Readers of The Wall Street Journal know that there are economic laws that cannot be bypassed or abolished, even when trying to achieve some well-meaning social goals. The laws of economics are as real as the law of gravity, even though those who would prefer to ignore them accuse us of being « ideological » for saying so.
As president of a think tank devoted to economic education, I realized that even defenders of do-goody utopian schemes know more about these laws than I previously imagined, if only intuitively.
There is an ongoing debate in France about the legislation – passed under a previous Socialist government – that forcibly reduces the official work week to 35 hours. The legislation is still in force but was somewhat loosened by the government of Jean-Pierre Raffarin.
As I arrived in Paris a while ago, I saw demonstrators (you are bound to meet some any time you are there) chanting slogans in relation to this issue. They were walking in the street with a big sign showing a shark named « Profit » eating people. Intrigued, I approached a woman who seemed to be one of their leaders. She explained that they were protesting to make sure the 35-hour law was maintained, because it was imperative to share work in order to reduce the number of unemployed in France.
Trying to sound as unsarcastic as I could, I asked, « Then, why not demand a 25-hour work week? That would reduce unemployment even more. » The woman seemed genuinely puzzled for a few seconds. She then answered, « Well, we have to be realistic! »
There you have it, reality intruding again! But why should we expect a small bit of unreality to bring better results than a whole lot of it? Are people more justified to think they can fly when jumping from a high ladder than when jumping from a plane?
The same logic applies to all attempts at legislating desired ends that contradict the laws of human action. If people tried to understand economic laws and respect them the same way they respect the laws of physics, we would certainly live in much saner – and more prosperous – societies.
Michel Kelly-Gagnon est président de l’Institut économique de Montréal.