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Social spending: "The paradox of France is to be both too liberal and too statist"

2020-12-16T14:07:52.481Z


FIGAROVOX / TRIBUNE - Jean-Loup Bonnamy describes the slow deviation of the post-war social model, which from the 1970s has continued to be extended to absorb the rise in mass unemployment. The associate of philosophy pleads for a reduction in social spending and a ...


A former student of the École normale supérieure, Jean-Loup Bonnamy is a graduate in philosophy and a specialist in political philosophy.

He published with Renaud Girard “

When psychosis derails the world

” (Tracts, Gallimard, 2020).

Charles Prats' book-event on social fraud,

Cartel des fraudes

, both exciting and terrifying, relaunches the eternal debate on the French social model.

But we will not understand anything about our current welfare state, if we do not know that it is in fact made up of two quite distinct strata.

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The first floor was built between 1936 and 1973 and has as its cornerstone the program of the National Council of Resistance (CNR) of 1944. Gaullists, Christian Democrats and Communists then agreed to build a Social Security that would protect the individual from the main social risks (unemployment, illness and accidents, old age, etc.).

Of course, it was a generous system and - with the exception of the Nordic countries - unique in the world.

But he wasn't overdone.

It encouraged work and corresponded to an economic model where capitalism, planned and highly industrialized, generated full employment.

Social protection was linked to work.

In this view, mass unemployment, far from being perennial, was a temporary anomaly.

Provoked by a possible exogenous crisis, it had to be wiped out by the economic recovery, while the social shock absorbers absorbed the shock.

All these new inventions have perverted and corrupted our social model, making it obese

The second stage of our social protection was built from 1974, that is to say the economic crisis which marked the end of the prosperity of the Thirty Glorious Years and the appearance of permanent mass unemployment.

France began to deindustrialize.

To face this situation of long-lasting economic anemia, all governments worked to add a second floor to our welfare state system to ensure the social treatment of the crisis.

A whole new series of aids, rights, subsidies, which were neither in the spirit nor in the letter of the CNR program, have been created since 1974. Retirement at 60 and the RMI (created in 1988 and became the RSA in 2009) were the cornerstones of this second stratum.

All these new inventions have perverted and corrupted our social model, making it obese.

But the fact that the CNR program has been misguided does not mean that it is bad in itself.

When France chooses unemployment

With this second stage of social protection, France made the choice of unemployment.

It turned away from production, accepted deindustrialisation, favored assistance.

With the RMI and the minimum old age, it broke the link between social protection and work.

Rather than operating an economic treatment of the causes of unemployment by creating jobs, we opted for a purely social treatment of the consequences by paying massive allowances.

Work was devalued, both symbolically and materially.

Those who before became road mender, laborer or housekeeper were now considered unemployable.

The merits of the entrepreneur were ignored.

The State, now influenced by neoliberal doctrine, withdrew from the economic field: disappearance of the State-strategist, constant decline in public investment, abandonment of planning and industrial policy, financialization of the economy and liberalization of capital movements, free trade and the naive opening of our markets to unfair competition from emerging countries, end of monetary policy (with the strong franc then the euro) ...

The State fell back on the social sphere, playing the role of the SAMU, to compensate for the macroeconomic shocks resulting from its own disengagement and globalization

At the same time, and as a consequence, the State retreated to the social sphere, playing the role of the SAMU, to compensate for the macroeconomic shocks resulting from its own disengagement and from globalization.

Instead of having targeted social protection which anticipates and plans, which helps and accompanies, which encourages initiative and rewards effort, which encourages training and entrepreneurship, which controls and punishes abuses, we took the easy way out by blindly pouring billions of euros on now passive individuals.

This second stage of social protection corresponds to an economic model which now prefers consumption to production, services (finance, tourism, mass distribution, personal services, etc.) to industry, and income to investment.

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The paradox of France is that it is both very liberal and very statist.

At the macroeconomic level, it has taken - more than any other country - all the great neoliberal turns.

But curiously, in France, this neo-liberalism has not developed the market.

On the contrary, it atrophied it while it strengthened the place of the State as a social actor.

And while the liberal macroeconomic orientations accumulated, our companies suffocated under more and more statism, red tape, taxes and social charges intended to finance the inflation of social rights.

The less the state intervenes, the more it grows

In France, the more the State withdraws from the economy, the more taxes and social spending increase.

In a crumbling private economy, the last thing left standing is the welfare state.

Moreover, the RMI / RSA, which is the opposite of the CNR doctrine, sums up this French paradox: of Anglo-Saxon liberal inspiration, it actually contributed to Sovietizing the French economy.

Our economy is a mad bicycle that always needs to go further in its madness, to spend more, to take on more debt

Historian Pierre Vermeren provides a perfect summary of this curious economy, doped with social spending, both ultraliberal and ultra-state.

About our social assistance, he writes: “

This non-market social economy is a unique system in the world, which has become a marker of the French economy: mass distribution, housing, leisure activities, medicine, the training system, etc ... also depend on the distribution of transfer payments.

The 8 to 9 million poor are thus economically integrated into the system, and they contribute indirectly to overall growth, not through employment from which they are excluded, but through the social economy which provides rents.

The 85% of annual immigrants who are not labor migrants participate in this strange economy

”.

Our economy is a mad bicycle that always needs to go further in its madness, to spend more, to take on more debt.

And this ocean of aid will be used to buy poor quality products made abroad, thus contributing to further widen our trade deficit and destroy our industrial jobs.

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But the problem is often frowned upon.

We do not see that the economic disengagement of the State and the obesity of the Welfare State are two sides of the same coin, of the same

economic

model

”.

It is because our neo-liberal state is withdrawing from the economy, letting our productive fabric wither, that it compensates by deploying an outrageous social policy.

We have either liberals who want to break the CNR program (this is what the CEO of the Scor group, Denis Kessler, explicitly proposed in 2007) and entrust social protection to private groups on the Anglo-Saxon model, which would be of great social brutality, that is to say carefree people who, always telling the same nonsense, want to maintain, even increase, our social expenditure, however already astronomical.

However, the only viable attitude consists in defending the first layer (that inherited from the CNR and the Trente Glorieuses), which is economically useful and socially legitimate, and destroying the second (which cannot be done without reindustrializing our economy).

Is it normal that the accumulation of social assistance allows some who do not work to earn more than others who work?

France therefore needs that we keep the first floor (very generous), that resulting from the CNR, and that we eliminate the second (too generous and which feeds the assistantship).

For example, the Social Security designed by the CNR must be safeguarded.

But nothing obliges to add the State Medical Aid, created in 2000 for illegal immigrants, and which costs us a billion euros per year, nor the CMU (created in 1999), which costs us 2.3 billion.

Ditto for unemployment.

While it is quite normal to pay unemployment benefits, is it wise to discourage work and allow some to voluntarily become unemployed and enjoy it for two years without looking for any job?

Is it normal that the accumulation of social assistance allows some who do not work to earn more than others who work?

Is it a good idea to offer RSA for life without requiring any consideration?

Sometimes, the RSA is affected by French people who left our country for a long time to settle in the Maghreb, Thailand, the Philippines or Africa, poor countries where the 560 euros of the RSA offer them a pleasant way of life.

We could thus condition the payment of the RSA to a few hours of weekly work in the service of the community.

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Another example, capping the workweek at 40 hours, as the CNR did in 1944, did not imply implementing the 35-hour week (1998).

These 35 hours only benefited executives, completely disrupted the public service and came at the cost of stagnating wages.

We could very well eliminate the 35 hours and go back to 40 paid hours 40. As regards the minimum old age, it is legitimate to pay this aid to French citizens (without distinction of origin).

But is it really reasonable to grant it to elderly immigrants, who are 75 years old, have just arrived in France thanks to family reunification, do not speak French and have never worked or paid contributions in our country?

Likewise, the pay-as-you-go pension is a system which is based on solidarity and which must be made a sanctuary.

But there is no obligation to set the starting age at 60 years.

Indeed, the CNR had planned a starting age at 65, and this at a time when life expectancy was much lower than today.

It was not until 1981 that François Mitterand demagogically decided to lower the starting age to 60 years.

This starting age has become a problem since it reduces the number of contributors and increases the number of beneficiaries, whereas today we must absorb the mass of retired baby boomers.

We could thus summarize what France needs in social matters: “The CNR program.

All the CNR program.

Nothing but the CNR program "

Thus, we should have the courage to face the unions and operate a classic pension reform, purely parametric, playing on the criteria of age and duration of contribution to restore the system to balance.

And this without lowering the amount of pensions or introducing private capitalization or setting up a point-based pension or merging the different schemes into a single universal scheme, that is to say without calling into question the Social Pact of 1944.

The CNR program, no more, no less

We could thus summarize what France needs in social matters: “

The CNR program.

All the CNR program.

Nothing but the CNR program

”.

The CNR program

” against those who like François Fillon or Denis Kessler want to destroy the bases of the welfare state in France.

"

Nothing but the CNR program

", against those who always want to further expand the welfare state.

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Why save the CNR program?

Because economically, it stimulates demand.

The economic successes of General de Gaulle's France prove that he is in no way incompatible with prosperity.

Quite the contrary.

In fact, if we take the year 1965, we see that France had already applied the CNR program for 20 years, but its economic growth was 4.5% and there was no unemployment.

Its industry and public services were far better than they are today, despite much lower public spending.

Its trade balance was in surplus.

Just like the state budget.

Public debt was less than 15% of GDP (compared to 98% at the end of 2019).

In 1971, the Rolling Stones even left the United Kingdom for France in order to pay less taxes!

The compulsory tax rate was only 33% of the GDP (against 48% today) and de Gaulle indicated that it was necessary to stay at that level.

In 1971, the Rolling Stones even left the UK for France in order to pay less taxes!

Proof that the CNR program is not synonymous with over-indebtedness of the State, nor weak growth, nor excess social spending, nor tax racketeering.

Without the social gains of the CNR, France would risk with each economic crisis to experience what the world experienced in 1929: a depressive spiral in which the crisis created unemployment.

As the unemployed no longer consume, this drop in consumption would increase unemployment and so on.

Ethically, the CNR program protects millions of people from misery and anguish.

Ensuring free health care and peaceful retirement for the population is part of the most basic social justice in a country which is the fifth world power and where Bernard Arnault holds a fortune of 90 billion euros, a fortune which increases by 800 euros per second.

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Socially, the CNR program is the basis of our social pact.

It is the price to pay for the French to agree to live together.

Social security is therefore part of our identity.

Whenever you see a French person opening their wallet, the first thing that jumps out at you is the green rectangle on the Carte Vitale.

Alain Juppé in Matignon in 1995 and François Fillon in his 2017 campaign committed suicide by attacking Social Security.

They should have understood how scary the fact of no longer having your health expenses reimbursed by the community.

And how rational and legitimate this anxiety is.

But why should we also destroy the second tier of social protection, established since 1974?

Because it has become unbearable!

Social Security will show a deficit of around 44 billion euros this year.

France spends 30% of its GDP on social spending, or 700 billion euros.

This is the "

crazy money

" that Emmanuel Macron rightly spoke of.

While our country is home to 1% of the world's population, it pays 15% of the planet's social assistance.

Social spending alone represents two-thirds of our public spending, which means that the state spends twice as much on social issues as on everything else.

The more the welfare state grows, the more the sovereign state shrinks

Our totally excessive public expenditure rate therefore does not come from the state budget but from social spending.

To support the astronomical amount of this social expenditure, we are cutting state funds, putting public services under constant austerity pressure.

So we are eliminating police and nursing posts, we sub-equip the army and hospitals, we no longer renovate roads and bridges, we compress scientific research, we no longer invest.

All this in order to continue to pay social assistance en masse.

But where does the money go?

In the spring, faced with the Covid-19 crisis, the French were surprised to see their hospital system in ruins even though they are the people who pay the most taxes in the world and their State is heavily in debt.

But where is the money going, they wondered?

The answer is simple: in social spending.

Unlike our infrastructure and our public services which are withering away, the social system of redistribution is operating at full speed.

This is why we have the largest social spending in the world, the highest rate of compulsory contributions, and why we have even been unable to have stocks of masks.

All the money goes into the RSA, retirement at 60, minimum old age for all, CAF, AME, CMU ... The more the welfare state grows, the more the sovereign state shrinks.

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We must reduce our enormous public spending.

But this overall decrease should not concern all sectors: it should focus on social spending.

If we divided social expenditure by two, 300 billion would be saved each year.

100 billion could then be devoted to deleveraging, 100 billion to lower taxes for companies and households as well as social charges, 100 billion to investment (industrial policy, ecological transition, housing, hospital system, renovation infrastructure, cutting-edge research, national defense, security, etc.).

Contrary to what some right-wing leaders are proposing, our necessary reduction in public spending must therefore not affect the sectors: we must massively reduce spending for the social sector but increase it for the police, the army, hospitals or infrastructure.

The weight of social charges is both the cause and the consequence of the attrition of our economy

The French economy is caught in a vicious circle.

Excessive burdens are levied on labor, to the detriment of employment and net wages.

This pushes companies to squeeze wages and not hire, even lay off or go bankrupt.

The number of contributors is then reduced (since fewer people are working) and the total amount of aid to be paid increases.

It is therefore necessary to tax even more those who continue to work.

Until this increase in costs destroys more jobs.

And so on.

The weight of social charges is both the cause and the consequence of the attrition of our economy.

Where the first stage of social protection, resulting from the CNR, made it possible to avoid a recessive spiral, the second stage, for its part, creates a recessive spiral of a new type.

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Ultimately, this model is unsustainable anyway because it squeezes the economy and relies on debt.

If we continue like this, the entire social protection system will collapse.

It is the hypertrophy of the second stage that threatens the entire system, including the first stage.

By adding more and more aid, there is therefore a risk of causing a collapse: a bankruptcy which will take with it all our social protection, including the legacy of the CNR.

Such a generous system automatically leads to fraud

Socially, where the CNR program favored work and solidarity, the second level of social protection promotes assistance, mistrust and suspicion.

Indeed, such a generous system automatically gives rise to a large-scale fraud: it is the occasion which makes the thief.

Charles Prats's book teaches us that social fraud has become industrial, that it represents 30 billion euros per year and that a surplus of 2.6 million vital cards, corresponding to individuals-zombies, circulates in nature.

The jihadists also instruct their sympathizers to engage in social fraud to finance themselves.

20% of “

French

jihadists

who

left to fight in Syria continued to receive their social allowances.

One of the

Daesh

leaders, nicknamed by Charles Prats “

Abou Allocs

”, is emblematic: thanks to a false identity, this Belgian terrorist was able to benefit from French social assistance.

The jihadists also instruct their supporters to engage in social fraud to finance themselves.

Instructions received five out of five, as evidenced by legal cases concerning the financing of terrorism, which are very often cases of fraud in social benefits.

We know this for the people who participated in the commando of November 13, 2015: most of them lived off the misappropriation of allocations.

How many respirators, masks, beds and nurses would we have to pay with this money?

Workers, middle class workers and small entrepreneurs can no longer bear to work and pay to finance those who do not work and who cheat.

Although he has the will, Emmanuel Macron will therefore not be able to lower social spending because it is the consequence of an economic model with which he does not intend to break for the moment: a financialized and deindustrialized economy, which is based on services and consumption, with a laminated private productive sector and an obese, indebted and socially withdrawn state.

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Our gigantic social spending does not exist on its own and in isolation from the rest of the economy.

They are (alas) a part of our current economic model, in which everything fits.

But if we continue like this, the entire house of cards that has become the French economy risks collapsing.

We cannot be satisfied with lowering social spending without doing anything else elsewhere, that is to say without reindustrialising the country and without reviving the original spirit of the CNR.

We must choose another economic model than the current system, with the aim of cutting aid, recovering money from fraud, reviving production and replacing assistantship with work.

Source: lefigaro

All news articles on 2020-12-16

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