When Emmanuel Macron, speaking to both Houses gathered in Congress at Versailles recently, dropped the C-bomb mid-way through his 90-minute address, it went down about as well as you’d expect in a country that derives its attitudes to finance from both Roman Catholicism and Marxism.
Macron said he wanted to foster “un capitalisme populaire” (a popular capitalism) “through investment by employees in their companies, with proper profit-sharing and participation.”
The next day, a respected professor of economics at Lyon University thundered that “in reality, this involves imposing a double economic and financial risk on employees, firstly because their income would fluctuate, secondly because their investments from participation and profit-sharing would become volatile”, all this “without increasing employees’ role in the management of the company.”
And that was just in Le Monde. Elsewhere, much was made of Macron’s brief banking career at Rothschild’s: Macron inherited from Nicolas Sarkozy the poisonous tag of “Président des Riches”, a convenient opposition shorthand to tar his supposedly neither Right nor Left policies as, in fact, the former.
Yet there was nothing new or provocative about his proposal.
In fact, it’s more than likely that Macron, hoping to signal to traditional Gaullists, was consciously using phrasing introduced by de Gaulle himself in one of the very first legislative orders of his brand new presidency, in January 1959. (That the crucial phrase “la participation” went largely unrecognised is a comment on the current state of French political science studies.)
A traditionalist and a Catholic, de Gaulle had long pondered ways to adapt French society to modernity: from the 1940s on, he explicitly defended the idea of individual stakeholder capitalism as a means of discouraging mass ideologies like Fascism and Nazism.
De Gaulle’s 1959 text was turned into a 1967 law making it mandatory for any French business employing more than 100 people to devise a scheme to redistribute part of their profits to their staff. It was weaker than le Général wished: by that time his popularity had dropped, and with it his mastery of the agenda.
Prime Minister Georges Pompidou, who did not much believe in the new law, rammed it through as quickly as possible, again as a Legislative Order, rather than take potentially damaging political losses from segments of both the old Right and most of the Left, who despised it for opposite reasons.
France’s statist instincts mean that infrastructure and key industries have a tradition of being commanded directly from the top. Roman roads were extended and supplemented under Charlemagne using corvée labour, and again under Louis XV and Louis XVI. Strategic industries such as glass-making or silk-weaving and printing were developed to compete with Italy’s by order of Louis XIV.
Private enterprise thrived in the 19th century largely when it provided something wished for by the Emperor, later the King, later again the Emperor, etc. Pure capitalism had a bad name from the start: the century is book-ended by Balzac on early speculation scandals (La Maison Nucingen) and Zola on the excesses of finance (L’Argent); the theme runs through most of their other works.
De Gaulle himself, concerned by the impact of the Industrial Revolution’s satanic mills on the structure of society, invoked in several speeches the 19th century chrétiens sociaux thinkers: Lamennais, Fourier, Proudhon, reproaching the modern French Socialist movement for neglecting their answers to “import Marx instead”.
La participation in France was initially meant to be based on a degree of equal cooperation between employers and employees, each partly responsible, deciding on what would nowadays be called strategic choices as well as on compensation. (Ironically, the spirit of this is better preserved in the German Mitbestimmung than in the acrimonious and pointless Kabuki performed at regular intervals between French bosses and unions).
A number of such initiatives have historically existed in the French corporate world from the first decades of the 19th century. After the Second World War, many of the Northern mining and textile family concerns practised a concerned paternalism that ranged from providing cheap housing to giving birth to what would become some of France’s largest mass retailers (to provide cheaper food and staples to workers).
Few have survived, while workers’ trust has been eroded by outsourcing and downsizing. What remains of participation proceeds is usually seen as a stingy bonus, especially compared with top brass pay packets. The trust de Gaulle wanted to foster between classes is at an all-time low.
Enter Emmanuel Macron, a technocrat and a mandarin who barely dipped a toe in the waters of merchant banking. How committed is he to popular capitalism?
There is no plan to extend the measures already existing in large outfits, and therefore there will be little impact in terms of governance and decision-sharing. Economics Professor Bernard Baudry of Lyon University, in his angry Le Monde piece, warns of a trend to altogether replace salary raises with share packages tied to market performance.
Where Macron wants to change things is for small and mid-sized companies. He wants to create a French Mittelstand, the quality exports-focused dense fabric of mid-sized and small German industrial firms who always were the backbone of the German economic miracle. (He is not the first French politician with this avowed aim.)
His PACTE Bill, presented, perhaps not coincidentally, on 18 June, will be debated in Parliament this autumn, and is expected to be passed into law in time to be enforced in 2019. Among an array of steps to cut red tape and open up new investment sources are measures expected to double the number of SME employees benefiting from company share packages: this is currently the case for only 16 per cent of people in firms with fewer than 50 staff; the goal is to hike the figure to 30 per cent.
And, well, that’s all, really. The spin-obsessed En Marche inner circle have heard the people’s verdict and it is that capitalisme populaire is, at best, not much of a vote-winner, and, at worst, an occasion to trot out the Margaret Thatcher caricatures.
Until the President’s people find a new and interesting way of selling it to the French, popular capitalism will have an uphill struggle in Macronie.