François Hollande has just been elected president of France: the first socialist president since François Mitterrand (1981-1995). The outcome was narrower than polls had predicted: 51.7 percent for the winner and 49.3 percent for the loser. What is important to note is that in the first round on 22 April, by adding up both extreme right and extreme left, over 30 percent of the French electorate voted for extremist candidates. (Results in elections in Greece which also occurred on May 6 were even worse in terms of gains of extremist parties.) To win in the second round, both mainstream candidates had to seduce the extremists, thereby abandoning the centre. France is clearly a fractured and confused society – reflecting a general European malaise.
While the world has changed considerably over the last two decades and the global economy has been marked by the rise of emerging economies - especially China, catapulted in a very brief period to the second biggest economy after the US, soon expected to overtake it, and the biggest trading and financial power - let us look briefly to how France stands in the global firmament.
Recent global convulsions notwithstanding, France still ranks as the world’s fifth largest economy and in the top twenty in GDP per capita terms. France is a rich country. It is also a geopolitically powerful country. It is a permanent member of the UN Security Council. It is a nuclear power state. French nationals head two of the most prominent international financial institutions – Pascal Lamy at the World Trade Organisation (WTO) and Christine Lagarde at the International Monetary Fund (IMF).
Though the French economy is smaller than Germany’s (by just under $1 trillion!), there are more French than German multinational companies in the Fortune 500. French competitiveness has decreased – and that is a problem that needs to be addressed – but France is still the fifth biggest exporting nation (after China, US, Germany and Japan). French luxury brands are highly prized - especially in China, which has become the biggest market for French luxury goods, wines and spirits. But aside from luxury, France also has highly competitive companies across virtually all sectors, from nuclear to lingerie. France is a major destination for inward foreign direct investment. It is also by quite far the world’s most popular foreign tourist destination. Most recently, Chinese tourists have been spending lavishly in the country. A Frenchman (Jean Dujardin) has just won the Oscar for Best Actor. The architect of the monumental new Beijing Opera (Paul Andreu) is also a Frenchman!
France clearly benefits really greatly from globalization. So it would be logical – indeed highly “Cartesian” – to assume that the ten candidates for the first round and the two remaining candidates for the second round would be competing like hell to determine who could best leverage and enhance France’s global position and prospects, and thereby strengthen the global market economy framework. It would indeed be totally logical. It would also be totally wrong.
What has been especially depressing in this election has been how all the candidates have competed to demonstrate that they would be most aggressive in “protecting” French citizens from globalization. And indeed, the outside world begins at the Franco-Belgian border, since Brussels has been relentlessly under attack. Some have gone further than others – for example, both the extreme right and extreme left have urged leaving the Euro and the EU. But both the mainstream candidates, Hollande and Sarkozy, took a quite stridently protectionist anti-globalisation stance.
There is a quite virulent anti-globalization/anti-capitalism psychosis in France. This is illustrated in what some caricature as the French collective “Astérix mindset”. Similar phenomena can be found, of course, elsewhere - not only in Europe, but also in the US; but it is in France that it tends to be the most vehement. Although a French economist of the early 19th century, Frédéric Bastiat, was one of the most influential leading exponents of liberalism, the concept has been rejected by mainstream political-economy thinkers in France for the last two centuries and seen across the political spectrum as an “Anglo-Saxon conspiracy”. The occasional liberal politicians, such as Raymond Barre or Alain Madelin, have had short and unsuccessful political careers. When I tell my compatriots I am a “liberal”, I am stared at as if coming out of a dark and dangerous closet.
Of course, once elected, rhetoric will have to cede to reality at least to a certain extent; many of the protectionist promises may be difficult to keep. While Hollande may have won, either candidate would have been a negative force for advancing the global agenda, especially in trade.
This is unfortunate. The world is clearly in a very fragile condition at the moment. This applies not only to state of economies and to social conditions – notably pervasive high unemployment in most of the industrialized countries and in many developing countries – but also to global governance and to global leadership. All the key global agenda items – trade, climate change, finance, immigration, food, fisheries, poverty, security, nuclear proliferation, drug, arms and people trafficking, and so on – are blocked. While it is too much to expect the French leader to be global statesmen – partly since neither Sarkozy nor Hollande speak the global language, English – it is alarming that what influence the French presidency will have – and it is not that negligible – will more likely impede than advance these global agendas.
In concluding, as a professor in a business school, I have to say that I consider French business leaders are greatly to blame. While their companies make great profits from, and succeed in global markets, with far too few exceptions they have been quite pusillanimous in speaking up in favour of a global market economy and demonstrating the benefits it brings to France and indeed the costs to France were globalization to be reversed. In France, business leadership has been, alas, an oxymoron.
(Photo © DR)
(Opinions voiced by Global Minds do not necessarily reflect the opinions of The Global Journal.)