The Latest French Revolution
Public opinion greeted the election of François Mitterrand to the Presidency of the French Republic on May 10, 1981, and of a Socialist majority to the National Assembly on June 21, with a degree of skepticism that was, to say the least, curious. Neither those who voted for the Socialist party (PS) nor those who voted against it thought that it would apply its program—let alone that it would carry that program through to its clear and natural conclusion, which was to put an end to the capitalist system.
This was curious because the PS, the new Socialist party that was born in 1971 (when Mitterrand joined it and assumed leadership), is a party of doctrinaires and theoreticians who have produced an abundant literature. This literature was known to the public: it includes the official program and projects as well as a voluminous quantity of books, articles, speeches—material which, while it does not carry the weight of the documents adopted by the party congresses, comes nevertheless from highly placed leaders and represents the goals of most of the party members. Among the most explicit of these, as a matter of fact, are those of Mitterrand himself. His most recent book, Here and Now, was published in the fall of 1980, just a few months before the elections. The author was perfectly clear here, as indeed he was in the official program of his presidential candidacy, which was elaborated and published in 1981.1
As early as 1972, in the oldest of the PS’s government programs—entitled “To Change Life”—Mitterrand wrote in the preface: “While this program follows no dogma and has no official doctrine, its principal theoretical inspiration is and remains Marxism.”
It is worth noting that this statement nicely represents the bankrupt thinking of French socialism. The party congress adopts a program and immediately announces that it does not represent official doctrine; then what is it? The party congress states that there will be no dogmas, and in the next sentence makes an oath of allegiance to the most tyrannical of modern dogmas. Eight years later, in Here and Now, Mitterrand writes: “It would be strictly absurd to govern while allowing the nerve centers of our society to be occupied by the number one enemy of socialism: Big Capital.”
Thus, at a time when there are no longer any Marxists, aside from a few priests; at a time when the whole world, including some Communist nations, is rediscovering free enterprise as the lesser evil; when in Italy and in Great Britain the harm of an excessively large public sector is recognized; when Felipe Gonzalez, the leader of the Spanish Socialist party (PSOE), and his economic advisers announce that they will not demand nationalization because “no system works better than the free market” (dixit Gonzalez)—well, it is at this very moment that the French Socialist party announces that it will pursue an archaic project, a project that needs be described as “collectivist,” however much the Socialists may dislike this term. For to describe the turning over of the means of production to the state in the name of the collectivity (the general public) by any other term would require that the dictionaries be revised.
This mass of PS doctrine, so thick that it resembles a mixture of treatises on theology and novels of chivalry, is indeed dominated by Marxist thought. Its analyses and its political and economic propositions all designate capitalism—private ownership of the means of production—and the market system as the radical evils that explain all problems and all human sufferings. To be sure, all manner of ritualistic qualifications are brought to bear upon this judgment in order to save the PS from being labeled “bureaucratic” or “collectivistic,” qualities that have been discredited by the failures of Soviet-style socialism. Hence the verbal hanky-panky, a game at which French Socialists are very adept: you learn from their documents how it will be possible to carry out nationalizations without statist authoritarianism, or how to remove the most dynamic businesses from the private sector without increasing the role of the state bureaucracy.
But these are campaign-rally acrobatics. The truth is that the social-democratic current within the PS has been in the minority for ten years and it has been defeated consistently in the party’s internal debates. If the essence of social democracy is leaving economic initiative to the private sector while granting to the state the job of redistributing national income and enhancing social welfare, the French PS is not social-democratic. Criticizing the most famous model of social democracy—Sweden—Mitterrand writes: “Sweden is insufficiently socialistic, for despite an unparalleled redistribution of income among social groups, it has not struck capitalism a mortal blow, in the heart of its power: the ownership of the major means of production.”
This principled position is in conformity with the most orthodox Marxism. It has been reaffirmed thousands of times in all the writings of the French Socialist party over the past decade. To repeat an expression dear to the authors of these writings, it brings one to a “strategy of rupture” with capitalism. The aim of this position is to turn over to the public power—that is, to the political power—all, or at least most, of the opportunities for taking economic initiatives.
Nevertheless, very few people in France or anywhere else believed that the Socialists, once in office, would apply their program in a literal way. In fact, during the long years of opposition it was considered almost a sign of bad faith to quote from their most categorical texts. They became consummate artists at deriding criticisms based on references to their own writings; they drowned these in a stream of rhetoric and irony, presenting their proposed reforms as ordinary and prudent improvements for which there were many reassuring precedents. To conquer the votes of the Center without losing those of the extreme Left, they said every other day that while their lips rendered unto revolutionary socialism the ancestral devotions, their hearts yearned secretly for social democracy. Therefore, even those who had not desired their victory believed it signaled the arrival of a moderate sort of leftist reform movement.
It was, then, with stunned disbelief that partisans and opponents alike watched the new government, without losing any time, enact a whole series of laws that will transform the French economic system and will inaugurate a radical change in French society as a whole. Only a month after the National Assembly elections, the Prime Minister presented his program; its most important section asks for the largest series of nationalizations ever proposed at one time in a liberal economy. Added to the economic sectors already nationalized in the past, the new ones will give France the most extensive public sector in the non-Communist industrialized world.
It should be remembered that haste has always been prescribed as a necessary condition of social transformation. To delay change permits revolutionary enthusiasm to wane and gives the opposition time to get organized. Yet during the campaign even Mitterrand had said—every other day—that he would spread structural reforms over several years, at a slow, progressive pace. The Prime Minister, Pierre Mauroy, enjoyed a reputation as a prudent social democrat. As a result, the shock—the feeling of being overwhelmed, the sense that a change of regimes, as opposed to a mere change of government, was taking place—came all the more rudely.
In a legal sense, the expression “change of regimes” does not apply to what amounted to a replacement of the party in power. Nevertheless, François Mitterrand’s aim is not just to carry French history into a “new era,” but into an authentic renaissance. This quasi-mystical ambition has to be understood in order to see that objections based on economic realities will carry little weight with the Socialists, who come close to seeing in these realities elaborate plots organized by “Big Capital.”
Indeed, the discussion of technical economic issues interests French Socialists very little. What they are driven by is moral ambition: they want to create a new man in a new society. The president of the National Assembly that was elected in June, Louis Mermaz, one of François Mitterrand’s oldest political associates, declared before a group of journalists a few days after taking up his new post: “The Socialist deputies . . . do not necessarily believe in the eternal and intangible rules of economics. In my view, they must believe there are economic rules for capitalists and economic rules for socialists which are completely antagonistic, which is why debates on economic issues always reach a dead end. One always gets the impression that there are speakers using two different languages: Greek and Chinese. In reality, it is a question of two value systems and two entirely different kinds of economic rules.” And he added: “I believe in the phenomenon of rupture.”
While disapproving of Communist totalitarian methods, the French Socialists have a philosophy of history and an analysis of contemporary society that do not differ markedly from those held by the Communists. The ideas of the Socialists have been expressed very widely in writings that represent their deepest thinking and that are not merely verbal concessions to their electoral alliance with the Communists, as many thought for a long time. The official program of Mitterrand’s candidacy, the “110 Propositions” published in January 1981, laid out once again the unchanging foundations of these ideas. The world view that dominates here is clear: capitalism is intrinsically bad; the search for profits causes inflation and unemployment; “Big Capital”—with the multinationals at its head—is the sole cause of misery in the Third World and the children dying of hunger there. Society must be rendered moral by eliminating the profit motive.
The best example of how this thinking works in practice is the Mitterrand government’s decision to nationalize all private banks. There is no convincing economic argument for the nationalization of the private banks; this scheme rests upon the ideal, common to both Christianity and Islam in the Middle Ages, of creating a profitless financial market.
In September 1981, a member of the government suggested that what was needed was a “cultural revolution” in the banks. The French experience is original in that it offers the spectacle of a cultural revolution directed from the top in the context of an advanced industrial society—moreover, a rich society, where per-capita purchasing power is among the five or six highest in the world and where it continued to expand even after the onset of the energy crisis in 1973. Will France maintain this position? For the new rulers, that is not the issue. Mitterrand’s objective is not primarily economic. It is above all to build the good society, as he sees it—to reform man, avenge the poor, punish the rich (or at least riches). France has abandoned itself, quite legally, to a kind of lay puritanism, moderate in its first steps but extreme in its ultimate objectives. If the announced metamorphosis is carried through, France will cross the border separating market economies from those controlled, directly or indirectly, by the state.
This is the essential fact, and evidently it was no more clearly understood by most political and economic leaders, in France and elsewhere, than by most analysts and editorialists, to judge from the reassuring reception they accorded the vast program of nationalizations set forth by Mitterrand and the National Assembly as early as July 1981.
Some note that, anyway, the French state has always intervened in economic affairs, and to do so a little more or a little less will not change much. Others stress that the key factor, in a business, is whether it is well or poorly managed, not whether it is private or public: Renault, say these people, Volkswagen, Lufthansa are nationalized enterprises that are competitive. The individuals and chief executives who for a third of a century have been clients of those French banks which were nationalized in 1945 see no difference between the services of the nationalized and of the privately-held banks.
There is something to such observations. But they would be more effective if they took into account the fact that statist intervention is partly responsible for France’s late start in industrialization. They also avoid dealing with the fact that the same criteria for “profitability” are not applied to nationalized industries as to the others. But especially, and once again, they miss the essential point: what is the philosophy behind a nationalization?
A nationalization may be technical or ideological. It may be brought about by circumstances, it may be aimed at solving a specific problem, it may alter the status of a given enterprise by defining it as a public service. It does not, in any such instance, call into question the fundamental nature of the market economy of which the nationalized enterprise remains a part (as in the examples of Renault, Volkswagen, and Lufthansa). On the other side, nationalization—and all the more so a whole series of them—can be conceived as a way of attaining a political objective whose real significance is to remove economic initiative from the private sector in order to concentrate both kinds of power, economic and political, in a single decision-making center. It is beyond question that the French Socialists desire the second type of nationalization.
Moreover, their aim in the banking sector is not simply to complete the nationalization program undertaken in 1945, but to change its purpose. Above and beyond nationalizing what is still private in French banking, they want to make the previously nationalized banks function differently, for these, in their view, are excessively committed to free competition. As Le Monde‘s F. Renard has written: “The private sector, holding 13 percent of all [banking] resources and responsible for 16 percent of the economy’s credit, is, according to the Left, guilty of a mortal sin: its existence justifies the behavior of the big banks nationalized in 1945, which are thought too ‘commercial’ and in need of being ‘renationalized.’ ”
The goal is to set up a central system for the allocation of the country’s financial resources. In these circumstances, the official slogan, according to which “nationalization is not statism,” rings like word play, and its purpose is to mask the contradiction between the system being put into place and the declared commitment to economic pluralism and decentralization.
Until 1981, over 75 percent of credit was controlled by nationalized banks and state-directed savings-and-loan associations. The private banks and financial establishments were thus far from having a monopoly. They were not a public service. Their situation was sound and did not require a rescue operation by the state.
But from the perspective of the PS, the problem was that even though private banks represented a minority of the banking sector, their simple existence gave an open and competitive aspect to the French financial market. The big banks and the savings-and-loan associations competed with one another and with the private sector. The market worked.
The nationalization of what was still independent of the public sector will have the effect of radically modifying the system. It will turn over to the public authorities nearly total economic power, because to have a monopoly on savings and on the allocation of financial resources is to have the ultimate political weapon. Through its control of credit, the state will control indirectly even those firms that are still privately held. If the Socialists were not interested in transforming the banking sector into a political tool, there would be no reason for them to replace the banks’ shareholders with the state.
All the more so since the social goals of these nationalizations are no clearer than are the economic ones. As Paul Fabra wrote in Le Monde, taking over the banking sector in order to reduce inflation is the equivalent of believing in wolves who disguise themselves as grandmothers. “The argument,” said Fabra, “would have some merit only if in the past private banks had been observed to apply regulations less rigorously than the three giants nationalized in 1945. Such is not the case.”
One is forced back to the prior conclusion. Since the state already exerted sufficient control over the banking and financial sectors to oblige them to follow policies that it considered to be in the public interest, the nationalizations have no practical economic purpose. They must therefore fit into a large moral and political design.
To understand this design—since even the government’s friends in the press cannot discern the economic value of the reform of the banks—one must ponder the dread of mortal sin and the thirst for purification haunting the Socialist soul. The motives given by the Socialists, which include stimulating growth, increasing productivity, reducing unemployment, lowering inflation, and even—surely the funniest—preventing the banks from competing with the state by “creating currency,” are good at the most as rainy Sunday diversions for fairly well-informed observers of the true realities of the economic scene.
These fantasies demonstrate once again that there is no technical competence that cannot be sacrificed on the altar of faith. The new Cathars believe the banks are impure. The private banks, still under the mark of original sin, must be baptized. The nationalized banks, corrupted by contacts with pagans, must be rebaptized. After the ceremony, decked out in candid probity and white linen, the baptists and anabaptists will be worthy of receiving daily; communion.
So far as the economy in general is concerned, the new French leaders plan to embark on a new road, neither capitalist management complemented by welfare statism or social democracy, nor totalitarian socialism on the Soviet model. This is a tough experiment, even self-contradictory at first sight, since it consists of enlarging the public sector, and therefore the state’s role, while simultaneously reducing the role of the state. In effect, the French government wants to deprivatize the economy, in order to escape from “the logic of capitalism,” all the while avoiding the sandtrap of a dirigiste (directed) economy run by bureaucrats.
The Socialist party prides itself on promoting, in all its programs, both socialism and self-rule. Thus, the government had the National Assembly pass a massive series of nationalizations and simultaneously a law reversing the old French tendency toward political and administrative centralization. This is a law which can scarcely fail to please all those who, for many years, have called for the revival of local democracy in France. The growth of central power in Paris has been supported by Left and Right, monarchy and republic. Tocqueville, as is known, was struck by the vitality of local democracy in America, in contrast with the Old Continent. One must therefore give credit to a government which has had the courage to do what others only talked about doing for a century.
But how does one reconcile this decentralization with the narrowing of private economic initiative and the consequent growth of state intervention in the economy? The contradiction between the two policies is only apparent. In fact, Mitterrand’s ruling idea in both cases is to push back the power of capitalism, to suppress the “private ownership of the major means of production and exchange.” It matters little whether the powers taken from the capitalists are transferred to the central government or to various regional authorities. What matters is that they be transferred to a political power, central or local.
Complementing this transfer will be an increase in the power of unions. There would be nothing extraordinary in this, were it not for the fact that French unions represent a small minority of the workforce: between 15 and 20 percent. Thus, the union representatives will have enhanced power but they will not be speaking for the majority of their co-workers in a given enterprise: in fact, they will follow the orders of their national leadership. In the case of one major union, the CGT, the orders will be those of the Communist party.
German-style Mitbestimmung (co-determination) is not possible, nor for that matter is it desirable, when out of three unions one (the CGT) is an arm of the Communist party, and another (the syndicalist CFDT) believes that workers should take over the means of production (“self-management”). In Germany with Mitbestimmung, or again with the management-employee consultations which are the practice in Japan, it is understood that workers and management have a common interest in the success of the enterprise. But the dominant ideology, in French syndicalism as in the PS, and naturally in the Communist party, heaves this solution into the hell of “class collaboration.” The final goal of true socialism is not to share power with the owners but to eliminate them.
This is why the new government, still needing the help of management, let it be known that it would postpone the workers’ right of veto in matters of hiring and firing, a right the Socialist party program called for. In any event, this reform would affect only small- and medium-sized enterprises, since the more important ones are supposed to be placed under the direct or indirect control of the state and the unions.
In short, the French Socialist plan in its entirety is coherent. All its elements aim at placing the major levers of economic decision-making in the hands of the public authorities and the unions.
In the past ten years we have witnessed the collapse of the last illusions about the Communist world. Its totalitarian essence, incompatible with all hope of liberty and human dignity, is recognized now for what it is by an international opinion that is no longer intimidated by the terrorism of impostors; and whatever illusions one could entertain about its economic efficiency have been swept away as well. Only a handful of agents and lunatics believe that Communist systems can build viable economies. Even equality in misery is not guaranteed, since Communist societies, as is now known only too well, are among the most unequal in the world.
Still, in France and perhaps in other industrial countries (the Third World is something else again, for understandable reasons), there is a middle layer of political leaders, trade unionists, and intellectuals whose faith in “real socialism” has not been shaken by these facts. They cling to the doctrine coined by Arthur Koestler in The Yogi and the Commissar: the “doctrine of unshakable foundations.” That is, they concede the failure of the Communist model, which is progress of a sort, but they view it as a morbid accident which does not discredit the basic principle of socialism. For them, the failure of Soviet socialism and the failure of capitalism can be placed on exactly the same level, and they reject them both equally, with this difference: of the two, it is only capitalism whose failures cause them to reject it in principle, even though capitalism’s failures seem so much less serious than the calamities of socialism.
As for Mitterrand himself, it is obvious, from all he says, writes, and does, that he shares this view. He seems convinced of the intrinsic and essential superiority of socialism to capitalism; and he means socialism, not social democracy or the welfare state. Therefore, it is to be feared that, if he has to make a choice, one day, in domestic affairs, between radicalization and compromise, his choice will very likely be radicalization.
1 Since this was written, the second volume of Mitterrand's Politique has appeared in France.—Ed.