomenon, adding to it the attractiveness for employers of relocations to countries where even skilled labor is significantly cheaper. But this is the only interest because the Asian crisis of 1997, as well as the Russian crisis of 1992 show that these trading zones are still not solvent to buy us our production capacity and since we do not want to deliver these goods and services at low prices…!

Updated 14/06/2020:

While these arguments of the defenders of the Liberal system have not changed, we have made progress in our control of this right, which they forbid us, to free us from their domination.

The complementarity between the three forms of property eliminates the redistribution of wealth between private property and collective property and its public services because common property is the most efficient way to redistribute directly the wealth produced by the work of all.

Similarly, the management of all human activity: work, work, political action, eliminates unemployment and ensures the raising of the standard of living through the management of the common goods.

Finally, the use of a full currency to pay only for the work done to manage all human activity guarantees the elimination of the rent, the use of monetary savings for speculation by financiers.

Social unrest, particularly in France, has certainly worsened and in 2020 we are on the verge of revolts of misery and ignorance on both sides again in the conflicts that promote movements of resistance to this liberal system who do not know, ignore, do not want to undertake this change of civilization to restore this right that is forbidden to us while it has been used in humanity by all flourishing civilizations and last, in Europe, during the medieval period as long as the monastic and knighthood orders have managed to contain the ambitions of absolute monarchy essentially of the French royal family, the Valois until Friday, October 13, 1307.

Updated March 23, 2023:

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It helps explain the recent origins of France’s social crisis, which since the early 1980’s has never been more virulent or exacerbated than it was when President Macron imposed his pension reform on ordinary citizens, with the legal departure date set aside at the age of 64.

The French employers’ desire since the 1830’s to create the worst social conditions in the industrialized countries was matched by the neo-liberal policies of the Anglo-Saxon financial oligarchy run by the Puritan sect. The priority now given to Rent and Capital and Labor led an Anglo-Saxon bank like JP Morgan in 2013 called for authoritarian regimes in Europe to implement austerity policies aimed at safeguarding the profitability of bank investments.

The cynicism and authoritarianism used by politicians in power in 2023 to impose pension reform against the will of the majority of citizens is a response to this strong demand from Anglo-Saxon banks.

For our part, we have yet to complete the essay Our Networks of Life to show that the choice of a new humanist civilization is possible and realistic using the Law that is forbidden to us, in France since Friday, October 13, 1307.

This document is classified in Part 2 of the Essay: the functioning of power systems and especially the neo-liberal capitalist system. The description of the functioning of our Life Networks is found in Part 1 and Parts 3, 4 and 5 complete this presentation of the Alternative to the Systems of Power, once we have emerged from our submission to those tyrants who claim to be predestined to govern the world according to their divine precepts.

Sources

• La logique du système capitaliste industriel
• Le paternalisme source de la crise française du travail
• La perception du travail depuis 1789
• Les crises économiques et financières
• La démarche Qualité Totale
• La troisième dimension du Management
• La Monnaie Pleine, sans dettes
• Le choix de Civilisation
• La déclaration des droits à la vie sociale pour les êtres humains