Tuesday, September 15, 2015

Lessons of Stanley Hoffmann's Work for France Today

Slate asked me to reflect on the lessons of Stanley Hoffmann's work for France today. Although it's presumptuous to take up such a challenge, I was rash enough to take a stab at it. Here is the result.

Governing the Banque de France

President Hollande has nominated François Villeroy de Galhau to be governor of the Banque de France. 150 economists, including François Bourguignon and Thomas Piketty, have signed a letter opposing this nomination for fear of "potential" conflicts of interest.

It's an interesting confrontation. Villeroy, an énarque (of course) whose "brilliance" everyone concedes, was the chief of staff of DSK when the latter served as finance minister. His former classmate at the ENA, Pierre Moscovici, attests to his "social conscience" dating from his youth. Villeroy has renounced a whole series of bonuses, stock options, deferred compensations, and the like from due him his time in the private sector. The JDD estimates the monetary value of these concessions at more than €1 million. Yet these sacrifices are not enough to allay the fears of the economists, who note the peculiar susceptibility of the banking sector to conflicts of interest.

No doubt the protesting economists know more about M. Villeroy de Galhau's outlook and commitments than I do. It nevertheless seems odd to make such an issue of this particular appointment, when another énarque with a similar experience of private banking, Emmanuel Macron, is already in the government and, according to polls, largely approved in his reform efforts by the general public.

What is really at stake seems to be a deepening split between the "managerial left" and an increasingly restive element within center-left parties across the developed world. The Corbyn victory in the British Labour leadership contest is one sign. The unexpectedly good performance of Bernie Sanders in the Democratic primary race in the US is another. Many on the left feel they have given the "managers" ample opportunity to prove that they know what they are doing, and the results are simply not there. Patience has worn thin. The resistance is coming not solely from angry radicals--although there are certainly some of those, especially in the UK. It stems rather from disappointed center-leftists. made anxious by the rising populist tide on the right and unconvinced that the seasoned leaders who acquired their "insider" experience in the pre-crisis years of social-liberal compromise with neoliberal institutions can steer center-left parties toward either electoral success or robust recovery. M. Villeroy de Galhau may be sacrificed on this altar of doubt. He may not be the right expiatory victim, but jettisoning him may nevertheless prove necessary--though almost certainly not sufficient--to placate the festering internal opposition, which thus far, and surprisingly, remains far milder in France than in Britain or even the US.