8   A mandate for class war

Iain Mackay looks at the conditions which have seen France'sThatcher bounced into the top job

Conservative politician Nicolas Sarkozy has won the French Presidential election. He managed to convince 53% of the population that he represents change and this message has dutifully been repeated in the media over here.

Failing to note that he had been a politician for 20 years, he played the right-wing populist card of portraying himself as an outsider and attacking politicians (and trade unions, immigrants and other usual suspects) for stealing the wealth of hard working French people.

What was significant in the reporting was how a 3% majority was turned into a strong mandate for his agenda rather than what it was, a relatively small majority which showed that a sizeable section of the French people reject it. It is doubtful that a Royal victory of 3% would have been reported in quite the same way.

So what to make of this demand for 'change'? MEDEF, the French bosses association, was solidly behind Sarkozy. This is unsurprising, as he promised to `reform' the tax on large fortunes and give tax breaks to big business and the rich while making more cuts in the state-run national health system.

`Reform' used to be associated with making things better. These days it is usually an `economically correct' code word for imposing a neo-liberal agenda (i.e., `freeing' the labour market, weakening union power and state regulation of business, and reducing taxes).

The assumption is that worsening the situation for the bulk of a population by making workers cheaper will lead to greater competitiveness, higher profits and, therefore, more jobs.

The sad thing is that this programme is based on economics which are at deeply flawed and which have little or no bearing to reality. At best, it is impartial and incomplete, at worse it has been debunked for decades and reflects a fantasy world of whatever unreal assumptions are required to make the theory come to the conclusion the economist seeks.

So the only group that needs Sarkozy's `reform' of the French economy is its very rich. Do the French people really want to become like the UK and USA? Countries where the bosses are in the saddle and workers do what they are told? Sure, the French bosses would love such a regime but they do not make up 53% of the population. Part of the problem is that many people accept the image of France as one inflicted with economic stagnation, a new `sick man' of Europe.

The source of the `decline' of France is usually linked to lower GDP growth over the past few years compared to countries like Britain and the USA (both of which are constantly touted as models for France to follow). Yet this perspective fails to take into account internal income distribution. Both the USA and UK are marked by large (and increasing) inequality. This means that GDP growth is not equally distributed. In America, for example, most of GDP growth has been captured by the top 5% of the population while median wages have been flat for decades. Ignoring the elite would mean that GDP growth would be roughly similar in both countries, at least for the bulk of the population. This means that while France may grow more slowly, it benefits more than just the ruling class. Then there are such factors as poverty and social mobility. Child poverty is around 7% in France, but at 16% in Britain (double the rate for 1979) and at 20% in the USA. While poverty has risen, social mobility has fallen in the US and UK since the 1980s neo-liberal revolutions.

Moreover, comparing France's income or GDP per person to the U.S. fails to take into account the fact that French people work far less than Americans. So while France may lag America ($30,693 to $43,144), it cannot be said that working class people are automatically worse off. Less hours at work and longer holidays may impact on GDP but only an idiot would say that this means the economy is worse. Economists cannot say that one person is worse off than another if she has less income simply due to working fewer hours. Like other Europeans, the French have decided to work less and enjoy it more.

A far better indicator of economic welfare is, in fact, productivity. It is understandable that this is not used as a measure as it is as high, or higher, in France as it is in the US (and much higher than in the UK). And it should be remembered that rising productivity in the US has not been reflecting in rising wages over the last three decades. The gains of productivity, like those in growth, have been accumulated by the boss class and not by the hard working American people (whose working week has steadily increased during that period). France also has created more private sector jobs (+10% between 1996 and 2002, according to the OECD) than the UK (+6%) or the US (+5%). Ironically, the UK economy has barely created any net employment in the private sector in the past five years but unemployment has dropped due to increased public sector spending.

What about the notoriously high unemployment? This is based on measuring techniques more than anything else. The standard measure of unemployment divides the unemployed by the unemployed plus employed. By this measure, French males age 15-24 have an unemployment rate of 20.8%, as compared to 11.8% in America. Yet this difference is mainly because, in France, there are many more young males not in the labour force (more are in school and fewer work part time while studying). As those who are not in the labour market are not counted in the standard measure, this gives an inflated value for youth unemployment. A far better comparison would be to compare the number of unemployed divided by the population of those in the same age group. This results in the USA having a rate of 8.3% and France 8.6%.

So the whole `France/Europe is in a state of decline' narrative is better understood as a corporate media's clever ploy to push it into the hands of the self-destructing neo-liberalism that is slowly taking its toll on Britain and America rather than a serious analysis of the real situation there. Perhaps the French economy comes in for such consistent bashing precisely because it shows that overall good standards of living are possible without the rich getting richer and the workers being turned into serfs.

Can Sarkozy force the French people down the road to (private) serfdom? He wants to be France's Thatcher and `reform' the economy. As such, it would be useful to remember Thatcher's actual economic performance rather than the `economically correct' narrative we have inherited from the media and economic `experts'. When Thatcher came to office she did so promising to end the mass unemployment experienced under Labour. Unemployment then tripled in her first term rising to over three million in 1982 (for the first time since the 1930s, representing one in eight people), in large part due to the application of Monetarist dogma making the recession far worse than it had to be.

Faced with unemployment rising to well over 10%, Thatcher's regime simply changed how unemployment was recorded. Yet even knocking hundreds of thousands off the official unemployment records did not stop the steady rise in people looking for work. It remained above the 1979 Labour numbers until the Conservatives left office in 1997.

Needless to say, a very deep recession, double-figure unemployment for most of the decade, defeats for key strikes and unions plus continued high unemployment for nearly two decades had its impact. It made people willing to put up with anything in order to remain in work. Hence Thatcher's `economic miracle' the working class finally knew its place in the social hierarchy.

Sarkozy does have some disadvantages compared to Thatcher. It is unlikely that France will discover substantial deposits of oil and so he will not have the boost of North Sea oil which mitigated some of the destruction inflicted by Thatcher onto the economy. Nor does France have a financial centre as powerful as the City of London whose influence ensured it profited from the flawed policies it helped inflict on the country.

Monetarism is utterly discredited and so he lacks the security of economic ideology which Milton Friedman provided the Thatcher politicians. France is also in the Euro and so lacks significant means of changing central bank policy as Thatcher had.

Can Sarkozy really `do a Thatcher' and triple unemployment in under three years? Can be provoke the deepest recession in French history since the 1930s? Is he willing to oversee the destruction of French manufacturing sector? Will he be willing to use the powers of the state to break the mass protests and strikes his policies will, inevitably, provoke? That depends on the willingness of the French people to stand up and impose, from the streets, the reforms really needed for the French people reforms politicians will not or cannot achieve.

from Freedom, 2nd June, 2007