Channel Reversal: Will The Free Market Leave London For Paris?
With Brexit woes dominating the UK and the fresh air of Macron's victory in France, capitalistic economics in Europe may be turned on its head.
PARIS — It was just one year ago that France was bogged down in regular demonstrations against a labor reform law and the coming presidential election looked set to offer a depressing rematch between the outgoing president, François Hollande, and his predecessor, Nicolas Sarkozy. Across the Channel, meanwhile, all was looking bullish in Britain, where the unemployment level had fallen below 5%, the conservative government's bet on austerity had just been overwhelmingly approved by voters, and the European issue was finally going to be solved with the upcoming referendum. It would all add up to a confirmation of the stunning transformation of a dying empire into a paragon of the open modern society.
Now, in a brutal twist worthy of Shakespeare's Henry VI, the two destinies look like they've been reversed. The new French head of state, Emmanuel Macron, embodies a sort of liberal revival, promising to give back businesses some flexibility and to bring France back to the center of the European and world stage. On the contrary, after the referendum results defied all predictions, the long agony of Brexit has begun for our British neighbors, draining all of the public administration's energy and exacerbating jingoism in a mad dash in search of some ghost of old England.
The contrast is particularly gripping when it comes to labor law.
The British renouncement of the single market brings back the memory of lines of trucks in Dover, waiting to pass through custom controls. Every day brings a new difficulty, from renegotiating airline travel accords to military operations to scientific research collaboration. The UK must now undo ties that had been patiently woven for 40 years and hastily weave new ones from scratch. This labor of Sisyphus risks leaving Britain sovereign but isolated, a windswept rock in the middle of the North Sea, drunk on Laphroaig and Churchill quotes.
The current contrast with France is particularly gripping when it comes to labor law. Emmanuel Macron's program is still a work-in-progress, but it's founded on a clear change in philosophy: to protect the individual rather than the job. From this, should come reforms on retirement, unemployment insurance, and professional training, aimed at creating the safety nets of the digital era. On the contrary, the British Conservatives' new agenda led by Prime Minister Theresa May is a return to pre-Thatcher social policies, reinforcing by law the rights of the "insiders," in what May claims as "the greatest expansion of workers' rights by a Conservative government."
The British free-marketers who have long dreamed of being freed from the Brussels bureaucracy will now have plenty of time to revise Economics 101 and return to Friedrich Hayek"s lesson on why isolationism always leads to state interventionism.
For nearly 20 years, the Eurostar has been dropping off the young talents of France at London's St Pancras station: corporate executives but also teachers, IT engineers, writers, entrepreneurs, artists, all frustrated by the search in their own country for the best opportunities. In return, the Eurostar would pour on France a flow of British tourists and pensioners eager to take in the sun of Provence (there's now even a direct London-Aix en Provence train). France hadn't had such a hemorrhage of intellectual and economic capital since the Huguenots.
Shuttling back and forth between the two countries myself, according to professional opportunities and family choices, I am a witness to the fact that 300,000 French citizens living in London were not attracted by the British way of life nor even by the lower capital gains tax, but by a more dynamic labor market and, often, a more tolerant social environment. It was a perfect case of institutional arbitration that would please the authors of Why Nations Fail and all of those who underline the pre-eminence of the legal framework over cultural factors in accounting for a country's success.
Suddenly, modernity seems to have crossed the Channel. I don't share the Schadenfreude displayed by those like Paris Europlace, which shamelessly rushed to try (in vain) to strip the City of London of its finance companies. I am saddened that Brexit delays the reunification of peoples, diminishes the moral and diplomatic might of Europe, and deprives the Union of an important voice against the temptation of building in Brussels a Leviathan that reproduces the bad habits of our national states.
Even if I remain certain that London's cosmopolitan appeal won't vanish overnight, I cannot help but smile at the idea of soon seeing young Oxford graduates seeking exile in the newest "startup nation" that France may become. A valid EU visa will be required.