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In France, There Is a Cost to Executives for Laying People Off

2015 October 11
by Ian Welsh

This is mild compared to what happened to managers in the early twentieth century, mind you:

Union activists protesting nearly 3,000 proposed layoffs at Air France stormed the headquarters during a meeting Monday, zeroing in on two managers who had their shirts torn from their bodies, scaled a fence and fled under police protection.

There are two great problems with our attitude towards violence today. The first is that we condemn it as “bad,” but permit it for people who abuse it. What we really mean is that violence by the state is ok, but violence by anyone else isn’t. You can justify that when the state doesn’t abuse its monopoly on violence (much), but that’s hard to do for most states.

The second is that we fail to recognize non-violent actions that have horrid consequences as serious. Laying off thousands of people has serious consequences for those people–consequences that are much more serious than having some clothes shredded.

We lock up “violent criminals,” but we hardly even bother to lock up most white collar criminals and, when we do, they get off lightly, as a rule. No one went to jail for the financial crisis, despite the fact that the fallout from that is far worse than a hundred serial killers each killing ten people.

I don’t like violence. But neither do I like going hungry. I don’t like homelessness. I don’t like millions of people in refugee camps. I don’t like—well, add to the list as you please.

Corporations are given a very valuable set of privileges by the government, including protection of their owners and officers from a wide range of normal liability for financial losses, negligence, and, indeed, in effect, criminal actions. Effective immortality and a wide range of tax advantages allow corporations to do things no actual person can do.

These privileges are granted because it is presumed that corporations are in the interest of society.

When a corporation does not act in the interest of society, the law allows it for it to be dissolved. This is done routinely to small corporations, but almost never to large corporations.

Corporations have multiple responsibilities: to shareholders, to employees, to customers, and to society as a whole. Officers and managers in corporations receive extra compensation (a lot of extra compensation, though less in France than in the US) in exchange for, presumably, taking on extra responsibility and being more skilled (or something, I’m often unsure what) than line employees.

I don’t know the specifics of Air France’s situation. Perhaps the layoffs truly are required.

If so, whose responsibility is that?

Barring an Act of God it is hard to make the case that it isn’t the responsibility of management. No? They are paid to be responsible, after all, and they are supposed to be competent.

The buck stops somewhere. If it doesn’t stop with a company’s management and officers, it stops nowhere.

Equally important is the fact that we keep precisely, and only, the rights (which includes property and jobs) that we are able and willing to fight for. Any other rights we have in excess will eventually be taken away from, awaiting only someone with enough power to gain the opportunity and motive to do so.

This is the real law of the jungle. Nothing. You have no rights, no possessions. Nothing. Everything you “have” is because it was at one point in the interest of others that you have it. Once it is no longer in their interest, watch out.

Union negotiating, in whatever form, is about making sure that management, officers, and society understand that taking what union members have incurs a cost. Air France may continue with layoffs, but be sure that a message has been received, and will be taken into account.


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21 Responses
  1. Greg T permalink
    October 12, 2015

    Interesting story. There’s almost a farcical element to it, but it is suggestive of employees’ willingness to fight back. No executive wants to experience public humiliation, so this will undoubtedly factor into their decision-making. Moreover, it sends a message to other workers and to other executives alike.

    Executives will always save themselves first. If a company has to cut costs, frontline workers are always first to get hit. Without a countervailing force to stop them, corporate managers will do what is necessary to protect their lavish bonuses. If families have to be ruined in the process, that is not their concern. After all, managers reason, better them than us.

    Anyone not a member of the bonus class should take note.

  2. markfromireland permalink
    October 12, 2015

    Well as to quote the classic line from The Life and Opinions of Tristram Shandy, Gentleman “They order, said I, this matter better in France.” 🙂

    As you say, mild.

    mfi

  3. scruff permalink
    October 12, 2015

    One minor quibble, and I hate to even say this, because it is so often used as a right-winger’s handwave, but is it not possible that “The Market” might change in such a way that these kinds of layoffs periodically become necessary? Probably not in this case, since air travel technology isn’t doing much right now, but in general.

  4. V. Arnold permalink
    October 12, 2015

    America has, for more than a decade, become a cesspit of social propriety; ruled by PCness.
    Anger? Against the law. Organized opposition? Against the law. Ratting out corruption (aka, whistle blowing)? Against the law. CCM (corporate controlled media)? Encouraged and government supported.
    A major difference between France and the U.S.? France’s government still fears their citizens.
    In the U.S.? The citizens fear their government!
    If you can answer why; then you have the solution.

  5. Ian Welsh permalink
    October 12, 2015

    Of course the market can change. Still, it is the job of executives to anticipate that and head it off, is it not?

  6. Dan Lynch permalink
    October 12, 2015

    Well said, Ian.

    My generation grew up worshiping Martin and Gandhi. Their non-violent tactics have their place, but they don’t always work. It works best if your opponent has a conscience, or if you can triangulate one power center against another power center. The North against the South, or Communism against Capitalism.

    When Martin took his non-violent movement to Chicago, it fell flat, because he could no longer triangulate the North against the South.

    Today our leaders are psychopaths, and no triangulation opportunities seem to be on the horizon. Our psychopathic leaders are not going to bend just because we hold up cardboard protest signs. They’re just not.

  7. Lisa permalink
    October 13, 2015

    Classic example of a (cheap) sell out:

    Bill Shorten’s (current Labor Party leader in Australia) AWU: ‘sold out’ workers for $300,000

    A serious cloud hangs over Bill Shorten’s record as a union leader. He ran a union that took $300,000 from an employer in disguised payments based on fraudulent invoices as part of a deal that hugely benefited that employer.

    That’s the damning conclusion from Tuesday’s evidence to the royal commission into union corruption, and documentary records, of former Thiess John Holland senior executive Julian Rzesniowiecki.

    http://www.theage.com.au/federal-politics/political-news/bill-shortens-awu–sold-out-workers-for-300000-20151013-gk80hn.html#ixzz3oRD4q4qH
    Follow us: @theage on Twitter | theageAustralia on Facebook

  8. montanamaven permalink
    October 13, 2015

    The answer to the question in the previous post about ineffectual protests lies in Lisa’s comment. Without a workers movement and gumming up the machine, no amount of marching and holding up cute signs is going to cut it. But corruption has neutered the union movement. There is corruption because there is money to be made in unions because of mandatory dues. In France, they elect their leaders from the floor and no “leader” makes more than the average worker and dues are voluntary. There are no union “bosses”. I mean really, the idea of workers having bosses doesn’t make sense. But at least the French have it way more right than we do. The French in solidarity are allowed to join strikes that can shut down the country. We aren’t allowed to do that. We made rules so we can’t have general strikes. Occupy was the first real protest in a long while. They did the opposite of marching, they took over a park and declared it public and then squatted there. If it weren’t for the thugs sent by Democratic mayors and a Democratic president, who knows what might have been.

    I ‘m not one who believes that marching ended the Vietnam War and I was there and married to a conscientious objector who served 2 years as a nurse’s aid at a hospital. Other friends went to Canada or put braces on their teeth rather than participate in an unholy war. People took over buildings and refused to leave. They made it more than uncomfortable to be a professor who was part of the MIC. They burned down ROTC buildings. They stole draft records and burned draft cards. They did not blow conch shells. They had too much to lose. It was a chaotic time. But maybe that didn’t even end the war. I think people slowly realized it was a big waste of money as our economy started down the toilet. And maybe it was because the Vietnamese kicked our butts out of their country once and for all.

    I am also a child of the Cold War and grew up 10 miles from Hilary and I am and always have been a pacifist not a war monger. And I admire the Russian people and their long struggles to make their world better. They won WWII with the sacrifice of over 20 million of their citizens. But USAians are taught that we won the war. The demonizing of Russia and Putin is to make sure that there is no alternative to neo liberalism. Putin said in his speech to the UN that the world is now ruled by selfishness, but there is another way that has more of a collective idea for structure. We should trade with each other rather than invade and steal people’s stuff.

    It took me from 2004 to 2009 to realize that the answer, for me, did not lie in electoral politics or the Democratic Party. I am lonelier without a tribe, but I sleep better at night.

  9. ekstase permalink
    October 14, 2015

    Yeah. “I was only doing my job. I’m secretly a very good person,” only works until it doesn’t.

  10. markfromireland permalink
    October 15, 2015

    @ Lisa – French (Continental European unions generally) vs. Australian (UK & Commonwealth & US unions generally)

    You are not comparing like with like. European unions specifically French ones which is what Ian is talking about tend to be bottom up and there’s usually a fairly explicit ideological basis think CGT (France) or CGT (Spain) for examples. That tends not to be the case in Anglophonia. I think it could be the case again in the UK and so does the extreme right-wing political movement that’s hijacked the UK Conservative party which is why they’re in the process of enacting some of the most viciously anti-union legislation I’ve ever had the misfortune to see.

    As a general point if you go here:

    http://www.worker-participation.eu/National-Industrial-Relations/Map-of-European-Industrial-Relations

    And hover over each EU country in turn there’s a strong correlation between a high level of collective bargaining and a successful defense of reasonably decent working conditions what’s interesting is if you try to match unionisation as a percentage to collective bargaining as a percentage to that – it may surprise you.

    mfi

  11. Hugh permalink
    October 15, 2015

    I don’t think laying off thousands of people is non-violent. It does great violence to the lives of those affected. Our rich and elites are masters of violence. The rich and elites loot us and tell us this is the natural order of things. We want some of the loot back, and we are thieves and lowlife scum, dangerous radicals and welfare queens. The lords of Wall Street, the powers that be, the unseen, obscenely wealthy, and their minions, the whole apparatus of the elites, these are the great mass murderers and criminals of our world. They kill us even more through neglect than in their pointless, senseless wars. They send our jobs to China because competitiveness and then bless huge and hugely anti-competitive corporate mergers. They sell us houses and steal them back through foreclosure. They force us to buy health insurance that is too expensive to use. And on and on. We live in a violent age, and most of this violence comes from our ruling classes.

    There is a phrase in the movie The Godfather: “It’s not personal, Sonny. It’s strictly business.” that has become iconic. It sounds cool, and our rulers love it because it allows them to justify their violence against us by making it impersonal. They kill us and loot us, but hey, it’s strictly business, not their fault. What I have always found fascinating about this quote is that this is not exactly how it plays out in the novel. There Michael Corleone says, “Tom, don’t let anybody kid you. It’s all personal, every bit of business. Every piece of shit every man has to eat every day of his life is personal. They call it business. OK. But it’s personal as hell.”

  12. markfromireland permalink
    October 16, 2015

    @ Hugh (Hugh as in “I’ve got a little list” Hugh???)

    Agreed – the State/Establishment is whatever group or groups has the monopoly of legitimate violence. It seems to me that whenever financiers get too much power that savage state sanctioned violence occurs. I agree also that it is very personal – I remember reading an interview with a concentration camp survivor and he said that for the concentration camp guard whichever piece of beastliness it was he did to you was just the way things were and he would soon forget it. But that was you or your father or brother or son he did it to and you never forgot it. The example is extreme but the principle holds good. For the establishment no matter how corrupt they are it’s just the natural order of things. “It’s the market” so they “have to do it” – Other than of degree I really don’t see any difference between that and the standard SS excuse of “I was only following orders”.

    mfi

  13. Hugh permalink
    October 16, 2015

    Yes, that Hugh. I gave up writing my scandals lists because there were just too many. They went down layers and layers into government, and at the same time, it was hard to keep them discrete because of the long and varied histories of the players and crossover between departments and branches of government.

    I kick around on sites until I get booted or get threatened with censoring of my views. I was at firedoglake (which is where I first crossed paths with Ian). I lasted through the great healthcare debate there although I was a supporter of Medicare for All and not the public option, but left after a moderator censored my criticisms of a so-called “principled” conservative (and lobbyist for Turkish Armenian holocaust denying groups) that Glenn Greenwald was hosting and proposing making alliances with. I moved on to corrente and Naked Capitalism where I commented and posted mostly on economics and especially on the monthly US jobs reports. That lasted until about a year and half ago when Yves and lambert drank the koolaid on an unbelievably poorly constructed, pseudo-progressive cult called Modern Monetary Theory. Its adherents have no knowledge of theory, and really almost none of economics. It has a superficial allure but almost all of its major points are either false or need to be so heavily caveated that they come out saying something completely different. So after making fun of some egregiously bad posts by one of its main “theorists” Randy Wray who maintained that corporations shouldn’t be taxed because they had earned their profits (in what universe you might wonder) and that the rich should not be taxed more because it was just too hard, I got booted from the supposedly “progressive” corrente and got threatened with censorship of my remarks by Yves at Naked Capitalism. Way more information than you probably wanted. Since then, I have been writing more sporadically and am still considering starting site of my own that would deal with a variety of issues, especially economic ones, from a progressive (or at least what I call progressive for want of a better term) perspective. One advantage of this is that I would be unlikely to kick myself off my own site. Another is that I could actually point out some things that everyone else seems to be missing. For example, if I had to pick one number that depicted the state of the US economy it would be 532,000. Seasonally unadjusted, the US economy has created 532,000 fewer jobs January-September this year than in 2014. I prefer seasonally unadjusted numbers because they show the actual state of the economy. What most economists and everyone in the media ignore is that seasonally adjusted numbers, while “official”, aren’t real and depend on economic activity in coming months which, of course, hasn’t happened yet. But even if you look at the seasonally adjusted numbers, you’re looking at a 458,000 job shortfall this year compared to last. Even taking into account that most of the jobs being created nowadays are crap, the US economy is more than two months behind its 2014 pace. And 2014 was not considered a great year economically. This is the number lurking behind all the Fed’s kabuki on interest rates. It’s not just China and emerging markets which have been slowing. The US economy has been slowing for the 3-4 months as well. In other words, we are looking at a global slowdown underway, but psst, don’t talk about it because it might spook “markets”. Only after you would have to be dead not to notice it will economists, economic gurus, and other quacks via their long experience and deep insights “discover” it. It would be funny if it were not so personal to so many of us.

  14. nihil obstet permalink
    October 16, 2015

    @Hugh

    I wondered where you went, since I find your comments interesting. Get the word out if you start your own site or settle on another one as a commenting home.

  15. October 16, 2015

    @ Hugh
    I too wondered what happened to you and was pleasantly surprised to see your post here. I have not be blogging much at all and rarely post a comment anymore. But I do read Moon of Alabama every day and check in at Naked Capitalism, but I too did not understand the fealty to the MMT theories. When I had a small radio show years ago, I interviewed Stephen Zarlenga of the American Monetary Institute and read his voluminous “The Lost Science of Money”. He’s not an economist. He comes to his ideas from studying the history of money. And I like his writing style. I’d be interested in what you thought of the ideas there.
    http://www.monetary.org/
    @markfromireland
    On the French unions: I got my information from a book that gets a lot of hackles up when mentioned. It’s Bob Fitch’s “Solidarity for Sale.”

  16. ProNewerDeal permalink
    October 16, 2015

    Good evening Ian,

    Can you write an article on the CAN election, or forward some links on it? What happened to the NDP, the wiki article shows they started in the lead in the polling, but slipped to 3rd now. Is the Liberal party actually “Less Evil” than the Conservative party?

  17. Hugh permalink
    October 16, 2015

    Hi, nihil obstet, and thank you, MM. I will look up the site. Frederick Soddy was a Nobel prize winning physicist, not an economist, but his discussion of virtual wealth written at the beginning of the Great Depression introduced a key concept to the understanding of financialization then and now. Warren Mosler, the godfather of Modern Monetary Theory, was a bond arbitrageur, not an economist. His raising the issue of fiat money and his point that banks don’t need reserves to make loans are both important, but like I said they, along with everything else in MMT, need to be heavily caveated. Money creation in the US is mainly driven by the banks through the Fed, not the government. And while it sounds kind of cool and counterintuitive at first glance to say that loans precede reserves, it’s something of a yawn when you consider that we live in a credit economy and that we all create money, in much the same way banks do, every time we swipe a card.

    For me, I think all modern economic theory went off the rails when it split from political economy a century and a half ago. And it shows the lamentable state of the field that Aristotle had a better grasp of the economy, its nature and place in human affairs, 2300 years ago, than economists do now.

  18. Jeff W permalink
    October 16, 2015

    I got booted from the supposedly “progressive” corrente and got threatened with censorship of my remarks by Yves at Naked Capitalism. Way more information than you probably wanted.

    It wasn’t more information than I wanted, either, Hugh—I wondered why you had vanished. I recall that Randall Wray thread on taxation perfectly.* (I wrote some comments on that thread essentially raising the same questions you were—they weren’t my questions, they were yours—and I thought they deserved some answers.) You were among my favorite commenters at NC and I’ve missed your comments greatly. It’s good to see you commenting here and if you have your own site, I would be a definite regular reader.

    *And, FWIW, your comments generally (not just that thread) on MMT definitely shaped my views of it.

  19. Hugh permalink
    October 17, 2015

    Thanks for the support, Jeff W. Progressives have the attention span of a dog who has just seen a squirrel. It makes progressive organizing almost an oxymoron. Part of me is sympathetic. They want so much to believe that they take up whatever person or idea comes along that even halfway pays attention to them, without any close examination. MMT talks some about jobs and social spending and that’s enough for many progressives to ignore just how neoliberal and market(not people)-based its core practitioners are. The cognitive dissonance is deafening.

    I have the same problem with Bernie Sanders. Black Agenda report called him a sheepdog meant to herd progressives into the Democratic fold. I called him a Trojan horse for progressives. I can’t take him seriously because

    1. He is running as a Democrat.
    2. His whole Senate record is one of serial folds and not fighting for or disrupting anything because that might upset the status quo or the powers that be.
    3. He’s a one man show, when it would take hundreds of progressive candidates in the House and Senate and at the state and local level for real change to occur.

    So progressives are setting themselves up to be taken again. It gets old after a while.

  20. Jeff W permalink
    October 17, 2015

    Thank you for your response, Hugh.

    My take on lots of progressives is that parts of their implicit theories are wrong. So, if MMT talks about jobs and social spending it must be liberal/progressive when in fact, as you say, its core practitioners are very neoliberal and market-based—the implicit theory of “this implies that” is not quite right. (It’s like thinking that Barack Obama is progressive because he’s a person of color.) I think that some ideas, like having the “fiscal space” for social spending, are valuable—the whole anti-austerity, anti-“government-is-like-a-household” thing is what appeals to Naked Capitalism, I think—that doesn’t mean it isn’t premised on neoliberal/market-based assumptions.

    As for Bernie Sanders, I wouldn’t say he’s a “Trojan horse for progressives” (although writing this comment, it occurs to me that that might be exactly what he is). I’d just say that progressives are once again exhibiting a kind of a learning error: if one basic progressive belief is that, in essence, the country is run by an oligarchic/corporatist élite (or, to use your term, “kleptocracy”), then what exactly is a President Sanders—assuming he is everything progressives hope he is (which is probably wrong)—supposed to do? By definition there is a systemic problem—something one person can’t change. That’s not based on your terms (or mine)—it’s on progressives’ own terms. That doesn’t mean that Sanders can’t, as a candidate or, perhaps, as President, accomplish anything—one thing he’s done pretty well is sort of invert the frame of American “exceptionalism,” i.e., “every other advanced country does x, what makes us think we can’t?”, which, at least expands the political agenda—it just means we can’t assume he can accomplish a lot.

    There’s a lot of “stuff”—almost all of it behavioral—that goes on: implicit theories that don’t hold up; theories that are right but not applied*; tribalism; inability to sustain attention; not focusing on high leverage points within a system; and it all gets in the way of effective action on the part of progressives. I agree—it all does get old after a while.

    *I’ve said this before: I think (for the most part) Ian’s view of things is right and he actually applies his theories which are among the reasons I like reading his posts.

  21. Tom W Harris permalink
    October 17, 2015

    Here’s a cover of an economics pamphlet co-written by Soddy. The hook-nosed Jew shows us where Soddy’s really coming from.

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