Monday, 28 January 2013

Of death and taxes

Who remembers the French presidential elections? They were civilised, almost too much so. Most of the debate was either obscure or unashamedly populist, and miles removed from the needs of a country struggling with both economic crisis and social disintegration. France is in decline (who isn't?). French universities have now dropped out of most international ratings. The business climate is so bad that London alone has more than 300.000 French expats who left their country - reluctantly for the most part - to seek their luck elsewhere. The labour market is half frozen by heavy-handed laws that make hiring and firing a risky business. The rich, but also many firms,  are leaving the country to set up business elsewhere to loud protests and calls for trade protection - like in the 1930s.

What is different though is that today, France has a ruinously generous social protection system, yet it parks its low paid, unemployed and immigrants in sink estates which form grubby tide marks around  often beautiful cities: rings of low quality housing with bad services and high crime rates. Drug trafficking is a parallel social and economic order on these estates. Much of it is low level cannabis trading but it is highly organised. The police has long since withdrawn from many of these places, leaving the dealers to terrorise their own kin and the dwindling numbers of "real" French people who are still there because they can't afford housing in better areas. It is a ticking time bomb.

There are similar stories in other countries around the world, but few have the French obsession with the "Grand état", the great state, a thing full of pride and strength run by great administrators. The French are still proud of their state but doubt is seeping in as it fails to keep France in its rightful place. De Gaulle, in his memoires, writes that it is typically French to call for progress, hoping that nothing will actually change. Thus, the promises made by François Hollande (creation of tens of thousands of public sector jobs, etc) are shown up for the fantasy (and lies) that they are.
The creepy prospect that now faces Europe however - since David Cameron's speech - is that it may have to depend on a Franco-German axis in which France is trying hard not to slide down to the status of, say, Spain. Maybe it will be a German Europe after all then.

Cameron's long suicide note (not his, the British economy's) makes a fair point or two.
One is what he says about the institutional impasse in Brussels. The Commission is indeed unwieldy, with one representative for each member state. He forgets to explain however that this has enabled  his own officials and diplomats to wipe their boots on the European treaties, as they have been doing  in the discussions about the EU budget for some time. UK (and Dutch, German, Danish...) attempts at getting through political decisions by breaking the law is hardly what you'd expect from a government that wants "another Europe".

David Cameron and François Hollande's policies couldn't be more different, but Cameron too is presiding over the slide of a once stable "civitas" into a broken collection of economic and social interests, each with its special claims but with a declining stake in society as a whole. This is not surprising, since in the UK the state has for years been turning over the provision of public services to private interests. The EU, made up mostly of centre right governments, has been on the same daft   wavelength for years.
In a country like Britain this is re-creating a sort of Ancien Régime tax farmer system, whereby private individuals decide how much people are going to pay for essential goods and services, thereby generating steady private incomes for services that used to be largely supported by general taxation because they were in the public interest. We cannot do without railways, gas, higher education, etc. so choice doesn't come into it. And as people pay more and more for these third worldish services, their taxes are still going up. The decline of the middle classes in Europe is not simply traumatic for the people concerned as they see their incomes and pensions decline and prices rise. The growing gap between rich and poor in Europe (and the rest of the West) will ultimately destroy the knowledge base and the consumers that our economies depend on. 

Carel Edwards, 30 January 2013

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