March 23, 2005

Politicians aren't perfect, yet won't admit it

An interesting article from BusinessWeek, (found via Michael’s econ blog) on France's labour market legislation.

Sophie Guilbaud not only holds a full-time job, she also helps run her son's nursery and treats herself to regular weekdays of shopping, movies and art shows.

The secret to her balancing act is a remarkable piece of social engineering -- France's 35-hour workweek. Introduced under the Socialists but headed for effective abolition by lawmakers Tuesday, "les 35 heures" have been a boon for some but, critics argue, a big drain on the economy.

Heated debate over dismantling the working time law has fed into wider political and literary soul-searching in France, on themes ranging from the country's economic frailty and bureaucratic office culture to whether quality of life should be measured in time or money.

For Guilbaud, a Parisian who works as a loan company manager, that last question is a no-brainer. "Work is not the only thing in my life," she said, suggesting she might quit rather than work more hours.

But with unemployment at 10 percent, politicians of all stripes acknowledge that the country's unique 35-hour law has failed in its original ambition: to force employers to hire massively. What's more, there are strong signs that it hurt living standards as employers froze salaries to make up for lost labor.

Full article here

In an ideal world, perhaps we’d be able to work 35, 30, or even fewer hours whilst having an environment appealing to businesses, lower unemployment, higher growth and a growing standard of living. However as things stand, that doesn’t look likely. That’s not to say it’s impossible; only that government policy is unlikely to make it so.

There’s a certain arrogance amongst politicians when it comes to policy making. They think they have all the information needed to interfere with a system and that their foresight into the results will be accurate. Little thought is given to possible unintended consequences, as shown by what’s happening in France. New policies are boldly put before the electorate, and later down the line, explanations as to why things went wrong are handed out with similar confidence. Of course the blame rarely lies with themselves.

Not that you’ll see anyone in power saying that a given piece of legislation will achieve the intended result with a probability of 10%, 40%, or 70%. Admitting that the future isn’t cut and dry is to admit that they’re only human; and perhaps better off not interfering.


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