Thursday, December 20, 2012

liberté, égalité, compétitivité

Louis Gallois,French Pres. François Hollande
A major French industrialist has proposed a new French revolution based on super-competitiveness, to shock the country back to economic growth.

"In France, there is not actually agreement that companies must be competitive to create value," Louis Gallois, who this year stepped down as CEO of EADS, the parent company of the European airplane manufacturer Airbus, told The New York Times. "We need to create that consensus first, and after that people can fight over sharing the benefits of competitiveness."

The problem here is that what is of value to Monsieur Gallois, who remains on the board of EADS and spoke with the Times from his "gilt-trimmed office in central Paris," wearing his "Légion d'Honneur pin," may not match with what's of value to a worker in his firm.

Indeed, neither Gallois nor anyone else quoted in the article specifies exactly what France must do to become competitive. The article implies that a panoply of tax breaks, lower corporate tax rates, and relaxed labor rules, making it easier to hire and fire, are what's needed. But this is the toolkit always advocated by big business--achieving profits by punishing workers.

Further, the Times article notes, "Culturally, France and many of its leaders are wedded to the idea that a social safety net -- despite its expense -- is needed to protect society from the ravages of lassez-faire economics. Economists say a pullback would have to happen to ensure competitiveness."

While I'd love to endorse Gallois' vision of a French economy in which "small and midsize firms can grow and create jobs," the "competitiveness shock" proposed by a global industrialist whose firm's revenues were close to 50 billion euros in 2011 ($66 billion, U.S.) is likely out of synch with what small businesses need to grow.


Anonymous said...

The guy in the picture is François Hollande.

rn said...

Thanks, Anon. My bad. Pressing 'publish' before reading things through. Apologies.