9 September 2016

What’s gone wrong with France?


There were gasps of horror this week when a new poll confirmed that Marine Le Pen, of the far-right Front National, was maintaining her place among the favourites in the race to replace Francois Hollande in the Elysee Palace.

It is now almost certain that Le Pen will make it through to the final round of voting in May 2017 – even though her chances of winning are weak, given the likelihood that respectable opinion will unite against her as it did when her father Jean-Marie made it through to the same run-off stage against Jacques Chirac in 2012.

What, my English and American friends ask me in shocked tones, has gone wrong with France?

First, it is necessary to keep in mind that my country is not the only one to be affected by the rise of the far right. The causes of this ascent are common to most developed countries. To treat Le Pen’s rise as simply an expression of a revolt against an overly bureaucratic Europe, or Islamist terrorism, or mediocre governments, would be a mistake – not least because it would underestimate the durability of the extreme right’s popularity, and thereby make it harder to fight effectively.

For example, some people have argued that France’s high unemployment rate is part of the problem. Yet the far right is strong in Austria, the Netherlands and Denmark, which are all at full employment or close to it. And there are countries where unemployment is high, such as Spain and Portugal, where it is contained.

To understand France, in other words, we have to understand everywhere else – including countries not in the European Union, such as the United States or Switzerland, where extremism is also on the rise.

So what’s going on?

All developed countries have, over the past decade, been experiencing and immense economic and social transformation connected to globalization and innovation. Deep changes in the Internet, robotics, genetics, artificial intelligence are triggering a huge wave of Schumpeterian “creative destruction”.

In other words, a new economy is replacing a former one – creating winners, but also many losers. The winners are the ones that the American sociologist Robert Reich calls the “manipulators of symbol” and what the extreme right call the ” globalized elites”. The losers are the workers, the small shopkeepers, the small companies in the traditional sectors – or the great majority of civil servants who have to change the way they work at the risk of being exiled from this new economy.

Many people have argued that the inevitable effect of this transformation is technological unemployment: robot workers replacing humans. That happens more in the countries where the labour market is inefficient and inflexible, such as France or Italy: in places like Austria, Switzerland or the UK, employment has remained pretty strong.

But to differing extents, all developed countries are undergoing a structural decrease in the size of the middle classes: the individuals who know how to take advantage of the changing economy grow rich, while those who cannot adapt suffer. This is at the root of the terrible feeling of anxiety many people have – one validated by how visibly inequality has increased.

All that being said, it is also true that the extreme right, although growing in strength almost everywhere, is specifically strong in France. I see two reasons for that.

The first one is that far right claims to have a plan for the losers of globalization and Schumpeterian innovation: protectionism, interventionism and anti-immigrationism. None of that will actually fix France’s problems – but at least it’s a plan. The centre-right and centre-left parties haven’t come up with any solutions for a very long time (yes, things are improving thanks to Alain Juppé on the centre- -right and Emmanuel Macron on the centre-left, but it’s very late in the day).

The program of the extreme right may be reactionary, but it is consistent. According to the Front National, unemployment, insecurity, poverty have their roots in globalization, the European Union and immigration.

The second reason for Le Pen’s surge is that France is traditionally a country hostile to the free market and globalization. Government has always been seen as a rampart against private interests and the market, not a champion of them. As a result, far- right ideas find an audience already primed to accept some of their basic assumptions.

For these reasons, I believe we need to find a way to combine Schumpeterian growth (which delivers prosperity) with a humanist approach which leaves nobody left on the edges. That, in fact, is what I’ve tried to do in my new book, ‘Innovation Will Save the World’ (Editions Plon). And we need to do it quickly – because even if she doesn’t become president, the popularity of Marine Le Pen and her ideas could soon make France ungovernable.

Nicolas Bouzou is an economist. He is the founder and the director of Asterès, a consulting firm based in Paris, and co-founder of the Belém Circle, a European think tank