11.15.19
Gemini version available ♊︎Understanding Thierry Breton: Moral Responsibility for “a Capitalism That Kills”?
Overview
Understanding Thierry Breton
- Part 1: In the Beginning...
- Part 2: “Mister Cash” Arrives at France Télécom
- Part 3: Toxic Management Goes on Trial in France
- You are here ☞ Part 4: Moral Responsibility for “a Capitalism That Kills”?
- Part 5: Chirac’s Entrepreneurial “Joker”
- Part 6: The “Cost-Killer” Tries to Tame the National Debt
- Part 7: “Rhodiagate” and the Vivendi Universal Affair
- Part 8: Insider-Trading Scandal at EADS
- Part 9: Noël Forgeard and His “Golden Parachute”
- Part 10: What Thierry Did Next…
- Part 11: Atos Healthcare – “The Ugly Face of Business”
- Part 12: Thierry and the $100 Billion Man
- Part 13: Socialising With the Elite
- Part 14: More Influential Friends in High Places
Further parts pending review and research
Moral responsibility for “a capitalism that kills”?
Summary: “…France Télécom which had previously been defined by an ethos of public service, by egalitarian working conditions and by a sense of universal mission, had now been transformed into a “cash machine” whose sole purpose was to generate shareholder value on international financial markets.”
French telecommunications had a long and illustrious history as a state enterprise. Since 1889 the state telecommunications company was administered directly by a government ministry in Paris which had its budget fixed by the French National Assembly.
Employees of France Télécom enjoyed job security and guaranteed income as state employees, or “fonctionnaires”, but were part of a hierarchical, paternalistic, and tightly regulated structure that offered restricted opportunities for career advancement.
At first, the privatisation of France Télécom was hailed by free market enthusiasts as a showpiece of economic liberalization which had surpassed all other French companies in the scale and speed of its transformation from a state-owned enterprise to a global economic player.
French politicians like to cite France Télécom as a flagship for privatization which demonstrated the methods that could be used to privatize other companies stifled by the yoke of state ownership.
“…France Télécom which had previously been defined by an ethos of public service, by egalitarian working conditions and by a sense of universal mission, had now been transformed into a “cash machine” whose sole purpose was to generate shareholder value on international financial markets.”However, in the eyes of some critics, France Télécom which had previously been defined by an ethos of public service, by egalitarian working conditions and by a sense of universal mission, had now been transformed into a “cash machine” whose sole purpose was to generate shareholder value on international financial markets.
In her article entitled “A Capitalism That Kills: Workplace Suicides at France Télécom” (2014), Sarah Waters, Professor of French Studies at the University of Leeds, takes the view that France Télécom’s situation represents a microcosm of the broad economic changes that transformed the French economy since the early 1980s.
These economic transformations which involved processes of privatization, economic liberalization, and deregulation were characterised by a shift from an economic model rooted in industrial production to a model of finance capitalism driven by exogenous financial indicators.
This is a new economic “paradigm” in which profits are derived from financial exchanges rather than material production. The worker is no longer an essential factor of production but is reduced to a mere “cost factor” and thus becomes an impediment to profitability.
“This is a new economic “paradigm” in which profits are derived from financial exchanges rather than material production.”Under this model France Télécom was increasingly driven by financial imperatives that determined how the company was to be run at every level, from the shop floor to senior management.
With the increased privatisation of its shares, the company was obliged to comply with performance indicators put in place by financial analysts in order to measure the company’s share price on international markets.
France Télécom managers increasingly substituted a coherent internally-defined economic and technological strategy with short-term financial indicators to measure workplace performance.
At the same time, France Télécom’s increasing indebtedness as a result of its vast acquisitions meant that making short-term financial returns became the single and all-pervasive goal of management, to the detriment of every other human consideration.
Didier Lombard protests at the injustice of being branded “the CEO with 60 suicides over 3 years” which overlooks his achievements as “the CEO of the 4 billion annual dividend!”
The new course was set by the ruthless “cost-killer” Thierry Breton when he became CEO in 2002. He defined his primary task as the restoration of the company’s financial health (“santé financière”) through the reimbursement of € 15 billion euros in 2003 and renegotiation of company debt to 50 billion euro over three years.
“France Télécom managers increasingly substituted a coherent internally-defined economic and technological strategy with short-term financial indicators to measure workplace performance.”A company once governed by a vision of the “common good” became increasingly subjugated to a single overarching goal: “la finance”.
The “suicide wave” which occurred under the stewardship of his successor, Didier Lombard, took place after Breton had departed to take up his new position as Minister for the Economy in 2005.
However, some commentators take the view that by laying the foundations for the toxic management culture which ran riot under Lombard and by acting as one of the main cheerleaders for the new economic paradigm, the swashbuckling “ultra-liberal musketeer” Breton shares a moral culpability for the tragedy known as “l’affaire France Télécom “.
According to French MEP Yannick Jadot, cost-killer Thierry Breton bears “moral responsibility” for the France Télécom “suicide disaster”.
This view was recently expressed by the French MEP Yannick Jadot who commented on Breton’s nomination as the French candidate for EU Commissioner in the following terms:
“The “suicide wave” which occurred under the stewardship of his successor, Didier Lombard, took place after Breton had departed to take up his new position as Minister for the Economy in 2005.”“The questions raised by Mr Breton’s career are indeed numerous. He also has a moral responsibility regarding the ‘suicide disaster’, which affected employees at France Télécom.”
In the next part we will look at the events which led to Breton entering the world of politics as Minister for the Economy under President Jacques Chirac in February 2005. █
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