The French youth are rioting over retirement ages, and I’ve seen it claimed that they’re failing to act in their own interests. More generous retirements have to be paid for by someone, and that “someone” will have to be the young workers. Why on earth are they shooting themselves in the foot like this? Why aren’t they acting in their class (err, age cohort) interests?
One of my favorite authors, Theodore Dalrymple, writes:
The lycéens’ demonstrations against the increase in the retirement age seemed to me something of a failure of the Cartesian critical spirit on which the French pride themselves… Whose labor, after all, do these lycéens imagine will pay for all of the unfunded pension obligations of the French state, as pensioners live longer and longer? Where do they imagine the money will come from?
He has a point here, but his explanation falls a bit short:
What probably accounts for the strikes is a mixture of combativeness—the prejudice that being against something is inherently superior, morally speaking, to being for it—and a desire for a day off from school.
Combativeness, sure. Nothing ever happens in France without someone going on strike. And nothing really important happens without a general strike. Now, the leaders do tend to be students, so I can’t dismiss the day off school hypothesis out of hand. But let’s at least look at the students’ own professed motives. Here’s what one of them had to say:
“If the reform passes, we’ll have even fewer chances to find work, we young people, because the jobs will be freed up more slowly.”
The impulse is both subtler and more ridiculous than Dalrymple realizes. It’s our old friend, the lump of labor fallacy: Force the oldsters into retirement, and it’s like a jobs program for everyone else. There is only so much labor to go around – not like jobs are ever created, you know – so we’d better be sure we get our fair share of it. Or so the theory goes. The protest signs, insofar as they communicate anything worth repeating, have often read “Place aux jeunes!” – Make room for the young! – or similar.
Not that this approach to economics makes any sense, either theoretically or practically. Putting someone out of work faster means he’s not producing anymore, which makes the economy worse off on the whole. And “his” job won’t necessarily stick around, because retirement is often the least painful time at which to eliminate a position entirely. Today’s workers aren’t likely to be trained for the same types of work as their parents and grandparents, and they shouldn’t necessarily want to be. The lump of labor fallacy imagines a world frozen in time, not one of dynamism and growth.