What do raging fires and overturned Peugeots reveal about France’s economy? The riots that started with two Arab boys being electrocuted after supposedly running from the police have origins much deeper than anger over these specific deaths. The riots, soon approaching a duration of twenty days, have been fueled by the decades-long conflict between France’s social model and reality. This conflict makes it nearly impossible for those starting with disadvantageous backgrounds to succeed, and the two boys’ deaths were the straw that finally broke the poodle’s back.

Although it has now spread to other areas, the scene of the core violence was in the Parisian suburbs. Far from the landscaped, picket-fenced suburbs of many American cities, these communities are ghettos drenched in graffiti and violence. Here youth joblessness hovers near 50%, schools are to be pitied, and the population is homogenously non-white. And, unless something changes, it’s going to stay that way. France opposes affirmative action, claiming that, since the constitution requires everyone to be treated equally, and since everyone is French, no such programs are needed. A quick peek into America’s national history reveals that this rational ignores the reality of the ghettos, which impede assimilation.

In fact, the French government, insisting on a color-blind policy, refuses to track data by racial and ethnic backgrounds, which renders it difficult to argue that discrimination exists, even though nearly everyone agrees it is prevalent. (The symbolism behind the two boys’ deaths of police being more aggressive with Muslims than whites was, of course, what allowed the event to translate into rage among so many neighborhoods.) In one attempt to test how severe discrimination actually is, the University of Paris performed a study whereby researchers sent out résumés from fake job applicants to over 200 French employers. A résumé with a traditional French name received more than five times as many positive responses as one with a North African name, even though both listed identical qualifications. Hmmm, and we wonder why France has not a single Muslim in its Parliament?

Add to discrimination France’s rigid labor laws, and the work needed for a member of these ghetto communities to break free is overwhelming. France is so focused on protecting high standards of living that it stifles the dynamism needed to continuously reallocate resources to their best use. It allows massive unions to wrap their tentacles around key industries to protect people’s jobs even when they may not be the most deserving. Companies must pay huge severance packages if they want to layoff employees, which makes them incredibly hesitant to hire them in the first place. Temporary hires, common in the US and very helpful to give younger, less-trained employees a foot in the door to corporations, are almost nonexistent due to union opposition.

And, even if these minorities were all blessed with the gift of great innovativeness, chances are their dreams would still be shot. Bureaucracy overrides entrepreneurialism, so to start one’s own business is misery. Imagine wanting to put up a road sign for your business and having to wait two months for approval from the mayor’s office.

At a time of such economic weakness, these factors become unbearable. France's economy has grown an average 1.5% annually for the past four years and is predicted to grow only 1.2% this year. Unemployment is nearly 10%, and among those under 25 it is nearly 22%, (almost double the U.S. rate).

With no voice in government, and no power in the corporate world, fire and violence have become the vocal chords of this sector of the economy. Propositions have been announced, but only effective implementation will be trusted. We’ll see how long it takes for the bureaucracies to move once it’s the bureaucrats’ leather seats being scorched.

Posted by Michelle Smith on November 13, 2005 02:04 PM

Posted by: Bruno at November 19, 2005 07:00 PM

Posted by: Market-Racket at November 20, 2005 10:43 AM