Fragmented France

The second round of the French presidential election returned the incumbent President Emmanuel Macron to a second term of office.  Macron won with 58.5% of the vote against the opponent, Marine Le Pen of the right-wing nationalist National Rally, who got 41.5%.  Sounds comfortable – but the voter turnout of 72% was the lowest since 1969.  Moreover, Le Pen did better than in 2017, showing that Macron’s neoliberal policies of cutting pensions, reducing the health service and ‘liberalising’ the labour market have not been received well by a sizeable body of the electorate.  In the first round, Macron polled only 28% of those voting, or about 21% of those eligible to vote, while Le Pen took 23%.  Left-wing candidate Jean-Luc Melenchon polled 22% and nearly made the run-off, despite the ecology and other socialist candidates splitting the vote.  Melenchon’s supporters abstained in large numbers in the second round, some voted for Macron, but few for Le Pen.

Basically, France is split three ways politically.  One-third backs a pro-EU, pro-capitalist France as represented by Macron; one-third backs a nationalist, anti-EU ‘Frexit’, anti-immigration France as represented by Le Pen; and one-third backs a socialist pro-labour France as represented by Melenchon.  This fragmentation is likely to be further exposed in the upcoming parliamentary elections.  It’s possible that Macron’s party will lose its majority in the National Assembly and Macron will have to appoint a prime minister and cabinet that is in opposition to his policies – a further fragmentation of French politics at a time when France is taking on a senior position in EU policy over the Ukraine conflict and sanctions against Russia.

France is a key G7 economy, the fifth largest in the world and represents around one-fifth of the Euro area GDP.  In manufacturing, France is one of the global leaders in the automotive, aerospace and railway sectors as well as in cosmetics and luxury goods. It has a highly educated labour force and the highest number of science graduates per thousand workers in Europe.  Its services sector is large, led by tourism and financial services. Additionally, France is one of the world’s largest exporters of farm and agricultural products and is renowned for its wine, spirits and cheeses. The French government provides significant subsidies to this sector and France is the largest exporter of farm products in Europe.  France is linked closely to its largest trading partner, Germany, which accounts for more than 17% of France’s exports and 19% of total imports.

After the failure of the Mitterrand government’s attempt to sustain Keynesian policies in the teeth of a  global slump in the early 1980s, successive governments have applied neo-liberal policies of privatisation, tax and welfare cuts to boost profitability – despite opposition by working-class movements and the trade unions. Governments either partially or fully privatized many national industries, including Air France, France Telecom and Renault, and today, France’s leaders remain committed to capitalism. However, the French government still plays a role in certain key national sectors, such as agriculture, and will intervene in the market to sustain certain ‘national interests’.  For example, the energy companies are publicly owned and since the oil and gas price rises, were directed to hold price increases to just 4% this year, while the privatised UK companies have been allowed to raise tariffs by nearly 60%.

In recent years, France, similar to many western European nations, has experienced poor real GDP growth.  France’s real GDP grew just 1.27% a year from 2011 to 2019, just before COVID and the unemployment rate remains high. The French economy performed better than expected after the calamitous effects of the Covid crisis, with 6% growth in 2021 – higher than Germany, Italy and Spain. Unemployment sank to 7.4% in the fourth quarter of 2021, its lowest rate since 2008.  But slowing global growth and the war in Ukraine will deliver a much weaker recovery this year.

Real GDP growth

Like other G7 economies, the French economy is suffering from the global supply chain breakdown, rising energy and food prices and the Ukraine war.  The IMF forecasts real GDP growth this year of just 2.9% and only 1.4% next year.  Over those two years, only Italy is expected to grow more slowly in the G7.

Indeed, the French capitalist economy has followed the same pattern as the other G7 economies in the 21st century: slowing economic growth, then the Great Recession, followed by even weaker growth and investment,…

… and stagnating productivity.

As always, behind this relative stagnation lies the falling profitability of capital.  French capital’s profitability peaked at the beginning of the 21st century and has trended down since.  There was a sharp fall in the Great Recession and no recovery in the last decade, culminating in another sharp drop in the COVID 2020 slump.

AMECO

Inequality of incomes and wealth, while lower than in the US or the UK, remain relatively high and unchanged for the last 40 years.

Successive governments, whether of the centre-left or centre-right, have failed to deliver increased prosperity, full employment and a reduction in inequality.  As the global capitalist economy deteriorates, with the rising prospect of a new recession, a Macron government will change nothing, except probably for the worse.

16 thoughts on “Fragmented France

  1. Michael thanks for this, very interesting! By the way, would you ever do a post doing a deeper dive into the successes and failures of the Mitterand experiment?

  2. “France’s real GDP remained almost unchanged from 2011 to 2019” – I compute a 10,5 % higher GDP in 2019 than in 2011.

  3. Capitalism is entering its declining stage, characterized by the fact that the imperialist countries (First World) can only keep their status by keeping the Third World down instead of growing themselves and “leading the way” to world prosperity was was the perceived case of the post-war miracle. In this sense, France is no different than its First World cousins.

    Therefore, we cannot talk about

    “a key G7 economy, the fifth largest in the world and represents around one-fifth of the Euro area GDP. In manufacturing, France is one of the global leaders in the automotive, aerospace and railway sectors as well as in cosmetics and luxury goods. It has a highly educated labour force and the highest number of science graduates per thousand workers in Europe. Its services sector is large, led by tourism and financial services. Additionally, France is one of the world’s largest exporters of farm and agricultural products and is renowned for its wine, spirits and cheeses. The French government provides significant subsidies to this sector and France is the largest exporter of farm products in Europe. France is linked closely to its largest trading partner, Germany, which accounts for more than 17% of France’s exports and 19% of total imports.”

    This interpretation doesn’t make any sense in a France fractured politically between conservatives (neoliberals) and populists (fascists + [western] socialists); we’re clearly seeing a nation-state in decline and not at its apex.

  4. “France is a key G7 economy, the fifth largest in the world and represents around one-fifth of the Euro area GDP. ”

    Sorry to be picky, but does this make sense?

  5. “However, the French government still plays a role in certain key national sectors, such as agriculture, and will intervene in the market to sustain certain ‘national interests’.”

    …like a year ago when the state doubled its holdings in Air France to 30 percent account of the pandemic slowdown, provided a 5 billion euro loan to Renault in which it still has 15 percent ownership for the same reason, and maintains a 27.5 percent share ownership of France Telecom. liberté, égalité,copropriété

    1. ”freedom, equality, co-ownership”
      The first two wishes (+fraternity) gave rise in 1.789 to the French Revolution (of the bourgeoisie who wanted to be a capitalist owner of the means of production), which added to the English, American and Dutch revolutions created the capitalist mode of production . And Western states grew in size to 10% of GDP. The third desire, that of co-ownership (social and common property), materializes in the first step of the socialist mode of production in the Russian Revolution. And the western states grow up to 50/60% of GDP. But the state companies that mean another 10% of GDP. Result today in France: Macron gets rid (by a narrow margin and for a short time) of Lepen thanks to the fact that France has one of the largest Western social states after the Nordic countries and that gives rise to a greater redistribution of wealth in wages and increased subsidies to French companies and citizens. The great States have avoided the riots and revolutions in crisis 2,008, Covid19 and Ukraine war crisis. Until when will they do it? . Good question. Several factors and economic studies (among them the declining profit rate, but it is not the only data) indicate that this aid cannot last long and the following simple scheme says the same thing: a) the States decrease (they continue to be privatized since the 1980s -China too- as a consequence of the regressive phase of the revolutionary cycle and b) the social problems of capitalism grow: inequality, climate change and the ongoing and upcoming wars.

      1. Antonio,

        It must be frustrating waiting for the necessary conditions for revolution to emerge.

        The following might help boost your morale and raise your spirits:

        (From, in my opinion, one of the great and brilliant albums of music, now 50 years old, even if Thompson himself hated it. Go figure.)

      2. His commentary, superficial and banal although sympathetic, only reveals one thing: little knowledge of the revolutionary cycles. And little knowledge of economics in general, judging by others of his comments. Forget your capitalist economy asap (I did) and you’ll come out ahead. Give yourself a thorough review, it may take years, by the following academic authors (and many more) who have studied long cycles in the economy (revolutions and their cycles are just one more economic phenomenon that affects the political structure) and after your studio may discuss cycles with you. Doing it now would just be a waste of time. Some capitalist authors to study: I. Wallerstein, Ragnar Frisch, etc. Socialist authors: Rosa Luxemburg, E. Mandel, Kondratieff, Ernesto Srepanti, Beverly SSilver. I’m replying just out of kindness but I won’t do it again until I know something about cycles and socialism.
        Hopelessness.-
        – I haven’t had it for many years. Only those who promote the capitalist model should have it. Because they are increasingly isolated in defending a model that causes mass social collapse: growing inequality, wars and climate change. Despair was felt by those who trusted in capitalism and lost their economic well-being. That happens and will happen to 90% of humanity. Most likely it has happened to you (in the 2008 crisis?). and that is why he has decided to study socialist and Marxist economics. Keep doing it and your despair will end. Revolutions? They only happen due to objective, material and scientific facts: if there are social collapses they occur and if there are no such collapses they do not occur. They have always existed, their admired capitalists made them and, since 1917, we socialists are making them. The next socialist revolution (2040/2050) that I know is going to happen, how it is going to happen and why it should happen does not despair me at all, in the same way that at night it does not despair me that the sun only rises in the morning. Only knowledge removes hopelessness.

      3. Antonio,

        There are a couple of ironies for socialists to consider, as far as I can see.

        The first one is that, according to the Marxist historical process, capitalism is a stage that society must necessarily traverse. It seems to me that feudal societies that leapfrog the capitalist stage end up failing. I would say that the history of 20th century socialism supports that notion.

        And secondarily, socialism itself is a transitory stage. It has its own contradictions.

        I imagine you won’t see these matters as ironic but merely the outworking of an inevitable process.

        I would say the one great deficiency of Marxist logic is that it is based solely on the relations of production and takes no account of human nature. That I would say this may reflect/probably reflects the fact that I have not by an means probed Marxist thought deeply enough. And I haven’t.

        For me, what will forward the communization of society will be technological change. It will proceed to the point where the great mass of workers become redundant and a non-market system of distribution will be required. The capitalist himself will also probably become redundant although there may be some kind of ongoing organizing/entrepreneurial role that may be required.

        In the mean time, the art of people like Richard Thompson provide the opium, diverting attention from the travails of ordinary living. 🙂

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