DRAINING THE GLOBAL GLUT
The great majority of those who voted for Lionel Jospin's Socialists in the French elections earlier this year were surely voting against, not for: they were protesting high unemployment and the aloof austerity of Alain Jupp‚'s conservative government, not endorsing the specifics of the opposition's program. Nonetheless, Jospin's elevation to prime minister is a remarkable event. Sooner than anyone might have expected, a radical economic doctrine has emerged from obscurity to become, in principle at least, the official ideology of a major advanced nation's government.
Let me give that economic doctrine a name, and call it global glut. It may be summarized as the view that capitalism is too productive for its own good -- that thanks to rapid technological progress and the spread of industrialization to newly emerging economies, the ability to do work has expanded faster than the amount of work to be done. In its milder forms, the global glut doctrine involves the belief that policies should aim at increasing demand rather than supply; thus its American advocates have opposed efforts to eliminate the budget deficit or increase national savings, claiming that such efforts will actually reduce the economy's growth. In its more extreme forms, the doctrine calls for outright reductions in the economy's capacity, in particular through "work-sharing" schemes that reduce the length of the workweek. And it was this extreme form that was a central plank of Jospin's program: he called for a mandated reduction in France's workweek from 39 to 35 hours.
Heterodox doctrines, in economics and elsewhere, often fail to get adequately discussed in their formative stages. Both the intellectual and the political establishment tend to regard them as unworthy of notice. Meanwhile, those doctrines can seem compelling to large numbers of people, some of whom may have considerable political clout, financial resources, or both. By the time it becomes apparent that such influential ideas -- say, supply-side economics -- demand serious attention after all, reasoned argument has become very difficult.
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