Neoliberalism : Le Monde : social anxiety


Richard Moore

This is an interesting article, as an example of 'thinking
inside the Matrix'.

It talks about how various nations use different 'models'
in responding to the neoliberal project. Some models are
'effective' - i.e., they enable a 'competitive economy' -
while some are not. Some models are 'equitable' - i.e.,
they provide reasonable social protections - while some
are not.

    In the absence of dynamism in Continental or Mediterranean
    countries, it is ever-larger layers of the middle class
    that will fall under the growing pressure of
    globalization. France and the United States are two
    different models, but both create the same social anxiety.

Here Le Monde tells us that 'social anxiety' is 'created'
not by neoliberalism, but rather by the response model!

The response of the victim is being blamed for the harm
caused by the perpetrator. It's a bit like saying a woman
'causes rape' by the way she dresses.

The neoliberal project, aka globalization, is about
disinvestment in Western economies: disinvestment not only
in social programs, but in basic infrastructures and in
domestic economic development. The various 'free-trade'
treaties implement this project by making it easy for
investors and corporations to move their operations
wherever in the world they can be the most exploitive.

Such a project can only lead to anxiety, in the West and
globally, no matter how any nation might choose to

Le Monde talks about everything but the elephant in the
kitchen. C'est la vie a la Matrix.



The French Model Is a Factor in Social Anxiety, as Is the American 

By Eric Le Boucher 
Le Monde 

Saturday 22 October 2005 

Before European leaders meet on Thursday 27 October at
Hampton Court to discuss the European social situation, a
Tony Blair initiative, it must be agreed that there is no
ideal model. In the face of the shocks of globalization,
very few developed countries have succeeded in remodeling
their system of social protection, in marrying
competitiveness and solidarity in a completely convincing

If growth is impressive and solid in the United States,
that success is not successful in preventing the
development of "social anxiety." That stems from the fact
that this system, as encapsulated by Professor Michel
Aglietta, "transfers all insecurity to those the least
able to bear it," the least qualified, those at the bottom
of the scale.

Middle Class

In the last few weeks we've seen another piece of former
American social protection collapse. General Motors, which
is suffering from significant financial losses and a
reduction in its market share over the last twenty years,
announced a cost-saving plan that will change the
company's social contract. First, the giant will reduce
its health insurance payments for its 106,000 employees
and one million pensioners by a billion dollars. Second,
the bankruptcy of Delphi, which manufactured its
components, will force it to take over payment of this
former subsidiary's supplementary pensions. GM will not
have the means, except by also limiting supplementary
pension payments for its own employees.

The GM crisis announces the end of the social regime of
the big company that pays well and offers benefits. Ford
will surely follow down this path, a path down which the
automobile groups were preceded by the airlines, oil
companies, steel and chemical industries.

The good worker from these traditional sectors, a central
figure of the famous American middle class, finds himself
deprived of social coverage. He will have to pay
personally for a health insurance policy. The weakest and
the least prudent will join the 45 million Americans who
now have no health insurance whatsoever.

For pensions, there is a minimum, paid out by a federal
body. But the latter, financed by companies'
contributions, is itself in serious deficit. The American
social system is therefore much less "sustainable" than is
economic growth.

Unstable Environment

Europe has nothing to be proud of. Certainly it protects
its citizens much better overall, but that occurs, in the
majority of member countries, at the expense of growth and
employment. André Sapir, from Brussels' Bruegel Research
Institute, has just published a study that distinguishes
four European models, of which only two are "effective":
the Anglo-Saxon model (weak unions, a wide salary range,
social protection limited to a minimum) and the Nordic
model (high level of social spending, strong unions,
narrow salary range, freedom to fire but strong
compensation for unemployed persons). Only one of those
two - the Nordic - is both effective and equitable.

The two other models are ineffective. One is equitable -
the Continental model (heavy social spending, very limited
lay-offs and generous unemployment benefits; this category
comprises France and Germany). The other - the
Mediterranean model - is ineffective and inequitable
(heavy spending, limited lay-offs, but weak compensation).

Wanting to preserve the social systems constructed in the
1950s for a stable economic environment (big companies
like GM), ineffective countries deprive themselves of the
indispensable flexibility required in the shifting
environment that globalization has created.

Sapir provides a startling statistic: 45% of our
industrial imports come from low salary countries, versus
only 8% in 1970. "And that's only the beginning," the
author adds.

The creation of the single market and the Euro were
intended as responses to globalization, but they have not
sufficed to "generate a greater dynamism." Because those
efforts have slowed down (no single market in finance or
services), because the European budget is too limited and
remains allocated to "relics" like agriculture. But also
because their social inflexibility has made Continental
countries suffer the disadvantages of globalization
without realizing any of its benefits.


André Sapir goes further by predicting that these
countries which are blocked in the absence of social or
monetary adjustment (the Euro prohibits devaluations) are
going to try to create a comparative advantage by
launching themselves into fiscal "dumping." Austria has
done it; Germany is thinking about it. These countries
will lose their revenues; the cycle is deadly. National
social conservatism is becoming a factor in European
social disintegration the French left should reflect upon.

These are the lessons André Sapir draws:

    1. Equity has a price. There's no solidarity without
    social transfers. Tony Blair has, moreover, understood
    that. Since 1997, poverty has decreased by a quarter 
    on the other side of the Channel to return to a level
    comparable to that of Continental Europe. On the other
    hand, inequalities there remain substantial.
    2. Effectiveness is not dependent on the level of taxes,
    therefore on the amount of money spent. It comes from 
    the quality of concrete policies.
    3. Ineffective systems cannot endure (they are also not

Countries have the choice between two effective models,
neither of which signifies "the end of the social
contract" as political demagogues claim. The reverse is
true: immobility will not allow us to defend the benefits
already gained and will end up imperiling the single
market and the Euro.

In the absence of dynamism in Continental or Mediterranean
countries, it is ever-larger layers of the middle class
that will fall under the growing pressure of
globalization. France and the United States are two
different models, but both create the same social anxiety.



"Apocalypse Now and the Brave New World"

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