Strike Action in the 21st Century

~ Frederic Sautet ~

 

No, this is not a picture of a state-owned grocery store in a former Soviet country. This is a grocery store in France. I took the picture myself, as it happens that I was in France during a national strike action last week (and there is another one scheduled for next week). The strike took place mostly in the public sector, but many private companies were also affected. Indeed, it was the first time I saw a strike disrupting, to such an extent, the supplies of a (privately-owned) grocery store, so I wanted to share this. As I am writing these lines, the strike is still going on. I had forgotten how wonderful life can be when France gets all wrapped up in social conflicts. The French are so used to it that they don't even realize that life could be different.

Strike actions are more common in Europe than in the US. In the US, some jurisdictions even prohibit strikes by public employees. This is now also enacted in Europe, but it has been difficult to implement. The economics of striking has mostly to do with incentives. Western economies often provide generous laws for strikers, which reduce the cost of going on strike (such as an expectation that the days of strike will be paid). When incentives change, strike action also changes. NZ is a case in point. In the early 1980s, according to Stat NZ, there were more than 500 days a month lost in labor strikes (up to a million person days of work lost). This number has since then gone down to around 50 (less than 10,000 person days of work lost). With the various reforms, especially the Employment Contracts Act of 1991, the NZ labor market became more fluid, unemployment went down, and the cost of striking increased. When living in NZ, one forgets that pre-1990s, the country was constantly threatened by strikes, the way France (and others) are now (and have been for a long time).

In addition to incentives, there may also be cultural issues. In France it is not rare to find the public in favor of strikers in opinion polls (even when it makes everyone’s life more difficult). Opinion polls have their limitations, but if there weren’t an attitude in favor of strikers, it would be harder to go on strike. Many see the right to strike as a sacred right given to workers and employees, on par with voting or freedom of speech. For instance, the abrogation of Le Chapelier Law in 1864, which reinstated the right to strike, is seen as one of the most important social victories in France. But again, a change in overall incentives would probably eventually affect the cultural attitudes towards striking (even in France).

 

Comments

[Jerry O'Driscoll]

Vive la France!

[Jasper]

And, how does this relate to deer and beavers?

[Rafe Champion]

Beavers don't go on strike.
Don't know about deer, but they stand around a lot. Did you ever hear someone say "working like a deer"?

[Roger Koppl]

Bastiat is really wondering how Paris gets fed.

[Steve Miller]

Don't worry, I'm sure Michael Moore is filming it.

[The_Orlonater]

So, how many libertarians are in France and what influence do they have?

[Rafe Champion]

Most likely the unions were less organised in France when Bastiat was writing, Hutt described how they developed the strike threat system in Britain during the 19th century, presumably that spread worldwide.

We had almost empty supermarket shelves in Sydney a few years ago, it was only one union involved, either the truck drivers (teamsters?) or the storemen and packers. The distribution system is to fine tuned there is only about three days supply in the store (less on the shelves).

[Jerry O'Driscoll]

France has a handful of classical liberals and I know almost everyone of them. They fit in the backyard of the leading one.

[Mathieu Bédard]

That is however becoming less and less true Jerry. It used to be true, but in recent years there's been a surge classical liberals and libertarians, and they're increasingly young and devoted to the ideas.

[Frederic Sautet]

When Bastiat was writing, strikes were illegal. This was because of Le Chapelier Law and the Decret d'Alarde which were both enacted during the Revolution in 1791. These laws were a mixed bag, as they forbidden unions but also other forms of associations, but they did have a free market bent however, as they were originally meant to suppress the guilds and other associations that controlled markets in various cities of France.

Throughout the first part of the 19th century, the anti-union atmosphere is strong in France (I think it is visible in Les Miserables). One had to wait for the end of the Seconde Republique and Napoleon IIIrd to have the law abrogated. I am not a specialist but I understand that the reign of Napoleon IIIrd was rather liberal (in the European sense). Especially once he had established his power, he was willing to let the economy run freely. I think as part of that period, however, and in order to gain the support of the masses, he abrogated the law. He also gave more freedom to the press, etc. But again, I am not a specialist and I know there is much more to that story.

I do not remember Bastiat writing much on the subject of strike action. One reason may have been because there weren't any. And remember that in those days, they would enforce the law very swiftly...

[Mathieu Bédard]

Bastiat's only writing on strike laws are a speech at the assemblée in 1849 to defend an amendment that would have made collusion regarding salaries (both industrial to lower salaries and worker's to increase them) legal but not their use or threats of violence; "Discours sur la répression des coalitions industrielles".

I do not know about the strike threat system in Britain in the 19th century, but how organised unions are can really be explained by the privileges they have. For 40 years 5 unions had an "irrebuttable presumption of representativity", meaning that they didn't really need members to have authority during all sorts of negociations. This barrier to entry allowed them to become more radical and develop a powerful nuisance apparatus to give them even further leverage during negociations. This all leads to the situation today where an incredible amount of political power rests in the hands of unions, while their membership really only represent 7% of the actives, approximately 3% of the French.

[Current]

State sector strikes are often popular with the common people. I think that's because the union's position is often understandable in the short-term. The union is up against a monsopolist employer - the state - and that engenders sympathy. This is particular difficult for anyone that has invested a lot of human capital in a skill that only the state buys. That's one reason why miners were popular in Britain and why nurses still are.