Tuesday, December 9, 2008

The Golden Bowl

Sarkozy met yesterday with Gordon Brown and José Manuel Barroso. The French president reportedly finds it easier to work with Brown than with Angela Merkel, whose response to the crisis baffles her allies. Brown shares Sarko's urgency, although the two men's instincts are quite different:

The prime minister's response excludes an anti-capitalist "corralling of the Anglo-Saxon Wild West."

"What Sarkozy doesn't really seem to get," this British account says, "is that we're not for tearing up the system and shooting all the people in the hedge funds. We're not going to destroy vitality and energy. We want to regulate the system better, not destroy it."


Although John Vinocur, who wants to portray the French-British couple as a "marriage of convenience," puts little stress on this difference, it is bound to loom large in the not-too-distant future. It's not just different attitudes toward regualtion of the financial sector that are at issue. France and the UK may both be capitalist economies, but the very culture of capitalism is quite different on the two sides of the channel. France is comfortable with national champions, a high-degree of state influence, and a cozy partnership (think pantouflage) between government and even those businesses in which the state does not participate formally. Sarkozy was not out to change that culture even before the crisis. His aim was rather to weaken the implicit guarantees to labor that went along with state capitalism, so that the state and its partners could "rationalize" the management of their work force. Paradoxically, the crisis, by weakening labor's bargaining position still further, may assist in this restructuring.


Gordon Brown's challenge is quite different. Britain's economic situation may be worse even than that of the United States and at this point is certainly worse than that of France. According to the Lehrer Report, one in five British jobs were tied to the City. The collapse of the financial sector is therefore not merely a precipitant of trouble in the real economy, because it is hard to distinguish in Britain between a Wall Street and a Main Street. Too many people are dependent on incomes from the rapidly shrinking financial sector. Sarkozy will be only too glad to see the City reduced to a shadow of its former self, not least because he hopes that some of its brokerage activities will be repatriated. What he wants to regulate out of existence, Gordon Brown wants to regulate in order to perpetuate.

There is a structural flaw in this marriage. I would like to work this into an extended metaphor by analogy with Henry James' Golden Bowl, in which a continental charmer and a naive anglophone are united in doomed matrimony symbolized by a cracked golden vessel. It doesn't quite flow naturally, however, as James' heroine is an American. But if Brown and Sarkozy are supposed to represent Europe with Barroso in the role of Charlotte (or is it Adam Verver?), there is a flawed vessel at the heart of this tale.

1 comment:

James said...

"Sarkozy was not out to change that culture even before the crisis. His aim was rather to weaken the implicit guarantees to labor that went along with state capitalism, so that the state and its partners could "rationalize" the management of their work force."

That's a really susinct and helpful way of looking at Sarkozy's position. Thanks for that.