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Macron Wins Mandate, to Lead France Onward to Economic Oblivion

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French President elect Emmanuel Macron and his wife Brigitte Trogneux celebrate on the stage May 7, 2017 at his victory rally near the Louvre in Paris, France.
French President elect Emmanuel Macron and his wife Brigitte Trogneux celebrate on the stage May 7, 2017 at his victory rally near the Louvre in Paris, France. Credit: Reuters

Emmanuel Macron didn't win big. True, he garnered two-thirds of the vote, which was more than the polls said he would get, but that's because by and large, the voters were given a binary choice of one candidate they don't like, or another they fear and loathe.

Given a real choice, as they were in the first round of the election, just over a fifth showed a preference for Macron and the free-ish market economics and globalism he stands for.

In the second round, more than a third of voters didn’t vote at all, or chose to mark the ballots blank or nullify them.

Macron is being cheered the day after the vote as the savior of the European Union and the man who has seen down the populist threat menacing Europe. But as the numbers suggest, that is something of a misreading.

Unromantic in Paris

Macron’s economic agenda is decidedly pro-business. He calls for less red tape, a smaller public sector and paring back France’s elaborate social protections slightly. But don’t think the French bought it.

First of all, 34.5% of the electorate voted for Marine Le Pen. Many didn’t vote at all, and plenty of Macron voters held their nose while marking the ballot.

The French may be more or less pro-Europe, but they have never developed the fondness for capitalism and the heroic entrepreneur as Americans have. They are helplessly in love with government intervention in business and are loathe to take pruning shears to the France's giant public sector.

Virtually every effort at reform in this direction under Macron’s two predecessors at the Elysee Palace -- Nicolas Sarkozy and the hapless Francois Hollande -- met fearsome opposition on both the right and the left, from the establishment and from the street.

It's not that France's politicians aren't delivering on the reform the county needs to spur growth. It's the French people who are blocking them.

The French disease

No one doubts the France needs to do something. Economic growth has been glacial and France's recovery from the 2008 financial crisis has lagged behind other top economies by a wide margin.

Unemployment is over 10%, double the rate in the U.S., Germany and Britain. More than 40% of jobless French are long-term unemployed. Nearly 87% of all new hiring was for temporary jobs, often for less than a month.

Even France’s vaunted high levels of productivity are a symptom of economic malaise: businesses prefer to buy machinery instead of hiring people.

The typical Frenchman sees these problems as the consequence of globalization, a corrupt and self-serving elite and piggish capitalism, all of which must be solved with the hit with a stick and never with the offer of a carrot. Le Pen, for instance, wanted to lower the retirement age and called France’s social policies “patriotic models” she would preserve. Melenchon proposed taxing robots

We saw the emergence of very strong anti-capitalist forces,” Gaspard Koenig, the director of the French think tank Generation Libre, told The New York Times this week about the elections. “You have 50%  of the electorate that reject the market economy in a very radical way.”

In fact, France’s problem is exactly the opposite of the conventional diagnosis.

Businesses are far too enmeshed in rules and regulations to ride roughshod over workers. The rules make it difficult to fire people, so they avoid hiring them.

Taxes imposed on labor are close to 50%, among the highest in the developed world. They have to be, to pay for France’s enormous public sector, which accounts for a bigger share of the economy than the Scandinavian welfare states. Investment levels are even lower than before the financial crisis.

All these show that the preferred solution of the great majority of France's right and left, which is more rules and greater benefits, is the problem.

Mandate: To muddle along

France – and again we're talking about the mass of people, not an effete and disconnected elite – don't want to wake up to the reality of the global economy where  Europe and North America have lost their 20th-century monopoly over industry and have to compete with countries like China and India.

The election thus gives Macron a mandate to muddle through, just like his predecessors, and watch France's economy continue to deteriorate.

His immediate problem is trying to rustle up a parliamentary majority when voters go back to the polls for a third time to choose lawmakers next month. But his En Marche party is a year old and it's highly unlikely it will enjoy the same success he did alone in the presidential election.

But Macron’s real problem is that French don’t want change. In the word of Le Pogo, "Nous avons rencontré l'ennemi et l'ennemi c'est nous.”