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The return of the Popular Front

Summary:
Let’s say it straight away: the agreement reached by the French left-wing parties under the label of the “New Popular Union” is excellent news for French and European democracy. Those who see in it the triumph of radicalism and extremism have clearly understood nothing of the evolution of capitalism and the social and environmental challenges we have been facing for several decades. In reality, if we look at things calmly, the transformation programme proposed in 2022 is rather less ambitious than those of 1936 or 1981. Rather than give in to the prevailing conservatism, it is better to take it for what it is: a good starting point on which to build further. The programme adopted marks the return of social and fiscal justice. At a time when inflation has already begun to cut into the

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Let’s say it straight away: the agreement reached by the French left-wing parties under the label of the “New Popular Union” is excellent news for French and European democracy. Those who see in it the triumph of radicalism and extremism have clearly understood nothing of the evolution of capitalism and the social and environmental challenges we have been facing for several decades. In reality, if we look at things calmly, the transformation programme proposed in 2022 is rather less ambitious than those of 1936 or 1981. Rather than give in to the prevailing conservatism, it is better to take it for what it is: a good starting point on which to build further.

The programme adopted marks the return of social and fiscal justice. At a time when inflation has already begun to cut into the incomes and savings of the most modest, it is urgent to change course. Those who claim that whatever-it-takes-type policies will not be paid by anyone are lying to the citizens. In order to compensate the most vulnerable for the effects of inflation and to finance investments in health, education and the environment, it will be essential to ask the wealthiest to contribute.

Between 2010 and 2022, according to Challenges magazine (which cannot be suspected of leftism), the 500 largest French fortunes rose from 200 billion to nearly 1,000 billion, i.e. from 10% of GDP to nearly 50% of GDP. The increase is even greater if we widen the focus and look at the 500,000 biggest fortunes (1% of the adult population), which now exceed 3,000 billion Euros (6 million Euros per person according to the World Inequality Database), compared with barely 500 billion for the poorest 25 million (50% of the adult population, each holding 20,000 Euros on average). Choosing, in the midst of such a period of spectacular prosperity for the highest wealth and stagnation for the least prosperous, to abolish the meagre wealth tax, when it should obviously have been increased, shows a curious sense of priorities. Historians who study this period will not be kind to the Macron governments and their supporters.

The first virtue of the left-wing parties is to have overcome their conflicts in order to unite in their opposition to this drift. In addition to reinstating the ISF (Impot sur la Fortune) or wealth tax, it is proposed to transform the property tax into a progressive tax on net wealth, which would allow large tax reductions for millions of over-indebted French people from the working and middle classes. To encourage access to property, the package could eventually be completed by a minimum inheritance system for all.

The agreement reached between the “insoumis” (rebels) and the socialists also provides for the extension of wage rights to gig workers and the strengthening of the presence of employees on boards of directors. Such a system has existed since the post-war period in Sweden and Germany (with up to 50% of the seats in large companies) and has allowed a better involvement of all in long-term investment strategies.

Unfortunately, it remains embryonic in France: the right has always been hyper-hostile to it (the Gaullists sometimes pretended to favour profit-sharing, in reality a few crumbs, but without ever questioning the monopoly of shareholder power), and the left has for a long time staked everything on nationalisations (as in 1981). The current shift towards a less state-centred and more participatory approach is reminiscent of the collective agreements of 1936 and opens the way to a new paradigm. Again, in the long run, much more should be done, for example by guaranteeing 50% of the seats for employees in all companies (small and large) and by capping the voting rights of an individual shareholder in large companies at 10%.

Let’s turn to the European issue. All the « New Popular Union » parties advocate social and fiscal harmonisation in Europe and a move to majority rule. To try to pass them off as anti-European, when they are the most federalist of all, is a crude manoeuvre. Liberals who claim to be European are in fact simply using the European idea to pursue their anti-social policies. In doing so, they are the ones putting Europe at risk.

If the working classes voted massively against Europe in the referenda of 1992 and 2005, and again in the Brexit vote in 2016, it is mainly because European integration as it has been conceived so far structurally favours the most powerful and mobile economic actors, to the detriment of the most fragile. It is Europe that has led the world and the United States in the chase for ever lower taxation of multinational profits, to the point where some people are now congratulating themselves on a minimum rate of 15%, barely higher than the Irish rate of 12.5%, with, moreover, multiple circumventions, and in any case much lower than what SMEs (Small and Medium Businesses) and the middle and working classes pay. It is a lie to claim that the problem will be solved by remaining within the unanimity rule.

To put an end to fiscal, social and environmental dumping in Europe, we must both make specific social-federalist proposals to our partners and take unilateral measures to break the deadlock. For example, as the European Tax Observatory has shown, France could already impose a minimum tax rate of 25% or 30% on companies based in tax havens and selling goods and services in France.

Let us hope that the legislative campaign will be an opportunity to move beyond caricatures and make progress on these essential issues.

Thomas Piketty
Thomas Piketty (7 May 1971) is a French economist who works on wealth and income inequality. He is a professor (directeur d'études) at the École des hautes études en sciences sociales (EHESS), associate chair at the Paris School of Economics and Centennial professor at the London School of Economics new International Inequalities Institute.

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