COMMENTS: Storm Warnings for Mitterrand
Carpenter, Luther
2. Luther Carpenter Two and a half years after its first bold initiatives, it is clear that the Mitterrand presidency has not taken France "beyond the welfare state." The 1984 budget, announced...
...In education, over the last 30 years, there has been a quiet, deadly battle, in which efforts to increase opportunities for ordinary people are frustrated by the lack of opportunities farther along the line—a lengthening of the line you need to stand on in order to get credentials...
...Without full employment, the welfare state works badly...
...but there is a setback...
...nonetheless, they still are one of the most favored groups in the nation...
...The total "fiscal pressure" (taxes plus social security 28 contributions) passed 45 percent of GNP for the first time...
...Conservative governments in France could not fiddle with eligibility for benefits as Reagan has done, because the bulk of these programs are not means-tested...
...IN THE ABSENCE of a social contract, slow growth, high taxation, and the silent jockeying to maintain entrenched social positions lead to a lot of frustration...
...With respect to growth, the Socialists have had a major disappointment: the industries they nationalized in 1981 have not led the economy into a new wave of growth...
...Their union reacted bitterly, calling for mass demonstrations to oust the Mauroy cabinet...
...The current budget tries to cajole business into investing more, by making a show of placing no more taxes on companies but, instead, raising employees' social security contributions...
...The austerity came from increased taxes, not from reductions in any major social benefits...
...There is a bit of unreality about this measure, because many of the benefits go right back to the working population, not to inactives, and also because social spending provides many jobs...
...Social expenditures have a momentum of their own, largely beyond the reach of any government...
...Efforts to create equality through education alone often backfire, strengthening class-segregated institutions instead of creating more equality of opportunity...
...Instead of this race between wages and inflation, the French welfare state needs something like the social contract preached by the right wing of the British Labour party or the national wage bargaining practiced in Sweden...
...Nonetheless, Mitterrand proclaimed the goal of reducing it to 42 percent by the 1986 legislative elections...
...The best way to reduce fiscal pressure would be rapid economic growth...
...One sign is the government's extremely low standing in opinion polls...
...Growth of GNP would reduce the pressure caused by a constant volume of public expenditures, and it would reduce some social expenditures (such as unemployment insurance...
...This does not mean that the strategy of using nationalizations to create investment-led growth (a kind of left supply-side economics, which the British left also shares) now has definitively failed...
...Education is an especially tangled boundary, where Socialist desires to reduce the disparities between working-class and upper-middle-class children's opportunities have angered some liberal Catholics as well as conservative elites...
...Their reaction imperils one of the basic tendencies in the French welfare state for the last 15 years...
...Wages in France went up some 9.6 percent last year and 15 percent in each of the two previous years, but in a period of slow growth, inflation took most of the gains...
...Three devaluations in two years have permitted French industry to offset the differences and continue to export...
...The Dreux election shows how important it is to get growth and keep the welfare state functioning, and what a grave situation the Mitterrand government now is in...
...The 1984 budget, announced in September 1983, shows both the durability of the welfare state and its persistent problems...
...austerity means no new social programs...
...The group that has complained the most is middle and upper management...
...even more ominously, he was invited into the opposition coalition for the second round...
...Investment in public industries fell last year at the same rate as that of private industry, despite the government's announced intention of getting public industries to invest in high technology...
...In Britain, for instance, the abolition of municipal grammar schools has given the old "public" schools a near monopoly on "quality" education, far beyond the reach of working-class children...
...The same thing has been true, to a lesser extent, of wages...
...Socialists and Communists made antiracism and the defense of human rights their slogans, happy to be fighting the election on such favorable ground...
...According to Alain Vernholes in Le Monde (September 16, 1983), "German unions negotiate yearly salary increases of 4 percent to 5 percent . . . while, in France, escalator clauses assure an automatic gain of 10 percent...
...One answer to the worker outburst of 1968 has been to let workers' incomes rise more rapidly than the incomes of the managers, so as to integrate workers into the system...
...Prime Minister Mauroy and Finance Minister Delors characterized the budget as "austere," but it is "austere" in a context light years away from American politics...
...The candidate of the National Front, running on an anti-immigrant program in a town with a large number of immigrant workers, polled some 17 percent of the votes on the first round...
...These slogans made some more sensitive figures of the opposition dissociate themselves from the National Front, but this was not enough to bring victory—in a town where the incumbent mayor had been a Socialist...
...The government still plans to spend more on health and unemployment insurances and on pensions...
...So far, there is no sign of appreciation from the employers' federation...
...Delors and Mauroy have accepted them as a basic commitment around which to plan...
...It is true that they were hit hardest by the budget, since a surtax on the income tax fell mostly on them...
...A sign that such frustration could turn ugly was the mayoral election in Dreux in September...
...Despite this commitment, President Mitterrand raised once again the question of whether there is an economic boundary to the welfare state...
...Their reaction could well intensify the fighting over other parts of the tangled boundaries between the masses and the elites...
...As a result, the French government has turned back to courting business...
...now the managers are setting a sharp limit to the degree of equality they will accept...
Vol. 31 • January 1984 • No. 1
