Time for a reality check for the Yellow Vests

14-1-19

Dear Partners in thought,

As the Yellow Vests were on their eighth weekend and numbered 84,000, which is a decline from past weeks but still a significant number, I could not help notice the long banner that demonstrators were carrying on Saturday in Paris. It said “Devoir de Mémoire (duty of memory) – Fourmies 1899”. It referred to the time in a Northern French town when the troops fired on workers demonstrating for an eighth hour workday. Putting aside that the event took place in 1891, it shows a certain revolutionary romanticism that points to the hard if not extreme left inserting itself astutely in the movement and which might take the lead going forward. The demonstrators from now on will increasingly be hard core political extremists (with their cohorts of associated “breakers”) which extremist parties like Les Insoumis from Jean-Luc Mélanchon (or even Marine Le Pen’s National Rally) will quietly support, unofficially as violence is not good for image, however with the hope for more votes at the May European parliamentary elections.   

As discussed, while some French are better off than others as would be the case in many societies, France is hardly a slave country where people toil like Gavroche and his friends in Les Misérables in the mid-19th century. As I mentioned in earlier Interludes and The Economist, hardly a paid agent of the French government, remind readers this week in “More égalité than you might think”, France is a very redistributive country and les riches don’t give their lesser off fellow citizens brioche to assuage their eating and living concerns. 

A quick summary might be useful for all to read including the Yellow Vests:

1. France’s tax take and its level of public spending is at 57% of GDP, the highest level of any EU country.

2. Much of the public spending goes to subsidising public services from high speed trains to universities.

3. France has still excellent infrastructure, mostly free education and top health care at little direct costs to patients. 

4. In France the top 1% earners earn less before taxes than the bottom 50%, a gap that has remained stable since 1995 unlike in most developed countries especially America. 

5. According to the OECD, France is the country among developed nations that has done the most to reduce inequality, only slightly beaten by Sweden (see chart on page 24 of The Economist this week).  

6. As INSEE (the French national statistics institute) showed this week, while the top 10% earners earn 22 times more gross income than the bottom 10% that gap is reduced to six times by taxation (incidentally explaining why many top earners go working elsewhere as they also feel the taxation pinch and they can work where they want). As discussed most Yellow Vests pay no or little direct income taxation which is the case for a majority of French people today (The Economist did not mention this latter point).  

7. Real household income grew by 8% from 2007 to 2017, more than in most European countries this in spite of the last financial crisis.                

It is not possible to argue that France is an unfair country to its population, including the lesser off, this since 1945 where the State played a direct role in rebuilding a nation shattered by defeat and occupation and needing to re-find itself indeed as a cohesive nation.

While the real issue may be a breakdown in social mobility and the impact of indirect taxation (like the recent trigger fuel tax), which alter the redistribution process and need to be addressed fairly, France has treated its population well in its entirety for decades. While societal challenges should be further addressed and respectfully recognising aspects of inequality that can be improved, the French should also take a more direct and responsible approach to their lives and taking advantage of the globalised economy rather than waiting from the State to cure all its bad aspects for themselves. Salvation is also in the minds and should be a gradual cultural process, all the more as France as we know it and its vast safety net are happily here to stay.        

We can only hope that the Great National Debate launched by Emmanuel Macron will provide the forum to make progress on the issues that triggered the current unrests though extremists and their destructive agendas should no longer take the lead. The French will eventually stop them as they do when it goes too far like in May 1968. It would be a question of time.  

France has worked well so far and will continue to do so. The time is no longer about taking the Bastille. 

Warmest regards,
Serge 

PS: For those who read la belle langue, I attach the “letter to the French” (or Lettre aux Français) about the Great National Debate sent by Président Emmanuel Macron today. https://www.elysee.fr/emmanuel-macron/2019/01/13/lettre-aux-francais

Serge Desprat- 14 Jan, 2019 (Prague)

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