French soccer clubs have called off a planned strike. This fact is probably only as surprising as it is uninteresting to most North Americans. Nonetheless, the few followers of ligue 1 football in North America and the much larger interested audience in France will no longer be deprived of the final two weeks of this year’s season. What might make this story interesting to a broader audience is the difference between this labour action and the disputes that have sporadically affected professional sports on this side of the Atlantic. French footballers are not in conflict with team owners and investors. Instead, the teams are resisting French government policies, specifically its promised 75% tax rate on income in excess of one million Euros.
Francois Hollande was elected on a platform that included a promise make the rich pay their “fair shares” in French society. This rhetoric was well received and, in combination with the collective weakness of his opposition on the right, propelled the centre-left candidate into office. The name of Hollande’s Socialist Party tends to elicit some nervousness from business interests and draws the ire of leftists who doubt its authenticity. But both of these reactions tend to overstate the capacity of Hollande’s government to pursue thoroughgoing left-wing reforms. A 75% tax on extremely high income is a largely symbolic measure as it does nothing to radically change the essential dynamics of the French economy. Its effects are ones of magnitude and scale rather than structure. However, a French court ruled the measure unconstitutional and the government amended the law and shifted the burden of payment from individuals to businesses. What started as a popular promise to make the rich pay their share for the benefit of society has turned into “the death of French football.”
This is a variation of the defining feature of contemporary globalization and Thomas Friedman’s famous analogy of the Golden Straightjacket. Friedman argues that when countries adopt market-oriented reforms, it becomes progressively harder to reverse course. In other words, “your economy grows, and your politics shrink.” The validity of the first assertion is highly debateable, but the second is readily apparent. When footballers are in a position to exert a serious potential constraining influence on the policies of the French state, politics have shrunk to near invisibility.
Typically, states are constrained by the capital mobility afforded to investors by a globalized economy. If capital gains, real estate, or commercial taxes are abnormally high, a country will have difficulty attracting the investments it depends upon because more profitable endeavours can be pursued elsewhere. The more capital mobility there is, the more governments become bound by this principle. This underscores the limits of elections and reveals that state policies are shaped by various social forces whose power is equally divided at the ballot box, but unequally distributed in other important respects. Critics argue that this precipitates a race to the fiscal and regulatory bottom as states compete with each other to become more and more attractive for investment while deriving less and less direct material remuneration from investors. Others assert that the gains from increased economic dynamism far outweigh these sacrifices, and both sides have gone back and forth in a never-ending debate.
Few unions have an extremely wealthy constituency, but professional footballers are the exception. Their wealth, popularity, and labour mobility have all conspired to create this difficult situation for an already embattled government struggling to live up to a largely symbolic populist promise upon which it was elected. In this case, the government must not only compete to keep and attract investment, but take care not to lose its national athletes and celebrities as well.
This state of affairs should serve to temper the trepidation of the right and the enthusiasm of the left in equal measure when left-of-centre parties achieve future success in the industrialized west. There are numerous and formidable obstacles to any left-wing reforms. This has been true for a long time now, but it is clearly underscored by the fact that even football clubs can exert serious pressure on the government to abandon its election promises.