François Mitterrand has been president of France since May 10, 1981. Just over a year ago, having dissolved the National Assembly, he won the legislative elections of June 14 and 21, 1981. In discussing the presidential election, I concluded that turning his victory into a program of action entailed three problems.1 One was political—obtaining a working majority and a strong government. The second was economic—reducing unemployment without provoking acute inflation and troubles for the franc. The third was personal: how would this enigmatic and complex man, emerging from twenty-three years in the wilderness, perform as a leader?
Some of the answers are in: the political problem did not arise; the economic program, however, failed—it has been a fiasco marked by two devaluations in nine months. But the uncertain economic future may well awaken the dormant political problem, and the Mitterrand mystery has not been resolved. One prediction that turned out to be accurate concerned the brevity of the “state of grace” that he counted on for success.
Observers of France cannot fail to be struck by several facts. Two concern the domestic French scene. Rarely has so much been undertaken in so short a time—and yet most people complain either because bad things have only gotten worse, or because all the reforms have failed to “change life,” as the Socialists had promised to do.
Moreover, the absence of genuine enthusiasm a year ago (there were hope and sympathy, but no euphoria or influx of new members into the left-wing parties or the labor unions) works both in favor of and against the government. It works for it in so far as it limits disillusionment and makes it easier for the Executive to scrap much of its original program. But the lack of élan among Mitterrand’s followers also deprives his policies of firm support, and encourages his adversaries to regain lost ground.
The other striking points are comparative. As in the case of the Reagan administration—which also came to power less because the voters had converted to its philosophy than because they were fed up with the incumbent’s—the difficulties result only in part from divergences among the rulers. The main cause is the gap between the program and the hard facts, between ideology and reality. In both countries, it has taken very long for the rulers to discover that contrast, and the discovery leaves them more with a tendency to seek scapegoats than with ready alternatives.
Finally, the “Socialist way,” which prided itself on being radically different from the approaches to the world economic crisis of Reagan, Thatcher, Giscard d’Estaing (or Raymond Barre), and even Schmidt, has no chance of succeeding unless the foreign leaders themselves begin to succeed, or unless France drops out of the Western economic and political community, something which Mitterrand and most other Frenchmen neither want nor deem possible.
In May 1981, it seemed unlikely that the Socialists would obtain an absolute majority in the legislative elections. But they did: with their Radical allies, they won 38 percent of the vote and, thanks to the electoral system (which they had denounced in the past as unfair), elected 269 Socialist deputies in an Assembly of 491 members. This victory solved the problem of the government and of the parliamentary majority. Mitterrand and his prime minister, Pierre Mauroy, had no need either to seek allies on their right or to rely on different coalitions, issue by issue. They did not even need to include the Communist Party, either in the parliamentary majority or in the cabinet: it had kept only forty-four of its eighty-six seats.
But Mitterrand decided to take Communists into the cabinet. He doubtless calculated that in the short run they would be less likely to be troublesome (especially in the factories) if they were, so to speak, compromised by ministerial solidarity. More important, Mitterrand always believed that common action under Socialist leadership would either gradually transform the Communist Party (about whose organization and behavior he has no illusions at all) or, should the Party remain as rigid and sectarian as ever, result in more and more of its voters deserting the alliance.
Thus he obtained the strongest possible formula: a government of the whole left, on his terms. What had seemed, in May, shaky and temporary, has turned out—so far—to be quite stable. The four technical ministries granted to the Communists are rather unrewarding, both in actual power and in their possibilities of infiltrating Communists into important positions or sectors. But, having lost much power nationally, the Communists are eager to preserve the gains they had made in the municipalities—in 1977 especially, thanks to their alliance with the Socialists. The next municipal elections will be held in the spring of 1983. Any break of the left alliance before these elections would be a disaster for the Communist Party. Moreover, the lesson of the troubled period 1977 to 1981 is clear: when the Communists desert that alliance and treat the resurgent Socialists as their main foes, a sizable part of their electorate abandons them.
The other problem that the legislative elections solved was the constitutional one. Fears that the politics of the Fourth Republic would reemerge turned out to be unjustified. Giscard d’Estaing, during his seven years in office, had been plagued by the rivalry between the neo-Gaullist party (RPR), set up by Jacques Chirac, and his own supporters (who became, in 1978, the UDF). By contrast, Mitterrand and Mauroy have enjoyed the tremendous advantage that the constitution gives to the Executive whenever it has a solid majority in the National Assembly.
Even though Mitterrand’s victory, unlike that of his three predecessors, was the triumph of a party at least as much as of a personality, during the past twelve months the party has learned the hard way that in the Fifth Republic (especially when—one more paradox!—the party controls the Assembly) the president, with the help of his prime minister, controls the whole political system. The regular meetings between Mitterrand, Mauroy, and the top figures of the party mainly ensure party conformity to the Executive’s wishes. Repeatedly, the Executive has forced Socialist deputies to give up amendments to bills submitted by the government, or else (as in the case of the new austerity measure of June 1982) it has presented the party with a fait accompli.
Mitterrand’s endorsement of a constitution he had attacked as authoritarian does not mean that what the French sociologist Pierre Birnbaum calls “the heights of power”—the power elite and the degree of state autonomy—are unchanged. First, as Birnbaum notes in a postscript to his study (which reviews the evolution of France’s ruling elite from the July Monarchy to Giscard), the Socialist parliamentary group is very different from the Gaullist and Giscardian parliamentary factions: 132 out of 285 Socialist and left-Radical deputies are teachers (94 of them are secondary-school teachers). They have, on the whole, far less experience of economic life than the previous conservative majority, and less experience of local realities than the old political clan of “local notables” of the Third Republic—doctors, lawyers, veterinarians, shopkeepers.
Second, even if it is dominated by the Executive, the Socialist Party, through its parliamentarians and even more through its militants, plays a double role that is quite different from that played by the Gaullists under De Gaulle and Pompidou. Being the guardians of socialist orthodoxy, they are both a constant source of pressure for change and an obstacle to any overt return to the economic and social orthodoxy of the Gaullist and Giscardian era. At the party congress in Valence last October, Mauroy had to throw cold water on overheated ideologues calling for vigorous class warfare and for purges of civil servants.
Third, the reinjection of politics has created a certain amount of tension between the new political class and the bureaucracy. The Fifth Republic, before 1981, had become “la République des fonctionnaires.”2 Many of the political leaders of the Gaullist and Giscardian parties were products of the Ecole nationale d’administration, known as énarques (e.g., Giscard and Chirac). The top civil service dominated in the cabinets ministériels, i.e., the staffs of the ministers, which are the vital links between the minister and the bureaucracy. And many of the key decisions on economic, social, and fiscal policy were actually made by the civil service elite. There was a broad similarity of aims between its members and the Gaullist and Giscardian leaders. Modernization, efficiency, a concern to reduce extreme inequality, the growth of a competitive industry, power on the international scene—these were the objectives. Both groups shared an addiction to the technocratic method (thinking in terms of technical means toward the goals of collective wealth and power) and an aversion to letting either politicians mess with these ends and means or special interests or local pressures interfere with them.
This harmony has been disturbed. While many top civil servants moved toward socialism during Giscard’s declining years, there has been much grumbling among them about incompetence and a lack of enthusiasm for some of the new rulers’ pet ideas, especially nationalization and decentralization. Ideological differences have, as usual, been compounded by considerations of power. The proportion of énarques in the staffs of the president, the prime minister, and cabinet ministers has decreased. Journalists, union members, the party faithful have returned. Moreover, although by American standards there has been no “purge” of the bureaucratic elite by the new government (French civil servants can be moved around but not fired), more than half of the directors in the ministries were replaced.
Finally, the state-led symbiosis that had existed throughout the Fifth Republic between the ruling elite, the national organization of businessmen (CNPF), and the largest national organization of farmers (FNSEA) has been ended. The Socialists’ program ensured the break between the rulers and the CNPF. In the case of the FNSEA, which in the past has received great financial and power advantages from the state in return for its support for the ruling parties,3 the Socialist minister of agriculture, Edith Cresson, was the one who declared war. (She got it, in the form of violent demonstrations ad feminam.)
The old symbiosis had known several forms, depending on whether the state was more or less dirigiste, but even during Raymond Barre’s experiment in relative liberalization there was no doubt about who set the policies: business and farm leaders remained largely the clients of the state. Today, as before, the policies are set by the state. But one of the Socialists’ greatest disappointments has been the failure of the labor unions to establish a comparable, left-wing symbiosis with the new government. They should probably not have expected it. French unions are weak. (only one fifth of the workers are members), divided, and, for different reasons, eager to preserve their independence from “the system.” But the rivalries between the unions and their refusal to let themselves be “integrated” has deprived the government of the kind of support and transmission belts its predecessors enjoyed and exploited.
Before 1981, France had never been a good example of what social scientists call neocorporatism—the close cooperation in public policy between the state and organized economic interests—precisely because the labor unions were left out of the symbiosis. Now all the major interests are left out. This may give the appearance of strengthening the state’s independence. But it is not a source of real strength at all.
Mitterrand wrote, in 1974, just before the election which he lost to Giscard: “If I am elected, I will change the course of things, and therefore the life of my contemporaries.”4 The Socialists came to power with an extraordinarily ambitious set of ideas. Their attempt can be divided into two parts.
The more fundamental one is nothing less than an effort at reshaping France’s industrial society. A new society had emerged from the industrial revolution of 1955-1973, and settled down in the post-1973 recession. It differed from the old French stalemate society in two essential respects: first, in the importance of industry and the acceptance (through a deep change of values) of industrialization and growth; second, in the leading role and increased autonomy of the state. But, like the stalemate society, the new one functioned with the style of authority described by the sociologist Michel Crozier5—centralized, a mixture of authoritarianism on top, egalitarianism and resistance below, fragmentation, and opacity. And the state continued to lean on the more privileged interests: the wealthier farmers, the haute bourgeoisie of industry, finance, and civil service—a collusion fostered by centralization and elitism. Elitism has been nurtured by the grandes écoles, which recruit the top political and economic personnel, and by the grands corps of civil servants who administer the state and the economy.
The Socialists want to change the entire formula, by several kinds of policies. They seek to reshape the state itself,in two very different ways. Most spectacular is the faith in increased state power. Here the left is much closer to De Gaulle than to Giscard, to Richelieu than to the Third Republic. Mitterrand and Mauroy (a former schoolteacher) share the Gaullist and bureaucratic idea that the state is the only representative of the public interest. Their distrust of factional interests is heightened by their dislike of capitalism, of the inequities and monopolies engendered by the free market, and of business greed in the hoarding of profits and power.
State power has been augmented by the Socialists at every level: through new attribution of power to the elected organs of local government, and, at the center, most obviously by the nationalization of five major industrial groups, the acquisition of state control in four others, the nationalization of most of the steel industry, and of thirty six banks and two major financial companies. These measures give control to the state of about one third of all French industry and more than three fourths of bank deposits and credits. Basic and technologically advanced industries are now largely in the hands of the state. The government has also prepared legislation aimed at increasing state intervention in agricultural markets.
These measures have been accompanied by a kind of voluntaristic incantation: “One can if one wants to,” in Mitterrand’s words. Hence the new government tends to confront organized interests—such as the cadres, or middlelevel managers, but also, as in mid-June 1982, the labor unions—with faits accomplis.
The other way of reshaping the state—decentralization—constitutes a sharp break with the centuries-old trend toward central control initiated by Richelieu, pursued by Louis XIV, restored by the Jacobins, perfected by Napoleon, and preserved ever since. It is even a break with various socialist schools of thought—the Marxist-Leninist, but also that of the old French Social Democrats. Decentralization is partly a return to early French socialist ideas, such as those of Proudhon; more immediately, it is a result of the infiltration into the new Socialist Party, created in 1971, of liberal ideas developed by members of the Club Jean Moulin and other political clubs of the 1960s. Some of these men later shifted to the right (such as Michel Crozier), while others, like Michel Rocard and Jacques Delors, joined the new Socialist Party.
Decentralization had previously been proposed either by reactionaries eager to preserve the power of traditional local elites from the encroachments of a modern bourgeois or popular state, or by conservative liberals such as Tocqueville, who wanted to combat the democratic state’s tendency to take over its citizens’ lives. In today’s Socialist policy, one finds a mixture of Tocquevillian ideas (i.e., the desire to combine democracy and liberalism) and aspirations to autogestion. The minister in charge of decentralization, Gaston Defferre, was the Club Jean Moulin’s candidate for the presidency in 1964.
So far, two major bills have been passed. The most recent (June), prepared by Rocard, decentralizes and thereby democratizes the planning process, calling for agreements to be negotiated among all the various planning authorities—national, regional, local, as well as those of public enterprises. The earlier Defferre bill on local government transferred the power to enforce the decisions of the elected councils of the departments, a power traditionally held by the government’s appointed representatives, the prefets—now renamed commissaires de la République—to the presidents of those councils. The bill also stated that the regions, established in 1972, would in the future elect their assemblies by universal suffrage (as Michel Crozier, among others, had been asking for many years).
The unexpected victory of the opposition in the local elections of March 1982 seemed, at first, to cool Socialist ardor for further decentralization. It would not have been the first time that a long-term reform was killed by short-term political losses. But Defferre has now prepared two new bills which would give to each level of local government new powers and a certain specialization. This bill would provide the regions with important new functions in planning and professional training, and would grant to local government units substantial new resources (block grants as well as new local taxes). It will take years for these measures to be voted and carried out. It remains to be seen whether really strong powers will be transferred to local governments. And local government will never be able to flourish if the state keeps its quasi-monopoly of expertise, or if the local executive branches and civil servants remain amateurishly recruited and trained. Still, the steps taken in one year are bigger than any in almost one hundred years.
Another fundamental policy aims at moving the social center of gravity in France away from the more privileged groups. Here the Socialists return to some of the main concerns of the governments after the liberation of France in 1944. Then, they tried to introduce more social justice (especially by setting up an extensive social security system) and to improve the relations between the working class and the rest of the society—in vain. During the last year the two efforts have been resumed, but with more emphasis on the latter than on the former.
Under the rubric of greater social justice (or redistribution), one finds mainly two bills. The first increases the rights and powers of renters against property owners; it has, predictably, raised a storm of protests among the latter. The other bill is the only attempt at tax reform so far: the creation of a tax on “big wealth.” The list of exemptions (e.g., works of art and forests) and the need to grant large deductions for productive investments have made this tax more a symbol (and an irritant for the rich) than an instrument of redistribution or an effective way of raising revenue. For both these purposes, reforming inheritance taxes would have been better—but it would have been politically far more controversial.
More interesting are the bills of Jean Auroux, the minister of labor. They do not give French workers the kind of comanagement rights enjoyed by German workers. Nevertheless, they are a major reform of the French system of industrial relations. This system is marked by considerable business authoritarianism and by collective bargaining that is altogether haphazard, highly centralized (i.e., the bargaining is mostly for a whole industry, not any specific enterprise), and—precisely because the parties so often fail to meet or to agree—frequently preempted by state legislation (which, in turn, makes it unnecessary for the parties to bargain).
The Auroux bills try to broaden the scope of collective bargaining by obliging business and labor organizations, once a year, to negotiate (but not to agree) over wage levels for an entire industry, and over actual wages and the organization of work in every factory with more than fifty employees. Disciplinary powers of the patron are curbed, greater means and powers are given to existing institutions representing the workers, which the unions control. Workers also receive a “right of direct expression” in enterprises with more than 200 employees. Despite their vagueness and loopholes on limits, these bills have been called intolerable by the leaders of the CNPF: “economic democracy,” writes one of them, “is a misnomer.”6
Yet another way of reshaping French society has consisted in an attempt at liberalizing repressive institutions and practices. Giscard had started a similar approach, but turned around sharply after the unexpected victory of the right in the legislative elections of 1978. The Socialists have abolished the death penalty, tried to improve the treatment of immigrant workers, and canceled measures restricting the universities’ autonomy. The Peyrefitte law of 1980, which reduced the leeway of judges and made for harsher criminal punishment, is also to be abolished.
The second half of the Socialists’ policy has been the fight for economic recovery. This was not just a short-term program: they realized that more was needed than quick measures aimed at curbing unemployment, that the recession was worsened by lasting weaknesses in French industry and by bad demographic trends.
The method could be called neo-Keynesian. New jobs were to be created by what is being euphemistically called “work sharing”: reducing the working hours from forty to thirty-nine (a first step toward the goal of thirty-five), setting the retirement age at sixty, promoting “solidarity contracts” with enterprises that hasten employee retirement, favoring part-time work (while protecting those who carry it out), adding a fifth week of paid holidays. Moreover, the state expects to create 90,000 new jobs in the public sector in 1982.
Above all, production was to be stimulated by two sets of measures. In the short run, the increase in wages and social security benefits last summer was meant to reflate demand. The second major step was to relance through supply. The nationalizations were presented as the best method for direct action on investment; the state also increased public investment in the construction industry. Private industry was to be encouraged to invest more, both by measures attempting to direct private savings toward productive activities (rather than gold or real estate), and by an ambitious policy of government aid to promote the reorganization of weak industries (leather, wood, textiles, machine tools) and industries in financial trouble (e.g., the chemical industries).
Such aid, and a considerable increase in public research and development funds—administered by the ambitious minister of research and technology, Jean-Pierre Chevènement, now appointed, in addition, minister of industry—were aimed at the “reconquest of the domestic market,” i.e., limiting imports not through tariff or quota protection but by making French industry, through public assistance, capable of competing with foreign goods. It was expected (although not stated at first) that America’s economic recovery would also stimulate France’s, by providing further opportunities to export, and by lowering interest rates.
After an initial success—a small increase in consumption and production—the policy has failed to reach its goals. Unemployment, which was around 1.7 million at the end of April 1981, is now over 2 million. Troubles developed—some of them similar to those that have plagued Reagan’s policies.
First, the French budget deficit has soared (as in the US, to about 3 percent of the gross domestic product). Among the causes are the increases in social benefits and in aid to industry; the subsidies to three nationalized industries with large deficits; the costs of new public employment and of unemployment compensation; and the heavy burden of indemnities to shareholders of nationalized enterprises. The method chosen for nationalization—100 percent in most cases—was the most expensive. When much of a deficit results from nonproductive expenditures, it is inflationary; and Mitterrand’s deficit has been partly financed by money creation.
Second, private investment failed to pick up. It had already declined (by about 12 percent in volume) in 1981, and it continued to fall in 1982. This is not a “political” strike by business, since the decline had begun under Barre. But it reflects the squeeze on profits: enterprises complain about the burdens imposed on them by increased social security benefits, higher wages, and the various social measures decided by the government (such as the reduction of working hours without any reduction in purchasing power). It also reflects the very high interest rates. Partly these result from US Federal Reserve policy; but partly they also reflect the stiff competition in the rather small French money market between the state, which needs to finance its deficit, and private businesses.
Third and consequently, the old and serious problem, the social security system’s deficit, has become much worse. Economic stagnation and rising unemployment increase the need to pay welfare benefits, but a welfare system that in large part depends for financing on total wages contributes both to inflation—by raising production costs—and to unemployment. Health expenditures now amount to one fourth of all social welfare expenditures; these exceed the state’s budget and represent one fourth of the gross domestic product.7 Lowering the retirement age will add 17 billion more francs to the welfare burden.
Fourth, France’s trade deficit has also worsened, disastrously. The relance of consumption led to a huge jump in imports, especially of consumer goods produced more cheaply by France’s neighbors. The French trade deficit with West Germany increased by 35 percent in 1981, and by 80 percent in the first three months of 1982; the French automobile industry has suffered most from German competition. Financing this deficit has drained France’s monetary reserves, increased French debt abroad, and weakened the franc.
Fifth, and most important, there is the issue of inflation. The Socialists point out that the rate of inflation has only increased by a little over one point (from about 12.5 percent to 14 percent). However, given the drop in the price of imported raw materials and in the volume of oil imports, and the limits imposed, early, on the prices of various services and public utilities, this is hardly a great achievement.
Above all, the drop has to be compared with the declining inflation rate of France’s trading partners. In Germany, from March 1981 to March 1982, the rate of inflation was only 5.2 percent (6.8 percent in the US). This explains why the franc had to be devalued again in mid-June. This time the government had to impose a four-month freeze on wages and prices, an end to its policy of raising the citizens’ purchasing power, and an increase in payments to the social security system (including one very important measure: civil servants and other members of professions with safe employment will now have to contribute to unemployment compensation).
The failure of the Socialist Party must be put in perspective. Barre’s program had not slowed down unemployment or lifted private investment through the attempted restoration of substantial profit margins. Unemployment has been rising faster in West Germany than in France. The Reagan and Thatcher policies have not increased jobs and production. The Socialists have been caught in a dilemma. If they carried out their program, the dangers announced by their adversaries were likely to materialize, especially in the present international environment. But what if they listened to those who told them that “work-sharing” formulas would not create many jobs, that a relance through consumption and public expenditures would raise inflation or lower private investment, that renewed growth depends on a mastery of prices, since the increase in production costs cuts down profits and brings in cheaper imported goods?8 In that case, how would their policy have differed from that of their predecessors?
This political predicament must be recognized. But clearly the government made a series of mistakes. First, despite the warnings of Jacques Delors and Michel Rocard, several illusions were favored far too long. One was the illusion of salvation through nationalization. Many of the old and new public enterprises are in serious financial trouble: Electricité de France has a debt of 120 billion francs; the state must spend 21 billion more francs in 1982 to help the steel industry (which has already cost it a fortune); the deficit of the coal industry is expected to increase. The limits put on the prices charged by public utilities worsen their deficits. The decision to oblige the nationalized banks to help finance the deficit of three newly nationalized industries reduces the credit available to the private sector.
Another related illusion is that of industrial policy. According to many Socialists, only the state can take the long-term measures and risks necessary to build up “the industries of the future.” But the long history of industrial policy under the Fifth Republic shows that civil servants are no better at making the right kinds of guesses than private entrepreneurs.9 . The very expensive contract recently signed with Algeria for the acquisition of natural gas has been widely criticized. Bad choices, inflationary measures of support to public lame ducks, and the renewed encouragement for mergers that only produce inefficient and unmanageable firms damage the competitiveness of French industry at home and abroad.
There was also the left-wing illusion that private enterprises were not so heavily burdened as to be incapable of carrying new charges and keeping prices down and having enough money left for investments. In April, Mauroy had to agree to reduce some of these charges and to delay any further reduction in working hours (but these concessions had to be paid for by a tax on the nationalized banks, and by an increase in the value added tax, which contribute to inflation).
Raymond Barre used to say that the profits of today are the investments of tomorrow; but in a period of stagnating demand, at home and abroad, investments have stagnated also. The Socialists seem to be saying that the subsidies of today, plus whatever profits may be left, are the investments of tomorrow. Unfortunately, the Socialists’ hopes went sour today.
Some of these illusions reflect a failure to make certain more fundamental economic choices. Several Socialist leaders want a national industrial policy that would make of France a new Japan—by divining what technologically advanced industries would be most profitable to specialize in and by building them up through close cooperation between the state and the private sector and with massive injections of research money. This is the dream of Jacques Attali, Mitterrand’s closest adviser. It is an outward-looking vision, focused on France’s position in the international competition, rather than on unemployment. But the Japanese did not get where they are by keeping alive declining industries; and in so far as they have preserved a “dual economy” and almost full employment, it has been by severely limiting imports.
A very different tune is being sung by other French Socialists. They refuse to believe that any sector is doomed; they want to promote industry across the board and to shore up declining businesses in order to protect jobs. This would be a Sisyphean enterprise (how would the state find enough funds?), and would encourage high-cost, uncompetitive production. Above all, it would require a divorce between France and those of its advanced partners who produce at lower costs. So far the desire to “reconquer” the domestic market has only led to crypto-protectionism in the form of public loans and contracts. But a further degradation of the trade balance and of the franc would oblige France to jump out of the European Monetary System, and would threaten the Common Market itself.
Nor has Socialist policy been too clear about the function of the nationalized enterprises within industrial policy. Will they have full entrepreneurial autonomy? Or are they meant to be state levers for public policy? The nationalization bill grants them autonomy of management, but asks them to sign long-term contracts with the state and to meet the state’s objectives, although it is not yet clear what these will be.
The basic economic choice that has not been made is between a preference for the public sector and state control, and a climate that enhances private enterprise along with the public sector. The Socialists have alternately or simultaneously proclaimed their distrust of private enterprise, and their awareness of the fact that with 60 percent of investments remaining in private hands, recovery is inconceivable without business cooperation. To be sure, one can hardly expect private entrepreneurs to be enthusiastic about sweeping nationalization, tightened credit control by the state, and income redistribution from the capitalists to the workers. But the piling up of new financial burdens on the enterprises did not help, nor did the language of some of the Socialists.
Given the failure of the past policy, and the desire not to retreat to Barre’s, what road is left open to the government? It must devise a coherent strategy to be enforced at the end of the fourmonth freeze in the early autumn. Such a strategy will, by necessity, be austere. Rocard’s warning that France’s level of social protection exceeds its resources and that the cost risks absorbing the funds needed for research, education, and industry will have to be heeded. The combined deficits of the social security and unemployment compensation systems must be reduced by some increases in contributions and a decrease in the benefits provided to those least in need. Slowing down inflation must become the chief priority (it had not been even before May 1981). This will mean controlling wages (as Mauroy is now suggesting), slowing down increases in social security, cutting imports, and slashing the deficit, to bring the interest rates down. All these measures would ease the burdens on enterprises. Reducing the deficit would entail a more rigorous industrial policy, concentrated on a limited number of industries.
But if such austerity can and should be—again in Rocard’s terms—Socialist austerity, what will be lost in (shortterm) purchasing power could be compensated by greater efforts at income redistribution (narrowing the range of salaries) and fiscal justice. This would mean shifting from highly anti-economic and unfair indirect taxes and compulsory payments to social welfare—which now amount to 42 percent of all taxes—to direct taxation—now only 17 percent. It would also mean removing some of the advantages now held by well-off farmers and real estate owners. But how the government will work out an austerity program is still not clear.
Mitterrand’s economic difficulties, however, are tied to other, more fundamental problems. The new government (like the Carter administration) has given an impression of broad confusion. Of course, the simple return of politics, after years of orderly technocracy, was enough to disturb groups that felt neglected or threatened. But there has been real messiness, not just effervescence. There have been open clashes between ministers with overlapping responsibilities, sudden policy reversals, and a bewildering prolixity of statements. The new devaluation and austerity measures announced in June immediately followed a singularly bland press conference by the president, who stated that public controls on prices and wages would come only if all negotiations with the concerned interests had failed!
This confusion has many sources. Mauroy’s capacities as an administrator do not equal his skill as a public cheerleader. The whole team, from Mitterrand down, lacks economic experience. (Jean-François Revel—another liberal disenchanted with the left—suggested that the vision Socialist schoolteachers and mayors have of the economy is that of “municipal socialism”: the state gives you a subsidy, and you create jobs with it).10 Inexperience is sometimes mixed with hostility toward those who assert that there are real economic constraints: economics, to Mitterrand, is “only a branch of the humanities”; it is fundamentally political, being the creation and cloak “of the ruling classess.”11
The new rulers have not made a clear choice on two essential, related issues. Should France be a highly productive (as well as just) industrial society, in the vanguard of the industrial revolution of biotechnologies and electronics, as Mitterrand announced to his somewhat indifferent colleagues at the Versailles summit? Or should France be more eager to preserve the values of a “pastoral society,” which the same Mitterrand had celebrated in an earlier press conference? Enthusiasm for innovation coexists uneasily with nostalgia for the past. A planned reform of commerce is likely to protect small shopkeepers from supermarkets, even more than the “loi Royer” adopted under Pompidou. And there is another uncertainty: is the goal of the left a “break with capitalism,” as many militants would like, or is it only a more just and regulated capitalism?
The deepest dilemma is also the oldest—especially for Socialists: it concerns society versus the state. The vast increase in the scope and powers of the central state creates a double risk. It can turn out to be incompatible with decentralization and democratization. Decentralization could become the victim of the need for financial austerity (the new Defferre bills promise that the overall weight of public taxation will not increase), or of the chaos that multi-level planning could inflict, especially on industrial policy. Already, the promises made—in opposition—about liberalizing radio and television have melted away: sweeping purges have affected only the public radio and TV, where a political spoils system can and does prevail.12 A new bill restricts the financial resources available to private radio stations, and puts public radio and television under a high authority modeled after the Constitutional Council, a rather irrelevant model.
The other, related danger is that of French bureaucratization invading society, substituting regulation for bargaining, legalism for experimentation, hierarchy for initiative from below. The so-called forces vives—the young, the members of voluntary associations—to whom Rocard used to appeal have not been much involved in the new Socialist design. The reduction of working hours was accomplished by legislation, not by negotiation between workers and business. An amendment to one of Auroux’s bills says that the form of the “right of expression” given in each enterprise to the workers, which was to be negotiated by the employers and the unions, would be ultimately determined by law in 1985—a decision that makes successful negotiations unlikely, since each party knows that whatever it agrees to will be changed by law anyhow.
This intrusion of a heavy-handed state could provoke vigorous resistance to reforms that disturb habits and prejudices. The CNPF’s flat rejection of the Auroux bills is an example. The great public fear of rising criminality and terrorism has led the government to replace the provision in the Peyrefitte law, granting the police broad powers to control identity papers, with one that is almost identical.
Another result is a gigantic mobilization of specialized interests, eager to protect their turf, to expand their privileges, and above all to push sacrifices onto others. This is the kind of “privatization” characteristic of French society in the late 1930s as described by Marc Bloch.13 It is almost always a reaction to the extension of the state’s claim to define the public good. And when the defenders of private interests are Socialist or Communist voters, or people whose votes are necessary to ensure a left majority, even the strong, voluntaristic Socialist state must compromise. The governing boards of the new agricultural offices will have a majority of farmers’ representatives. The minister of education has been careful not to offend the unions of primary or secondary school teachers by any rash reform proposals (and he now must be careful not to arouse the vigilant and worried champions of Catholic schools by carrying out the Socialist Party’s vague promise of an “integrated public service of education,” a promise which public-school teachers want him to keep). Auroux has, on the whole, extended the power of the unions over the workers, instead of giving the workers unfettered rights of expression and action—not only because bypassing the major unions could have encouraged the employers to foster “yellow” unions, but because two of France’s three major unions, the CGT and Force Ouvrière, would not have accepted increased workers’ rights.
And so the old vicious circle persists: centralized state action often seems the only alternative to the confrontation of hostile interests unwilling to compromise or to give up established rights. Yet such state action, decided by fiat, perpetuates the tendency of the citizens to behave as irresponsible subjects, and to turn to the state either for doles or to protest. And the state ends up being tied to every group by a formidable net of contracts, protections, and favors; it has the illusion of command, yet it is being colonized and neutralized.
A word needs to be said about continuity and about political prospects. Continuity has been remarkable in France’s ambitious nuclear energy policy (a field in which the government overrode party grumbling) and in France’s defense policy. Here the emphasis remains both on developing France’s strategic, tactical, and battlefield nuclear weapons, and on preserving France’s power of independent decision, seen as necessary to avoid the weakness of pacifism. A European defense entity is still being rejected as an unrealistic alternative to the present policy of autonomy and cooperation with France’s NATO allies.
Continuity has also been far more evident than change in foreign policy. Mitterrand’s determination to have good relations with Reagan is not so different from the friendly beginnings De Gaulle, Pompidou, and Giscard enjoyed in their dealings with Washington. It also corresponds to two traditional concerns of postwar France. The French want to maintain the military balance in Europe. They have been disturbed by the growth of the Soviets’ “Eurostrategic” arsenal—not merely the SS-20s—and they believe that the deployment of groundbased missiles capable of reaching the Soviet Union is the best way of deterring the Soviets from a conventional attack on Western Europe (i.e., prudence would require the Soviets to begin by attacking these missiles, and thus to initiate nuclear war).
They also worry about neutralism and pacifism in West Germany: Bonn’s loyalty to the Atlantic alliance (and to the European Community) is still considered essential for the security of the Continent; a partly denuclearized or neutralized Germany has always been feared as a return to the German tradition of playing East against West, and as also a major Soviet goal. Friendliness toward Washington and public firmness toward Moscow have their domestic function as well: obliging the Communist Party to choose between loyalty to the Kremlin and solidarity with a government that makes no mystery of its own loyalty to the Atlantic alliance.
The latter, however, does not prevent Mitterrand and his foreign minister, Claude Cheysson, from defending traditional Fifth Republic positions that entail serious conflicts with the US, such as denouncing the effects of American monetary or protectionist policies on the French economy, asserting the need for a dialogue and for business relations with Moscow (hence French anger at Reagan’s ban on deals for gas and oil technology with Moscow), and calling for global negotiations with developing countries. The contrast between this rhetorical position—or the willingness to preserve a relatively high level of public aid to these countries—and France’s restrictive policies on imports of goods that could compete with French ones, also persists. So do huge French arms sales abroad: France sells more arms per inhabitant than any other nation, despite Mitterrand’s erstwhile criticism of France as an arms merchant, but the arms trade provides employment, export markets (mainly in the Middle East), and 24 billion francs in 1981 for the balance of payments.
If—before the current war in Lebanon—French policy was less critical of Washington’s in the Middle East, and more appreciative of Camp David, this has been offset by Mitterrand’s moves dissociating France from Reagan’s policies toward El Salvador and Nicaragua. In the Arab-Israeli conflict, the Socialists have tried both to restore good relations with Israel and to clarify their position further by endorsing a Palestinian state—but, not so surprisingly, they seem to have succeeded only in alienating some Arab leaders, without gaining any influence on Mr. Begin. Now Israel’s invasion of Lebanon appears to have pushed French diplomacy back to its earlier tracks. In short, there have been few changes from earlier policies, and the president, like his predecessors, spends much of his time traveling abroad, with obvious relish.
Such journeys are always, in part, escapes from domestic dilemmas (remember De Gaulle’s trip to Rumania, in mid-May 1968). The political future of the Mitterrand administration is both safe and cloudy. It is safe—unlike leftwing governments in the two previous Republics—because it has time. There is no regular legislative election before 1986. Between now and then the Socialists may worry that the union of the left would no longer gain a majority of the seats under the present two-ballot, single-member district system; or they may decide to break up their alliance with the Communists (or the latter may break it on their own). The Socialists may therefore want to return to some form of proportional representation. As long as their party remains considerably stronger than either the Communists or the UDF or the RPR, such a system would allow Mitterrand to remain the master of the game, whereas the present electoral law could give control of the National Assembly to the right. The Socialists could then either resort to ad hoc coalitions, or try to “debauch” parts of the UDF—or even ally with it.14
It is nevertheless a long time to 1986. The political future, in this period, largely depends on the government’s ability to define a new policy acceptable to its own supporters and capable of bringing good economic results. The Communists are unlikely to drop out before next year’s municipal elections. But there is a remarkable division of labor between sober and respectable Communist cabinet members on the one hand, and, on the other, a more outspoken party (which has condemned the wage freeze) and, above all, an increasingly more militant and tightly controlled CGT (with a tough new leader, Henri Krasucki, and no hesitation to launch violent strikes or to object to any pause in social reforms or to any loss of purchasing power among workers). This allows—for a while—the Communists to play both sides of the street. Communist participation remains a partial insurance policy for the Socialists, but it also hinders an “agonizing reappraisal” of the government’s program. The economic margin of maneuver is limited, and draws the government to the right; the political margin is also limited, and keeps it on the left: an unpleasant predicament.
Would the need not to lose the municipal elections draw both Socialists and Communists more to the center? It is not obvious. The losses suffered by the left in the four legislative by-elections of last January and in the local elections of March came in part from the desertion of centrist voters, but in part also from the abstention of many Communists: an ambiguous warning. The defeat of March greatly demoralized the Socialists and revived the energies of the right, but its significance was probably exaggerated on both sides. It may have meant nothing more than the electorate’s prudent desire not to put all eggs in one basket while having efficient government at the center. When the right dominated the central institutions, the voters gave control of local government to the left. Now that the voters have thrown out the right in the central institutions, they have put it in control of most of the departments and half of the regions: a territorial set of checks and balances.
What confirms this interpretation is the continuing popularity of Mitterrand and of the left in public opinion polls. But the problems of Mitterrand and the tactics of the right will make the municipal elections of 1983 a kind of “third ballot” of the legislative elections of 1981. If the right should win, the Communists might well decide to leave a sinking ship and to raid a demoralized Socialist Party. The latter would be torn between militants pleading for a radical “class front” against the right, and moderates afraid of further polarization, economic decline, and international isolation. Until then, one can expect Mitterrand and Mauroy to practice deliberate ambiguity, in order to avoid losses on either their Communist flank or their centrist fringe. Hence Mitterrand’s tendency to present the new emergency measures as a mere “second lap” of a bicycle race (the first lap crossed a plain, the second goes through mountains, but the direction—victory!—remain the same).
Ambiguity fits immediate political needs. It also fits the president’s personality. A Dorothy Pickles, one of the best British observers of France, puts it in her book, “no French political personality is more elusive.” His writings, such as the two notebooks (first published in 1975 and 1978) which are now appearing in English, provide us with a few clues: self-confidence, bordering on self-infatuation (the musings on birds and rivers, oaks and willows are among the most narcissistic contemplations of nature imaginable); a fascination with strong or seductive personalities, either political or literary; a nineteenth-century enthusiasm for “morality, love, beauty, freedom, knowledge”—which explains both his sympathy for that sentimental poet and lamentable politician Lamartine, and the consistency of his admiration for Davids who defy Goliaths: Allende, or Theodorakis, or the dissidents of Eastern Europe.
Mitterrand’s laborious determination to think in class terms and to condemn the “inner logic” of capitalism does not quite fit his eclectic enthusiasms for pure literature, and his “deep instinctive awareness” of France (“there is no need for me to seek the soul of France, it lives in me”). Despite the references to Marx, we are closer to Michelet. The desire to fight for justice on behalf of the poor—of those who are deprived both of welfare and of culture: a theme he shares with Jaurès—coexists with a desire to reconcile, to unify, to pacify (Lamartine wrote a “Marseillaise” of peace …).
From his controlled confessions, from his record, and from his very few statements on internal affairs during his first year in office, only two things can safely be said. He will not betray the Socialist identity he recently gave himself, for it meant a conversion not to a specific catechism, but to a positive goal that transcended his personal ambition, and gave him, at last, a road map for a career that had veered in different directions. But he also will not easily give up the ideal of convincing (or seducing) as many Frenchmen as he can, or the intention of “taking into account the multiple realities of France,” as he wrote with reference to the public versus private school debate.
Will such ambiguity fit France’s economic imperatives? This is another matter altogether. One year has demonstrated that unemployment cannot be licked by inflationary means. But can one curb inflation without further blows to employment and production, in a country where supply must depend on internal demand (given the condition of the world economy) and on state subsidies and public orders? Can inflation be lastingly curbed in a society in which almost every group has learned to benefit from it, or at least to adjust to it? Ultimately, the success of economic policy in a nation like France depends on three factors: a favorable international environment—for one gets penalized for trying to go it alone; measures that are neither inconsistent nor contradictory nor based on wishful thinking; and a public consensus. All three conditions have been missing so far.
Even if the world economy should improve, and the technical skill of French policy makers become superb, the problem of consensus remains unsolved. It is an old one—already lamented by the philosopher Alain sixty or seventy years ago, and bitterly experienced by the Popular Front: the divorce between “formal” power, when it is in the hands of the left, and “real” socioeconomic power, controlled by conservatives. The left is trying to take “real” power away from them. Of course, they resist. Their opposition is bolstered by the mistakes of Socialist policy. As a result, another vicious circle appears: right-wing politicians, business and farm leaders, while paying lip service to the principle of alternance (democratic change of majority), deny legitimacy to a left government that “goes too far,” mismanages the economy, and increases the power of Communist unions. This, in turn, breeds paranoia and sectarianism on the left.
When each side demands the capitulation of the other—or each one feels that this is what the other one wants—democracy is in serious trouble. France has not reached that state. But there is only a short time left before it could be reached. Polls still suggest that a majority accepts sacrifices and would understand a language of candor and seriousness—as in the brief days of Pierre Mendès-France, the moral mentor of the Socialists. Would a conversion to such a vocabulary disarm the malevolent hostility of the right and dispel the romantic illusions and historical fantasies within the left? The president, in the Fifth Republic, can go directly to the people, over the heads of interest group leaders and even of his own party’s militants and clients, in order to appeal to that latent desire for the common good which De Gaulle wanted strong presidents to be able to mobilize. It is worth trying. But so far, for more narrowly political reasons, the left rulers hesitate between the language of class warfare and an increasingly hollow good cheer.
August 12, 1982
“France: The Big Change?” New York Review of Books, June 25, 1981. ↩
See Ezra Suleiman’s two books. Politics, Power and Bureaucracy in France: The Administrative Elite (Princeton University Press, 1974) and Elites in French Society: The Politics of Survival (Princeton University Press, 1978), as well as Pierre Birnbaum’s work under review. ↩
See the essay by John Keeler in The Fifth Republic at Twenty, edited by William G. Andrews and Stanley Hoffmann (SUNY Press, 1981), and Keeler’s PhD thesis, “The Politics of Official Unionism in French Agriculture: A Study of the Corporatist Bases of FNSEA Hegemony” (Harvard University, Department of Government, 1978). ↩
The Wheat and the Chaff, entry for May 12, 1974. ↩
See his books The Bureaucratic Phenomenon (University of Chicago Press, 1967), The Stalled Society (Viking, 1973), and Strategies for Change: The Future of French Society (MIT Press, 1982). ↩
Yvon Cholard in Droit Social, April 1982, p. 959. ↩
Le Monde, May 23, 1982. ↩
Cf. the articles by Jacques Méraud in Le Monde, May 27 to May 30-31, 1982. ↩
See the sober assessment by the Commission du Bilan, La France en mai 1981 (Documentation française, 1982), pp. 128 ff. ↩
La grâce de l’Etat (Grasset, Paris, 1981), pp. 100-101. ↩
The Wheat and the Chaff, entry for June 4, 1975. ↩
Le Monde reports (June 10, 1982) that 1,614 people have been hired there since May 1981. ↩
See his classic analysis, Strange Defeat: A Statement of Evidence Written in 1940 (1949). ↩
Proportional representation has its dangers as well: it would affect the power of the president, would both enhance and complicate the political role of the prime minister, and it could encourage factionalization within the Socialist Party. (See Dorothy Pickles’s Problems of Contemporary French Politics, pp. 134 ff.) ↩