The current riots in the suburbs of some French cities and in Argentina (with the Summit of the Americas) are symptoms of a profound malaise existing in these societies.
The question is whether we should welcome these problems. France is sick from decades of policies hampering wealth creation. From labor regulations making it very difficult to hire and fire people to tax policy, which confiscates wealth by taxing the same revenue many times (for instance, in addition to the income tax, there is the CSG and the RDS, and once you have accumulated capital, you are taxed again with the ISF, which taxes almost all assets, including one’s main residence, above a certain level – and this is in addition to payroll taxes, the TVA, and a host of other taxes).
Argentina suffers from the same problems. Contrary to France, it has tried to reform its economy in the last 10 years but with little success. Argentina is now recovering from its 2001 crisis but the foundations for sustained prosperity are not in place.
The Economist published last week its Latinobarómetro poll. The poll shows that more and more South Americans favor a market economy. However, Venezuela ranks higher than Chile in the “value of markets” (i.e. the percentage of respondents who favor a market economy), for instance. I find this symptomatic of the state of belief systems in Latin America.
As far as France and Argentina are concerned, belief systems are very strong. Peronist ideas have survived and developed for many decades in Argentina, even in the face of political failure. Piqueteros are one instance of this current of ideas alive in Argentine society. Politically the country is divided along one line: those who support Peronism and those who are against it. However, even those who are against it cannot ignore it and are influenced by it. Same is true in France with the influence of the pensée unique propagated and sustained by the énarques. Once one realizes that the French National Assembly has more than 51% of its members who are civil servants – that is, people who have always been paid by the state and who have a very strong stake in the status quo (see the study by Prof. Bertrand Lemennicier here) – social change seems very difficult, if not impossible.
This is why the current riots both in France and in Argentina can also be seen as good signs. 
The riots in France, among other things, send a very strong signal to the establishment and to the entire French population: the last thirty years of labor, urban, and social policies have been a complete failure. While official unemployment stands at 10%, unofficial unemployment is possibly more than twice as high. Moreover, official unemployment of young people (less than 25 years old) stands at 23% for the whole country (see figure, click to enlarge - source French Government). The feeling of despair of many is very high – especially in poor suburbs.
Do these facts make for the right conditions for social change? If New Zealand is of any guide, it was only once its economy was on the verge of falling into the abyss that social change became possible – that is, acceptable for a majority of the population. The same was true for Britain in the 1970s. France, as well as Argentina and most of South America, desperately needs a change in its economic policy. It urgently needs to deregulate its labor market, reform its tax policy, embrace free trade (e.g. remove the CAP), and focus on reducing its debt. As France’s problems worsen, the signal becomes stronger. However, it also means that it needs someone – an institutional entrepreneur – who can read the signal and act on it: where is France’s Roger Douglas or Margaret Thatcher?
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