The Spectacle of the Society

France's half-century social-spending spree is coming to an end -- and Nicolas Sarkozy is stuck holding the bag.

Four years ago, French Prime Minister Dominique de Villepin proposed allowing employers to hire workers up to age 26 to their first job on a probationary basis and be able to fire them without the immense rigmarole imposed by France's elaborate labor laws. The French took to the streets in outrage; I was able to take my son to his first manif, or demonstration. The Socialist Party backed the protesters all the way; their candidate for president, Ségolène Royal, told me that it was unjust to provide job security for businessmen but not for first-time employees. President Jacques Chirac -- by then a depleted force -- withdrew the proposal, humiliating Villepin, who resigned in early 2007. Nicolas Sarkozy won the party's nomination for president and then trounced Royal in the election in March of that year.

Sarkozy vowed to haul France into the market-oriented world of the global economy, but most of the reforms he introduced in his first years in office were timid or clumsy. Now, after much hesitation, he has made good on his promise by proposing legislation to raise France's retirement age for minimum pensions from 60 to 62, still low by the standards of the European Union. And he has, inevitably, provoked the whirlwind, just as Villepin did: Unionized truckers have blocked gas stations and refineries; workers have taken to the streets; and high school students have racked up some very satisfying confrontations with the police. But the stakes today are much higher than they were in 2006; both Sarkozy's presidency and France's long-term economic health depend on the triumph of common sense.

The drama of rewriting the postwar social contract is taking place across Europe. Over the past generation, globalization has challenged Western economic dominance and forced wages downward throughout the industrialized world; the economic crisis that began in 2008 delivered the coup de grace. The crop of European leaders unlucky enough to hold office amid all this has been stuck with the unpopular job of offering solutions. British Prime Minister David Cameron has proposed a radical assault on the benefits of social democracy, including not just deep cuts in welfare spending, but the elimination of cherished middle-class subsidies. Cameron has also proposed raising the retirement age -- to 66. Greece, where a wildly intrusive and inefficient government brought the country to within a hairsbreadth of bankruptcy, has been convulsed by popular resistance to Prime Minister George Papandreou's proposed cuts. Germany is widely admired for having made painful changes to labor laws without endangering social peace, but the Social Democrats who drove those reforms were booted out of office in a spasm of public anger.

What Sarkozy is proposing is quite modest by comparison. Raising the minimum age to 62, and the age at which a full pension kicks in from 65 to 67, hardly solves the problem of a smaller and smaller number of workers supporting an ever increasing number of retirees. Even the Socialists have long acknowledged the need to make changes in social security, and both sides have agreed that workers' contributions to the system should not be increased. That leaves only increasing the retirement age and extending the number of years of employment required before workers can receive their pension -- which Sarkozy has also proposed. And as Gilles Andreani, a fellow with the German Marshall Fund, observes, pension reform is the ideal vehicle for sending a signal to financial markets "because it shows a dedication to reform and rigor, but doesn't endanger economic growth," as Britain's budget cuts do. Given this inexorable logic, why the melodrama?

First, Andreani says, Sarkozy dithered. Instead of getting the decision out of the way over the summer, as some of his advisors wanted, he let it drag on until the rentrée, the traditional season for street demonstrations. And melodrama in the face of social change is a French birthright. The French have the habit of deploying the revolutionary gesture in the service of the reactionary cause of stopping change. "There is no political life here," as Alain Touraine, a pillar of French sociology, told me back in 2006. "The French have a revolutionary world; everything is black or white." Modest reforms quickly become intolerable affronts to Justice, Equality, and so forth. Students of the best lycées, members of communist-run unions, bank tellers, and insurance agents alike can all become, for one glorious moment, resistants.

Sarkozy is also incredibly unpopular, with approval ratings of 30 percent. Weakened, he makes a perfect target for protests. And the president is seen as a friend of the rich, both because he swans around on yachts and because some of his earlier reforms involved lowering taxes on the well-to-do. Pension reform hurts the working man but not, of course, the banker. And retirement age is an especially sacred issue in France. "A lot of people in France live in pretty grim suburbs, cannot afford to participate in the luxuries of a city like Paris, and spend as much as four hours a day commuting," says Thomas Klau, head of the Paris office of the European Council on Foreign Relations. "For these people, the social contract is to look forward to an early retirement because you put your life on hold until the moment you stop working." Try driving around a soulless French suburb, and you'll see what he means.

Americans have no reason to feel smug on this issue. Experts in the United States have long agreed, as they have in France, that the social security system is unsustainable and will ultimately bankrupt the country. And yet both parties fall all over themselves to pander to voters on the protection of those benefits. I have recently been pelted with emails from a liberal, union-supported group called the Strengthen Social Security Campaign, which boasts that "over 135 members of Congress" have signed a letter to President Barack Obama opposing any cuts in benefits or any further increase in retirement age. Of course, all attempts to include serious cost-control measures in the health-care reform bill failed. Rewriting the social contract turns out to be very hard, no matter how obvious the need to do so.

Although the demonstrations in France have begun to spin out of control, with radicals and disaffected youth trashing cars and provoking confrontations with police, Sarkozy will not retreat on pension reform and is likely to win a vote on the issue. (Both houses of Parliament have approved the measure and are likely to take a final vote next week.) A victory would cement his claim of being a force for reform and modernization, and might even improve his dismal poll ratings. It would also forestall the (unlikely) prospect of France losing its AAA bond rating and thus falling victim to the frenzy of currency speculation that savaged Greece this year. The French tradition includes accepting the outcome with a shrug once you've done your all in the streets.

Still, something bitter will remain. The 2006 demonstrations were fueled in part by the French fear of and distaste for marketplace liberalism, insecurity, and risk. The economy has since become more open and entrepreneurial, even if the labor market remains fiendishly regulated. But the protests today are also rooted in a deep sense of injustice: Why are the rich getting away scot-free, while ordinary people pay the price? No senior executives of Société Générale, the giant bank brought low by the actions of a rogue trader in 2008, have been punished for blithely encouraging reckless behavior. As Klau notes, "The price for wresting capitalism from collapse is paid by the poorer and weaker sectors of society rather than those most responsible for the collapse, who continue to derive the most benefit from the system." It's actually surprising that the French, with their contempt for bosses and their famously inflamed class consciousness, have been content merely to simmer over Sarkozy without demanding that the rich share the suffering.

You have to wonder how long this forbearance will last as countries throughout the West adjust to their diminished conditions. The one populist movement in the United States, the Tea Party, opposes the inheritance tax, the repeal of the Bush tax cuts for the rich, and most economic regulation. Its agenda can barely be distinguished from that of the American Bankers Association. What happens when finally the time comes to pay the piper -- to reduce entitlement spending and increase taxes? Will the rich still enjoy their immunity? Not likely.


Terms of Engagement

All Roads Lead to Istanbul

Turkey is more popular now than it has been since the Ottoman Empire. But can it please all of its new friends at the same time?

ANKARA, Turkey - It's great to be Turkey just now. The economy, barely scathed by the global recession, grew 11.7 percent in the first quarter of this year, and 10.3 percent in the second.  Like the Ottoman Empire reborn, Turkey has sponsored a visa-free zone with Syria, Jordan, and Lebanon, and is moving toward creating a free trade zone as well. And Turkey is a force not just in its neighborhood but, increasingly, in the world. It's the next president of the Council of Europe, an observer of the Gulf Cooperation Council, and a new friend of ASEAN and Mercosur. And the world is beating a path to its doorstep: When I was in Ankara this week, the Sudanese foreign minister was in town; the French, the Austrians, and the Poles had just visited. Senior Iraqi politicians were making regular pilgrimages. Turkey has become a net exporter of diplomatic services. "For the first time," says Selim Yenel, the highly Americanized deputy undersecretary of foreign affairs responsible for relations with Washington, "they're asking us for advice."

Like its fellow emerging powers Brazil and South Africa, Turkey was once a right-wing state that the West could safely pocket during the Cold War. And like these countries, the Turks now have the self-confidence to feel that they no longer need belong to anyone. Such states are now a force unto themselves, as Turkey and Brazil demonstrated -- to Washington's chagrin -- when they reached a deal with Iran this past May to ensure that Tehran would not produce weapons-grade nuclear fuel. Intriguingly, Turkey, Brazil, and Nigeria currently serve on the U.N. Security Council, and South Africa and India will next year -- a murderers' row of emerging powers, and a glimpse of a post-hegemonic, polycentric world.

But diplomatically, Turkey matters more than the others do. Among them, only Turkey is overwhelmingly Muslim and located in the Middle East, within hailing distance of practically every crisis zone on the planet. And thus the question of what kind of force Turkey will be matters more as well. Turkish diplomats, well aware that the eyes of the world are on them, are quick to give assurances that they are a liberal, secular, and, above all, responsible influence in their neighborhood and beyond.

The question arises, of course, because of the events of this past spring, when, in dismayingly rapid succession, Turkey delivered the unwanted gift of the Iranian deal and voted against a U.S.-sponsored U.N. resolution to impose sanctions on Iran -- and then erupted in outrage when Israeli commandos, determined to stop a flotilla sailing from Turkey to Gaza, killed eight Turkish citizens in the course of a terribly botched operation. The accident of timing left the toxic impression that Turkey viewed Iran as a friend and Israel as an enemy. Turkey's policy of "zero problems with neighbors" seemed to mean that it was prepared to alienate its old friends in the West in order to mollify countries in its own backyard, including the worst among them. The New York Times' Thomas Friedman wrote that Turkey seems intent on "joining the Hamas-Hezbollah-Iran resistance front against Israel."

I think that's a bum rap. On Israel, virtually everyone I've spoken to here, including harsh critics of the ruling AKP, has said that popular opinion was so outraged by the event -- the first time since the Ottomans, as one is constantly told, that Turkish civilians had ever been killed by a foreign army -- that no government could have preserved its popular legitimacy without demanding an apology (though whether leading figures had to describe the incident as state terrorism is another matter). Turkey is still waiting for that apology. As for Iran, it's clear that Foreign Minister Ahmet Davutoglu and his team really did believe that the West would welcome the deal they struck, by which Iran would agree to transfer 1,200 kilograms of uranium out of the country to be enriched for civilian purposes. The fact that they were wrong probably says as much about U.S. President Barack Obama's ambivalence about engaging Iran as it does about Turkish tone-deafness or disingenuousness.   

Still, Turkish officials recognize that they've jeopardized their emerging brand identity and have some serious repair work to do. "We've got to find something flashy," Yenel told me. Maybe Turkey could persuade Hamas to release Gilad Shalit, the kidnapped Israeli soldier? (Good luck with that.) Prime Minister Recep Tayyip Erdogan has backed off on his apparent obsession with Gaza and Israel's perfidy, and a U.N. investigative panel may deliver a definitive judgment on the flotilla incident in early 2011 (compelling an Israeli apology, Turkey hopes).

It's a caricature to say that Turkey has chosen the Middle East, or Islam, over the West. Turkey's aspiration for full membership in the club of the West, including the European Union, is still a driving force. But Turkey aspires to many things, and some may contradict each other. The country wants to be a regional power in a region deeply suspicious of the West, of Israel, and of the United States; a Sunni power acting as a broker for Sunnis in Lebanon, Iraq, and elsewhere; a charter member of the new nexus of emerging powers around the world; and a dependable ally of the West. When Turkey is forced to choose among these roles, the neighborhood tends to win out, and that's when you get votes against sanctions on Iran. At this week's NATO summit in Brussels, for instance, Davutoglu has expressed skepticism about missile defense, because any such system would be aimed at countries like Iran and Syria, which Turkey declines to characterize as threats.

Turkish officials insist that they embrace the "universal values" that drive public discourse, if not necessarily policy, in the West. But they seem to give their Muslim brothers a pass on human rights. Erdogan notoriously exonerated Sudanese President Omar Hassan al-Bashir by saying "A Muslim can never commit genocide." Erdogan also publicly congratulated Iranian President Mahmoud Ahmadinejad on his victory in the 2009 election, widely condemned elsewhere as grossly rigged. Turkish diplomats say that they use tough language in private -- but autocratic regimes shrug off private recriminations.

Unlike China or even India, Turkey does not resort to the language of "sovereignty" when defending abusive regimes -- it takes the "Western" view of international law. Rather, its dilemma has to do with its neighborhood: You can't be a regional leader in the Middle East if you take human rights too seriously. But the problem might also have to do with the unresolved state of Turkey's own democracy. Eight years after Erdogan gained power, secular Turks continue to doubt his commitment, and that of the ruling AKP, to human rights, tolerance, and the rule of law. Although many of the people I spoke to saw the country's recent constitutional referendum -- which among other things reduced the power of the army over the judiciary -- as a further consolidation of Turkish democracy, plenty of others viewed it as a dangerous ploy by the AKP to increase its control over the state. Secular Turks fear that the country is becoming steadily more conservative -- certainly in the Anatolian heartland, if not yet in the big cities.

From the time of Kemal Ataturk, Turkey has been committed to its "European vocation." But Ataturk was a modernizer, not a liberal; one of his slogans was "For the people, despite the people." And if Kemalist secularism was not a formula for European-style liberal individualism, it's scarcely clear that the AKP's market-oriented moderate Islamic restoration is, either. Turkey's democracy is not yet "consolidated," as political scientists put it.

Turkey is a success story that the West has every reason to welcome. The image of moderation and tolerant cosmopolitanism that it offers to Middle Eastern audiences contributes not only to Turkish soft power but to global peace and security, at least in the long run. That's already a pretty solid record. But Turkey is not content with being the brightest star in its benighted neighborhood; it wants to play on the world stage. And that ambition may force Turkey to find a new balance among its competing identities.