Macron–Le Pen: A Lesson for Supporters of the Transatlantic Relationship

Editor’s Note: Bruno Selun (Twitter: @bselun) is a 2017 Marshall Memorial Fellow. Together with 21 other fellows from Europe, he is currently exploring transatlantic issues of open societies and social justice in Washington, DC, Pittsburgh, Spanish Fork (Utah), Los Angeles, and New York City.

This Sunday, Emmanuel Macron (who completed his Marshall Memorial Fellowship in 2006) will face off with Marine Le Pen in a crucial election for France, Europe, and the transatlantic relationship. French voters will pick between two opposing visions: Macron’s pro-reform, pro-Europe, and globalist liberal agenda, or Le Pen’s nationalist, protectionist, and racist far-right program.

A Familiar Scenario

Polls show Macron remains ahead, but do not expect relief before Sunday. A week after the first round, support for Macron had shrunk by five points down to 59 percent. As many as 18 percent of those certain or almost certain to vote on May 7 remain undecided, and two thirds of far-left candidate Jean-Luc Mélenchon’s activists have said they will either cast a blank ballot, or will not vote.­­

An anti-elite (though elite herself) right-wing populist buoyed by underserved working class and rural populations? A mainstream center-left ‘technocrat’ speaking to the middle class and urbanites? Far-left voters unwilling to support a mainstream candidate who would compromise their social justice politics? This sounds oddly familiar.

Regardless of Sunday’s outcome, supporters of the transatlantic relationship must ask themselves a serious question: If globalization, open trade, and international cooperation are so virtuous, why do our prosperous nations repeatedly see illiberal candidates rise to the top?

The Elephant in the Room

To solve this riddle we must realize there is a clear, widening gap between the macro-level story we tell — globalization and open exchanges between nations increase global prosperity — and the micro-level realities lived by the working and middle classes on both sides of the Atlantic.

Branko Milanovic, visiting presidential professor at the City University of New York and income inequality scholar, illustrates this phenomenon through a helpful elephant graph that he presented to the Marshall Memorial Fellows in Washington, DC.

Source: Branko Milanovic

The global economy and most national economies have now recovered from the 2007–08 shocks and the instability that followed. But it is a different story for the working and middle classes of rich Organization for Economic Co-operation and Development (OECD) countries (those in the 75th–90th percentiles of global wealth, the elephant’s “trump”). For them, income stagnated or decreased relative to global trends.

This trump pinpoints the lower-paid jobs, job losses, economic declassing, and stagnating purchasing power of those in formerly prosperous industries such as steel or coal work, manufacturing, or jobs now automated. It is a trend that will likely continue as automation increases, creative destruction replaces old industries with newer sectors, and wealth accumulates at the top while failing to trickle down.

As Columbia University professor and Nobel Prize winner Joseph E. Stiglitz argued this week, those losing their job and purchasing power to globalization have every reason to elect a Donald Trump or a Marine Le Pen vowing to turn back the clock, however falsely.

Making up for Globalization’s Harms

This election is a harsh wake-up call to supporters of a transatlantic relationship built on open trade and cooperation. If this relationship is to remain, we must deploy greater efforts to mitigate the harms of globalization. Three policy options could be part of a solution.

1.  Encourage and bolster economic transformation. In Pennsylvania, the city of Pittsburgh successfully transformed itself from the Steel City, a glowing industrial and commercial epicenter of 19th and 20th century America, into a local hub for 21st century industries such as robotics, technology, and advanced medicine. It is a prime example of all levels of government, business, and academia jointly fostering innovation and future economic hubs around growing industries.
2. Support markets and individuals transitioning to new industries. A 2017 working paper by the OECD suggests three policy responses that can help cope with industry-wide transformations: active labor market policies (employment services, training, employment subsidies); structural reforms to increase labor demand (for example lowering the cost of labor, or improving the effectiveness of public spending to boost jobs); and increased regional mobility for workers. And no support is complete without serious investment in education. (In Utah, a state we visited, income tax is earmarked for public education.)
3. Ensure everyone can live with dignity. It is paramount that those negatively affected by economic shifts keep both their material and moral dignity. Materially, robust welfare systems must guarantee living conditions — housing, health, transport — that do not equate loss of employment with loss of worth. And morally, those who are not employed must be able to meaningfully contribute to society. It will not be possible to keep most adults employed through the coming decades: 47 percent of U.S. jobs are at risk of automation (57 percent across OECD countries). We must rethink societies that currently revolve around paid work. Again, Utah ranks as among the states with the highest volunteering rates in the United States (two out of five residents volunteer). The sooner we find other ways to contribute to society outside of paid work, the better.

The far right is at the doorstep of executive power, and French voters may well let them in on Sunday. If we are lucky to escape this nightmare, let us help those who lost livelihoods to globalization. Let this be the start of a better liberal agenda on both sides of the Atlantic.