by Michael Roberts
The victory of Benoit Hamon as the new leader of the ruling
Socialist party in France sets the scene for an unpredictable outcome
from the upcoming presidential election in April-May.
Hamon is a Corbyn-Sanders type left leader who defeated the
right-wing Blairite-Clinton candidate in the socialist primary that saw
nearly 2m vote. He stands for cutting the working week, boosting the
minimum wage and reversing various neo-liberal measures introduced by
incumbent ‘socialist’ President Hollande, who is so unpopular (with 4%
approval) that he decided to not to run again.
Hamon starts way behind in the public opinion polls, with about 15%
of those voting likely to support him, but ahead of the ‘far left’
candidate Jean-Luc Melenchon with 10%. The leader of the pack is Marie
Le Pen, head of the (formerly openly fascist) racist, anti-immigrant,
anti-EU Front National (NF), who is polling about 25%. The
centre-right, neo-liberal main capitalist party, the Republicans, have
picked Francois Fillon, who wants to increase the working week,
privatise more and cut public employees and services sharply. Fillon,
who has been caught in a scandal of paying his wife €800,000 as his
‘secretary’ from public funds for doing nothing, is polling about 22%.
Then there is the so-called centre candidate, a former right-wing
‘socialist’ minister, Emmanuel Macron, who is pro-EU, wants more
neo-liberal policies etc. He is getting about 21%.
So it’s all wide open. As the French presidential election is over
two rounds, with the top two in the first round then having a run-off,
the most likely outcome is that Le Pen may get to the second round but
then be roundly defeated by one of the others (in a second round any of
the others are ahead against Le Pen by about 60-40). So it is unlikely
that France will vote in a racist Eurosceptic president.
But that does not rule out a new right-wing president who will try to
boost profitability at the expense of labour, by raising the working
week, imposing stringent labour laws, cuts in public services, pensions
and have more privatisations. That’s because French capital needs to
act as it slips further behind its major partner in Europe, German
The French economy picked up the last quarter of 2016, but it was a
very modest recovery. The French economy grew 1.1 percent in all of
2016, compared with 3.2 percent in Spain and 1.9 percent in Germany.
The unemployment rate remains stuck close to 10 percent compared to just
3.9% in Germany.
The reality is that French capital has been in trouble for some
time. The best estimate of the profitability of French capital in the
last 50 years shows that after the profitability slump of the 1960s that
all the major capitalist economies experienced, French capital made
only a limited recovery in the so-called neo-liberal era.
That was partly due to the failure of French industry to invest and compete in world markets and eventually in the Eurozone compared to Germany.
And it was also partly due to the stubborn militancy of French labour
to allow cuts in wages and conditions and to preserve public services
and benefits – France has the best national health service in the world
and still relatively good social benefits and pensions (although these
have been eaten away). And it has an official 35-hour week which is
enforced by the labour movement.
At the end of the 20th century, profitability peaked and
began to fall again. It is now at a post-war low. As a result, French
capital is struggling to compete. Indeed, since the euro started in
1999, the profitability of French capital has plummeted 27% compared to a
21% rise in Germany. Profitability is still down a staggering 22%
since the peak just before the global financial crash in 2007 – that’s
way more than the decline in Germany or the Euro area average.
As a result, investment, particularly business investment, has stagnated in the ‘recovery’ since 2009.
As investment has been so poor, growth in productivity has been low (as in many other capitalist economies).
French productivity levels (GDP per hour worked) seem higher than the
G7 and the UK. But this is partly an illusion because the unemployment
rate is close to 10% or double that of the UK and Germany. When you
account for that, French productivity is not much higher than the UK.
So this upcoming election is important. French capital wants a
president elected who will introduce policies designed to reverse the
long-term secular decline in the profitability of capital and put French
labour in its place. For this, they look to Fillon or Macron – either
will do. But votes do not always work out as the strategists want or
expect – as we have seen in the UK with Brexit and Trump in the US.
It is still unlikely that Le Pen will enter the Elysee Palace or that
Hamon or Melenchon will combine to enable a leftist candidate to get
into the second round and defeat Le Pen. But it’s possible. But
whatever the outcome, the next French president will face major
challenges with an economy that has sluggish growth and investment, high
unemployment and growing ethnic divisions. And that is not even
considering the probability that there will be a new global slump during
the next presidency.
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