Leftist France gloats at capitalism’s failings as free market model melts

When storied Wall Street firm Lehman Brothers Holdings Inc. fell, France looked on in disbelief as the U.S. government refused to rescue the 158-year old firm and its 25,000 employees.

Uncle Sam was pictured in a front page cartoon in Le Monde chucking a wreath at the bank’s headquarters as it sank in turbulent waters.

Then, in the financial maelstrom unleashed after Lehman’s failure, the United States and other bastions of free market capitalism changed tack, embarking on what many have called a semi-socialist path of nationalizing banks.

For many in France, the meltdown of the long despised and envied “Anglo-Saxon” capitalist model has been cause for grim satisfaction.

While fearful of the global economic downturn, French commentators in cafes, dinner parties, newspaper columns and beyond have been quietly gloating that maybe their much-criticized system of heavy government involvement in the economy isn’t so bad after all.

In the Nouvel Observateur weekly, columnist Jacques Julliard rejoiced that France was no longer hearing “diatribes” against its “archaic” system.

“Where have the (economic) liberals gone?” he asked. “Since Bush nationalized the American banking system we don’t hear from them anymore.”

That the dramatic events of the past few months have provoked such a reaction is not surprising, as opinion polls over the years show a lot of French voters are wary of capitalism. According to a 2007 survey of 18 developed and developing countries by Globescan, an international pollster, France is one of only two countries along with Turkey where a majority disapprove of the market economy.

The irony of France’s satisfaction over Wall Street’s troubles is that the French economy is very much part of the capitalist system, too. Its workers, while better protected by hiring and firing laws than in the United States or Britain, are among the world’s most productive. Some of its leading banks have been key players in cutting-edge financial markets. And in electing Nicolas Sarkozy as president in May 2007, the French put in power a reformist who vowed to make them work longer hours for more money.

But France also has long been a spiritual homeland for leftism, from the revolutionaries of 1789 to Jean-Paul Sartre and other 20th century intellectuals.

The financial meltdown has confirmed people’s doubts, says Stephane Rozes, head of French polling firm CSA.

“For 15 years French people have been hostile to economic liberalism,” he said. “In the past, it was a theoretical perception, a question of culture. Now they feel they are dealing with something real.”

Even Sarkozy, nicknamed “The American” for his admiration of the U.S. entrepreneurial spirit, is changing his tune.

Elected on promises to shake up stagnant, interventionist French traditions, he has now teamed up with British Prime Minister Gordon Brown to call for a new global economic order that will rein in the perceived excesses of the free market.


Sarkozy was in Camp David this weekend arguing the case for “a new capitalism” with U.S. President George W. Bush. He wants a rethink of tax havens, hedge and sovereign wealth funds, and the “folly” of big pay bonuses for risk-taking executives.

Sarkozy declared last month that the world of “all powerful markets which are always right” to be “finished” and he has stopped talking about freeing up mortgage lending and hiring and firing.

On Tuesday, Sarkozy suggested that EU countries should set up their own sovereign wealth funds to prevent European companies from falling into foreign hands as share prices plummet.

“I don’t want European citizens to wake up in several months and find European companies belonging to non-European capital, which bought at the share price’s lowest point,” he said.

Many of the French bankers Sarkozy wanted to woo back from lucrative jobs in London have returned to take advantage of the generous social benefits after they found themselves out of jobs.

Le Point weekly said a loophole allows the unemployed former London-based French traders to claim more than half of their salary if they work for more than one day or less than a month on their return to France. Many of them are serving fries in McDonalds, temporarily at least, according to the magazine.

The French are saying the crisis is bigger than a financial or banking problem that can be fixed with more or better regulation or with wads of taxpayer money. It’s the system itself that is broken. Just like a junkie, they say, the world has lost control and allowed its appetites to overwhelm it.

“A page is being turned,” declared Olivier Besancenot, leader of France’s Revolutionary Communist League, as printing presses churned out revolutionary leaflets one floor below his offices.

Polls place Besancenot as one of the most well-liked politicians on the left, even if people aren’t ready to vote for his radical left solution at the ballot box: a planned global economy, with stabilized prices.

Segolene Royal, the Socialist presidential candidate who lost to Sarkozy, blames Ronald Reagan for having “contaminated” Europe with his belief that big government was a problem.

“What do we see today?” she asked in a speech Oct. 15. “We see that state intervention is an essential part of the solution while unregulated markets are precisely the problem.”

That view is shared at Les Deux Magots, a cafe once associated with Sartre and his existential friends and now a respite for high-end shoppers.

“We are victims of capitalism,” said Thierry d’Olivera, 50, a lighting engineer said as he sipped his afternoon coffee. “It’s the hunt for profits, the need to get as much money as quickly as possible, the greed that has brought us here.