Monday, November 17, 2003

France Falling – Nicolas Baverez, Part Two of Four

Three Transformations in Economics and Strategy

According to Baverez, three great transformations have affected the world, transformations to which the French government has largely been blind. These include: the economic crisis of the 1970’s that ended the thirty years of growth following World War II, the collapse of Soviet communism bringing an end to the Cold War and the globalization movement along with its attendant opponents. The effect of all these changes has largely been a decline in the predictability of the world scene, both in terms of economics and strategy. And in response, countries like the United States under Ronald Reagan and Great Britain under Thatcher reacted by transforming their nations and their governments. Key here was a move to flexibility and the ability to adapt quickly in what Baverez refers to as “real time.” While Baverez isn’t entirely supportive of some actions, he clearly understands that reforms needed to be made, that reality demanded practical political adaptations.

Not only did the US adapt, however, but in doing so, it initiated movements of liberalization and globalization. September 11 was the most striking example of a backlash against this movement, but once again, the US has responded on both the economic and strategic front. Again, Baverez sees mixed results, but what he does affirm is that the US is setting the agenda by reacting to events quickly and decisively, mobilizing “the whole of its resources together, budgetary, fiscal, monetary, industrial.” By contrast, Europe, and France particularly, has been “resigned and passive.” The United States and Britain have pushed ahead with innovative responses while Europe, under bureaucratic and corporatist models, is bogged down in inflexible structures.

Now, it is worth noting that France has pushed for changes to the EU stability pact that limits national deficits to 3% of GDP, but it has done so by largely offending the rest of Europe. With a deficit reaching 4%, France simply told Europe that it would not be constrained by commonly accepted rules, contrary to Germany and Portugal which have attempted to control their deficits. Among its European neighbors, France appears both arrogant and entirely self-concerned. Moreover, France’s economic problems seem to have as much to do with its own failure to modernize its fiscal and monetary policies. As such, the rest of Europe isn’t particularly prone to revising its agreed rules in order to adapt to the failures of French economic policy. And in this regard, other European nations are well ahead of France. In an effort to deal with a declining population, the Netherlands has promoted private, rather than government-funded pensions. Spain has implemented numerous reforms aimed at promoting entrepreneurship and now is one of Europe’s leaders in small business activity. Denmark is pushing tax and monetary reforms in an effort to update its social-democratic model, resulting in a strong Danish economy. Italy’s Berlusconi has championed significant reforms to that country’s pension system in order to deal with its rapidly aging population. Even Gerhard Schroeder’s government is attempting to make changes to bring that country out of its current economic mess. France, by contrast, trails behind, with rather pathetic attempts at reform often sabotaged by national strikes directed by powerful unions.

On this point, Baverez provides a wealth of statistics highlighting France’s decline on the economic front. A decrease in the hourly work week coincides with a growth in the number of government employees. Levels of unemployment hover around 10%. France’s share in global technological research continues to decline as researchers make their way to the US. French manufacturing gives way to service industries as an increasing rate. Corporate corruption infects French business, while total French bankruptcies exceed those of the far more populous United States.

At the same time, France’s diplomatic comportment has, according to Baverez, been less than successful. The end of the Cold War has left the world with one predominant national presence, but far from using this as an excuse to criticize the United States with the pejorative of “hyper-power” as did former French foreign minister Hubert Védrine, Baverez sees this situation as one of the international facts to which the world must adapt. In this regard, we can say there is a unilateralism to the extent that the rest of the world must respond to the overwhelming power of the US. However, this is not an occasion for moralistic lecturing. Rather, thoughtful analysis is needed. And once again, the French ruling class has failed. While Baverez is not full of praise for current American foreign policy, he notes that the French response during the Iraq crisis was a foreign relations fiasco, one moreover, than ran against the democratic values of France herself.

Responses to American predominance fall generally into three categories: close alliance with the US, a degree of neutrality or outright hostility. Britain and Australia, as Anglo-Saxon democracies tended to choose alliance, as did nations with a memory of tyranny such as Poland. Other European democracies, along with many democracies worldwide tended to neutrality or military non-engagement while often expressing a degree of moral or strategic support for the US. Here we can think of Spain. Few western democracies went to the extremes of France. And here we see one of the most striking failures of French foreign policy. Unable to adapt to the new givens of international relations, France settled for the status quo in the Middle East, as well as in Africa.

Whatever the effect of the war in Iraq, it is clear that American foreign policy in the region, and not only toward Iraq, is undergoing fundamental change in response to new facts on the ground. By contrast, France seeks only to maintain the status quo from a past that no longer exists. As evidence here, Baverez points to Chirac’s democratic rhetoric belied by France’s ever-deepening ties with the corrupt and highly undemocratic Algerian regime, along with the welcome given by Chirac to Zimbabwe’s Mugabe during a visit to Paris. While the US attempts to promote democratic reform in Africa and the Middle East, France holds to a contrary policy of speaking endlessly about solidarity and a more benevolent form of globalization all the while propping up decayed old regimes completely out of step with the new international situation.

And this brings us to globalization and its critics. As Baverez points out, in what is a truly stinging criticism, France is “running counter to the world.” The new geopolitical situation, both more unpredictable and chaotic than during the Cold War, demands immediate and flexible responses. More importantly, the western democracies must act in a consolidated manner to ensure the progress of democratic institutions. On this point, Baverez is not indulging in democratic utopianism – he has no illusions about the potential for democratic reform in many parts of the world. At the same time, he affirms that the western democracies, and not the United Nations, must be at the forefront of promoting liberal democracy in a prudent manner where possible. He is critical of the United States’ actions in Iraq, though his disagreement appears more as a dispute about practical actions, rather than a fundamental and ideological opposition to the United States itself. In France’s case, however, Baverez argues that the overall approach of the French government is uniformly misguided. Rather than seeking out an independent and practically constructive position among western democracies, the Chirac government has undertaken to champion the cause of anti-globalization while giving tacit support to the most antiquated and foolish ideologies once spouted by third world tyrants. In the place of practical propositions, France offers up abstractions full of pointless speech about multilateralism. This, of course, contradicts the facts inasmuch as most of Europe’s democracies offered their moral support to the United States and Britain during the Iraq crisis, and not to the Franco-German coupling.

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