December 17, 1995|By George F. Will
WASHINGTON -- Fear has been called the aerobics of the mind. If that is so, all who think there can and should be an entitlement to economic security should tone up their minds by focusing on what is happening in the streets of French cities, and on what has happened on the streets where pickets walked for 17 months outside Caterpillar works in the United States.
The future of all unreformed welfare states can be seen through the smoke from fires set by people protesting the French government's ''austerity'' plans, meaning plans to curtail entitlements to public jobs and benefits. Being asphyxiated by the smoke is any lingering hope that welfare states will be sources of social cohesion.
Instead, welfare states weaken the unity of their nations by creating large state-dependent factions that aggressively throw elbows against one another in defense of their portions of their nation's budgets.
Because the French strikes involve so many groups -- transportation workers, teachers, sanitation workers, newspaper deliverers, broadcasters, air-traffic controllers, and on and on the list goes -- the strikes may seem to be a single rising of ''the people'' against the uncaring state.
Actually, the state has been so comprehensively caring that it has created a Hobbesian state of nature, a war of all against all, where life is nasty, brutish and short-tempered. The welfare state that organizes the factions around their entitlements also inhibits economic growth, thereby inducing panic about scarcity -- the suffocating sense of competing in a zero-sum game in which one party's gain must be a commensurate loss for others.
France's unemployment rate is officially double digit, but under
stated. Unemployment compensation is sufficiently generous in weekly amounts and in duration that it is a disincentive for seeking employment.
And in addition to the 19 sick days the average French worker takes in a year (disproportionately on Mondays and Fridays, of course), the average worker gets 36 vacation days and holidays. (In the United States the average is seven sick days and 23 vacation days and holidays. The Japanese take off an average of 29 days. Germans average 61.)
Rationing scarcity
French entitlements to leisure, including early retirements, are ways of rationing a scarcity -- work. So are many German apprenticeship programs. And so is Germany's leisurely higher education: According to the Manhattan Institute's City Journal, the average university graduate gets his degree at age 29.
In the Reagan years the U.S. economy created 18 million jobs. At the end of the 1980s France's unemployment rate was 2.8 percentage points higher than it would have been if job creation had just equaled the growth of the labor force. The pandemonium in France today reflects widespread insecurity among factions dependent on a government that has made more promises than the private sector's wealth-creation can pay for. The promises have crippled the private sector's wealth-creating capacities, so insecurity is the product of policies designed to deliver an entitlement security.
The United Auto Workers union has learned another way not to achieve security. It struck Caterpillar in 1994. Two weeks ago, the UAW surrendered to a company that during the strike increased its sales, profits and stock price. The terms of surrender will leave the union with fewer prerogatives than before the strike.
Beleaguered by foreign competition during the 1980s, Caterpillar shut inefficient plants, distributed work to low-cost subcontractors and spent $1.8 billion on computerized machine tools and assembly robots. Barry Bearak of the Los Angeles Times reports that between 1979 and 1991 Caterpillar's UAW employees declined from 40,500 to 15,100, and from 45 percent of Caterpillar's workers to 28 percent.
Because of similar downsizing throughout the economy, when the strike started, management could enlist help from what Marx called a ''reserve army of the unemployed.'' But this was not Marx's army of the unskilled. It included large regiments of skilled workers. And when the strike ended, the company said that under the pressure of the strike it had learned so many labor-saving efficiencies that now it needs 2,000 fewer employees than before the strike.
In 1977, the year of record-setting labor strife, there were 3,111 work stoppages (strikes and lockouts). In the 12 months that ended September 30, there were just 385 stoppages. The Caterpillar episode illustrates why strikes are becoming weak weapons.
France's social turbulence has the government in retreat, and will confirm that nation in its reactionary inwardness, strengthening its faith that politics can keep economic realities at bay. At least the rigors through which Caterpillar and the rest of the U.S. economy are being put will, like aerobics, conduce to fitness.
George F. Will is a syndicated columnist.
