Learning from les rosbifs?

The grass is always greener

In the fallout from the EU referendum in France, the country’s political and media elites have sought to respond to what many perceived as a crisis in contemporary political life. The vast majority of mainstream politicians, with the exception of a dissident section of the Socialist Party led by former prime minister Laurent Fabius, had been in favor of the EU Constitutional Treaty – as was the country’s media. Since the shock of the 29 May ‘non’ vote, there has been a fevered debate on the question of ‘what’s to be done’ with France.

Recently, this debate has led those who saw in the victory of the ‘No’ campaign an outdated attachment to the French ‘social model’ to look to Britain as an attractive alternative. First came the European Summit in June, where UK prime minister Tony Blair faced down French president Jacques Chirac over the British rebate. Blair’s attack on the Common Agricultural Policy left Chirac exposed as an old-timer, defending the archaic interests of a tiny minority of French farmers. Then came the decision by the Olympic Committee to give the 2012 Games to London rather than Paris. Some in France accused Blair of unfair last-minute lobbying – but others argued that the French bid had been old-fashioned, and hadn’t gripped the imagination.

One article suggested that building restrictions in Paris prevented the city from having the verve and dynamism of London’s innovative and evolving skyline. There is no equal to Norman Foster’s gherkin in Paris (1).

The irony in today’s comparison between a dynamic Britain and a laggard France is that exactly 10 years ago, the British commentator Will Hutton published his bestseller The State We’re In, a denunciation of the Thatcherite legacy in Britain, and an attempt to find a way out of what Hutton perceived as being a political, social and economic crisis. Today, the ills Hutton associated with the UK are found in France, from political corruption (‘cash-for-questions’ in the UK; les affaires in France) to chronic unemployment. As a solution, many in France suggest a kind of ‘Thatcherism Mark Two’ that resembles the very model Hutton held responsible for the UK’s problems.

The recent ‘turn to the UK’ says more about France than it does the UK. The image of a strong and dynamic Blair has little basis in reality. Blair is perhaps able to drive a hard bargain at international summits, but his position at home is weak. He has as much of a hold over his Labour Party as Chirac does over his Gaullist Union for the Presidential Majority (UMP) party.

Blair has been discredited by the Iraq war and ensuing intelligence scandal, and was re-elected this year amid little public enthusiasm. The Chirac-Sarkozy rivalry also has much in common with the Blair-Brown leadership debate. Even the architectural comparison is superficial. Paris may allow very little innovation within the city’s périphérique, but the UK has its own périphériques – the green belts around towns and cities, introduced in 1955 and defended by all housing ministers since. Building restrictions in Britain have resulted in a severe housing shortage: according to some estimations, at the current rate of replacement houses today will need to last around 1,600 years. In France, the past few years has seen a boom in the construction of new houses (2).

It is political point-scoring that drives the comparisons between France and Britain. Those who look to Britain endorse the idea of ‘Thatcherism Mark Two’, and see the current debate as a chance to attack the vestiges of the French left. Their pet hates are unemployment benefits, the restrictive practices of trade unions, and the 35-hour week. They argue that France’s double-digit unemployment levels are the result of the myriad obstacles that firms face when hiring workers.

These arguments are shallow. For instance, few remember that under the 1997-2002 Socialist government of Lionel Jospin, when the economy was enjoying the fruits of a global upturn, over one-and-a-half million jobs were created, and this without any reform of the labour market. This saw unemployment fall from 12.2 per cent to nine per cent. That countries such as Sweden and Switzerland enjoy both low rates of unemployment and generous benefit systems, or that economists struggle to find even correlations between labour market flexibility and job creation, are ignored by those in France arguing for deregulation (3).

With the 35-hour week, we are seeing in France a situation where a moribund economy is no longer able to support laws introduced during a more dynamic period. The 35-hour week was a product of the late 1990s, where growth was above three per cent. With growth averaging between nought per cent and one per cent for almost three years now, the 35-hour week is now perceived as a barrier to growth. In fact, it is the absence of growth that allows the debate to coalesce around the labour market, not the labour market that holds back growth. Yet it is easy to attack the labour market, since it remains dominated by institutions and practices that were created in the postwar era.

With a socialist government in power in France in the 1980s, the abandonment of socialist economic policies did not occur in the dramatic form of the pitched battle between British miners and the state. Rather, it was a backhanded affair, with the left endorsing the laws of value and the market, but without taking on the unions.

Today, organised labour lacks the social base it enjoyed in previous decades, with only 11 per cent of the workforce unionised (the lowest rate in Europe). Unions appear as anachronistic political actors, without a viable political project to sell to non-union members. Yet there is no alternative – to either the government’s embrace of deregulation and piecemeal privatisation or to the unions’ defence of welfarism – that could serve to overcome the current political impasse.

Reorienting the debate

There are two important points worth retaining from the current debate in France. Firstly, France is not the ‘sick economy of Europe’: many of its ills can be seen elsewhere, in slightly different guises. Secondly, we will not see in France, anytime soon, anything approximating ‘Thatcherism Mark Two’. The specific feature of the French malaise is that owing to a lack of dynamism, the sursault remains elusive.

In the recent political events, from the 2002 presidential election to the 2005 referendum result, conflict and debate have been polarised along lines different from the left/right divides of the past. The actors in these conflicts, from parties to union, have become isolated from society. Part of the French malaise comes from an inability on the part of the society’s elite to articulate, or even to understand, these events.

The political economy of intervention without an alternative

One of the features that France shares with many other mature economies is the combination of an ideology of There is No Alternative (TINA) with a highly interventionist state apparatus. We see this in the contradiction between the claim that there is little France can do but bite the bullet and adapt to the pressures of global capitalism, alongside the vast array of measures which the government has adopted to manage the economy. This has become a feature of the political economy of mature Western economies over the past decade or so. That the right was always in favour of a small state, and the left supported big government, was more myth than reality. But today, the disjuncture between the uniformity of intervention and the widely believed notion of the powerless state is striking.

In the past four years, the Republican administration of US President George W Bush has approved some $1.5trillion in new spending, and has handed out $1.7million in tax cuts. Yet for all this, one of the themes of the 2004 presidential campaign was out-sourcing, and the threat it posed to US companies. In the UK, Oxford economist Andrew Glyn has claimed that ‘the public expenditure programme of [UK chancellor] Gordon Brown…has been responsible for all the growth in private sector employment between 2000 and 2003’.

This is because in the UK, owing to the nature of the public and private spheres, public sector purchases often translate directly into private sector job creation. According to Glyn’s estimates, some 530,000 private sector jobs were created in 2000-2003 as a result of extra public spending. It is not the dynamism of the UK private sector that has been propping up the British economy in recent years, but public money used to plug the hole left by the one million manufacturing jobs lost since 1997 (4).

Most recently, national governments have played a leading role in deciding the fate of various corporate mergers and acquisitions. The US government recently blocked an attempted takeover of the Californian oil company Unocal by China’s Cnoon (70 per cent owned by the Chinese government). And since 1998, the US Committee on Foreign Investments has investigated 1,560 contracts, and has acted in cases such as the takeover in December 2004 of IBM’s personal computer division by the Chinese company Lenovo.

As the French newspaper Libération dryly observed on 4 August 2005, ‘the law of the market is not always queen in the country where capitalism is king’. Other examples abound. China has recently introduced laws that prevent foreign investors from gaining control of its leading steel companies, a move which will perhaps block Arcelor’s interest in Laiwu Steel. In Germany, Nivea was saved from the hands of Proctor & Gamble by the intervention of the City of Hamburg, which bought a 10 per cent stake in the German company.

France is no exception. The new French premier Dominique de Villepin recently coined the phrase ‘economic patriotism’ to describe the duty of his government to prevent any takeover of the national champion, Danone. That the interest came from PepsiCo, the king of American fast food, made the whole affair a matter of national pride. In the words of Patrick Ollier, president of the Commission on Economic Affairs of the French National Assembly, ‘I don’t want any Pepsi in my yoghurts’ (5).

In 2004, the French government helped the merger of two pharmaceutical giants, Sanofi and Aventis, rather than see Aventis bought by the Swiss firm Novartis. At the same time, the French government’s industrial policy has been strongly interventionist. In response to the EU referendum campaign, where fears of out-sourcing and competition were strong, the government recently launched a plan for the establishment of ‘centres of competitiveness’ across the country, uniting researchers, companies and training establishments in specific areas. These centres will be supported with both public and private money.

In its initial plan, the government has set aside 1.5billion Euros over three years, in the form of tax breaks, exonerations from social security contributions, and various subsidies. With each pole (centre) developing a particular area of expertise, the plan amounts to an ambitious industrial policy at the national level, with the state as the guiding hand.

Malaise, but no crisis

A popular refrain is that France has been hiding behind the myth of French exceptionalism – from its language and culture, to its politics and economy activity – and that it is time to step into the real, ie, modern, ‘globalised’, world. For example, Nicolas Baverez, a historian and economist, claims that the legacy of the French revolution has been one of fluctuation between periods of radical renewal and entrenched conservativism (6). Baverez then looks to the creation of the Fifth Republic under de Gaulle in 1958 as an example of the kind of sursault the country needs today. In this case, the argument is about adaptation to changes that are beyond the nation’s, or beyond the French people’s control. Change thus becomes mere accommodation to the global status quo.

Those who are apparently critical of the political elite for failing to effect this elusive leap are in fact targeting their criticism at the recalcitrance of the French people themselves. A good example of this is former health minister and media-savvy humanitarian, Dr Bernard Kouchner, whose rallying cry in a recent article was ‘Let us stop lying to ourselves!’ (7). While aiming at the French political elite (‘we have not seen the world change…we have failed to make Europe loveable…we have supported dictators and have made a mockery of human rights’), Kouchener’s real target is the French people.

His call for debate is laudable, but his article concludes with the idea that the political elite must be able to better explain itself and its goals. He claims that French people are capable of admitting that rising oil prices means a move away from an oil-hungry lifestyle; that the French are not really xenophobic; and they are also not so stubborn as to deny that only private companies can today be the real engines of job creation. In Kouchener’s view, the problem is one of pedagogy: the French public is not stupid, stubborn or prejudiced, and the elite only has to explain things right for the situation to improve.

Such an argument encompasses the mixture of paternalism and determinism that marks contemporary debate in France. The goals are fixed: in Kouchener’s case, reduction in fossil fuel emissions, liberal immigration laws, and an economic policy designed to encourage firms to hire more personnel. The challenge for the political elite is to communicate this necessity in a way that avoids the recalcitrance and idealism that has been too long a feature of French politics. Kouchener argues boldly: ‘If we continue to pretend that utopias and magic potions exist, we know how too many French people will react. When lied to, the electorate has the sad habit of finding its mistress at the extremes….’

This liberal disregard for public opinion, and mistrust of the public, has a long history. However, in the present period, any political contestation, in the form of the French No vote over Europe, or the protest voters in 2002 who decided to vote for Le Pen out of disgust for mainstream parties rather than any real adherence to far-right politics, is understood by the elites as extremism, incoherence, political immaturity and confusion. It is true that there was little coherence in the No campaign. However, it was galvanised by a common distrust both of an elitist European project and a referendum intended to prop up an increasingly weak president. Unfortunately, this was unable to sustain itself past the referendum itself. As in 2002, the 2005 ‘populist moment’ will fade, stoking the fire of the French malaise but never quite pushing it to crisis point.

Conclusion

The dominant message in contemporary debates in France is that the country is lagging behind its rivals, and that it must make the leap into the twenty-first century by reforming its institutions, above all its sclerotic and union-dominated labour market. However, this argument is dominant only because of an absence of any alternative; it does not reflect the hegemony of so-called ‘neo-liberal’ economics or the immanence of ‘Thatcherism Mark Two’.

In fact, co-existing alongside the idea of a state powerless to act against the wishes of the global market is the reality of a highly interventionist state apparatus, and one above all willing to intervene in support of national champions or of national economic interests. The laws of the market are therefore regularly flouted, at the same time as they appear the only way to organise economic life.

Political elites and media commentators call for France to modernise, yet there is not the political dynamism necessary to destroy and rebuild new social institutions, a dynamism that in the past was the product of a confrontation between worldviews and models of social organisation. TINA prevents the French malaise from becoming a crisis. The result is that political contestation occurs in non-conventional channels, outside of the existing political process. This is perceived by elites as another example of French recalcitrance and unwillingness to embrace change. In truth, it is more a reflection of the immobility of the political process and of its leading actors.

Chris Bickerton is a PhD student at St John’s College, Oxford. He is currently helping to coordinate the Battle for International Relations, one of the strands at the Institute of Ideas’ forthcoming public event, the Battle of Ideas.

(1) Frérédric Edelmann, ‘Les JO: le prisme de l’architecture’, Le Monde, 12 July 2005

(2) For sources on housing in the UK and in France, see the following: James Heartfield, ‘The government must stop finding reasons not to build new homes’, Guardian, 21 February 2005; Godonou Cyrille, ‘La Contruction en 2004: Une année exceptionelle pour le logement’, INSEE June 2005. In France, the present construction boom is the largest seen in two decades. On the problems of building new homes in the UK, see the 2005 report by the Tory think-tank, Policy Exchange, Unaffordable Housing: Fables and Myths.

(3) On the ambiguities of the link between labour market deregulation and job creation, see A Glyn’s working paper, Labour Market Deregulation and Europe’s Employment Problems, 2003.

(4) Between June 1997 and the end of 2004, the UK has lost 22 per cent of its manufacturing jobs. In France and Germany, the loss has been between five and six per cent.

(5) Libération, 4 August 2005

(6) In Baverez’s opening paragraph, he argues that ‘Of all the developed democracies, it is France which presents the most uneven institutional, economic and social profile since the nineteenth century, with a brutal fluctuation between period of decline and periods of renewal. This chronic instability has its deepest roots in the radicalism of the revolutionary project of 1789 which, contrary to the processes in Britain or America, sought to ground liberty in a absolute rupture with the established order, tradition or religion, conferring an absolute primacy to politics, instituting a direct confrontation between the state and the citizens that prevented any mediation by intermediary bodies. This was accompanied by a deep conservatism, that manifests itself in an extreme difficulty to adapt to the major transformations that are overwhelming the global geopolitical and economic system’. N Baverez, La France Qui Tombe, Perrin, 2003.

(7) Bernard Kouchener, ‘Cessons de nous mentir!’, Point de Vue, Le Monde, 21 July 2005