July 18, 2016
Will the terrorist attack in France affect the outcome of the next French presidential election? Will the average French person be swayed by the atrocity to vote for Marine Le Pen as the only candidate who will “stand up” to terrorism? My sense is that, as with Brexit, the mainstream media is misjudging the electorate. The central media position on Le Pen is that while the National Front will do well in the first round of the election – as a sort of protest vote – when push comes to shove, French people will see sense and vote for the centrist candidate.
This is precisely the logic that led the mainstream to call Brexit so wrong and indeed, led the mainstream media in the US to predict that Donald Trump was a joke and that his reality-TV assault on the Republican high ground would have petered out by last Christmas.
In France, the sense that the common man is being left behind is very real and, as in Britain, this cohort of people whose vote has always been always “assumed” by the centrist Right or centrist Left is now up for grabs. Marine Le Pen wants to grab it on a platform of making France great again, by pulling out of the euro and curbing immigration.
The establishment reacts to floating voters by patronising them and if they indicate that they may vote for a candidate such as Le Pen, they are lampooned as being racist, out of touch or backward.
However, in this article, I am going to show you the economic evidence that is driving the guy in the middle, not just in France but everywhere in the West to the extremes.
The first thing to know is that the plight of the middle in France is real.
Firstly, traditionally rich societies like France didn’t recover as quickly as other OECD countries from the 2008 crash.
France has only just brought its per-capita GDP figure back to where it was at the start of 2007, while the OECD average has grown by about as tenth. France is getting relatively poorer than the rest.
Obviously, if the country is getting relatively poorer, social services, employment opportunities and peoples’ general contentment with the status quo diminishes.
But something else is happening in France. Personal incomes in France are lagging way behind. This implies that while French corporations might be recovering (and they are some of the best-run corporations in the world), the share French workers are getting out of this recovery is falling.
As French GDP personal incomes have fallen well behind, the average French worker is seeing his/her living standards falling behind and that is how you can, possibly paradoxically, feel poor in a rich country. Madame Le Pen is benefitting from this in the polls.
Let’s examine the politics of this dilemma. What is it like to feel poor in a rich country? What does it feel like to have no stake?
An interesting and novel way of looking at European politics – the politics of mature, wealthy, deeply democratic societies – is not through the prism of left versus right, rich versus poor, urban versus rural, Christian versus Muslim, conservative versus liberal or young versus old or whatever other face-off that we like to talk about. The real divide in mature democracies like France is between Insiders and Outsiders.
The Insiders are those literally ‘on the inside’. They are the people with influence, with a voice at the table, those with a stake in the society. Insiders can either be on the left or the right. They can be traditional public sector trade unions in France who want no reform or they can be bank bosses in Italy who want a bailout. Their game plan is to gouge the state and extract as much rent as possible for their members and interests. Insiders are organised. They are part of the process of politics and their concerns are listened to by the state. In short, they have access to power and can influence the way it is deployed.
In a crisis, when growth disappears, the Insiders redefine their strategy and go into self-preservation mode. The Insiders’ main objective is to make sure their members’ interests are protected from the slowdown in growth and that they get as big a share of the dwindling income pie as possible.
Interestingly, the Insiders on the traditional Left and conservative Right join forces to pass on the costs of recession to the Outsiders. This is why you see the statist left and the corporatist right in power in France, Italy and Spain. Sure, they might speak the language of left and right, and ham up their ideological differences for the audience, but essentially, they are both in the business of preservation.
The Outsiders in contrast, are those with no one to speak up for them. They have no stake in the political process and are thus on the outside. They are the self-employed small business-person, the contract worker, the hard-working immigrant, the unemployed and, of course, the young. They are outside the tent, beyond the process and because they are not organised, their concerns are never felt. They too can be on the left and on the right. The small rural French shopkeeper could well have traditionally conservative instincts, while the twentysomething Parisian contract worker could well be liberal to her core, but they are both Outsiders. Neither has a real stake in society; neither has a voice.
What they do have is a vote – as we saw in Brexit.
Because the Outsiders are, by definition, not organised and rarely speak with one voice, in challenging times they are represented by unconventional parties who mix the rhetoric of the excluded with the tribal comfort blanket of the nation; who offer the elixir of low taxes, with the promise of economic growth; who tell them that there are easy fixes.
More than anything, these parties have identified that the mainstream, traditional parties are in cahoots, trying to maintain a status quo, which is simply serving to featherbed the Insiders.
This is fertile ground for Marine Le Pen. It is not that the vast majority of the people who vote for her are racist – they are Outsiders. They look at the aristocracy perpetuated by the grandes écoles which dominate French politics and business, or the untouchable unions such as the air traffic controllers who strike with impunity and they see Insiders who run the country.
When there is an atrocity like the horrible mass murder in Nice, people get angry and scared and look to someone who will protect them. They look to the Insiders and see more of the same. In this context, voting for an Outsider makes eminent sense.