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.

Chapter 3 analyzes the party-political legacies fueling the contestation of economic liberalization. Because of France’s dirigiste past, it is not just the left that is ambivalent toward economic liberalization, but also the right. The French right was in power during the heyday of the dirigiste system, so statist and nationalist principles became central to its economic outlook. In addition, leaders of the right emerged from the upheaval of May 1968 upheaval with a deep fear of strikes and protests. Finally, much like the left, the right never developed a legitimating discourse for economic liberalization, instead blaming it on external forces, notably European integration. Because of these legacies, the right has been an inconsistent backer of economic liberalization. Chapter 3 describes several characteristic behaviors of the right that foster the contestation of economic liberalization both in the streets and within governing circles: (1) a nationalist understanding of the economy that leads to extensive intervention to prevent foreign takeovers of French companies; (2) a fear of social upheaval that inclines conservative governments to retreat from reforms in the face of strikes and demonstrations, thereby encouraging further protests; (3) a fair-weather liberalism that gives way to statist revival in times of economic crisis.