Who are the ‘Gilets Jaunes’ protestors?
Adam Bartha // 20 December 2018
The French ‘Gilets Jaunes’ started their protests a month ago and since then the global media landscape has interpreted their actions and demands in a million ways. News outlets representing all political angles have found something that they can love or hate about the protests. Macron became the punching bag of conservatives and socialists alike. But to what extent is his government really to blame for the current situation?
Macron has been widely criticised for being out of touch and arrogant towards his citizens. Indeed, the high expectations when he was elected in 2017 pre-set him on a course of quick disappointment. When Macron was elected, newspapers were quick to crown him as the new liberal leader of the free world. The Economist featured Macron in the spotlight, with Merkel weakened in his shadows, the Financial Times proclaimed Macron’s start-up nation as an ‘inspiring vision’ and headlines demanding a ‘New British Macron’ were all over the news in the months following his election. But the President’s honeymoon period quickly came to an end.
French presidents are the closest thing to modern-day, de-facto monarchs in liberal democracies. Under France’s constitutional system, presidents have more significant executive powers than even American presidents, along with a far more representative, nation-unifying role than that of a British Prime Minister. Therefore, upon their election, the huge expectations from the media and the electorate are bound to disappoint. The quick fall in popularity of presidents is the rule, not the exception.
The problems of France are much more deeply rooted than what can be resolved with quick, painless fixes by any president. The French administrative system is strongly overcentralised, the local and regional autonomy is strictly limited. Strict labour laws and excessive regulations make the workforce uncompetitive and inflexible. Despite having one of the highest marginal tax rates in Europe, the French government is constantly running a budget deficit and has been doing so for over 30 years.
It is understandable, why the frustration of the population reached a critical point and turned the anger of the citizens into flaming cars and smashed windows throughout the country. However, putting aside the often pointless destruction by the protestors, their demands are equally unreasonable and would make the economic and social conundrums of the country even worse.
Conservatives in the US were the first to cheer on the protestors, as many saw their demands against an additional environmental tax as a typical anti-tax cause to support. Donald Trump went as far as announcing that the protestors reaffirm what he was saying all along; that the Paris Climate Agreement should be scrapped. Another demand of the protestors was to introduce a constitutional cap on taxes, limited to 25% of GDP – at the moment it is almost double. Such demands might appeal to conservatives and free-market supporters, but many other points outlined by the protestors would lead in the opposite direction.
They would increase the basic pensions and social welfare by 40%, vastly expand the already bloated public sector of the country, and cancel debts that are considered ‘unfair’. They would also push for the re-nationalisation of certain industries, clamp down on tax evasion of ‘the ultra-rich’ and stop ‘planned obsolescence’ by multinationals. These are points that far-left groups can certainly endorse, hence why the protests have received praise from leftist media outlets as well.
The cheers (and critiques) from certain parts of the left and right might be surprising on the first sight, they are part of a larger trend of political realignment. The redistribution of wealth that divided the left and right for decades is becoming less important. Instead, the voices for more globalisation and openness will find themselves against proponents of closed societies, with more government control over the individual.
In the new battle of ideas, the yellow vest protestors are certainly on the anti-globalisation, more government control side. President Macron needs to prove that he can authentically stand for the other side. In order to do that, he needs to introduce more, and further reaching liberalising reforms than his half-hearted attempts in previous years.
He needs to simplify labour market regulations, so the young have a chance to compete in a global market. He should reduce income tax rates, so people actually feel some relief from the overbearing French state whilst simultaneously reduce the size of the bureaucratic apparatus to cut the budget deficits. The direction of leaving local and regional governments more breathing room is helpful, but further moves towards a more federalist structure could improve the efficiency of French governance.
Instead of just paying lip-service to globalisation and liberalisation on the EU level, he should put his money where his mouth is; abandon plans to establish an EU-wide welfare state and other protectionist ideas like the ‘Posting of Workers Directive’. Finally, if he wants to create a start-up nation out of France and an innovation hub from Europe, he should quickly forget about sector-specific digital taxes. The President must double down on liberal reforms and stop trying balance in the middle, which clearly upset his enemies, but didn’t please his potential supporters.
The yellow vest movement is clearly a warning sign and symptomatic of dysfunctional governance. However, implementing their ideas would lead to even more chaos. Instead of appeasing them, Macron should attract support from proponents of an open, liberal, smaller French state.
EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).