People's Democracy(Weekly Organ of the Communist Party of India (Marxist)
May 21, 2006
Advocates Of Neo-liberal Reforms Listening?
WAS in Paris during the recent agitation against labour law reforms, which was
fought and won by French students along with the workers. For quite some time
now, the post-war welfare state has been on the retreat in France as in many
other nations in Europe, giving way to neo-liberal politics and economics.
However, this is for the first time that a massive student movement erupted
against the neo-liberal reforms.
started with the proposed First Employment Contract (Contract Premiere Embauche
in French) or CPE, meant to introduce a flexible hire and fire regime for the
young workers entering the job market. It was argued by the French government
that this move would encourage firms to hire more young workers and thus solve
the problem of youth unemployment in France, which has been steadily rising over
the past two decades. If the employee sought judicial recourse against arbitrary
firing, the burden of proof would have to be borne by her rather than the
employer. Other measures to change labour laws contained in the “Statute on
the Equality of Opportunities”, which was masterminded by the French prime
minister Dominique de Villepin after the civic unrest in France in November
2005, were also proposed. They were, allowing apprenticeships from as early as
14 years age (before completion of school education, night work from the age of
15 (instead of 16) and suspension of certain type of welfare measures when
students skip schools. The last measure has been in the programme of the
far-right Front National for quite some time. Its endorsement by the French
government was seen as a concession to the far-right.
proposed legislation met stiff resistance from students, trade unions, and
Left-wing activists, sparking protests in February and March with hundreds of
thousands of participants in over 180 cities and towns across France. On March
30, the Constitutional Council (Conseil Constitutionnel in French), the highest
constitutional authority, validated most of the law along with its 8th article
instituting the CPE saying that it was “not unreasonable”. However, the
Constitutional Council did not pronounce on the question of its conformity to
international and European law. The sixty Socialist deputies and sixty Socialist
senators who had deposed before the Council had notably claimed that the law was
against the International Labour Convention.
with countrywide protests, the French government had to give in. After standing
firm for three months, prime minister Villepin ultimately declared CPE null and
void. It was replaced by a law, which would encourage employers to recruit young
unskilled workers on a permanent basis by subsidising them. The subsidy amount,
estimated to be around 300 million euros, would be financed by imposing
additional taxes on tobacco. The victory of the students and the trade unions on
the CPE was indeed a significant one. Not only has it rejuvenated the student
and working class movement in France, which would no doubt have tremendous
impact domestically on the presidential elections of 2007; it has also shown to
the world that determined opposition to neoliberal policies is not only possible
but can also succeed in reversing them if people are united.
neo-liberal logic for labour market flexibility is based upon a fallacious
notion that introducing ‘hire and fire’ would lead to enhanced employment.
It is fallacious because unemployment is not caused by ‘labour market
rigidities’ as the supply-side economists would argue. The cause for
involuntary unemployment, as was pointed by Keynes and Kalecki in the aftermath
of the Great Depression, was insufficient aggregate demand, which is bound to
afflict a market economy. The only way out of it is demand management by the
state. It was this basic truth that was upheld by the French students and
workers when they said NO to the CPE. Are the advocates of neo-liberal labour
reforms in India listening?