Let’s say it straight away: Macron is in the wrong era and is wasting our time. He is applying recipes that are completely unsuited to the world of the 2020s, as if he had remained intellectually stuck in the era of the market euphoria of the 1990s and early 2000s, the world before the 2008 crisis, Covid and Ukraine. Yet the current context is one of rising inequality, hyper-prosperity of wealth and the climate and energy crisis. The urgent need is for investment in education and health and the establishment of a fairer economic system, in France and in Europe, and even more so on an international scale. But the government continues to pursue an anti-social policy from another age.
On pensions, Macron had tried in 2019 to promote the idea of a ‘universal’ pension, with a unification of the rules between the schemes, which are indeed too complex. The problem is that he was supporting a very unequal universal pension, which roughly speaking perpetuates the abysmal inequalities of working life until death. Many other universal pensions are possible, with an emphasis on small and medium pensions, with a replacement rate varying with the level of salary, all financed by a progressive levy on income and wealth (with for example the introduction of a 2% CSG rate on the 500 largest fortunes, which alone would bring in 20 billion euros).
Today Macron is no longer even trying to pretend and play the moderniser of the social state: the 2023 pension reform simply aims to raise money, without any objective of universality or simplification. It is even the most opaque of the parametric reforms that one could have imagined. The new rules on long careers are totally muddled. The so-called measure on small pensions at 1,200 euros will in the end concern less than 3% of pensioners, and it will have taken the government a year to arrive at this still very approximate figure, even though it has the entire state apparatus at its disposal and spends billions on consultancy firms. The reality, which it is now impossible to hide, is that the efforts will fall mainly on low and middle paid women, who will have to work two years longer in difficult and poorly paid jobs, when they are still in employment.
Beyond these injustices and all the time wasted on pensions, the social and economic mess of the Macron presidency is found in other areas. If we look at the evolution of higher education resources, we see that the budget per student has decreased by 15% in France over the last ten years. Rather than rehashing McKinsey powerpoints on the start-up nation, the government would be well advised to meditate on the basic lesson of all economic history, namely that it is investment in training that is the source of prosperity.
In general, the construction of the welfare state was a huge historical success in the 20th century, and this achievement must be built upon. It is thanks to a powerful movement of investment in education, health and public infrastructure that we have achieved both greater equality and prosperity than ever before in history. Public resources mobilised in education have increased tenfold, from 0.5% of national income in Western countries before 1914 to around 5-6% since the 1980s-1990s.
In the middle of the 20th century, the United States was by far the world’s educational leader (with 80% of an age group in long secondary education by 1950, compared with 20-30% in France or the United Kingdom at the same time), and this is why it was also the economic leader. All of this was done with inequalities strongly compressed, thanks to tax progressivity: the top income tax rate reached 81% on average across the Atlantic from 1930 to 1980. Clearly, this has not harmed the exceptional productivity of the world’s leading economy, quite the contrary.
The great lesson of history is that prosperity comes from equality and education, not from chasing inequality. Reasonable income disparities can be justified (say, one to five), but stratospheric inequalities serve no public good. This lesson has been forgotten, and social and educational investment has stagnated for 30 years, while student numbers have increased. We need look no further for the reasons for the stagnation of productivity.
By weakening the social state instead of expanding it, the government is weakening the country and its place in the world. It also misses a historical turning point, which is the transition from the social-national state to the social-global (or social-federal) state. In the 20th century, the social state developed primarily within the national framework, sometimes superbly forgetting North-South inequalities. This is all the more problematic because Western enrichment could never have taken place without a very strong international integration and without the often brutal exploitation of the natural and human resources available on a global scale. It is no longer possible to ignore the consequences of the environmental damage caused by the enrichment of the North (including of course Russia and China). The social-global state must be based on an overhaul of the global economic and fiscal system, with the richest global players (multinationals, billionaires) being taxed for the benefit of all. This is the way to revive the social state in the North as well as in the South and to get out of the current contradictions.