The defeat of the Socialist Party (PS) in the French
National Assembly elections was worse than its most pessimistic supporters
had feared.
After a performance more abysmal even than Labour's in
Britain in the 1983 general election, the party that effectively dominated
French politics in the eighties has been reduced to a rump. The parties of
the centre-right and right now command a bigger majority than any seen in
France since the early nineteenth century.
It would be tempting for Labour to maintain a discreet
silence about this rout. The party is already far too readily associated with
failure for public discussion of what went wrong in France to be particularly
appealing for the party leadership.
But Labour must learn the lessons of its French
sister-party's debacle for one simple reason: as the Bill Clinton Presidential
campaign put it, "the economy, stupid”.
As Angus Mackinnon reports in this issue, the main cause of
the PS's disaster was economic failure. In particular, the PS presided over
ever-increasing unemployment, not least because of the franc /or* policy of
maintaining the value of the French currency against the Deutschmark.
The problem for Labour, in a nutshell, is that its economic
policy for Britain has for several years been the same as that of the PS for
France. Since the mid-eighties, when Labour, partly influenced by the PS*s 1983
economic policy U-turn, ditched the one-nation Keynesian interventionism of the
alternative economic strategy, both parties have advocated what can be best
described as "austerity social democracy”, in which mild redistribution
and "supply-side" intervention co-exists with a tough
anti-inflationary monetary and fiscal stance.
This policy mix served the PS well right up to German
unification in 1990. Subsequently, however, it proved incapable of providing
any respite from recession as high interest rates in Germany pushed up those in
all the other countries in the European exchange rate mechanism. For the two
years before this election, the PS appeared increasingly clueless about how to
turn the economy around. Now it has paid the price.
The big question for Labour is whether it would have fared
any differently if it had won a late-eighties general election -and it is
difficult to avoid the conclusion that it would not. Like the PS, Labour would
have been scuppered by German unification, its lack of a credible means of
tackling unemployment cruelly exposed.
Some argue that this shows just how wrong Labour was to
abandon the one-nation Keynesianism of the AES. But there is no reason to
expect that such an approach would rare any better today than it did when the
PS tried it in 1981-83. Infinitely more convincing are proposals for Europe-wide
counter-cyclical economic policies. Why is it that Labour has had so little to
say about them?
