Today's date:
Summer 2007

Sarkozy Has Half of What France Needs

Anthony Giddens' new book, Over to You, Mr. Brown: How Labor Can Win Again, has just been published by Polity Press. Giddens, a former director of the London School of Economics, was a key adviser to Prime Minister Tony Blair on "third way" policies.

London —Nicolas Sarkozy and his center-right party have take power in France. Tony Blair has handed the baton over to his long-term Labor Party colleague, Gordon Brown. What can we expect?

Let's start with Great Britain. New ideas are essential if the British Labor Party is effectively to counter the Conservative challenge and, even more important, rekindle enthusiasm amongst the electorate. To have a chance of a fourth term, Labor has to reinvent itself almost as thoroughly as happened in 1997.

I propose that Labor should develop what I call a "Contract With the Future." Of course, one can't literally sign a contract with the future, because the future (a) doesn't yet exist and (b) isn't an agent. What I mean by the phrase is that Labor should offer a contract to citizens to initiate a future for the country, and as far as possible the wider world, that is socially just, as well as economically and ecologically sustainable—where we do not, in effect, exploit our children.

A contract with the future, as I would see it, must involve a number of key points. Labor should at this juncture more openly rejoin the social democratic tradition. It has thus far kept its egalitarianism mostly under wraps. Why? There is no need to be coy about the need to reduce inequality. Britain is too unequal a society to compete effectively in the world marketplace. I advocate a "new egalitarianism," which is the very condition of longer-term economic growth. Policy innovation, not tax rises, should drive this program.

Major changes will have to be made in the structure of taxation to thread a concern with green issues through the whole of government fiscal policy. Brown must become Green—and, of course, he has just delivered a major speech on the subject. There should be no increase, however, in overall taxation levels. The "no" to tax rises will have to be a big "no," since the Tories will paint Brown as a tax-and-spend traditionalist.

Blairite policies in health and education should be radicalized and generalized rather than rolled back. The welfare state has been largely a middle-class monopoly. We must empower poorer groups by giving them real voice and choice. Decentralization and devolution—not themes that Brown has been conspicuously associated with in the past—should be the order of the day. Cities and regions need effective leadership in a world where global changes often impact upon them directly, rather than at the national level.

We are living through a period of the end of the welfare state, and further welfare reform is imperative. I do not mean this in the right-wing sense that welfare systems are a brake on growth. The opposite is true. The welfare state has to become a social investment state, much more than only a safety net. For instance, investment in skills is vital both for tackling poverty and for economic competitiveness. We need a more preventative and activist welfare system than in the past.

Labor should put an arm lock on the new and very extensive "well-being" agenda. Mental illness seems on the rise; it is responsible for more workdays lost than unemployment. Most chronic illnesses today are lifestyle-related. Coping with them demands lifestyle change—the adoption of healthier everyday habits. Lifestyle change is also the key to dealing with global warming.

Brown should adopt a more positive attitude toward the European Union than he has taken so far. Many of the most significant problems we face as a society today can only be effectively dealt with in the context of the EU—climate change, energy security, transnational crime, migration, worries about the Middle East and other issues. A new generation of European leaders is emerging, and Brown should seize the chance to be one of them.

Foreign policy, above all the tragedy in Iraq, has done more than anything else to undermine Labor's credibility. Brown must oversee the process of pulling the troops out of the country, a process, of course, that has already started. He has to put a distance between Britain and the current US administration without sacrificing Atlanticism altogether. Even more important, he has to think through the implications of living in a world where the influence of, and respect for, American power has shrunk.

I don't mean to underestimate the problems a Brown-led government will confront. One can see several areas of tension and difficulty. Although there will probably be some sort of leadership contest, Brown will come in as an un-elected prime minister. Over 70 percent of voters in the UK think that he should speedily call a general election. There is virtually no chance that he will do so, but such a situation could drain his legitimacy.

There could be problems maintaining order within the party. Brown will have to face down the old left, and deal with potentially fractious trade unions, just as Blair did. If Brown concedes too much to the traditionalists, he could perhaps keep the party happy, but his tenure as prime minister will be short.

We don't know how capable a leader Brown will be in dealing with such issues, but he might turn out a very good one. In my view, the Tories have made a serious mistake in deciding to depend upon spin rather than concrete policymaking in making their appeal to the public.

In his first year as prime minister, Brown should develop and put into practice a policy-rich agenda, in effect squeezing the Conservatives out once they formulate their own policies (if indeed they are able to do so). The next election might well be a close-run thing, but Labor can win again, have no doubt of it.

FRANCE | As for Sarkozy, it would be impossible to deny that the problems facing France are grave, and that they are structural—small-scale tinkering won't begin to deal with them.

France's unemployment rate is nudging 10 percent, and this figure excludes the large numbers of people who have retired and who have to be paid for by the younger generation. Public debt has built up from 20 percent of GDP in 1980 to 66 percent today.

About a quarter of people under 30 in France have never held a full-time job. No wonder the newspapers are full of stories about young people fleeing France to work abroad. There are 400,000 French expatriates living in London alone—the equivalent of one of France's large cities.

Following the "no" vote in the constitutional referendum, French influence in the EU has dipped sharply.

President Sarkozy is well aware of these issues. The problem is that his program offers only half of what France needs.

Sarkozy says that France is too resistant to change and concentrates too much upon protecting existing perks and privileges. Pointing to the fact that France is falling behind other nations in terms of economic success, he argues that the country has done too little to encourage initiative and entrepreneurial activity.

He distinguishes three main ways in which, on an economic level, the country must break with its past policies and programs.

First, it must be recognized that wealth has to be created before it can be distributed. The rigid labor laws in France discourage business start-ups and the flexibility needed to adjust to rapid technological change. A levy, for example, is imposed upon any firm that makes anyone over 45 redundant.

Second, overspending by the state must be brought down and public finances put in order.

Third, the free market should be regarded as a friend rather than an enemy whose influence is to be limited at all costs.

What's wrong with these remedies? Nothing: They are exactly what France needs. It is the other half of Sarkozy's program that is wholly inadequate. He has little interest in social justice or the limiting of inequality. Social protection will take second place.

France has massive ethnic inequalities. What was Sarkozy's response to the riots of 2005 in the minority neighborhoods? Famously, he dismissed the rioters as "scum." His mixture of free markets and hard-line law-and-order policies add up to a brittle combination indeed.

Sarkozy might well take some pages from his electoral opponent, Ségolène Royal, whose proposals focused on social protection, such as increasing the minimum wage, providing interest-free loans to young people and increasing benefits for the disabled.

A good sign of Sarkozy's possible open-mindedness are his ideas of "positive discrimination" for minorities, akin to affirmative action in the United States.

Still, the prospects for France look worrying. Economic growth and job creation are vital for the country's future. Let's hope that Sarkozy sees that these are not inconsistent with social justice, but on the contrary are the condition of pursuing it.

A final note. One result of the French election is that the German, French and British leadership (by which I mean now Gordon Brown) should be able to work well together on many things, and that could lead to a resurgence of Europe.

The German government is a coalition in which the social democrats still play some part. So it isn't simply "on the right." Brown is likely to give more attention than Sarkozy to continuing to beef up public services and reduce inequalities, as a good social democrat should. But there are certainly many issues today that don't break down easily into a left/right division—climate change, energy security, coping with crime—on which Europe can now find common ground.