The late Chinese Premier Chou en-Lai is reputed to have said in 1971 that it was “too soon” to assess the impact of the French Revolution. Whatever the truth of that epigram, it is certainly too soon to know how important the events unfolding daily in France will become. My recent trip to Paris, however, left me with a sense of historical déjà vu. While French President Emmanuel Macron is not a king, the slow motion popular resistance to his rule reminded me more than a little of the slow leaking of royal authority that predated the storming of the Bastille.
France as a whole has long been in economic decline. French unemployment has not dropped below 7 percent in more than two decades, and has been over 9 percent each year since 2008. French growth has also stagnated, averaging less than two percent per year since the Great Recession in 2008. The French welfare state, funded by the highest tax burden in Europe, keeps people from penury, but few can rise above their station.
Unless, that is, you live in or near Paris. Growth in the nation’s capital region has been brisk throughout this century, with GDP per capita in the core Ile de France region rising nearly 20 percent since 2000 while rising by much less than 5 percent in the rest of the country. GDP per capita in Paris and its rich western suburbs exceeded $110,000 in 2015 while it was below $40,000 per person nearly everywhere else. There are simply two Frances: the rich west side of Paris and the rest of the nation.
It should be no surprise, therefore, that the French rejected both traditional political parties in the 2017 election. People suffering from decades of economic stagnation tend to want to throw the bums out. What is surprising is to whom they turned. Macron is a creature of the very Parisian French elite who have been France’s winners. He is a graduate of the Ecole nationale d’administration, an elite institution that has produced three presidents (in addition to Macron) and seven prime ministers since its founding in 1945. A former minister in his predecessor’s government, Macron does not seem to be the sort of person an angry populace would support.
But Macron’s base of support was never the angry populace. France has a two round election system, where candidates from all parties run in a first round and the first two finishers compete in a run-off two weeks later. In the all-important first round, exit polls showed that Macron’s support came from the wealthiest and the most-educated in France. He was least popular in the countryside and most popular in the Paris metro area. Macron ran as a reformer, but a reformer whom the elites knew would protect their status and privileges.
Macron in power has not surprised. His signature reforms have been straight out of the elite Parisian playbook. He has deregulated the labor market, making it easier for employers to fire workers and increasing their ability to hire people to short-term contracts that offer less stability to employees. He has imposed a number of other business or market-friendly reforms that will tend to make daily life more unstable for the majority of the French in the short term, including cuts in the number of public service jobs and the amount spent on pensions and welfare. To top it off, he dramatically cut the French tax on net wealth to encourage private sector capital formation. These reforms might pay off in the long run, but it should be no surprise that his favorability rating had dropped to below 25 percent before the latest protests erupted.
The straw that broke the French camel’s back, however, was a rise in fuel taxes to combat global warming at a time when gasoline and diesel prices were already climbing dramatically. Only a well-to-do Parisian, who could easily take the Metro or train to work, could think that this was the right time to place even more burdens on the average Frenchman.
Queen Marie Antoinette supposedly said “let them eat cake” when told that peasants could not afford bread. No one claims Mrs. Macron uttered “let them drive less” in response to the protests, but the message was clear nonetheless.
A Sense of Foreboding
I arrived in Paris for a three-day speaking trip sponsored by the U.S. embassy and some elite Parisian institutions a couple of days after the protests had turned violent. My hosts were unfailingly polite and the events went off without a hitch. But in our conversations, I sensed foreboding but little fear. The economy had underperformed, I was told, and prior attempts to introduce market reforms to the French economy had also been met with street protests. Their foreboding was about the prospect of further violence, not that the Macron reform project might give way to a change of regime whereby the provinces would force Paris to share its wealth. That would be too incroyable to contemplate.
Yet that is clearly what is behind the gilets jaunes protests. The protestors and the majority of French who have sympathized with them do not believe that increasing the burdens on them while reducing them on the Parisian wealthy will redound to their benefit.
It is telling that Macron has refused to accede to the protesters’ demand that he repeal his wealth tax cut even as his speech Monday night showered billions of euros in reduced taxes and increased benefits on the protesting classes. He would raise costs for small employers by raising the minimum wage in January, but he will not take back a penny of the benefits his wealth tax cut gives to his Parisian friends.
Macron’s worldview is clear: the problem with France is the greed of the French, not the avarice of the Parisians.
The events that led to the French Revolution were a long time in coming just as have been the events that are now unfolding in France. Decades of wars and schemes foisted upon France by the Paris-based monarchy had finally bankrupted the country, but when Louis XVI finally turned to the French for help—more taxes—they insisted upon sharing power rather than sacrificing again without complaint. This the King would not do, and in a series of concessions and retractions he set in motion a two-year process which finally culminated in the Revolution of 1789. Unless Macron acts decisively and remakes his reforms so they have less to do with the will of Paris and more to do with the hopes of the provinces, he may be on the path to defeat at the hands of a genuine populist in the 2022 election.
He might be aware of that. Macron’s Monday speech included a phrase that attracted much attention: “the question of immigration” must be dealt with. It might finally have dawned on him that making jobs more unstable and reducing benefits for which the French are eligible is much scarier for a public who must then compete with legal and illegal immigrants for whom the conditions in France are still infinitely better than from where they came. Sacrifice from the French, for the French, might be a more saleable proposition than his current program of elite-driven market-based reforms that can build a new Europe and save the planet.
A Bigger Backlash Brewing?
A wise Macron might note that his impressive second round victory concealed more than it revealed. Modern politics is increasingly a battle between the “Ins” and the “Outs,” between those who have benefited from the 21st century’s economic and cultural changes and those who have not. Macron won the second round by consolidating support from “Ins” who backed other establishment candidates in the first round and from the abstention of many left-leaning “Outs” who could not support Marine Le Pen, the daughter of someone they considered to be a fascist.
In the 2017 election’s first round, Macron and the candidates of the two traditional parties won only 50.4 percent of the vote; Le Pen and two other anti-establishment “Out” candidates received 45.6 percent. If the gilets jaunes have united the Outs behind a common cause, the movement could also produce a charismatic leader who can ride that united support to victory.
On the advice of my hosts, I left my hotel when it was pitch black out to avoid the protestors. As my taxi took me to my train, I saw the reason for the sawing and hammering that had kept me awake during much of the night—boarded up shops in the rich, tourist mecca of the 1st Arrondissement. I would be safe in a couple of hours, but they had to remain behind and hope that the flood of provincials that would soon walk their streets would be dissuaded by their precautions. Their property, and perhaps their liberties, would be better protected if their leaders would take political precautions now to unite the entire French people behind a scheme of national renewal.
If not, le deluge may await.
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