4 March 2015

The convulsive making of the New France


France is usually better at revolutions than at evolutions. Does anyone remember a young and energetic French finance minister, with strong liberal values, who decided to take decisive action against the privileges, taxes and monopolies that were crippling his country? He wanted to give people “the right to work” by establishing a level playing-field for all. Unfortunately, corporations and vested interests were so strong that he had to call upon his boss to quell the discontent. After a few months, the government collapsed and the minister had to resign. His name was Turgot, and his boss, Louis XVI, was to be guillotined fifteen years later by the very same people who eventually implemented Turgot’s principles.

Is the same fate befalling Emmanuel Macron, France’s unusual economy minister, a philosophy student turned banker, unapologetic in his drive to liberalize a heavily centralized and absurdly constrained economy? The infamous “loi Macron”, a bill discussed for more than 200 hours in the National Assembly, has turned the political establishment upside-down. Around thirty hard leftists threatened to vote against it. The governing Socialist party, of which Mr Macron confessed he was not a member, is now in turmoil.

At first glance, this is much ado about (almost) nothing. The Macron law is far less ambitious than Turgot’s decrees. It wouldn’t have raised an eyebrow in most OECD countries. It doesn’t touch labour laws, public service or social benefits, but modestly endeavours to liberalize a few targeted sectors such as law professions and bus services. It marginally increases the number of Sundays where shops are authorized to open (and only with the local mayor’s blessing!). Even more depressingly, Mr Macron already had to back down on a number of issues, including minor ones like the liberalization of the driving schools market – the entire State apparatus, although well aware of the lengthy, costly and bureaucratic procedures of the French driving license, ended up with the most disingenuous face-saving compromise by appointing underworked postmen to help with the driving exams. Under pressure by so many lobbies, the Macron law became a Micro law.

From this perspective, the present drama only shows the worse of party politics. There is no substantial reason why the right couldn’t vote in favour of a law which it half-heartedly tried to pass when in power. Emmanuel Macron is only putting in practice now what he learnt under the previous government when working for Jacques Attali’s liberalization Commission. Unfortunately, the more left and right come to share the same basic understanding of the reforms needed, the more they feel obliged to stage such artificial bickering, feeding extremist movements.

The visible discomfort of the main political figures also reflects a more fundamental shift, as the traditional right-left divide is about to give way to a generational battle. Nearly half of the French MPs are past the retirement age – regardless of whether they are right-wing nationalists or left-wing protectionists, they stick to the vision of an hyperregulated society where ageing baby-boomers benefit most, and where change is always suspicious. Long-time promoters of social rights have become, willingly or not, protectors of privileged insiders. At the other end, the 37-year-old Macron is on the side of the Y generation, keen on low-cost travel, happy to work outside conventional rhythms, and eager to disrupt the most established markets with a few technological tools. Mr Macron was right to emphasize, as Turgot did in his time, that his law is less about growth than about justice.

The New France is getting ready to fight conservatives from all stripes. It is no surprise that opinion polls consistently found a widespread support in favour of the Macron law, and that ordinary employees now demonstrate against their own unions for the right to work on Sundays. If this New France is not politically represented, it is because the political representation system has organized its own preservation. This will be the last and hardest oligopoly to break.

Seemingly determined to reform head-on, with a refreshing make or break attitude, the government should now tackle the more fundamental flaws of the French system. Let’s give the Turgots of our times the leeway to reform and spare France and Europe a new Revolution.

Gaspard Koenig is President of GenerationLibre.