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François Hollande and the strange resurrection of French social democracy

Globalisation killed social democracy, and the experience of the Mitterand government in France between 1981-86 was the earliest intimation of the carnage that was to come. Well, that is the accepted wisdom, anyway.

My first ever visit to France came shortly after le vichysto-résistant made it to the Palais de l’Élysée. Even though I was a political rookie at the time, I could not help but notice the enthusiasm many young people felt for the first left of centre administration the country had seen since the 1950s.

Many on the Bennite left in Britain watched with interest developments across the Channel, not least because of the appointment of a number of Parti Communiste Français members to ministerial positions.

Even more excitingly, Régis Debray, a former guerilla fighter alongside Che Guevara in Bolivia, was appointed a foreign affairs adviser.

While Britain was deeply mired in monetarist-generated recession, France increased its public spending by 27%.  There was a 10% increase in the minimum wage, while many jobs were created in the public sector. Much of what we argued against the Tories, Mitterand actually rolled out.

Sterile student union coffee bar debates about reform versus revolution suddenly seemed to take on concrete form. Here was a social democratic regime, with a nominally Marxist component well in advance of Bennism. What would be the impact on French capitalism?

The death penalty was abolished, and the repressive Gaullist state security court was scrapped. Plans to build two more nuclear power stations were dropped. An amnesty for many prison inmates was implemented.

Mitterand also embarked on a wide-ranging nationalisation programme, broadly similar to what we Bennites advocated. Thirty six banks were bought into public ownership, as well as a number of large firms in electronics, glass, chemicals and aluminium.

The trouble was, these nationalisations were divorced from workers’ control. Existing management structures were left in place, and compensation for existing owners was more than ample.

Pretty soon it was apparent that things were not going well. Inflation topped 14%, while an increase in social security contributions hit the poor and the unemployed the hardest.

Reflation in one country failed to stimulate the French economy. For the first time in its history, France imported more than it exported. Overseas borrowing surged.

So in June 1982 came a dramatic U-turn. Maintaining the strength of the Franc was suddenly a priority. Both wages and prices were frozen, taxes increased sharply, and health provision saw deep cuts. Foreign policy came back into line with the desires of Washington.

Unemployment grew tremendously, especially for the young. The right – including Jean-Marie Le Pen’s Front Nationale – began to make huge electoral strides forward. After five years of Mitterand in office, the left lost its parliamentary majority in March 1986.

The experience suggested strongly that not only was socialism in one country a non-starter, but that social democracy within the same geographical constraint was also now impossible.

Yet right now we stand before another handover of presidential office. Parti Socialiste nominee François Hollande is the clear favourite in the current contest, and with any luck will secure victory over Nicolas Sarkozy in early May.

This time round, there is no talk of a reformist transition to socialism. But what does stand out is proposed introduction of a 75% top rate of tax for those whose incomes exceed one million euros.

New Labour, of course, increased the upper rate of income tax to 50% for those earning above £150,000. But – as rightwing commentators often complain – this resulted less from ideological conviction than the desire to set a booby trap for an incoming Tory government.

The striking thing is that Hollande’s plan is widely popular. One opinion poll found 61% of voters in favour, and only 29% against.

What is significant here is that this is possibly the first time in three decades that a mainstream European political party has gone into an electoral contest on a platform of taxing the rich, and looks likely to win as a result.

Many of the arguments that we have heard on this topic in the last 30 years will be put to the test. Will we see a mass exodus of the French bourgeoisie? Will this degree of taxation – which the right will instantly brand ‘punitive’ – act as a discouragement to the private sector?

Everything will depend on Hollande’s determination to make his scheme stick. The sentiment is absolutely justified, but the historical precedents cannot fill anybody with confidence.

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