Chapter 1 shows that economic liberalization is contested in France in multiple ways. Liberalizing reforms are routinely met with strikes and demonstrations; they are often defeated by protest movements; and, in some cases, the leaders who launch such reforms lose their capacity to govern or subsequent elections as a result. The chapter demonstrates that economic liberalization – as measured by indices of fiscal policy, labor market policy, and business competition – has made less headway in France than in the leading European political economies. It also demonstrates that this limited liberalization is not the byproduct of a well-functioning alternative to the liberal economic model. Chapter 1 presents and critiques three explanations of French resistance and contestation of economic liberalization, centered on economic culture, political leadership, and the character of the welfare regime respectively. It then presents the central argument of the book, which is that the pervasive contestation of economic liberalization in France can be traced to the policy, party-political, and institutional legacies of France’s postwar statist or dirigiste economic model. Although the dirigiste model was largely dismantled decades ago, the legacies of this model continue to shape the politics of economic liberalization in the present day.

Chapter 2 analyzes the policy legacies fueling the contestation of economic liberalization. When French authorities broke with the dirigiste system in the 1980s, they deployed generous social and labor market policies to pacify and demobilize victims of the move. While this “social anesthesia” strategy, as I call it, humanized and facilitated de-dirigisation, it contributed to contestation in three ways. First, it transformed France’s liberalizing trajectory into a two-stage process – a shift from the dirigiste state to the social anesthesia state, then an overhaul of the social anesthesia state itself – fueling liberalization fatigue. Second, the high costs and labor market disruptions of the social anesthesia state partially offset the economic benefits of de-dirigisation, resulting in disappointing economic results that bolstered the sentiment that liberalization does not work. Third, the fiscal burden of the social anesthesia state limited governments’ ability to offer side-payments in return for acceptance of liberalizing reform. Chapter 2 shows how these factors combined to generate mass opposition to two labor reforms aiming to boost employment among French youths by reducing their wages and job protections. In both instances, French youths, skeptical of the benefits of uncompensated labor market liberalization, protested and forced the government to retract its reforms.