Thursday, December 17, 2015

Further thoughts on the regional elections and the FN's advances.

I've published another article here.


bernard said...

I was going to quote long term labour productivity growth numbers, but the INSEE site is unfortunately malfunctioning today, so you will have to trust me blindly now and check the numbers when it functions again.

The one thing that you have not discussed in your article and which is massively relevant to the political situation is this: whereas labour productivity growth was always quite high in the long run - take 10 year growth rates - in previous decades, it has slowed down to virtually nothing since 2000. The implication is that either unit labour costs and real wages are stagnant or real wages are growing and the economy is losing competitivity internationally. The latter occurred until 2010 broadly and the former is the case since then.

The political consequence is massive.

Prior to 2010, the economy is composed of employed insiders and unemployed outsiders in a ratio of nine to one (broadly). The insiders are not doing too badly and vote for traditional parties, broadly. The outsiders are doing badly and are, to a certain extent de-socialized and vote less than others, and possibly more for the extremes than others.

Since then, the outsiders are still outside and their political behaviour has not changed that much. However, due to the halt in labour productivity growth and implementation of policies to restore some competitiveness, the insiders are now doing poorly as well as their wages have stopped growing in real terms and they are becoming seriously pissed off. Substantial numbers of insiders now do not even turn up to vote, such is their disdain for politicians, and large planks basculate towards extreme voting, which in France means the extreme-right. In other Southern European countries which had the pleasure of decades of fascist rule, the switch is more towards the extreme left, that's all there is to it.

So this is more fundamentally a product of secular stagnation as your American academics like to call it - Summers et alii - than of the great depression. All the great depression did was compress the political-economic process a little bit in time.

FrédéricLN said...

Congratulations Art for this paper — even superior to the one in The American Prospect, if I may rank.

I find your comeback to the question whether "the center can hold" especially relevant, for sure.

The comparison with the US and the moderate + Wall Street current in the GOP, is quite amazing. The French often see the USA as the canonical example of two-party system — but your parties are open and fuzzy sets, as exemplified by the relations between Tea Party and the GOP, something not many French people can decipher.

Our French parties are closed shops, as are the Spanish ones for example. They barely know hybridation of absorbing unforeseen opinion currents. They succeed or die. The (unconscious) panic within LR/UMP and PS suggests they understand they could well die, as Spanish PP and PSOE also could.