France -- and how it's really different from America (and how self-righteous Americans can't help but think their system is better)

1. In praise of French direct democracy
Henri Astier
The success of the mass protests against the government’s employment law illuminates the condition of French democracy itself, says Henri Astier.

French pundits have begun speculating about the fallout from the sudden, humiliating withdrawal of the government's youth labour plan, the now-notorious contrat première embauche (CPE , or "first employment contract") on 10 April 2006. Most say the climbdown in the face of public protests has ended the presidential hopes of prime minister Dominique de Villepin, the plan's architect, in the 2007 elections.

Some argue that the opposition socialists, with Ségolène Royal currently making most waves in a seven-candidate race for the party nomination, will reap the benefits. Yet others conclude that the debacle has boosted the chances of Villepin's ambitious arch-rival, interior minister Nicolas Sarkozy.

In fact, every single political force in France has lost. This is the consequence not of tactical mistakes on anyone's part, but of a stark truth about French public life: power no longer resides in elected bodies.

In most countries policy-making works more of less as follows: a government sanctioned by popular vote drafts legislation; parliament discusses it, with opponents allowed to table amendments; a vote is held and the proposal passes into law. That is the end of the story. In France this is where it begins. As soon as the measure is enacted, interest groups start to rally against the plan. If their protests are disruptive enough, and most crucially if they are accompanied by violence, the move is scrapped.

It does not matter that the government has a solid parliamentary majority – as is the case now for the right, and may be the case next year for the left. Equally immaterial is the fact that the right to protest, sacred under France's constitution, does not formally amount to a right to make or break laws. De facto, that right has been recognised for years. It must be noted that despite France's rich history of riots, the practice of legislating from the street is a recent innovation. May 1968, often cited as an example of student power, is in fact the opposite: its upshot was a victory for representative rule when a June snap election resoundingly won by Charles de Gaulle's party put an end to the demonstrations and strikes.

Large protests achieved some successes in the 1980s - notably when the right mobilised for private schools in 1984 and the left against university reforms in 1986. But until a decade and a half ago, there was no automatic expectation of a government U-turn in the face of unrest. As recently as 1992, when lorry drivers blockaded roads to express their disapproval of a new point-based driving permit, socialist prime minister Pierre Bérégovoy sent tanks to clear the roads. It was only when the conservative administration came into power the following year that a clear pattern emerged: street violence systematically resulted in policy changes and often in the handing of subsidies to the perpetrators.

A reform of the ailing national carrier Air France was shelved after strikers invaded the runway at Orly airport in October 1993. The following year fishermen who had ransacked the Paris wholesale market were rewarded with more aid, and a youth wage plan (which, like the latest ill-fated move, was designed to curb crippling unemployment among the young) was scrapped following violent protests. In the mother of all cave-ins in late 1995, a reform of public pensions succumbed to a huge wave of demonstrations and blockades. And on and on…

The right of interest groups to resort to "direct action" has even eclipsed an old prerogative of elected assemblies: fiscal policy. The fuel-tax protests of September 2000 offered a striking example of this. On both sides of the English Channel, independent hauliers spearheaded popular revolts against rising petrol prices and attempted to block roads and fuel depots. In Britain, despite widespread sympathy for the protesters, blockades were resented and seen as a challenge to parliament's power; to general approval, the government moved to restore free movement. In France, the protesters enjoyed popular support and there was widespread relief when the government caved in to their demands for tax breaks.

The withdrawal of the CPE jobs law is another illustration of people power à la française. I am not discussing its merits, or lack thereof, but merely pointing out that the formal trappings of legitimacy (debate in the assembly, parliamentary approval, endorsement by the constitutional council ) were not enough to give it the force of law.

A modest proposal

Supporters of representative rule may voice traditional objections against direct democracy, most powerfully expressed by The Federalist. According to the United States's "founding fathers", parliamentary systems are much better at reconciling competing interests in large, modern societies; direct government by the people, they argue, gives undue power to activist minorities and can degenerate into mob rule.

Before I explain why such objections are wide of the mark in France, two points must be conceded to the supporters of the representative orthodoxy. First, direct democracy does give a free rein to minorities, and the anti-CPE saga is a case in point. When the plan was announced in January, there was no groundswell of opinion against it. All the activists I spoke to while touring "occupied" campuses two weeks ago told me that they initially found it difficult to mobilise students. It was only though blockades, agitprop, "general assemblies" with voting by hand, and other well-tried militant techniques that momentum against the plan was built.

Second, it must be conceded that intimidation played a key part in this process. The point of a blockade is to deny individual students a choice in whether or not they want to take part in the movement. It is also illegal, as were numerous roadblocks erected by protestors and the trashing of the office of Paris MP Pierre Lellouche.

All this is true, but irrelevant. The point is that disregard for the legal niceties of formal democracy does not make a protest illegitimate in France. On the contrary, the CPE saga confirms that in terms of popular support, a government whose power rests on mere elections and constitutional procedures is no match for a movement that derives its legitimacy from numbers of marchers and fears of violence.

The first campus blockade over the CPE took place in Rennes in February 2006. Far from antagonising the apolitical student majority, the takeover increased support for the activists. Within weeks two-thirds of French campuses and hundreds of secondary schools were blocked, with only a minority expressing frustration at being prevented from studying. The same is true of the population at large: the protests played a key role in changing citizens' minds. Few opposed the CPE when it was introduced on 16 January , but popular hostility grew with the movement; by late March, 70% of people told pollsters they were against the plan. The movement was the cause not the consequence of widespread anger.

The attitude of media and political elites is equally enlightening. Initial criticism of the CPE was restricted to Villepin's usual foes, notably leftwing commentators and anti-Chirac centrists. And this criticism focused mostly on the way the law had been rammed through parliament, using the blockbusting Article 49-3 of the constitution. It was only when protests swelled that wide sections of the commentariat and the political mainstream decided that the plan itself had been a terrible idea from the start. Even conservative commentators and centre-right deputies rounded on Villepin.

The protesters, in short, are widely seen as the legitimate voice of the people. This is part of the French exception . Mass rallies can also lead to government climb-downs in other countries – as was the case with Britain's 1990 poll tax riots. But in France the protesters have more than a consultative voice, which the authorities may or may not choose to take into account. Both the public and smart opinion regard them as the ultimate arbiters of policy.

Why then, you may ask, does France bother with elected politicians? The philosopher Jean-François Revel raised this interesting question in 1994 in the wake of the government's U-turn on the youth wage plan. Revel then made a "modest proposal":
"We must formalise a state of fact that is already stronger than the formal Constitution… Since representative power has been stripped of any significance, I suggest the President of the Republic should be drawn by lots. He would rule from the Elysée palace, surrounded by cronies – which would not alter accepted practice. Instead of getting bills passed by the Assembly and Senate – a horrible waste of time – the President would just announce them to all and sundry, and wait for reactions. In case of sustained calm, the law is approved. If unrest occurs, it is withdrawn."

It is time to revive Revel's plan for constitutional reform. Such a procedure would formalise a system that is already in force, but has the advantage of being much speedier and less costly than the obsolete parliamentary apparatus France retains.


2. America and France, Marching in Different Battles -- by Steven Pearlstein

In one country, millions of hard-working people who earn modest wages and have no job security march to demand the right to continue participating in the global economy.

In another, millions of people without jobs and fearful of the global economy march to demand that, if and when they get a job, it comes with a 35-hour workweek, five weeks of vacation, mandatory profit-sharing, retirement at age 60 and the right never to be relocated, fired or demoted.

There, in a nutshell, is the difference between the political economy of the United States and France.

It's the reason one country's economy is growing at the annual rate of 4.5 percent and the other will be lucky to reach 2 percent.

Why one creates a million net new jobs in a year without breaking a sweat and why the other has trouble creating a million in a decade.

Why one has an unemployment rate of less than 5 percent and the other more than 10 percent.

Why one is a magnet for ambitious talent from all over the world and the other is slowly losing its best and brightest.

And the gap -- in terms of perception, in terms of economic performance -- is only going to get worse.

The decision by President Jacques Chirac to cave in to the demands of street protesters will set back market reform for a decade, not just in France, but in Europe generally.

Never mind that the law that sparked it -- a new labor contract that would have allowed companies to fire young workers during their first two years on the job -- failed to address the larger question of how any company can be expected to compete in a global economy while offering lifetime job security to its workers.

That Chirac and Prime Minister Dominique de Villepin drew a public line in the sand over such a modest reform and then failed to muster any serious support from business leaders, the media and the professional middle class will only embolden those who cling to the fantasy that the old socialist model can survive.

Not surprisingly, union and student leaders have already declared that they aren't done yet with rolling back earlier reforms that allow for temporary jobs and give small businesses more freedom to hire and fire.

And, as if to punctuate the full measure of their retreat from the cause of market-based reform, the alternative program for reducing youth unemployment involves yet another round of government subsidies supported by another tax increase. Can a fresh crop of new lifetime government jobs be far behind?

The news from Italy isn't much better. The virtual tie in the political rematch between Silvio Berlusconi and Romano Prodi will ensure that the government remains powerless to reverse the decades-long slide in the most dysfunctional economy of "old" Europe.

Although Germany's new chancellor, Angela Merkel, is enjoying a political honeymoon, it is largely because the deal she struck with her coalition partners precludes further steps toward liberalizing the country's labor markets and reducing its sky-high tax burden. In fact, taxes are headed up.

And in Brussels, Eurocrats are still trying to figure out how to rescue their big, new initiative to allow cross-border competition in service industries that have remained stubbornly localized and inefficient. A watered-down version, grudgingly approved at a European Union summit last month, excludes banking, telecommunications, health, audiovisual services, legal services, gambling, private security, temporary employment and utilities such as water, gas and electricity. More significantly, each country will be allowed to maintain its own rules for any firms operating within its borders -- a concession that will surely undermine the efficiencies that might come from cross-border integration while allowing countries to insulate any of their service industries from cross-border competition.

With all due respect to Tom Friedman, it is becoming clear now that the world is still a lot less "flat" than he imagines. Even Americans must acknowledge, from our own divisions here over immigration and trade, that there is nothing inevitable about the next increment of globalization or irreversible about the globalization that has already occurred, even in a "wired" world.

It is easy (and fun!) to blame recent stalemates and reversals on the pig-headedness of the French, the grandstanding of Lou Dobbs or the failure of politicians to adequately explain the benefits of a borderless economy. But just as important has been the utter failure of global elites to come up with effective mechanisms to redistribute the economic benefits of globalization from the winners to the losers. The political reality is that simply leaving it all up to the markets is no longer an option. It's time for a Plan B.