Monday, January 27, 2014

More on the Responsibility Pact in Response to George and Jeremiah

I thank my good friend George Ross and Jeremiah Riemer for their comments on the previous message, which have provoked a few further thoughts. Indeed, George is quite right that we know very little about the timing of either prong of the responsibility pact (elimination of cotisations familiales and reduction of public spending), and we can't be sure that there is agreement within the government about any of this. The opposite is almost surely true: that there is sharp dissension.

Hence to my mind the principal reason for Hollande's announcement was to signal a position in advance of the hard bargaining ahead, bargaining with both the social partners and the various ministries. Hollande is in a deep hole, and he's intelligent enough to know just how impossible his predicament has become. He's going to take a shellacking in the upcoming European and municipal elections, and he's maneuvering now to turn tactical defeat into strategic advantage (I don't say victory, which remains far too uncertain--all he wants is to improve his strategic position for the difficult year ahead). The extreme right is going to emerge from these elections as a threat to be reckoned with--a real danger, and a danger more immediate and pressing even than the crisis. Hollande sees this, and so do the unions--which sense the ominous rejection of the existing regime and even defections to the FN within their own ranks--as well as the patronat. Hence there is just possibly a small window available to make some serious structural changes--structural changes that eluded the Right during all its time in power and on which the Left has never been able to agree.

But the part of the Left from which Hollande springs has wanted to change the financial basis of the social security system for a generation. It rightly sees the tax wedge between the worker's wage and the employer's labor cost as an impediment to job creation and proposes to broaden the base on which part of the social security system rests. The responsibility pact is a signal to the patronat that Hollande is now prepared to stake his presidency on commitment to such a structural change. Until now, employers did not trust Hollande's professions of good will, not only because the good will sometimes seemed to be lacking (although I think many were prepared to see the expression of animosity toward finance and the 75% marginal tax on top incomes as the words of a politician doing what politicians do) but because they believed that when the battle was finally joined in earnest, Hollande would retreat, as Sarkozy retreated before him.

But now he has something more to fear than the ire of workers unconvinced that social liberalism has their best interests at heart, namely, the implacable enmity of the strange alliance of reactionary forces of all stripes (Front National, Catholics, anti-Semites, xenophobes, neo-Poujadists, regionalists, corporatists, nationalists, sovereignists, and ras-le-bol populists), who contest not just the wisdom of this or that policy but the very legitimacy of centrist government, be it of the left of center or the right of center. Hollande is therefore signaling his readiness to join in une union sacrée against this new threat. Les patrons can trust him because he has nowhere to go but into their arms, and les ouvriers can trust him because the only alternative is to trust Mélenchon, Besancenot, et cie., whose ability to fend off the extreme right has been demonstrated in numerous local election contests to be nil. (Anticipating Brent's objection here: you can argue all you want that Mélenchon has better solutions than the center left, though I wouldn't agree; you can't, however, argue that he has ever persuaded a majority anywhere that that is the case. So it's either democracy--and a coalition with elements of the patronat, of which Pierre Gattaz and Louis Gallois represent relatively palatable factions--or a putsch, and if shove came to putsch, I don't see Mélenchon remaining in the vanguard for very long. It's not his style.)

Hollande's Hail Mary pass also has the advantage of splitting the Right. The UMP is already in a tizzy about whether or not to support the responsibility pact, and the pressure from the patronat not to upset the applecart must be intense. Sarkozy is very cannily keeping a low profile so that he can sweep back in when the time is right and pick up the pieces remaining after the current principals knock one another off.

In short, what matters in the end is not the economic logic of this plan--pace Gourinchas and Martin. It's the political logic. Until now, no Socialist has dared to stake the party's future on building a coalition in the center of the political spectrum. The logic has always been "run to the left to win the nomination, then tack to the right once in power." Hollande followed this Mitterrandian formula as far as he could, but the left of the left has disintegrated into a populist nebula that offers no support, and the only terra firma remaining is in the center, if it is anywhere. So that is where Hollande is trying to find his footing. He's been so inept up to now, however, that it's hard to see him pulling this off.

Nevertheless, failure is too bleak a prospect to contemplate. We are witnessing an attempt to found a party of the center left in France, which explains why Hollande was so eager to embrace the label "social democrat" in his press conference. That eagerness is really an ironic tribute to the persistence in France of the archaic and perverse equation of social democracy with social treachery, etc. The old Stalinist amalgams never quite died in France, even after "social democracy" ceased to have any clear referent. What Hollande's embrace of the term really means is that he's searching desperately for an alternative to the Mitterrandian concept of the Socialist Party on which he was raised. He doesn't quite know what this party will look like or whether it will be electorally viable, but his responsibility pact will have been its founding document--if it isn't stillborn.


Mitch Guthman said...


If by “splitting the right,” you mean throwing throwing the people who elected you to office under the bus by adopting the economic policies of their opponents as one’s own, then Hollande has indeed split the right. But to what end? And at what cost to France?

Yes, you’re right that les patrons can trust Hollande because “he has nowhere to go but into their arms”. But your explanation of why les ouvriers should follow him is much fuzzier because the extreme right is promising economic policies that legitimately offer far more to the people, while Hollande offers them no hope of a better future. Distasteful as they may be, if the PS doesn’t dump Hollande, the FN will be the only political party offering anything to les ouvriers.

You say that Hollande sees the rise of the extreme-right as a danger. But if that’s true, why has he followed the policies that almost everyone on the left believes have lead to the reawakening of the old demons that nearly destroyed Europe? What we saw on the streets of Paris is the result, in no small part, of Hollande’s disinterest in improving the lives of ordinary French people who are suffering right now.

Moreover, even on purely political terms, what’s the payoff? Apart from Hollande’s personal political glory, what’s the virtue of forcing PS voters to move into a grand alliance with Bayrou’s few remaining voters even though none of these people will be receiving anything from the new responsibility pact and probably will be losers if it’s implemented?

As an individual, François Bayrou is far more appealing than anybody in the PS today. Yet he attracts very little support from voters. Perhaps the reason why we haven’t seen a president Bayrou is that while these structural changes might represent the Holly Grail to the chattering classes, these are policies that are deeply unpopular with a wide swath of French voters. Frankly, a union between the most unpopular president in the history of France and a party whose leader, founder and standard bearer couldn’t get into the national assembly doesn’t sound all that promising to me.

So the political gamble isn’t really about “splitting” the right but rather about trying to arrange a situation where Hollande cobbles together just enough support to stagger into the second round, at which point one either votes for a center-right neoliberal or gets stuck with the French equivalent of a rabid, frothing at the mouth follower of brother John Birch.

What’s more, Hollande’s strategy depends entirely on Sarkozy not running because if he does run, my guess is that the trade unions and the people of the left will feel free to tell Hollande to go screw himself because they will have someplace else to go in the first round, namely, the UMP. At this point, it costs PS and leftist voters absolutely nothing to vote for Sarkozy in the first round and that’s exactly what I predict they’ll do. In droves!

Art Goldhammer said...

I'd be a little circumspect, Mitch, about suggesting that the FN is offering workers what the center refuses to provide. And you misread me if you think I'm suggesting that Hollande is attempting to forge an alliance with Bayrou. When I say he's searching for a party of the center left, I mean that he's hoping that there will be a recomposition of the electorate. Already the base of support of the PS is hardly "the working class." It never has been, really. But this is not the place to enter into a complex argument.

PLM said...

Seconding Mitch here : Hollande’s only discernable strategy is to occupy the neoliberal center, to remain the only one standing against the frothing-at-the-mouth ones.

As to whether to call this move social-democratic or not, let’s say it is, in the Orwellian sense of neoliberalism through consultation (or at least a vague commitment to). According to Wikipedia, social democrats have historically advocated for a “peaceful and evolutionary transition of the economy to socialism through progressive social reform of capitalism”. True story.

In a milder sense, social democracy “promotes extending democratic decision-making beyond political democracy to include economic democracy to guarantee employees and other economic stakeholders sufficient rights of co-determination”. Wait, it doesn’t end there: “Common social democratic policies include advocacy of universal social rights to attain universally accessible public services such as education, health care, workers' compensation, and other services, including child care and care for the elderly”.
Holland is a social democrat the same way Sarkozy was a Jaurésien.

"Ils seront ensevelis, non dans un éclat de rire, mais dans un rictus».

brent said...

I certainly agree that the real french Left has nothing at the moment to offer Hollande and the PS by way of an alliance. Indeed, with the rift in the FdG, it will barely survive the municipal elections. But I would offer a couple further reflections:

1) While the media are salivating over every nazi-saluting, swamp-dwelling neo-fascist in town, Alexis Tsipris is quietly making the rounds of Europe's Left parties, building his symbolic candidacy for Commission president and consolidating a unified slate for the May elections.
If he succeeds in enlarging the GUE bloc in parliament, it is possible (though perhaps improbable) that the GUE will play king-maker for Martin Schulz. If that were to happen, it would open a quite new perspective on the PS/FdG relationship, and the realignment of France's parties.
2) In response to the notion that the Left has devolved into a "populist nebula" with no ideas for how to govern, I would encourage a glance at the Eco-socialist Manifesto (see link), which is nominally part of the GUE program, though not a topic Tsipris emphasizes. This document is not a platform, more a vision, and not something that will galvanize the May elections. In the long run, though, after the neo-liberal 'reforms' have run their course, and the disaffection of ordinary people continues to rise, this vision may be a useful way to re-imagine a progressive and sustainable new form of social organization.

Mitch Guthman said...

I’m not sure that discretion is appropriate. The time to engage with the enemy is now while it’s still possible to maneuver and not later when it may be too late.

I understand that data isn't the plural of anecdote but the consistent pattern during the last two or three years of stories about voters from the left defecting to the FN for exactly the reasons that I described in my comment suggests that the problem is that Hollande offers exactly nothing to the workers, to the middle classes and even to the merely rich even as the FN promises to help them. That’s the real problem. The left needs to respond to the crisis with something that will help people now, not in twenty years.

But rather than address the very real concerns of the French people about the EU or abandon the misguided policies of austerity and Liquidationism that are mainly responsible for this deplorable situation, Hollande inexplicably has chosen to double down on them.

What's worse, this sharp internal devaluation that is proposed as part of his “Responsibility Pact” comes at the very moment when the IMF announces that Europe is in danger of deflation. But instead of stimulating economic growth, Hollande announces some kind of conversion to supply side economics. Perhaps we will soon see Arthur Laffer enlisted as a consultant to the Socialist Party of France!