How Europe's left lost the working class

Economic stagnation, unemployment paves way for the right

By John Lloyd

(Reuters) — If parties of the left cannot appeal to the working class, what's their use?

The 21st century may be the one in which the umbilical link between the main left parties and organized labour is broken in favour of a politics of identity, and a grasping after some form of direct democracy that translates desires and frustrations into instant policies. Lurking over this movement is the fear of such an unsustainable politics producing authoritarian leaders, especially if the economies of the Western states worsen.

The first week of December saw two leaders of the European left — Prime Minister Matteo Renzi of Italy and President Francois Hollande of France — forced to admit defeat and to leave the political scene, their reputations and policies shredded, their parties embarrassed by their very presence.

In Italy, Renzi announced his resignation after losing a referendum on constitutional reform. In France, Hollande bowed to his nation's unchanging contempt and announced that he would not seek the presidency for a second time — an unprecedented move in post-World War Two France. He did have some success — job creation recently picked up — but he had fallen into too deep a chasm for rescue by the time a 50,000-plus increase was announced in October.

Hollande, who came in on a rhetorically leftist platform of "hating the rich" was forced to discreetly drop plans to raise their taxes to a marginal rate of 75 per cent on annual incomes of more than 1 million euro ($1,075 million). It was French actor Gerard Depardieu who called Hollande's bluff most dramatically — by moving across the border into Belgium. Depardieu remains a working class hero. The president who tried to take money from the few rich to give to the many poor has been mocked from office.

The French president's flip-flop from angry socialist to emollient centrist while the economy stagnated and unemployment rose was a terrible posture to take. He put icing on this sad cake with the revelation that he had insulted a series of friends and allies during discussions with two journalists during the period of his presidency, an act of self-indulgent narcissism only possible in one who had lost his bearings. Now, Prime Minister Manuel Valls will be the main leftist contender for the Élysée Palace, seeking to convince voters that his brand of pragmatic, growth — and business-oriented policies will woo the French away from the two present front-runners, National Front leader Marine Le Pen on the far-right and the Republican Francois Fillon on the center-right. Polls presently show Valls with little chance of surviving the first round. That may change, but he will have to claw away from his former boss's legacy.

It won't be easy.

Both Valls and Emmanuel Macron, the 38-year-old former economy minister who resigned from the Hollande cabinet in August to run as an independent presidential candidate, are strongly and openly pro-business: so, too, was Hollande, once he had dropped his leftist posture, and his attempts at labor reforms lost him much support among union members who might be tempted by the National Front's wooing of the working class vote. Valls and Macron prefer to speak of freedom rather than job security, seeing their mission as "unblocking France," as Valls has put it, releasing what they believe are the pent-up, over-regulated entrepreneurial classes.

They follow a line laid down by Bill Clinton and Tony Blair, the two most successful center-left leaders of recent times. Blair was convinced of the need to accept globalization, and of its inevitability. "The forces shaping the world," the former UK prime minister said in a 2008 speech, "are so strong and all tend in one direction. They are opening the world up."

Both Blair and Clinton believed globalization was good for the workers; as for a while it was. Ironically, the center-left strategy known as a "third way" between old style socialism and free market capitalism had most success in Germany, where it was adopted by the Social Democratic chancellor Gerhard Schroeder. Schroeder strengthened German's already formidable industrial base, though at the cost of fewer secure jobs and for some workers, lower pay.

The major European economy which was slowest to adapt to the new world of intense foreign competition has been Italy — the main reason for its present turbulence. Silvio Berlusconi, the prime minister who dominated his country's politics for 20 years, did far too little to reform an economy with islands of high tech excellence, but an ocean of small and middle sized companies unable to compete with foreign rivals.

Thus Matteo Renzi roared into office in 2014, brusquely displacing Prime Minister Enrico Letta, his comrade in the Democratic Party, saying that Italy urgently needed a radical set of policies, that there was not time for elections and parliamentary niceties and that he, Renzi, was the man, at a mere 39 and with no national governing experience, to do it. Calling himself the "rottamotore," or demolition man, he and the small group around him sought to liberalize Italy's labor laws, cut back the bureaucracy, fight corruption, reduce the power of monopolistic corporations and reduce the large privileges of ministers, members of parliament and senior officials.

It wasn't enough to get growth, but far too much for his compatriots. His autocratic, hustling style created enemies — on the right, of course, but also on the left of his own party, and in the amorphous but powerful populist Five Star Movement, co-founded by comedian Beppe Grillo and now bidding to be the next government. Renzi's critics excoriate him for arrogance, ignorance and — in the words of one professor — "brutality." Renzi's proposal to reduce the powers of the Senate — which under the present constitution has equal power with the lower house — was turned down in the Dec. 4 referendum on a high turnout of 70 per cent. Sixty percent voted "no" — a result which reduced him to tears.

For all the many mistakes both Renzi and Hollande have made, the larger point is the choice they had. Put briefly, it was between adapting to globalization, or fighting it through canceling trade partnerships, building tariff walls, reducing immigration and bullying domestic producers to bring back production from low-labor-cost countries to their home base. It is the Trump- Le Pen-far-right program.

Going global allowed the third-way leftists to enjoy real success — in the short term. But they were not magicians. Somebody had to lose in the competition against low wage, high tech economies not burdened with much democracy and with a rough way of handling strikes. The victims in this contest turned out to be Europe's indigenous, unskilled and semi-skilled workers and their families. These were the people the left was supposed to protect; in fact, the left was perceived to have done the reverse. The anti-immigrant, anti-trade, anti-free market right now finds itself the repository of the hopes of men and women who see relief in their policies.

That they are unlikely to get that relief will lead our societies into ever more stormy waters.

John Lloyd co-founded the Reuters Institute for the Study of Journalism at the University of Oxford, where he is senior research fellow. The opinions expressed here are his own.

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