It is said the French have been locked in an eternal struggle between their desire to crown a king and their desire to kill a king. Louis XVI, Napoleon, Louis XVIII, Louis-Philippe, Napoleon III, De Gaulle. The last two centuries of French history have been defined by this pattern of coronation and decapitation. The France of today is no different. In May 2017, Emmanuel Macron was elected President with a two-thirds majority. In June, his brand-new party swept the legislative election with almost a two-thirds majority. In July, he gave his first speech to parliament at the Palace of Versailles. Within the next two months, however, nationwide protests had become a normal affair and his popularity had plummeted, from the landslides of days past to lower ratings than Donald Trump.
It’s Good to be the King?
Such a reversal of fortunes was not to be unexpected. Macron rode into office on a paradoxical wave of “anti-populist populism”, but his victory was weakened by virtue of his second-round opponent being the unpopular far-right reactionary Marine Le Pen. From the very beginning, Macron’s coalition was built on a foundation of sand.
The proximate cause of his fall from grace, however, can easily be identified as his labor reform plan. Macron had first tried to implement these reforms as economic minister under predecessor François Hollande. The plans are intended to liberalize France’s labor code, the Code du Travail, and make the labor market more flexible and productive. Some of the biggest reforms focus on making it easier to hire and fire workers, allowing more issues to be negotiated at the company instead of industry level, and reducing the size of the public-sector, currently making up 21% of the workforce.
The impetus for such far-reaching reform is a chronically sluggish economy that has failed to capitalize on the post-crisis recovery enjoyed by France’s neighbors. GDP growth in 2016 averaged 1.2%, a pitiful statistic compared to the 1.8% enjoyed by Germany and the United Kingdom. The country’s unemployment rate has steadied at around 10%, more than double that of the other two. Even worse, the youth unemployment rate stands at 24%, one of the highest in Europe. In a variety of other measures, the same conclusion can be reached: France’s economy is going nowhere fast.
Fewer Friend than Foe
Critics from the left argue that Macron is using the slow economy to justify an expansion of “nasty neoliberalism” by appealing to employers rather than employees. Macron’s principal political opponent, leftist politician Jean-Luc Mélenchon, called Macron’s decrees a “social coup d’etat,” likening the protests to the demonstrations that defeated “kings, Nazis, [and] the Juppe plan” (the 1995 labor reform proposal). The critiques emphasize the weakened position of labor; the curtailing of collective bargaining power, the reduction in layoff compensation, and the removal of restrictions on multinationals with French employees are all major talking points for Macron’s opponents. They have painted a grim picture for Macron’s France, one utterly dominated by the corporate employer.
Among economists, however, the picture of the future is far happier. In a poll of European economists conducted by Chicago’s Booth School of Business the consensus fell sharply in favor of the reforms, agreeing that such revisions would likely increase productivity and reduce the unemployment rate. Among the panel of experts, only 4% and 2% disagreed with these statements, respectively. Similarly, the Executive Board of the International Monetary Fund, headed by former French economic minister Christine Lagarde, encouraged Macron’s government “to persevere with their efforts to rein in public spending, revive job creation, and remove bottlenecks to growth.”
France is now divided between these two positions, and, like always, the scarier argument that is easier to understand wins out with the majority of people. The French worker doesn’t read polls by the University of Chicago nor do they read reports by the IMF. They do, however, listen to their local union and their party leaders. Many of them then see the rhetoric used by the left and become afraid for their and their children’s futures. They lose trust in the government they voted in, and they go out to join their fellow workers in striking against the government.
Lonely (But Not Alone)
Macron’s government must now be feeling lonely, in need of support and rejuvenation of public opinion. But if one looks back through history, there are multitude examples of other leaders who went through the same situation of unpopular, yet necessary policy. In the West, there have been three in just the past few decades: Margaret Thatcher in Britain, Gerhard Schröder in Germany, and Barack Obama in the United States.
In 1979, the United Kingdom was in a similar situation France is in today, albeit much worse. The country was one of the hardest hit by the 1973-75 recession with 14 quarters of negative GDP, double-digit inflation, and a spiking national debt. In May 1979, after a winter of strikes and years of stagflation, the Conservative Party under Margaret Thatcher ousted the incumbent Labour government. The next twelve years involved a series of privatizations, tax cuts, and trade union legislation meant to liberalize the British economy, similar (in kind but not in degree) to the proposals of Macron. These actions were extremely controversial then and they remain controversial now, largely because of Thatcherism’s weak social safety net. However, the United Kingdom during and after Thatcher has consistently overperformed other large European economies in both unemployment and GDP growth, while maintaining stable inflation. Even Labour leaders like Peter Mandelson in 2002, Tony Blair in 2010, and Ed Milliband in 2011 have accepted Thatcherism as important and necessary.
Ten years after Thatcher, in 2003, German Chancellor Gerhard Schröder of the center-left Social Democratic Party (SPD) announced his own plan for economic liberalization. This plan, Agenda 2010, went into effect over the next two years, slashing taxes and social spending while simultaneously opening up employment restrictions through the Hartz plans. The consequences of such reform were harsh and immediate. In 2005, the SPD lost the regional elections in their Nordrhein-Westfalen heartland. Chancellor Schröder then lost a vote of no confidence, and finally, in the fall of 2005, the Social Democrats lost the general election to Angela Merkel’s Christian Democrats. Now, over a decade later, this economic liberalization is commonly seen as the secret to Germany’s economic success.
Finally, there is the case of Obamacare, or the Affordable Care Act (ACA). Barack Obama was elected President by a huge margin in 2008 with a similarly huge mandate: save the economy and reform the healthcare system. His response to the second demand was Obamacare, a compromise healthcare plan built around the established system with expanded benefits, new regulations, and a mandate that all Americans must have health insurance. Since Obamacare was enacted, health care in the United States has clearly, and without a doubt, improved. Premiums went from an average yearly increase of 69% from 2000-2005 to 27% from 2010 to 2015, with an increase of only 3% in 2016. Obamacare reduced the number of uninsured by 22 million, according to the CBO. This slowing of premium increases and expansion of coverage led to the prevention of approximately 50,000 deaths from 2010 to 2013. As the reader should expect, however, none of this really matters in the realm of public opinion. Americans continued to hold a negative opinion of the ACA, only ever becoming “popular” with its threat of repeal under the Trump administration. In the 2010 midterm elections, the Democratic Party lost 63 seats in Congress, nearly two standard deviations worse than the average midterm performance of a President’s party. Nonetheless, economists at the IGM Forum still liked Obamacare.
Tunes of Change, Repeated
All of these past examples are variations of the same political tune: a politician wins power, promises, then implements change. People don’t like change, the politician leaves, and people realize the change wasn’t so bad. This cycle has repeated itself throughout history, and so we can expect the same to happen with Macron. He will likely never recapture the popularity and the momentum he enjoyed earlier this year; he may even remain unpopular for the remainder of his tenure. His reelection chances are certainly out of his hands, now wholly dependent on how quickly the French economy can adjust. His policies, however, should they remain, will likely be looked upon favorably by future generations. This is unfortunately the problem of reasonable policy, but it should not go unmentioned that this also a problem of populism.
When populist politicians—Mélenchon and Le Pen, Corbyn and Farage, Sanders and Trump—disparage the political establishment and pander to their nevertheless large interest groups, they delegitimize decades of built-up consensus that produces compromise and dialogue. In rare moments of history, this can be beneficial, that is without a doubt. Too often, however, these movements contribute to deadlock and regression, playing then to the desires of more sinister and illiberal forces. Voters ought to be wary of the siren song of populism, of melodies both revolutionary and reactionary, lest they lead the ship of state astray into dark waters and hidden shallows.
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