The Devil You Know Can Still Burn You
Although he’s better than Le Pen, the international Left should not get too excited about Macron
Let’s dispense with pretense: the victory of Emmanuel Macron in France’s presidential election is without a doubt a good thing. Marine Le Pen’s agenda would have been an unmitigated disaster for the French economy and society, and the defeat of the Eurosceptics (a dubious contingent of both the right and the left) ensures that, with the exception of Brexit, the prognosis for the Eurozone is optimistic (provided they clean up their monetary policy). Now that the glow of victory over crudely-disguised fascism has worn off a bit, it is time to set off on the next step: how to manage the problems of Macron.
First, a note of caution: American writers have a tendency to frame all political issues, regardless of where in the world they originate, to fit within the confines of our own political spectrum. But such a narrow-minded, Americentric approach can obscure the facts. Yes, Macron is a centrist — but in the French tradition, this means something different than it does in America. France prides itself on a number of leftwing, quasi-socialist policies: a single payer health system (Assurance Maladie), substantially higher unionization rates (most industries are organized on a sector level) and higher taxes than in America. France has its flaws, as well. It has a strong desire to demonstrate its independence from both it’s rivals in Germany and their allies in America,, has high unemployment (just over 9%), and languishes in the grip of significant budget shortfalls and austerity measures.
All these differences add up to a political landscape that is far different from the American political arena. Therefore, it is unlikely that Macron will embark upon a “centrist” political agenda in the tradition of a moderate Republican or Democrat. This is simply because, as shown above, the political and legal landscape is so radically different in France than in the United States. Assurance Maladie is not slated for destruction or privatization because of the degree to which it has been ingrained in French society, and, in fact, Macron has shown some interest in regulating the supplemental private plans that extend coverage beyond the “complementary” (public funded) limit, to make them more sustainable and generous. Similarly, Macron has sought to reassure a nervous Muslim population that he has no intent to pursue immigration or hijab bans. He has even floated the study of more proportional representation for French legislative efforts. Macron only begins to step into seriously problematic territory when we reach his “economic modernization” efforts.
Some of Macron’s ideas to change the problems he has inherited are laudable: he has introduced a 50 billion euro (~$53 billion) investment program, much of which would fund essential renewable energy. Macron’s core theory of change within the economy, although well-intentioned, is tragically based on the same flawed neoliberal logic of so many “moderate reformers”: Labor has too much power within the economy. Taxes are too high for the wealthy and businesses. It is too difficult to hire because of “insiders” with secure jobs.
Macron has already begun on this path: he has already announced a plan to drop the corporate income tax from 33.3% to 25%. He has already met with Union leaders, who have pleaded with him to slow the process of changing labor laws via executive action. His agenda? He plans to make it easier to fire workers (in the hopes it will then make it easier to hire workers), putting more power into the hands of employers to manage work hours, and putting caps on severance packages. To his credit, he has shown a willingness to slow said agenda until upcoming parliamentary deliberation. However, that is not enough. Macron must recognize the core issue at the heart of his thesis: it seeks to solve the problems of France by empowering the already powerful, and unlearning the lessons of the Great recession.
Macron’s central thesis is effectively a bold call for a return to…what, exactly? The business-friendly centrist formulation of politics is not new, and not terribly successful. His reflexive distaste for the status quo (especially taxes) has led to an inability to recognize that he is playing to the same cycle of dysfunction seen around the West. The cycle typically plays out as follows:
1. The economy crashes (largely because of some bubble created by the finance sector) and destroy a great deal of wealth.
2. Tax revenue shrinks and public spending gets slashed.
3. The public demands jobs and new regulations on the finance sector. Weaker protections are put in place.
4. The economy recovers, but only for the wealthy, and job growth is not fast enough. Inequality is high because wealth was destroyed unequally.
5. Taxes and regulation get cut to create (temporary) growth. Spending gets cut to finance the tax cuts.
7. The economy crashes or goes into recession. Repeat.
America, Britain, and France all have become sucked into this vicious cycle, because of a critical error in the way the intellectual community views our own history and our own wealth. We assume business is the primary substituent of the economy, but that’s not quite true. Ultimately, all jobs, and all economic activity, flow from the spending of individual consumers. Any strategy that is focused around business rather than driving up consumption among the majority of the population ultimately creates the possibility of a bubble growing and bursting. To create long term growth, Macron must reorient his efforts directly towards the consumer; in other words, towards the citizen.
We shouldn’t be surprised that Macron, despite his earnest desire for reform, struggles to unite such a progressive vision with the capitalist centrism he is familiar with. He is caught between two worlds, and fails to see that they are incompatible. Nowhere is his struggle more clear than in an interview with Time in 2016. In this interview, he attacks the nationalist movement, and throws out platitudes to education and public investment, but then tells a curious story. Macron recalls the story of how Republican Francois Fillon once floated to him the possibility of a 75% tax rate for those making over a million Euros a year. His response: that would turn France into “Cuba without the sun”.
This is immensely telling. Letting go of the exact taxation targets (which can and should be the subject of intense scrutiny for any given country), the sentiment here is misguided. The US top tax rate was 63% in 1935, 90% from 1950 to 1963, and was 70% through the 70’s and 80’s, a fifty-year period in which the US became not only a global superpower, but the global superpower. This wasn’t simply via the strength of business — it was because tangible investments were made across the country in infrastructure and social programs. People were given jobs and economic opportunity directly, and it worked.
Macron struggles to reconcile finance capitalism with France’s commitment to secular humanism and public investment because, although he doesn’t realize it, the two are irreconcilable. Macron does have a real chance to create change. But he must recognize the greatest threat to the West is inequity, and inequity cannot be addressed by corporate tax cuts or glitzy investment strategies. Finance capital-backed centrism plays well to independents sick of partisanship, but this formulation of centrism is not failing because of political polarization. It is failing because it doesn’t work. Macron has an opportunity to do what Fillon, Hamon, and Hollande could not, but he will squander it unless both international and domestic pressure mounts on him to do so. So long as the malaise of the status quo remains, Europe is far from saved. So what’s next for reform-minded French citizens, and friends of France? To fight for a progressive, forward-thinking political and economic vision that borrows Macron’s favorite slogan as its rallying cry: En marche!