Why the French Love Social Conflict

France is in many ways a unique country. Where else in the world could you see a 15-year-old appear on TV saying that he is striking because he would like to retire at 60 instead of 62? Where else could you see a leading politician such as Segolene Royal encouraging 15-year-olds to go on strike? In any other country Ms. Royal would be part of the Loony Left, but here she got 47 % of the votes in the recent presidential election and is considered a mainstream socialist candidate for replacing Sarkozy in 2012. Where else would 71 % of the people support strikers who block refineries so that they have to wait hours in line to fill up their cars?  

Even supposedly right-wing politicians such as Dominique de Villepin, ex-prime minister under Chirac, have endorsed the 15-year-olds' position, claiming that if people retire later, the younger will have to wait longer for a job. This statement is probably the most pure form of static economic thinking ever pronounced -- i.e., the idea that the labor market consists of a fixed number of slots. If this were the case, we could simply eliminate youth unemployment by lowering the retirement age to 45.

After 9/11, many of us tried to understand why so many Saudis supported Islamic terrorism, and the answer was often found in school textbooks that openly preached hatred against the nonbelievers. A similar exercise should be done to better understand the French mind. What do the French learn in school to make them support economic terrorism and chaos as long as it is organized by the working class?

Except for students in a special economics section, French high school students get no education in economics or finance. So one explanation for the French attitude is the fact that the vast majority of the people have no basic understanding of economics or markets. Those who get economics training in high school probably get a muddled message. I got this impression after taking a closer look at the content of the economics courses of the last year of the "lycée," or high school. 

The topics discussed seem more appropriate for a sociology course. Out of the seven courses of the curriculum, four have titles such as "Social Stratification and Inequality," "Conflict and Social Mobilization," "Integration and Solidarity," and "European Integration and Economic and Social Policies." There is no discussion of microeconomics (demand and supply) or firm optimizing behavior such as profit (or value) maximization or discussion of financial markets or free markets in general. 

The seeds of anti-capitalism and anti-Americanism can be found throughout the curriculum. One chapter deals with "Conflict and Social Mobilization." After a thorough analysis of Marxist thinking and an almost sad note that the influence of workers has diminished (because they are fewer workers, and the ones that became wealthier lost their class-identification), the authors still conclude that

[t]he reasons for the conflict with the other social classes remain strong. Although workers participate in mass consumption they use fewer services than other classes: they go less on holidays than others, they have less access to the internet and they don't have maids or nannies. 

In short, French people are still taught today that class warfare is the nature of (French) society and will remain as long as not all classes are equal. Of course, equality is not possible, as it would require that either all maids have maids or that there would be no maids.

The chapter on "Work and Employment" explains unemployment only as a result of technological progress where machines replace workers. Nowhere can a discussion be found on how social charges, taxes, and labor regulations (such as the minimum wage) can contribute to unemployment.

The icing on the cake is the statement in the section on "Conflict and Social Mobilization", which is supposed to be a consolation for all of us waiting in the gas lines:

A priori we often tend to think that conflicts are useless, they are better avoided. Not at all what sociologists think: conflict makes change possible. Social conflicts, because they put individuals into action, also contribute to form identities and develop solidarity. The first difficulty for you in this chapter is therefore the need to consider conflict in a positive role.

Luckily, the French government has more or less responded as the Saudi government did after 9/11: starting this year, all high school students (not just the ones of the economics section) will have to take a course in economics, and the curriculum will be changed. The goal of the curriculum will be to better understand how companies, households, and the state behave and how markets allocate resources, including labor markets and financial markets. So there is some serious hope that in the future, corporations will no longer be depicted as entities to fight, but instead as the ultimate creators of wealth.

Predictably, when the reforms were proposed at the beginning of this year, Francois Dubet, the only sociologist on the curriculum committee, resigned in protest, stating that "[n]ow the corporation will no longer be seen as a place where people work, or like a social entity, but as a unit of production that has to continuously adapt to a changing environment."

Let's hope Mr. Dubet is right. And perhaps then the French will someday understand that when the supply of oil is cut by striking workers, the price of gasoline at the pump will rise.

Theo Vermaelen is Professor of Finance, INSEAD.
France is in many ways a unique country. Where else in the world could you see a 15-year-old appear on TV saying that he is striking because he would like to retire at 60 instead of 62? Where else could you see a leading politician such as Segolene Royal encouraging 15-year-olds to go on strike? In any other country Ms. Royal would be part of the Loony Left, but here she got 47 % of the votes in the recent presidential election and is considered a mainstream socialist candidate for replacing Sarkozy in 2012. Where else would 71 % of the people support strikers who block refineries so that they have to wait hours in line to fill up their cars?  

Even supposedly right-wing politicians such as Dominique de Villepin, ex-prime minister under Chirac, have endorsed the 15-year-olds' position, claiming that if people retire later, the younger will have to wait longer for a job. This statement is probably the most pure form of static economic thinking ever pronounced -- i.e., the idea that the labor market consists of a fixed number of slots. If this were the case, we could simply eliminate youth unemployment by lowering the retirement age to 45.

After 9/11, many of us tried to understand why so many Saudis supported Islamic terrorism, and the answer was often found in school textbooks that openly preached hatred against the nonbelievers. A similar exercise should be done to better understand the French mind. What do the French learn in school to make them support economic terrorism and chaos as long as it is organized by the working class?

Except for students in a special economics section, French high school students get no education in economics or finance. So one explanation for the French attitude is the fact that the vast majority of the people have no basic understanding of economics or markets. Those who get economics training in high school probably get a muddled message. I got this impression after taking a closer look at the content of the economics courses of the last year of the "lycée," or high school. 

The topics discussed seem more appropriate for a sociology course. Out of the seven courses of the curriculum, four have titles such as "Social Stratification and Inequality," "Conflict and Social Mobilization," "Integration and Solidarity," and "European Integration and Economic and Social Policies." There is no discussion of microeconomics (demand and supply) or firm optimizing behavior such as profit (or value) maximization or discussion of financial markets or free markets in general. 

The seeds of anti-capitalism and anti-Americanism can be found throughout the curriculum. One chapter deals with "Conflict and Social Mobilization." After a thorough analysis of Marxist thinking and an almost sad note that the influence of workers has diminished (because they are fewer workers, and the ones that became wealthier lost their class-identification), the authors still conclude that

[t]he reasons for the conflict with the other social classes remain strong. Although workers participate in mass consumption they use fewer services than other classes: they go less on holidays than others, they have less access to the internet and they don't have maids or nannies. 

In short, French people are still taught today that class warfare is the nature of (French) society and will remain as long as not all classes are equal. Of course, equality is not possible, as it would require that either all maids have maids or that there would be no maids.

The chapter on "Work and Employment" explains unemployment only as a result of technological progress where machines replace workers. Nowhere can a discussion be found on how social charges, taxes, and labor regulations (such as the minimum wage) can contribute to unemployment.

The icing on the cake is the statement in the section on "Conflict and Social Mobilization", which is supposed to be a consolation for all of us waiting in the gas lines:

A priori we often tend to think that conflicts are useless, they are better avoided. Not at all what sociologists think: conflict makes change possible. Social conflicts, because they put individuals into action, also contribute to form identities and develop solidarity. The first difficulty for you in this chapter is therefore the need to consider conflict in a positive role.

Luckily, the French government has more or less responded as the Saudi government did after 9/11: starting this year, all high school students (not just the ones of the economics section) will have to take a course in economics, and the curriculum will be changed. The goal of the curriculum will be to better understand how companies, households, and the state behave and how markets allocate resources, including labor markets and financial markets. So there is some serious hope that in the future, corporations will no longer be depicted as entities to fight, but instead as the ultimate creators of wealth.

Predictably, when the reforms were proposed at the beginning of this year, Francois Dubet, the only sociologist on the curriculum committee, resigned in protest, stating that "[n]ow the corporation will no longer be seen as a place where people work, or like a social entity, but as a unit of production that has to continuously adapt to a changing environment."

Let's hope Mr. Dubet is right. And perhaps then the French will someday understand that when the supply of oil is cut by striking workers, the price of gasoline at the pump will rise.

Theo Vermaelen is Professor of Finance, INSEAD.

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