Five Theses on the French Left

As an antidote to the snide gossip that passes for analysis of French politics at the moment, and in line with our broader reflection on the state of the European left, here are five theses on the French left that we hope might go some way to explaining the present impasse.

1. The French Socialist Party remains haunted by François Mitterrand’s u-turn in 1983-4. Elected on a platform of ‘Keynesianism in one country’, Mitterrand was forced to choose between spending more money and keeping the Franc within the European Exchange Rate Mechanism (ERM). Outsiders were betting he couldn’t do both and they were right. After much discussion with his anti-ERM “visiteurs du soir”, he opted to follow the advice of his finance ministry and give up his Keynesian policies. But instead of declaring a clean break with socialism, Mitterrand presented his decision as an embracing of Europe. Market-friendly policies were introduced through the backdoor without any ideological change at the level of the party. Hence the difficulty for the post-Mitterrand Socialist Party: they have pro-market policies but no new ideology with which to justify them. François Hollande, in his press conference this week, fumbled around with the language of social democracy. ‘Liberal’ in France remains a taboo, particularly on the left. The result is disenchantment all-round. Verbal gestures – such as Hollande’s promise to attack finance and re-moralize capitalism in 2012 – fall flat as they are not accompanied by policies that match the rhetoric. France’s business elites remain frustrated at the drip-drip nature of labour market reform. They know the Socialists have accepted the market but they see little public evidence of it.

2. France’s left-wing parties are not parties of the French working class. In the course of the 1980s, the French Communist Party (PCF) lost its status as the main, mass-based opposition party. Former PCF voters have gone in a number of different directions: many have left politics altogether, a few remained within the party or joined other small extreme left parties, and a large number shifted to the far right and began to vote – or at least sympathise with – the National Front (FN). The shift from the PCF to the FN is one of the most significant political developments for France in recent decades, though it is rarely commented upon. The Socialist Party has retained the support of much of France’s large public sector but it also competes for the urban, middle class vote that has little in common with former card-carrying communists whose life was spent working in French shipyards or fixing French trains. In Italy, Matteo Renzi’s transformation of the Democratic Party is aimed at keeping the public sector vote whilst also winning the support of employees and owners of the country’s small and medium-sized businesses. In France, the Socialist Party has made no such gamble and continues to experience these different constituencies as irreconcilable tensions.

3. The extreme Left in France has recently found a leader, Jean-Luc Mélenchon. Unfortunately for the left, Mélenchon is a narcissist. For all his eloquence and timely put-downs, his obsession is with himself. Rarely can he give an interview without talking about his persecution by the Socialist Party and the socialist-sympathising French media (e.g. here in the revue Charles). The momentum his party gained during the 2012 election campaign was partly a consequence of the widespread anti-finance and anti-elite sentiment, which also helped Hollande win the presidency. Yet Mélenchon was once again overcome by his own ego by deciding to run in the parliamentary elections against Marine Le Pen in Hénin-Baumon, a locality in the North of France, as if his mere presence could lift a town out of its depressed state and magically infuse it with some anti-National Front Mélenchon-inspired rhetoric. He scored poorly (just over 20%; Le Pen won with just under 50% of the vote) and has since been a more marginal figure in French politics.

4. Hollande will not change his spots. Ever. He will not pull out of his back pocket some long-hidden master plan for reforming the French economy. Nor will he take on the banks, or dent a long-standing trend towards growing inequality in France. He is what he has always been: a party apparatchik, clever and determined, but without any big idea or project. His election in 2012 was fortuitous. He became candidate because of the exit from the race of Dominique Strauss-Kahn and won the election because of the strength of anti-Sarkozy sentiment. His own contribution was to hold the line and not make any big mistake. Even then, he only just won. Another week of campaigning could have been enough for Sarkozy to claw back a victory. So there will be no “Mitterrand moment”, as Peter Gumbel recently put it, no grand transformation, no metaphorical rabbit out the hat.

5. Based on a close reading of the 2012 campaign, and an assessment of the state of French society and politics from the perspective of the left, it seemed that there were two historical goals against which the newly elected Socialist President – along with his Socialist majority within the national assembly – could be judged. The first was the goal of growth and social equality: pulling France out of its quagmire, reducing the terribly high levels of unemployment, doing something about the searing injustices of the dual labour market, tackling the decline in competitiveness. On that score, the record is dismal. Hollande failed to renegotiate the Fiscal Compact in favour of growth, as he had promised, and the preference for internal devaluation of prices and wages as a condition for the return of growth within the Eurozone – the ‘sadomonetarist’ agenda – remains central to EU macro-economic policy-making. The second goal was to halt the drift in French politics towards the right – the main-streaming of National Front rhetoric, the social acceptability of racism and anti-immigrant sentiment, the growing interest in law and order as a solution to France’s social problems. On this, the Socialist government has also failed completely, with its passing of the law on gay marriage a welcome exception that proves the rule (though even there, many defended gay marriage in the name of the family rather than equality). In fact, the most likely successor to Hollande is Manuel Valls, the hardline interior minister who has made much of his war on the Roma population. In his actions and rhetoric, there is little to differentiate Valls from the political right. Less likely to collude with the National Front in an election, the Socialist Party has nevertheless acquiesced in the rightward shift of politics in France. And here we also have to thank Mitterrand, whose tolerance of the National Front was due to his calculation that it would split the right and therefore keep the left in power. Perhaps it is too early to judge the Hollande presidency but so far, on both those counts, it has failed.

A note on the first round of the French elections

With one of The Current Moment editors based in Paris, it is difficult not to post on last night’s first round of the French presidential elections. And after the unedifying spectacle of different politicians talking over each other for hours on end on French TV, a few ordered thoughts will not go amiss.

François Hollande, the Socialist Party candidate, has come out on top, as most people expected. With 28.63% of the vote, he was a little ahead of Nicolas Sarkozy, the outgoing president, who secured 27.08% of the vote. What is surprising is how close these two scores were. There is some variation in the scores, depending on how you round them off, but there is little evidence of Hollande having pulled away dramatically from Sarkozy. Hollande’s victory in this round is far less decisive than Sarkozy’s was in 2007. Back then, Sarkozy won the first round with more than 31% of the vote, the socialist Ségolène Royal winning just under 26%. Watching the speeches each candidate gave after the announcement of the results, there was no obvious sense of victory either way. Sarkozy even appeared to upstage Hollande by challenging the socialist to three presidential debates over the next two weeks. A typically pugnacious gesture on Sarkozy’s part, Hollande seems to have refused which puts him in a defensive position vis-à-vis the ever combative Sarkozy.

At this stage, it is difficult to tell whether the anti-Sarkozy sentiment in France will be strong enough to sweep him out of power. The results suggest that contrary to many other elections that have taken place in Europe in the course of the crisis (e.g. here on the Spanish elections), the incumbent has managed to hold on to a good deal of support. Given the apparently ubiquitous dislike of Sarkozy, his score appears rather high. We are also seeing at this stage the limits of the Socialist strategy. Their slogan – Le Changement, C’est Maintenant (Change is Now) – highlights how much they have relied upon anti-Sarkozy feeling. Their claim to incarnate change is a weak one. Figures such as Laurent Fabius – a young prime minister under François Mitterand in the 1980s – hardly incarnate change. Rather, there is in the Socialist Party a sense that it is their turn to rule: out of power since the mid-1990s, their rightful place was usurped by a victorious Sarkozy in 2007. Now, their turn – long overdue – has come. It is this kind of sentiment – less evident in Hollande than it is in his entourage – that helps fuel support for the more marginal parties.

The first round result was noteworthy perhaps above all for the high scores of the far-right Front National and the left-of-the-left party, the Front de Gauche.  Much of the campaign had been taken up by this struggle between Marine le Pen and Jean-Luc Mélenchon, the populists of the right and of the left. Polls had credited the Front de Gauche with up to 15% of the vote but Mélenchon obtained on the night 11.13%. Marine le Pen, who had often been pushed back to fourth place in the polls, came a powerful third with 18.01%. It is difficult to assess what this means for the next round. Le Pen is expected not to give any clear sign that her supporters should vote for Sarkozy and many may not vote in the second round. Mélenchon called on his supporters to vote against Sarkozy, but held back on the night from openly calling on them to support Hollande – a tortuous position to hold if ever there was one. If we judge from the feeling that prevailed on the Sarkozyste right that “all is to play for”, there is no doubt some of that bullish sentiment comes from the hope that they can win over most of Le Pen’s supporters in the second round. Sarkozy’s speech last night – making much of patriotism, strong borders and economic protectionism – was an obvious pitch to Front National supporters. And the Socialists may find themselves in an uncomfortable position of trying to secure the votes of the virulently anti-FN Mélenchon supporters whilst at the same time sending conciliatory messages to the FN vote about understanding those who are suffering in the economic downturn. Here we see the problems of the Socialist Party: both a centrist and pragmatic (and largely middle class) electoral machine, and a party with a few remaining roots in the French working class.

It is unlikely that either Hollande or Sarkozy will upset the European crisis boat after one of them has been elected on May 6^th. Hollande’s main policy on the Eurozone crisis is to reorient macro-economic governance in a pro-growth direction. This is a very general claim, easily satisfied by cosmetic measures such as affixing the term growth to new European agreements much as was done with the Stability and Growth Pact. It is unlikely that the Socialists would rock the Eurogroup boat by denouncing all existing measures and demanding a return to the drawing board. It is likely that the curious way in which Brussels-based policymaking is able to insulate itself from domestic political currents will continue. What will happen within France, however, is far from clear. The success of the FN might also spell the end of its marginal existence and its transformation into a more mainstream party. There is talk of changing the party’s name, for instance, part of a wider and longer-term exercise in rebranding. But for the moment, the focus will be on what will happen on May 6^th.

Macron is a symptom of France’s problems, not a solution to them

This post was originally published here by Prospect Magazine

Having fought a campaign around the theme of over-turning the political establishment and pitching himself as the leader of an insurgent citizen-led movement, that very same establishment greeted Emmanuel Macron’s victory in the first round of the French presidential election with a huge sigh of relief. This tells us something about the candidate who is now most likely to become the next president of France.

Macron’s success boils down to one key insight: the French Socialist party (PS) is a sinking ship and anyone tied to it will go down with it. Macron quit the government presided over by François Hollande just in time to make his image as an outsider plausible. He decided to run as an independent rather than seek the Socialist Party nomination by taking part in the open primaries. This laid the basis for his success. The relegation of the Socialist Party candidate, Benoît Hamon, to fifth place in the first round, where he secured a paltry 6.35% of the vote, is the big story of this election so far. It had a decisive result in both propelling Macron to first place in the first round and in pushing up Jean-Luc Mélenchon’s vote share to within a whisker of François Fillon. The latter got 19.94% of the vote, Mélenchon 19.62%.

The collapse of the PS made the Macron phenomenon possible and this dynamic will shape a Macron presidency, assuming he goes on to beat Marine Le Pen in the second round as many assume he will.  His En Marche! movement captured the imagination of many but this enthusiasm came from his call to break the mould of French party politics. Disillusionment with the capacity of these parties to organize and lead drew people to Macron. In this first round of voting, it was striking how often people said they were voting in order to avoid someone else getting through. This sort of negative reasoning suited Macron perfectly as he was the acceptable face of all anti-system feelings: he was a safe vote for anyone who wanted to give the political mainstream a kicking but preserve the status quo at the same time. This peculiar and contradictory desire for both change and continuity was summed up perfectly in the days before yesterday’s vote, where voting Macron became a way of avoiding a Mélenchon-Le Pen run-off.

The negative feelings behind the Macron phenomenon are not new. In 2012, François Hollande won the presidency on the back of huge anti-Sarkozy sentiment. In 2002, Jacques Chirac won in a run-off against Jean-Marie Le Pen, securing over 80% of the votes cast in an enormous wave of anti-National Front feeling. Negative sentiments rather than a positive endorsement of a distinctive programme have become central to determining who makes it to the Elysée palace, and Macron confirms this rule. Even in organisational terms, Macron and his En Marche! movement have some roots in the recent past. Back in 2007, the Socialist Party candidate Ségolène Royale tried to create her own electoral movement, Desirs d’Avenir, after she received lukewarm support from the chauvinist barons of the PS. Her movement went nowhere after she lost to Nicolas Sarkozy but it was a sign that short-lived electoral vehicles built around the personality of a presidential candidate were possible in France as alternatives to traditional party machines.

What propels Emmanuel Macron forward as he fights to win the second round is the collapse of the French party political system and specifically the disappearance of the French PS as an electoral force. These disintegrative and negative dynamics make for very weak foundations going forward and explain why abstention is likely to be very high in the second round. Those congratulating themselves after Macron’s first round victory should think a bit harder about what is exactly is happening in France. Macron is a symptom of the country’s problems, not a solution to them.

Chris Bickerton

Look not to the peripheries

In recent weeks, Yannis Varoufakis, former Greek Finance Minister, has been under fire because of a secret group he ran, from February to June, whose purpose was to plan for a possible Grexit. Some have charged him with treason – primarily because his group hacked into the Greek Finance Ministry to acquire information they needed for the planning. Others defended him.

Whatever the stakes of this minor power struggle, it is a sideshow. In fact, Greece itself is not even the story. In this post-agreement moment, as the Tsipras government capitulates to the Eurogroup’s diktats, we need to grasp the dramatic failure of Syriza’s strategy in its proper context: the wider exhaustion of Left politics. The primary lesson is not (only) that Syriza failed but that the Left, across Europe, is politically exhausted. It is important to identify this weakness not only to acknowledge the limits of what Syriza could ever have done, but also to counter the emergent left-populist view that this is all about Germany.

To be sure, Tsipras deserves some blame. If the only planning for Grexit was happening in secret, on condition it never be made public and therefore never part of the bargaining strategy, then it was not just a pointless activity but a sign of Tsipras’ opportunistic willingness to use the Greeks as a stage army. They were there to vote, but never to have a real option granted. After all, for an exit to be a democratic act aimed at something like self-determination outside the Eurozone, it could not be a mere technocratic process of figuring out how to print and distribute notes, denominate payments, and sort out IOUs. It might have required seizing banks to prevent capital flight, nationalizing industries to prevent them being bought up by oligarchs who were hoarding euros outside Greece, rationing of certain basic supplies, even subsistence level economic production for a time. That is something the Greeks would have had to have been prepared for, something asked of them, and something which would have needed explicit popular backing. Tsipras made no effort in this direction and one has to think that he did not ultimately believe in his own people enough even to put the question to them.

Nevertheless, we should not lose sight of the extraordinary constraints that Tsipras and the Syriza government generally were under. They took power after Greece had already been through multiple rounds of austerity and seen roughly a quarter of its GDP evaporate. The financial thuggery by the European Central Bank, which engineered a quasi-bank failure in the last days of the negotiations by drastically reducing emergency funding, was illegal and extremely coercive. President of the Eurogroup, Jeroen Djisselbloem, doubled down on the threat, saying “we are going to collapse your banks.” It was clear that Schäuble wanted to turn Greece into something like debtor’s colony and was willing to take only that or let Greece go altogether. Even if Tsipras had, from the very beginning, made more effort to plan for the exit, looked for alternate sources of financing, pre-emptively printed drachmas, readied to seize the banks, moved to nationalize key assets, prepared capital controls, and taken the 50 other steps necessary to minimize the costs of exit, the democratic act would not have been a revolutionary step into a heroic, post-austerian future. It would have been a necessary, high-cost, step away from the clutches of the Eurozone.

The reason Greece was so limited in options is that Syriza had no meaningful support from the rest of the European Left. It had no support because the mainstream left parties, from the German SPD to the French Socialists, on through other Western European parties, have so fully committed themselves to the Eurozone and to some version of austerity that they were in no position to open the space within which a proper resistance to the Eurogroup’s divide-and-conquer sadomonetarism could be challenged. Syriza ran up against some world-historic limits that allowed someone other than the Left to dictate not just the basic terms but also the governing ideas of public discourse.

The best way to appreciate this is to note what could have been said but wasn’t. For one, it is striking how quickly the sovereign debt crisis of 2010 became pitched in nationalist terms, as a competition between creditor and debtor nations. In fact, the sovereign debt crisis had its origins in reckless lending by major French and German banks, which mirrored some of the profligacy and corruption of the Mediterranean spenders, and the majority of the money of the early bailouts was channeled into making those banks whole. This was true across the board but especially true in Greece. As Mark Blyth notes:

Greece was thus a mere conduit for a bailout. It was not a recipient in any significant way, despite what is constantly repeated in the media. Of the roughly 230 billion euro disbursed to Greece, it is estimated that only 27 billion went toward keeping the Greek state running. Indeed, by 2013 Greece was running a surplus and did not need such financing. Accordingly, 65 percent of the loans to Greece went straight through Greece to core banks for interest payments, maturing debt, and for domestic bank recapitalization demanded by the lenders. By another accounting, 90 percent of the “loans to Greece” bypassed Greece entirely.

The European people funded the bank bailouts, preserving their irrational financial system, and effectively nationalizing the debt through the Troika institutions. This could have been the start of more democratic control over the economy. Instead, the price of the bailouts was austerity for the southern countries, even less democracy (remember two elected governments, in Italy and Greece, were replaced by unelected technocrats), and worst of all the transformation of a conflict between the people and their economic system into a conflict between creditor and debtor nations. After all, once the majority of the debt was nationalized through the bailouts, the French, Dutch, other Northern Europeans, but above all the Germans, became creditors for the Italians, Spaniards, Portuguese and Greeks. The parties of the Left in these Northern countries could have tried to resist the nationalist impulse that coursed through the financial circuits of the European Financial Stability Facility/European Stability Mechanism, Emergency Liquidity Assistance, and other conduits of the bailout programs. They were, however, so thoroughly compromised by their commitment to the EU and the euro, not to mention their cooperation with what we now know as austerity, that there was no way out.

Consider the Germans. Any left-wing politician worth his salt could have pointed out that the way Schäuble talked about Greeks in public was likely how he talks about German workers in private. And, further, that Schäuble represented the interests of a fraction of German capital, not the German people as whole. Indeed, a German politician could have further pointed out that keeping Greece in but forcing it into deeper internal devaluation – namely, benefits reduction and wage repression – simply threatens to lower the wage floor for all of Europe, especially since the latest agreement also involved a direct assault on labor rights. However, the German SDP has been imposing wage stagnation on its own working class for the last two decades, most notably with the Hartz reforms of the early 2000s, imposed more or less in tandem with the rise of the euro. These reforms, pushed through when the SPD’s Gerhard Schröder was Chancellor, reduced benefits and contributed to wage stagnation. Even when the SDP lost to Merkel’s Christian Democrats, they agreed to be the junior partner in a governing coalition, in exchange for a few concessions, some lousy portfolios, and fealty to Merkel’s vision of Germany in Europe.

This has left the only significant party with any capacity for opposition utterly compromised. How do you tell workers whom you have been telling to accept wage stagnation and benefits reductions that they should now turn around and spend more money bailing out Greeks? Why save Greek benefits when your own are being chipped away? The SPD has no answers, no capacity even to generate answers, and even if it had generated answers, it could have never presented itself as a credible opposition, able to support the Greeks. That is why the whole affair looked like a unified, German hegemonic operation. Not because Germany really does have a national interest in dominating Europe – no working class has a stake in intensified nationalistic conflict – but because the expression of class divisions has been suppressed by the mainstream Left party itself.

A similar story could be told about the French Socialist Party. As already argued on The Current Moment, the French Parti Socialiste (PS) is not a working class party. Indeed, the abandonment of the working class by the French Left goes some way to explaining the popularity of the Front National amongst the young working class French. They rightly judge that the PS no longer represents them. Hollande’s tepid support for Tsipras soon after the latter’s election quickly turned into hostility. Hollande’s intervention at the last minute to stop Schäuble’s push for Grexit was a matter of French national interests, not of ideological or class solidarity. Hollande calculated that a German-provoked Grexit would make life in the Eurozone quite a bit more difficult, with rules ever more rigid. A similar calculation was made by Italy’s Matteo Renzi.

The PS’s commitment to European integration and monetary union stems from Mitterrand’s u-turn on membership of the European Monetary System (and the Exchange Rate Mechanism within it) in 1984. Whilst Mitterrand justified his decision to remain in the EMS in the language of Europe and peace, it fitted with his wider goals. He had become convinced of the need to reform the French economy through domestic adaptation rather than to use devaluations of the French franc as a basis for economic competiveness. The EMS was a rules-based framework that would help Mitterrand to pursue this strategy. De Gaulle’s attempt at internal reform failed with the general strike of 1968 and a devaluation in 1969. The Barre Plan of 1976 had also failed, which was why Mitterrand’s alternative of ‘Keynesianism in one country’ had been so popular in 1981. When he abandoned it a few years later, he brought the PS in line with the now established view about the need for an external monetary anchor to encourage reform internally. Mitterrand’s conversion to the power of external rules has become a core belief within the PS and there was no chance that Hollande, Valls, Fabius or Macron would challenge this by supporting Syriza. For them, as for the rest of the European Left, there is no alternative to this way of conducting economic policy.

The failure we see is, therefore, not just one of parties taking the wrong stance, or being compromised by their past commitments. It is also the dearth of alternative, left-wing ideas. Being anti-austerity is no longer enough, and it hasn’t been for a long time. It is one thing to say that turning Greece into a debtor’s colony, or undermining the European welfare state, is immoral. It is another to have some conception of and belief in the alternative. No doubt one reason that Tsipras and Syriza were afraid of what Grexit would take is because few found it credible even to consider nationalizing the banks. They only got as far as capital controls, very likely an example of how halfway can be worse than none or all. But the point is that, beyond outrage, there isn’t much in the way of a credible Left alternative to what gets shoved down the people’s throats each time the dollars or Euros run out. In such a political and ideological climate, there is little the Greeks could have done.

In fact, the degree of hope invested in Syriza by the wider European Left, especially around the time of the referendum, was the product of political displacement – not so dissimilar from left-wing support for the ‘Yes’ vote in the Scottish referendum last year. Unable to lead directly, the Left will project its needs and desires onto anything that looks vaguely oppositional, and Syriza had the added advantage of having some actual left-wing elements in it. If Syriza failed to lead, their failure only reflected the wider Left’s failure to imagine itself leading a popular movement that is willing to take responsibility for running society out of the hands of a bankrupt elite.

This is a failure not only of Syriza, but of the only other significant movements that have emerged out of the European status quo. Consider Pablo Iglesias, leader of Spain’s Podemos Party. In July Iglesias took pains to distance himself from Greece and to commit himself, if elected, to staying in the euro. He then openly professed that there is nothing he can do to resist the anti-democratic character of the EU – despite claiming the right to lead 45 million people. What better sign that it is not only the technocrats of Europe that are queasy about democracy. The peripheries and the core are constrained by the weakness of the Left everywhere.

Alex Gourevitch

Hollande vacillates (again)

This week’s cabinet reshuffle in France has done little to clarify where François Hollande stands on the key issues facing his presidency. What it has done is confirm that Hollande remains the manager of his own fractious party rather than a president with a clear political agenda.

When it was announced that Manuel Valls would replace Jean-Marc Ayrault as prime minister, it seemed that Hollande was completing his turn-to-the-right that had begun in January, in a speech where Hollande promised to cut public spending and reduce the tax burden on business. This ‘social compromise’, denounced by Marine Le Pen as an embrace of neoliberalism, was at the time seen as a new departure for Hollande. His nomination of Valls at Matignon seemed to take it further. The Financial Times complemented Hollande for ‘daring to turn to the right’ and commentators began to associate this new socialist government with the likes of Tony Blair’s New Labour in the UK, Schroder’s SPD in Germany, and the current much-transformed state of the Italian Democratic Party.

A couple of days later and the impression is very different. The appointment of Valls has been tempered by the promotion of key left-wing figures within the French Socialist Party. Arnaud Montebourg – the self-appointed spokesperson of the anti-globalization wing of the French Left – has been given a beefed up economic profile. Benoit Hamon, another prominent leftist, was made education minister, a powerful and key government department.

With such a cabinet, there is little evidence of any dramatic turn to the right in the Hollande presidency. Indeed, there is no dramatic turn to anywhere. Hollande’s goal seems to have been to manage the different currents within his own party, deploying the popularity of Valls as an antidote to his own poor poll ratings whilst compensating the left of the party with the promotion of Montebourg and Hamon. Michel Sapin’s nomination as finance minister hardly signals a radical change in France’s economic policy, given the little Sapin has achieved as labour minister. The impression Hollande gives is of placating his party rather than leading it. It may be that all along his success in the presidential primaries of 2011 was down to good luck: an absent Strauss-Kahn, strong antipathy to Valls, a weak showing by Royale and Montebourg, Aubry running rather than Fabius. Now Hollande continues to act as manager of his party’s different currents and egos, at the cost of pushing forward his own programme. There is little evidence as compelling as this to suggest that the French Socialist Party is no more than a sum of its many – and very different – parts.

François Hollande and the conservative critique of capitalism

In an earlier post, we criticized the French Socialist Party candidate, François Hollande, for his moralizing approach to economic policy. The ills of contemporary capitalism are, for him, a matter of evil intentions pursued by unscrupulous individuals. In his first major campaign speech, he declared that his real enemy was finance. Most recently, in a television interview for TF1, Hollande announced that if he was elected president he would introduce a new tax on high earners (Le Monde, 29 February). For those earning over 1 million Euros a year, the tax rate would be 75%. This would affect about 3000 people in France and would bring into the French treasury around 200 to 300 million Euros.

Upping the attack on the country’s rich and on its financial institutions seems in part a calculated response, in part a spontaneous reaction by Hollande and his entourage to the dynamics of the campaign. Whilst Hollande’s speech at the end of January was a carefully crafted affair, this latest announcement of a tax hike on high incomes seems entirely off the cuff. Announced by Hollande on TV and radio, even his taxation and budgets specialist within his own campaign team was unaware of the new policy. Hollande’s decision to crank up the anti-rich rhetoric is clearly both a strategy and an integral part of his world-view.

The problem with this moralizing approach to capitalism was put succinctly in a comment to The Current Moment: an ethical critique of capitalism leaves the system itself untouched and in fact only goes to legitimize the status quo further. It does this by attacking the present for being dominated by a materialistic, vulgar and anti-egalitarian culture, encapsulated in the figure of the bankster and the celebrity lifestyle of its political class. In its place, it proposes a deeply conservative alternative: austere, responsible, more egalitarian and less showy in its attitude to wealth and consumption. This is exactly François Hollande’s argument: he justified his new tax measure not on the grounds of how much money it can raise but in terms of morality and national patriotism. France’s rich elite, by paying more into the national coffers, will be doing its patriotic duty.

Instead of being asked to choose between different economic programmes, what Hollande is proposing is a different style of rule. In place of the crass materialism of Sarkozy, with his rich friends and rich wife, we are presented with François Hollande, a more ordinary and serious individual, with tastes that are less extravagant than those of Sarkozy. Here we can see very strong echoes between the campaign in France and developments in Italy. What Monti brings to Italian politics is more than anything a change of style: far removed from the glamour and glitz of Berlusconi, Monti represents the austere alternative, suited to times of generalized national austerity. When asked about the cost of his end-of-year celebrations, Monti replied by publishing a detailed list of his end of 2011 dinner party at the Chigi palace: 10 guests, all family members, a traditional New Year’s Eve menu, and a list of where Elsa Monti went shopping and how much it all cost.

This is in fact the key: this cultural shift proposed by Hollande and others such as Monti is what is required to legitimize the present age of austerity. Hollande’s moralizing critique of capitalism thus preserves the system in two ways: by proposing a set of conservative values, such as patriotism, duty and national responsibility: and by providing a closer fit between the downturn in France’s economy and the values and conduct of its political class. So far this is working for Italy, as Italians welcome an end to the Berlusconian orgy. Hollande’s bet is that it will work for him in the forthcoming elections. It may do, especially if the wealthy in France catch-on that Hollande isn’t out to get them, he is their saviour.

France’s heterodox economists

Back in June, The Current Moment blogged about a manifesto written by a group of “dismayed economists” in France whose critique of free market orthodoxies was beginning to gain ground. This past weekend, a long interview with one of the original signatories of this manifesto, the French economist André Orléan, was published in Le Monde. Focusing on the role of financial markets in macro-economic policymaking, Orléan makes a number of excellent points.

He notes that historically, the role of specific economic interests, such as those of finance or of specific sectors of the real economy (export industries, domestic farming interests etc.) have been contained by the wider concerns of governments. The universality of the general interests holds sway against the particularities of individual groups. He makes the good point that this battle has often been fought through national central banks. They have been the main tool used by the executive power to pursue the interests of wider society. This gives us a rather different perspective on what is often assumed to be the narrow partisanship of politically-controlled central banks. In the mainstream economic literature, independent central banks are the guardians of the public interest; central banks directed by national executives are prisoners of political short-termism. This may be the conventional view today but Orléan reminds us that the historical record supports the opposite view: politically-controlled central banks were the vehicles for the articulation of the public interest. The primacy of politics over economics, as Orléan puts it, has had as one of its main tools the power of the central bank. This might shed a different light on the Orban government in Hungary: attacked for its anti-democratic ambitions, one of Orban’s proposed reforms was to curtail the independence of the Hungarian central bank. Rather than welcome this as an attempt to regain political control over macro-economic policy, Orban was criticized for his nascent authoritarianism. In fact, the more powerful assault on the democratic control of macro-economic policy has been waged over the years by the European Court of Justice, particularly its attack on the notion that national public sectors should be shielded from the competitive pressures of the private sector.

Orléan also has an interesting reflexion on the nature of finance. Contrasting it with the market for goods or services, he notes that finance has a “directly collective dimension”: it is concerned not just with individual sectors but with the economy as a whole. He gives the example of the infamous downgrading of France’s triple A rating by the agency, Standard & Poor’s. In its report, S&P referred to the EU’s new fiscal compact agreed upon in December 2011 (which the UK and the Czech Republic are today refusing to ratify), which it judged inadequate to meet the demands of the Eurozone debt crisis. Orléan notes that it is exactly this kind of very general judgement that is typical of the financial sector; and yet such generality does not pass through – as with democratic decision-making – a system by which a variety of different views are confronted via the freedom of the ballot box. This curious combination of its very narrow representative claim along with its interest in the economy as a whole can go some way of explaining the rise of technocratic governments in Europe today: they express the same peculiar combination, with individual technocratic leaders such as Italy’s Mario Monti having a history of very close relations to the world of finance.

Orléan’s views on the way out of the current crisis are based around a reassessment of the idea of value in the economy and of value creation. He argues for a much greater focus on the creation of value within the real economy, as this is ultimately where jobs and growth are created. He suggests that a new law should be introduced that firmly separates savings banks from investment banks, an argument included in the French Socialist Party’s programme. There is nothing radically new in Orléan’s arguments but his attack on conventional assumptions in economics is both powerful and welcome.

People of Europe, Look to Brexit Britain!

Back at the time of the Brexit referendum, we were told that the EU is horrendously flawed (democratic deficit, Eurozone crisis, Fortress EU drowning refugee children in the Med), but that we have no choice but to vote for it, because it is the only thing constraining the peoples of Europe from unleashing their basic Fascist urges and sweeping away our nice social-democratic bits and pieces like workers’ rights and the welfare state.

But the brave voters voted for Brexit regardless, and, in the year since, Britain has seen pretty much the political opposite. The Right has been smashed. The BNP, Britain First and the EDL are scarcely to be seen, UKIP is crushed, the Tories are in government but disarray. The social-democratic Left is resurgent. Defying the long-term trend among social-democrat parties across the EU, Labour has bounced back from its decline, both in membership (it’s now the largest party in Western Europe) and its vote. Plus – that has been under the leadership of the Left of the party, blowing apart the decades of Blairite dogma that had been killing off faith in democratic politics, especially among the young.

What about Europe?

The big French and German elections this year have seen exactly what the EU allegedly prevents. Social-democrat parties in decline (just 6% for the French Socialist candidate!) and far-right populism surging: France’s National Front in second place, Alternative für Deutschland in third, gaining seats in the Bundestag for the first time.

And this is the big trend across EU member-states – social-democratic parties dying; right-wing populism surging. The Dutch Labour Party’s vote plummeted by nearly 20% this year. A far-right candidate very nearly became President of Austria the year before. Right-wing xenophobic types are in power in Poland and Hungary.

Obviously, EU technocracy isn’t the solution to populism, it’s the cause. They feed each other. Distant, unaccountable, they’re-all-the-same, technocratic politicians alienate the voters, who go to populist parties to cast protest votes. This scares the technocrats, who become more convinced that the voters are basically fascists, and so retreat further into the technocratic state away from the reach of democracy. Which then further alienates the voters. It’s a vicious circle.

Britain voted to leave the EU – necessary, though not sufficient, for breaking the vicious technocracy-populism circle. Far from being a triumph for the populist Right, it has been a humiliation. UKIP is disintegrating at the loss of its single issue, and the Tory Brexiteer Right are being very publicly humiliated for their lack of leadership and the hollowness of their political vision. Meanwhile Labour, even under the leadership of a dim beardy CND leftie, is looking like the next government.

So I turn the warning around on the EU.

Want to save democracy and social-democratic policies from right-wing populism?

Then you must follow Britain’s lead and exit the EU.

 

James Aber

Macron’s European Trap

This article was originally published on the Cambridge University website.

By any account, the French presidential election that ended last Sunday was extraordinary. The run-off in the second round was between two political ‘outsiders’: Marine Le Pen and Emmanuel Macron. In the first round, the mainstream left and right candidates came fifth and third respectively, with the far left Jean-Luc Mélenchon coming in way ahead of the Socialist Party candidate, Benoît Hamon. Many voters only decided late on who they would vote for, making this one of the most volatile elections on record.

The scandals affecting the centre-right candidate, François Fillon, overshadowed the campaign and relegated debates about political programmes into second place. In the run-up to last Sunday’s second round vote, a fierce argument raged – especially on the left – about the rights and wrongs of abstaining or spoiling one’s ballot paper. Political celebrities – such as the Greek Yanis Varoufakis – weighed in, urging French doubters to vote for Macron because “he is all that stands in between France and the fascism of Marine Le Pen”.

In the end, one in four of registered voters either stayed away last Sunday or spoilt their ballot paper.  What prevailed in the second round was the logic of lesser evil – voting for a candidate that is ‘not as bad’ as another – which goes some way to explaining the sombre tone of Macron’s victory speech on Sunday night at the Louvre in Paris.

For all the novelty, Macron’s election victory points to one important continuity: France’s complicated relationship with the rest of the European Union and its place within the Eurozone. When François Hollande was campaigning for the French presidency in 2012, it was the height of the Eurozone crisis with jobless figures reaching record levels and France’s economy in deep trouble. Aware of the opposition to austerity policies within France, Hollande promised to take-on the German government. He would discuss “firmly and amicably” with Ms Merkel and impress upon her the need for a new ‘growth pact’ for the Eurozone. His growth pact included proposals for Eurobonds to finance infrastructure spending and a transactions tax to fund development programs. His efforts came to nothing and the idea of a “growth pact” disappeared without a trace.

Something similar is happening today. Last Monday, a day after the French election, German Chancellor Angela Merkel gave a speech where she insisted that Macron’s victory would not change German policy in Europe. The German position is clear: France must reform its economy first, and bring its budget deficits well within the Eurozone’s rules, before there is any discussion on Eurozone reform. Even then, it is very unlikely that anything that was contained in Macron’s programme – creation of a Eurozone parliament, a Eurozone budget and a Eurozone finance minister – will see the light of day. Such changes would require treaty reform that national governments say is out of the question. Referendums have left European governments so bruised that they are unwilling to risk putting treaty changes to the vote.

There is an irony here. Macron has been an openly pro-European candidate, regularly waving the European flag and taking the Ode to Joy – the EU’s ‘anthem’ – as his own campaign song. And yet, this very pro-Europeanism is what will most constrain a Macron presidency. Most likely as a first step is that Macron will be pushed into cutting budgets and reforming labour markets, doing so possibly by decree given the history of opposition to such measures. In exchange, he may get some mild reforms of the functioning of the Eurozone but ones that fall short of any need for ratification through referendum or by national parliaments. This outcome may be part of Macron’s strategy, where the rigidity of the Eurozone’s rules is used as a means of pushing economy reforms onto France. Either way, the bigger difficulties, to do with structural imbalances of the Eurozone, will remain untouched.

A problem Macron never has confronted is that his promises to transform France’s national growth model are made within a context where Eurozone membership which makes such a change almost impossible. Macron’s election was extraordinary in many respects but his experience of life inside the Eurozone is likely to be rather more run of the mill.

Chris Bickerton

France’s anti-system election

This article was originally published in Juncture, the journal published by the Institute for Public Policy Research. This article was published in the spring issue of 2017 (Volume 23, Issue 4).

 

On the 22^nd January 2012, the then Socialist Party candidate for the presidential elections in France, François Hollande, delivered what many believe was his election-winning speech. Speaking from a venue in Seine St Denis, a poor urban conurbation north of Paris given an edgy chic in the late 1990s by the French rap group, Nique Ta Mère (F*#* Your Mother), Hollande lurched to the left. “My real enemy is finance” declared a politician considered generally to be on the right of the Socialist Party.

Hollande’s speech that evening cemented his journey towards the French presidency. However, in a curious book published last year under the title of A President Should Not Say That, Hollande recounts how the speech was so nearly derailed by a shoe thrown at him by one of the thousands of people crowded into the hall.[1] The shoe landed in front of him and slid towards his lectern. The television cameras missed it and the incident was not picked up by the press. Had it hit me, remarks Hollande, I would probably have lost the presidential election.

This story captures in a dramatic fashion the fragility that has come to characterize mainstream political figures in France. With their popularity always in the balance, politicians feel as if they are stepping on egg shells. This is why they hide behind empty slogans and stock phrases, derision and opprobrium never very far away. Hollande’s presidency always had a quality of the improbable about it. His victory owed more to the strength of anti-Sarkozy feeling than support for his own program. The more leftwing elements of this program – such as the proposal to tax at 75% earnings over a million Euros – were gimmicks, conjured up on the hoof by his closest advisers and quietly shelved after Hollande’s victory. Though Nicolas Sarkozy’s win in 2007 had much greater momentum than Hollande’s in 2012, a similar dynamic was at work. Sarkozy chose to celebrate at a notoriously swanky Parisian restaurant on the Champs Elysée, Le Fouquet’s, and then to holiday off the coast of Malta on a yacht owned by Vincent Bolloré, one of France’s wealthiest industrialists and close friend of the newly-elected president. Throughout his presidency, Sarkozy was never able to shake-off the impression that he was obsessed with money. The soubriquet, ‘le Président bling-bling’, stuck with him throughout his five years in office.

The weak authority of France’s political class did not develop overnight and the causes are many. One is the drifting away of parties from their traditional social base. The French Socialists, for example, pretend to stand for the country’s blue collar workers but they have long been an urban, bourgeois and middle class party. The very idea of an identifiable social base has been challenged by deindustrialization and the emergence of chronic unemployment amongst French youth. Whereas in Britain supporters of the UK Independence Party have typically been retired ex-Conservative voters, in France a core part of the National Front’s vote today comes from the young. The political divide between rural and urban voters, softened greatly by the ‘Golden Age’ of French capitalism in the 1950s and 1960s, has opened up once again with National Front supporters concentrated in rural and semi-rural areas.[2] Even for the National Front, however, there is no real core vote: since 2002 its support has undergone multiple changes including feminization, proletarianisation and secularization.

There has also been a waning of the ideologies that once underpinned the left and the right in France. Mitterrand’s embrace of the European Single Act in the mid-1980s put an end to the left’s hostility to the market but without proposing any new ideology or vision for the left. The French right has conventionally been viewed through the lens of the French Revolution and associated with three different traditions – counter-revolutionary, liberal and Bonapartist.[3] However useful that may have been to understand the likes of de Gaulle or Giscard d’Estaing, it does little to explain the appeal of Marine Le Pen whose recent electoral gains have been concentrated in communities that traditionally voted on the left. And as commentators have remarked, François Fillon’s campaign is an odd collection of all of these right-wing traditions, without capturing any in particular.[4]

The weakness of the political mainstream has become a structuring element of French political life. Without an identifiable social base or any coherent set of ideas, mainstream parties are adrift from society and fail to command much authority, At this point in a presidential election, a duel should emerge between the candidates of the left and the right: Mitterrand/Chirac, Chirac/Jospin[5], Sarkozy/Royal, Hollande/Sarkozy. In 2002, the failure of the Socialist candidate, Lionel Jospin, to get into the second round run-off was an electoral earthquake and experienced as such. No such duel is looking likely in this election. The two candidates leading in the polls are campaigning on a platform of ‘neither left nor right’ (Marine Le Pen) and ‘both left and right’ (Emmanuel Macron).

Of these two candidates, the most enigmatic is Macron. A relative newcomer to French politics, and someone who has never held elected office, Macron has become a darling of the French media. He represents the acceptable face of anti-system politics: young, progressive and pro-European. He has even been cited by those despairing about Brexit and Donald Trump as the savior of the global liberal order.

This desire for something new has been present for some time in France. In the 2007 campaign, Ségolène Royal – the Socialist Party candidate who was snubbed and maligned by the party’s chauvinist elite – established her own movement, Desirs d’Avenir. This went nowhere after Royal’s defeat but Macron is picking up where she left off. Macron’s movement – En Marche – is mainly an electoral platform but is part of the splintering and fragmentation of political organization in France seen also in its more radial cousin, the Nuit Debout movement that filled the Place de la République in Paris for a few months last year.  Macron’s main weakness is his program: after weeks of grandiose speeches but no real policies, En Marche has gone into policy overdrive, churning out endless proposals that seem disjointed and ad hoc.

If Macron is a revolutionary in search of an idea, Marine Le Pen is quite the opposite. The ideas are there and some of them have not changed much since the party was first founded by her father, Jean-Marie, in 1972. The National Front’s program is an arduous read made up of 144 propositions that cover most aspects of public life. Whilst Le Pen has been a vocal defender of ‘Frexit’ – France’s exit from the European Union – her program states that France will seek to renegotiate its place in the EU and then put the results of this renegotiation to a popular vote, much the same approach taken by former British Prime Minister David Cameron. In contrast to Macron, Le Pen is in many ways the quintessential political ‘insider’; she is, after all, running a party set up by her father. Her challenge to the system is in part ideological: she vituperates the political establishment for having given up on ‘the people’ and opposes her nationalist solutions to the ‘globalist’ policies which she believes have failed France.  Le Pen is also threatening to disrupt one of the only unifying forces of French politics that remain: the desire to keep the National Front out of power. This goal has contained the powerful disintegrative tendencies at the heart of French political life, at least until today.

Anti-system candidates are currently leading in France’s presidential campaign. There will be some who welcome Macron as a centrist and a unifier, as many did with Alexander Van der Bellen’s victory in Austria’s presidential election late last year. This misses how much of an outsider Macron is, and how unconventional and unexpected his victory would be for the politics of the Fifth Republic. Macron may yet fall into third or fourth place as his competitors pile on the pressure but at present he is neck-and-neck with François Fillon for the coveted second place in the first round ballot.

A Macron victory, just like a Le Pen victory, would represent the collapse of the political mainstream in France and its traditional system of parties. It is unlikely that French politics would revert back to its traditional patterns and rituals. François Hollande was saved in 2012 by the few meters that separated his lectern from the shoe that was thrown at him. Mainstream candidates may not be as lucky in 2017.

Chris Bickerton

[1] Gérard Davet and Fabrice Lhomme (2016) Un Président ne devrait pas dire ca… (Paris: Stock) p18.

[2] Pascal Perrineau (2014) La France Au Front (Paris: Fayard) p38.

[3] Rene Remond (1982) Les Droites en France (Paris: Aubier-Montaigne)

[4] ‘Le discours de François Fillon à la loupe’, Le Monde, 16 December 2016.

[5] For the Chirac/Jospin run off in 1995, Chirac’s place in the second round was a surprise as the candidate on the right expected to get through was Edouard Balladur. However, what was not in doubt was that there would be a left/right run off in the second round.