Tuesday 22 August 2017

Right and Left must respond to the surge of discontent

Emmanuel Macron won France’s presidential election and a commanding majority in parliamentary elections. Photo: Getty Images
Emmanuel Macron won France’s presidential election and a commanding majority in parliamentary elections. Photo: Getty Images
Brendan Keenan

Brendan Keenan

BREXIT, Trump and now Macron. Throw in Jeremy Corbyn as well, if you like. But of all the popular uprisings, the French one is surely the most astonishing.

The Brexit vote was a straight yes or no. The US presidential elections is a two-horse race. Mr Macron won both a multi-candidate presidential contest and then swept the parliamentary board.

It is true that Macron's landslide of seats was based on a third of the popular vote. On the other side of the Channel, Mrs May could not get a majority with 42pc. Be careful what you wish for in electoral systems; none of them can deliver everything right.

That leaves the danger of seeing revolutions where perhaps there are none. Mrs Clinton, after all, got more votes (although no-one dares tell Mr Trump). Even so, given the nature of the results - Jeremy Corbyn has to be included here - something fundamental is going on.

But what? That is the other reason why France is particularly interesting, especially for us. There has never been any Irish appetite for the kind of system instituted by Mrs Thatcher and fundamental to the USA. The French way holds much more rhetorical appeal.

Yet here are its citizens booting out the standard bearers of both Right and Left. The standards they bore were themselves significant. Ms Le Pen belongs to what might be called the political Right. But M Fillon was pretty far out on the economic right, with a pledge to axe half a million public sector jobs and cut spending by €100bn.

At the other end, while France looks fairly left-of-centre to most other EU states, Mr Mélenchon advocated something close to a completely planned economy, and one which would withdraw from the international system, including, if necessary, the euro.

France, however, elected none of them, but the unknown moderate. Mr Macron said he would cut "only" €60bn from government spending, retain wealth tax on property rather than abolishing it altogether, and reform the pension system rather than raising the retirement age from 62 to 65.

France is instructive in the search to understand what is driving the surge in discontent against the liberalised economic model and the so-called elites which devised and managed it. France was openly governed by an intellectual elite and never fully bought into the liberalisation. Yet it is seething too.

Are the French looking for more liberalisation, or less; a wider-based system of governance and administration, or just a better one? It may be that they are only looking for better results; just as in other, very different, countries. Unemployment is still around 10pc and youth unemployment a shocking 20pc. Leave aside Greece, and only Italy and Spain do worse.

The Spanish lady who works in my local deli misses the heat of home (except last weekend) but could not get that kind of casual but regular job in Spain. In other countries, such as Britain, the casualisation of so much work - zero hours, uberisation - is now a problem in its own right and will have to be moderated by regulation.

Here is the conundrum; not just for Macron's France, but for almost all the rich democracies. Change is needed on right and left. Both the traditional approaches - even when they fall short of actual ideologies - have run out of steam and credibility.

France, which did not apply even modest German-style liberalisation of labour markets, and never had German fiscal discipline, has a chance to show the way for the Club Med. It may well decide to have more labour protection than the UK or US but it cannot continue to make it impossibly difficult and expensive to employ people who want to work.

We can expect massed ranks of organised labour (massed, but nevertheless a minority of the French workforce) to violently oppose any extension of the working week or working life. It is much the same in Italy and, to a lesser extent, in Spain.

People in the FIGS (work it out yourself) can see that they are not doing as well as their northern neighbours, and they are very unhappy about it. Yet, to varying degrees, they insist on keeping, and enlarging, the very system which has let them down. Not wanting the pain required by change is understandable, but the failure to face obvious reality is not.

That is Mr Macron's challenge. The one for Mr Trump or Mrs May is more subtle but not as difficult. It is to head off the demands for trade protection and closed labour markets, while conceding that some of the consequences of globalisation and de-regulation are not acceptable.

There is a role for more labour, and perhaps product regulation; for more deliberate regional development policies and income re-distribution and, after the London fire, a recognition that outsourcing is not the same as abandoning responsibility.

That seems to be a good point on which to bring in Ireland; given that everyone knows the country is littered with firetraps but no one wants to face up to the cost of fixing them and deciding how it should be shared between builders, tenants and government. This appalling neglect was not due to outsourcing, still less austerity, but the abject failure of the public authorities to do their job in terms of regulation and oversight.

Ireland displays unique characteristics. Its politicians are too much in thrall to the interests of business lobbies, especially those which depend most on subsidies and friendly regulation, but at the same time must deal with the biggest and richest companies on the planet, whose presence is always a threat to economic stability.

On the other side, it has the most effective system of income redistribution in the EU (not that you'd ever think so) but one of the lowest proportions of people at work. The State has a bigger role in the direct provision of goods and services than in many EU states and ultimate power resides in central government to a greater degree than most.

Most troublesome of all, its public services have largely exhausted the financial resources which can be available at present or, to an even greater degree, in the future. Yet from health, to policing, to social services, they are not delivering what those resources should provide.

Mr Varadkar is onto something when he says that the future of Europe will have to be a better blend of right and left than many member states display today. The same is true of Ireland.

The trade unions have a particular question to ask themselves: do they want to follow the union model which has done so much damage in the southern states, or the one from the successful, more equal, northern ones? The answer has never been clear, but our different economic history give us time to decide.

Get it wrong, and the long-term prospect of a relatively impoverished regional economy - cities made up of the under-employed and the well-paid, but insecure employed - and the superior life prospects enjoyed by government workers could lead Ireland into the kind of crisis faced, in their different ways, by Britain, France and the USA.

Winds of change are blowing. Ireland may be less exposed to the coming storm, but only if we trim our sails carefully now.

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