Friday, April 24, 2015

Macron as Colbert

Emmanuel Macron, the symbol of Hollande's supposed neoliberal turn, now declares himself to be a Colbertist, in the finest French tradition of state capitalism:
La France a bâti après la seconde guerre mondiale un capitalisme d’Etat, fidèle à sa tradition colbertiste, et un capitalisme familial. C’est le soutien des pouvoirs publics et l’énergie entrepreneuriale qui ont rendu possibles les réussites industrielles de notre pays, et ce sont les choix industriels de long terme qui ont permis les investissements de l’économie française des « trente glorieuses ».
Sheesh. Rien que ça: revive the spirit of les trente glorieuses. But how? Well, that's where the column gets a little murky and needs greater financial acumen than I possess to decipher its meaning. There's some huffing and puffing about Google and Facebook B shares, for example:
Que dire en effet des actions B de Google ou de Facebook, pour ne citer que ces seuls exemples, qui accordent dix voix par action à leur détenteur ? Sortons de la naïveté française qui voudrait un libéralisme offert qui n’existe nulle part ailleurs ! Soyons compétitifs, exigeants avec nous-mêmes, mais cohérents avec notre vision de long terme.
Hmm. OK. In any case, the bottom line seems to be that the state is going to buy more shares in Renault, enough to constitute a blocking majority, to force Renault to do what it wants, and will later sell those shares. Beyond that, there seems to be some longer-term plan afoot to make strategic state investments in order to oblige certain firms to maintain manufacturing operations in France that they might otherwise shift elsewhere. And underneath all this, there is apparently an intention to change the way dividends are taxed and to encourage individuals to own shares in French companies rather than investing in real estate and assurances-vie.

Is there a coherent economic strategy behind this? Are large shareholders about to be given a tax break with significant distributional effects, which for obvious reasons Macron prefers not to discuss? What is the real strategy here? I confess I don't know. But this bears watching. It has the earmarks of one of those significant reforms that will ultimately change everything but that no one pays attention to while they're happening because the language in which they are expressed is addressed to tax accountants.