Farewell liberalism, Hollande tries to relaunch the French economy with an ultra dirigiste plan. Can it work in a globalized world?
Hollande’s actions have promised aid to the French industry, have illuminated a spotlight on the dreariness of his presidency, have resuscitate la grandeur, and have brought up the Colbert debate again. All of this was present in a discussion at the Elysee Palace, which was accompanied by a spot on the state TV channel (obviously!). France will help the rebirth of manufacturing, it is not be destined for extinction. Just like agriculture (we are speaking about France), it’s complementary to the services sector. A developed country cannot do without smoke stacks and the value added by manufacturing; the state will help the secondary sector. It will not be a substitute, but will create a premise to enable growth and its protection. 24 strategic sectors will be empowered in an attempt to generate wealth and jobs.
The effort is noble: recuperate the value of industrial politics. Concepts that penalized the industrial sector have prevailed for too long: that the real economy was secondary to finance, factories were moved to Asia, and the belief that the market was capable of auto-regulation. Beyond the fallacy, the crisis demonstrated that these positions were irrational, and based on disequilibria justified solely by interests; the false illusion that the west could transform itself into a collage of bankers, computer techs, and soldiers vanished five years ago. China would have welcomed the greyness of the lathes and blast furnace pollution.
France has lost 750,000 industrial jobs over the last decade, and manufacturing now accounts for less than 11% of the GDP. Only some workers have been relocated. Paris’ support aims to recover positions in the most relevant sectors: defense, the mechanical sector, luxury goods, and energy; the biggest enterprises rule, those in need of government support, public procurement, and good foreign relations.
Politics returns to center stage after a long time spent in supporting roles. Before becoming influential, it’s trying to offer itself as an unavoidable enclosure within which one can operate. In a burst of dignity it’s trying to recover its role in finance and globalization, stolen by banks and multinationals. The attempt opens a debate that was never concluded. If “protectionism” is an anathema, is “dirigiste” as well? If true socialism has been consigned to history, can the state’s intervention in the economy be allowed? In times of unbridled liberalism, the answer would have been a given, an easy berth for singular thinking.
In any case, the crisis has shuffled the deck, including the analytical cards. What to call Washington’s rescue of Detroit? Or the “too big to fail” banks? What name should be given to Abenomics that are inundating Japan with money? The central government’s role in business is so blatant, that Beijing’s politics don’t need adjectives. Labeling the acquisition of sovereign funds as state intervention is not difficult either. Aren’t they also fruits of hydrocarbons from Qatar, Singapore and Norwegian petroleum?
Alarmed by a crisis that won’t subside, dear old Europe is rediscovering the advantages of politics. It cannot allow itself to be the no-longer-happy island of liberalism. France has a long tradition of statism and is the first in line for the recovery of economic politics. “Our politics are neither liberal, nor dirigiste, it follows neither the Rhenish nor Anglo-Saxon model. It is French, pragmatic,” affirms Hollande. No one doubted that Paris could learn something. The Elysee Palace summons the nation rather than Europe, a continent that stopped directing some time ago. It solicits the spirit of tradition and will probably—given the importance of the country—reach some kind of result soon: some airplane in a theater of war, a nuclear reactor sold to an energy-consuming nation, and further acquisitions of Italian businesses.
The real danger is that these measures will prolong decay, and even subordination. Globalization has extended its effects well beyond France. Moving manufacturing to the East was so intense—and widespread—that it is by now irreversible. Governments were friendly to multinationals and China was the prime beneficiary. A few years and the mercilessness of numbers will suffice to determine whether Hollande’s efforts were a courageous attempt, a burst of pride, or a desperate move. “Too little, too late,” Obama would say, who has understood for some time that some wars are difficult to fight, especially when too many advantages have been conceded to the adversary. But the leaders at the White House can reason without the weight of history: they don’t carry Colbert and The Sun King in their backpacks.