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Don't Give up on Sarkozy Just Yet

France's Nicolas Sarkozy has come in for some heavy fire recently. Criticism from the left, of course, has been partisan and predictable. In the wake of the anniversary of his first year in power, however, criticism from the right has begun to mount.

The Economist almost seems content in observing that Sarkozy's first year has not seen the full demise of the French welfare state. Sarkozy, writes the illustrious magazine "has brought only limited change to France." It is as if the magazine were contentedly stroking its figurative goatee and saying "We told you so--reforming France simply cannot be done."

Niles Gardener of the Heritage Foundation scoffs that upon Sarkozy's election, some had actually compared him to Thatcher: Sarkozy, writes Gardener, "has failed to introduce any major labor reforms and has not launched a serious challenge to the preposterous 35-hour work week.... It is an illusion to see him as a Reagan or a Thatcher," writes Gardener, "and those who do will end up sorely disappointed."

The general criticism of Sarkozy is extraordinarily misplaced. When have political leaders been judged after their first year in office? Margaret Thatcher, one of Gardener's political idols, did not face down the unions until her second term in office.

Sarkozy, fortunately, has not waited that long to face down the brigade of unions that successfully blackmailed previous governments. In 2007, for the first time in years, the French government defied the unions and won, bringing the retirement age for several hundred thousand select public workers in line with higher private sector retirement ages.

With vocal support from France's free-market oriented economics Minister, Christine Lagarde, the top income tax rate was cut and, in a frontal assault on the 35-hour workweek, overtime work for hourly workers was made tax-free.

Sarkozy has pursued extraordinary reforms in the area of university reform, breaking open what has hitherto been an ossified higher education reform, in the face of stiff resistance.

And Sarkozy's Prime Minister, Francois Fillon, is pushing for further structural reforms. Fillon's popularity is significantly higher than his boss, indicating that the French are more disaffected with Sarkozy's conduct of his private affairs than with the course of structural reforms. In the week of May 5th, Fillon said the government would continue to cut back on public sector workers and force all workers to work longer before retiring in order to put France's long-term finances on better footing. And, in a move that should make reformers cheer, Fillon told a French radio station last week that "We don't have a choice." Guess who else used the phrase "There is no alternative"? Indeed, that great free-market reformer who broke with more than 30 years of a national statist consensus--Margaret Thatcher.

There is a persistent flaw that characterizes the thinking of outside observers who favor economic reforms in France: push Thatcherite reforms from the top-down, the thinking goes, and France will simply fall into line. After some initial resistance, it is said, all will be well. This is a spectacular misjudgment of French political culture.

Certainly, reformist French leaders can seek to implement far-reaching structural reforms, using the bully pulpit (and in Sarkozy's case, a Parliamentary majority) as a podium for such efforts. They can take steps deemed necessary to boost economic vitality, entrepreneurialism, and employment. But beware the French political leader who is suspected of pursuing free-market reforms for ideological reasons: France is not, and will not in the foreseeable future, be ready for such a leader. For such an ideological, polarizing style of leadership to be politically possible, France needs a change in thinking--something that comes about only gradually, through cultural and intellectual diffusion.

Much as Margaret Thatcher never seriously sought to alter the UK's inefficient socialized healthcare system--the NHS--shrewd political leaders usually know to what point they can push their own population with free-market reforms.

Hence Thatcher's emphasis on privatizing inefficient, government-owned companies such as British Telecom for the sake of revitalizing British industry. Hence Thatcher's emphasis on privatizing government-owned housing so that the poor, too, could have a chance at homeownership (an early version of the "ownership society"). Thatcher's agenda was focused on returning power from the state to the individual, not on hitting social benefits with a sledgehammer.

Thatcher's political instincts were correct in sensing that, though hotly contested, in the end these reforms would enjoy the approval of Britain's middle classes. For not going further than she did, she was criticized by conservatives. Ronald Reagan, too, was criticized by advocates of small government during his eight years in office for not dismantling the American welfare state. Some accused him of selling out to the status quo.

Yet in the end, both Reagan and Thatcher are celebrated by conservatives and pragmatists for giving their respective countries their economic vitality, dynamism, and confidence back, over a period of eight and eleven years, respectively. Sarkozy's been in office for a little more than one year, in France, of all countries one with an extraordinarily strong statist tradition. Let's not give up hope on this man yet.

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