Thursday, August 30, 2007
When leadership of the MEDEF passed from Ernest-Antoine Seillière de Laborde to Laurence Parisot in 2005, the change in style was undeniable, almost as dramatic as the change from CNPF to MEDEF. The former acronym stood for Conseil National du Patronat Français, the latter for Mouvement des Entreprises de France. Entreprises is so much more ... enterprising than patronat, which, after all, sounds rather "bossy." And the pixieish Parisot (pictured left) is altogether a softer personality than the crusty Seillière, whose career was in finance (CGIP, the Wendel holding company, later renamed Wendel Investissement). Parisot, by contrast, made her career in polling. She worked for Harris France, SOFRES, and then IFOP. She is a passionate amateur of surrealist art and an avid photographer. She regrets that in her current position as boss of French bosses she no longer has time for long walks in Paris, like the one on which she discovered a sign on the rue Jeanne-d'Arc in the 13th arrondissement a plaque that reads, "Jeanne d'Arc, patronne de la France." Seillière the financier backed Parisot the pollster for the position of head of MEDEF; the change of name occurred on his watch, and the selection of Parisot was no doubt intended further to soften the image of the organization. Her vocation in monitoring public opinion as well as her surrealist avocation no doubt taught her a thing or two about the importance of imagery. For instance: "There is a word about which public opinion has evolved over the past 25 years. It is 'reform.' It used to mean 'progress.' Today it means 'social regression.'"
President Sarkozy chose the Summer University of the business association MEDEF at Jouy-en-Josas to deliver a major speech on his future economic policy. The venue itself has been contested by union leaders Bernard Thibault of the CGT and François Chérèque of the CFDT, even though Chérèque is himself a guest of the MEDEF. This year's principal theme is the environment, and the MEDEF's brochures have green covers (pictured left, thanks to Versac) to reinforce the point, but this didn't stop Sarkozy from laying down his condition for a Suez-GDF merger, which has been in doubt since Suez apparently issued an ultimatum to the Elysée: he insists that Suez divest itself of its "environmental" arm to concentrate on its core business, the supply of energy. The strategy behind this maneuver may be to ensure that the state retains sufficient stock in the merged company to exercise a blocking vote and prevent "excess" layoffs, which would complicate life for the government. Some friends of Sarkozy are also in the environmental protection business and may be looking to make an interesting acquisition.
Of course this little maneuver isn't supposed to be the headline issue of the speech, which is so full of quotable tidbits that the media can choose which crowd-pleasing aspects of the speech to play up and which to play down. For those who like their economics replete with heroes and villains, for instance, there is the attack on "predators" and "speculators," to whom Sarkozy says he prefers "to oppose producers, inventors, and creators." Le Monde leads with this line, and goes on to mention the president's desire to "help small and medium enterprises to grow and export" and to encourage "a capitalism of entrepreneurs, not a capitalism of speculators." Of course this division of the world into white hats and black hats ignores the frequently heard lament that one source of weak French growth is the underdevelopment of French venture capital--the very "speculators" whom Sarkozy denounces--so that French "inventors" and "creators" with marketable ideas are forced to seek financing and in some cases even to relocate in the United States or Great Britain or Ireland.
Another major theme of the speech was Sarkozy's desire to improve the "purchasing power" of French households. As he did during the campaign, he arraigns the European Central Bank for indifference to this issue and says "I don't want people to go on thumbing their noses at the French with price indices that mean nothing, that don't measure the cost of living, that have nothing to do with the reality that households confront." It would be useful if the president were a little clearer about what he has in mind. Certainly indices can always be contested, but what exactly does he mean by "purchasing power?" If prices are too high--the always highly symbolic price of the baguette has just gone up--does he intend to impose some sort of medieval theory of the just price of things, or does he have in mind some market solution that will induce firms to reduce prices while maintaining wages and salaries and still finding the wherewithal to invest in the good ideas of the "inventors" and "creators" whose work he also extols? Because this seems to me a circle that can't be squared. If, on the other hand, the problem with purchasing power is that it is unequally distributed, with far too many French workers crowding the bottom of the wage ladder, between the SMIC and 1.5 times the SMIC, then why is his fiscal package tilted toward those whose purchasing power already exists?
To be sure, he does propose to achieve a reduction of prices by modifying the Galland Law, about which I have written previously. At the same time he proposes an increased tax credit for research and development. This is probably a wise move--R&D in France need to be encouraged--but the details will be important. Yet he also notes that "if you tax labor too much, you get outsourcing, and if you tax capital too much, it flees. In the world as it is, directly taxing the factors of production, directly taxing labor and capital, condemns you to lower employment, less production, lower growth, and less purchasing power." An impeccable analysis, but that leaves the option of indirect taxation on final consumption, the much-bruited "social VAT," which equally impacts "purchasing power."
The slipperiness of all this rhetoric will, I'm sure, not go unnoticed. Yet the man whom Sarkozy has put in charge of reflecting on "impediments to growth," Jacques Attali, delivered himself yesterday of a stupefying attack on the profession of economics, which hardly inspires confidence in the soundness of the advice the president will be receiving on economic policy. Attali's anti-intellectualism hardly becomes a mover-and-shaker who has at times professed a certain intellectual competence. His attack has not gone unanswered.
For La Tribune's roundup, see here. Versac's edgier take is here.
Along with all the disobliging things that Claude Allègre had to say about Ségolène Royal, he did allow that she had "une niaque pas possible" (or "une gnaque pas possible" according to another transliteration). In case the word niaque is unknown to you, it means "will to win," or what American presidential commentators sometimes call "fire in the belly." See also here.
I call your attention to an article in today's Libération by French economist and "French Politics" contributor Éloi Laurent on the contribution of globalization to inequality within nations and the strain that this is placing on "social contracts" around the world.
Claude Allègre, who is all over the press and airwaves today, has scarcely a kind word for anyone. François Hollande is a "schemer." He believed that "the more crocodiles in the creek, the better his chances of surviving." He was like Guy Mollet (the supreme curse among Socialists). Ségolène Royal behaved in an "unspeakable" manner. She had "no interest in the issues, only in promoting herself." The forty-year-old would-be renovators of the party, the Montebourgs and the Valls, are "young jackals and young hyenas."
Meanwhile, Laurent Fabius says that the "spectacle on the left is hardly appetizing." "Division, confusion, personal attacks--I don't like any of that." But he does see a role for himself in the renovation of the party: that of "active sage." He intends "to join in the debate on the issues ... but not to get involved in the internal preparations, because the aroma coming from the kitchen right now isn't very pleasant." He doesn't rule out a candidacy "in 2012, 2017, 2022, but it would be ridiculous to approach that subject today."
How does a political party get itself into such a deplorable condition? Sarkozy reportedly credits himself with having plunged the PS into turmoil with his policy of ouverture, but he's no doubt too cocky. Bertrand Delanoë was probably closer to the mark when he said the other day that it was time to echo François Furet and admit that "the French Revolution is over." Despite repeated experiences with power after 1981, and despite repeated protestations of adaptation to the realities of a market economy and the modern world, too many Socialists continued to believe that everything could change overnight, and would, if only they could once again gain the presidency. Hence they continually postponed the needed aggiornamento. Now it may be too late. There are too many ambitions and too few ideas. Manuel Valls and others have proposed changing the party's name. A change of name won't be enough to effect a change of identity. I think this crisis may well prove fatal.
For background on the damage wrought by the survival of the revolutionary ideal, see my contribution to a colloquium on Perry Anderson's critique of contemporary French politics.