The Yellow Vests, the Crisis of the Welfare State and Socialism

Michèle Brand

Far from dying down after the holidays, France’s yellow vest movement is continuing to blaze throughout the country. Every Saturday for eleven weeks, protesters have been disrupting or blocking roads, traffic circles and freeway toll plazas, gathering in the squares of villages, taking to the streets of towns, marching in massive numbers through city boulevards, and confronting violent police repression. Ten people have died in the protests, mainly due to accidents at road blocks, and over 2000 have been injured by the police, around 100 seriously. 17 people have lost an eye due to rubber bullets, according to an independent association and an investigative journalist, while the interior minister recently said there were 4. Thousands have been arrested.

Old and young, workers, retirees, artisans, some small business owners, farmers, students, self-employed and unemployed people are converging to protest not only Macron’s gloves-off reforms in favor of capital, finance and the ultra rich, but especially their own decline in living standards. Increasingly aggressive capitalism, the dismantling of the welfare state, and deindustrialization have eroded standards of living for forty years, and have stepped up pace with the crisis of 2008 and Macron’s “neoliberal” reforms dictated by the European Union.

Yellow vested demonstrators are fed up with running out of money before the end of the month, job insecurity, rising taxes on the working class, insufficient and decreasing pensions, falling social benefits, and working multiple jobs or extra long hours to make ends meet. France’s broad middle class is downwardly mobile. People are also protesting rising energy costs, job losses due to offshoring, deteriorating working conditions, homelessness on the rise, increasing numbers of undernourished children and people scavenging for food, underfunded public services such as hospitals, schools, post offices and transportation, especially in rural areas, and a host of other issues.

At the same time, fueling the fire, Macron has enacted a series of measures friendly to finance, capitalists and the rich, such as annulling the wealth tax (a tax of 0.5 to 1.5% on personal wealth above 800,000 euros), lowering the corporate tax rate, offering extra tax credits to companies, and gutting the work code, the law that has long provided strong labor protections to France’s working class.

The aggressive form of capitalism known as neoliberalism and austerity, as well as the declining situation of the working class, are not at all unique to France. Things are much worse in Spain, Greece, Italy and elsewhere. The French people, however, have a long and cherished tradition of rising up and gaining social advances, starting in 1789, which inspires the world over. 1789, 1830, 1848, 1871, 1945, 1968… today, a revolt is overdue. France is in its fifth republic, and the constitution is not a bible. The French know from historical experience that no institutions are set in stone, and that popular protest is necessary to abolish the present state of things.

67% of the population sympathize with or support the movement, while 25% are against it, according to a January 14 poll. The movement has spread so deeply and widely in French culture that young children in schoolyards throughout France are playing games of “yellow vests vs. cops” and shouting “Macron, resignation!” Elderly women and men in yellow vests are chanting alongside the crowd “Macron, we’ll come find you at your house!” and “Castaner, nique ta mère!” Many yellow jackets are newcomers to social protests, which is part of the force of the movement. Others, seasoned demonstrators, say that they have been waiting for this popular revolt to spark for years, even decades, as they watched living standards sink. Many protesters are among the 50% of the population who abstain in legislative elections. Both left and right are represented, and there seems to be a slide toward the left since the beginning of the protests especially as the trade unions get more involved. Apart from the occasional sticker or trade union flag, there is a tacit understanding (broken occasionally by Trotskyite groups) that no partisan affiliation will be shown – people have come together in their revolt against the current state of things, and not to represent a particular party. The rallies are “organized” by a number of nonpartisan facebook pages.

This leaderless quality means that the demands of the movement are extremely heterogeneous, often naïve and sometimes contradictory, and that the political future of the movement is unpredictable. But it also means that the uprising is very hard for Macron’s administration to pinpoint, target and shut down. There is no union or party to slander or recuperate, there is no entity to negotiate with, pressurize or buy out, there is no figurehead to decapitate. There is only a formless mass of angry people largely disillusioned by traditional politics, united in a new and unknown color, yellow.

Asked about his view of the movement’s lack of leadership, a protester who revealed that he was a CGT union member, said that it’s excellent, for now. For years, the unions have had one discouraging failure after another as they followed the traditional protest march formulas. Older tactics weren’t going anywhere. This kind of uprising has never happened before, it’s shaking things up, it’s the best we can ask for at this point. It’s nationwide, truly popular, strong in both rural areas and cities, and supported by the vast majority of the French people. Its unpredictability is, for now, an advantage. And it’s providing an important “street education” in activism for young people. Later we’ll see how things evolve, but for now this should be embraced.

Another protester, an oyster farmer who owns his own business, works long hours 7 days a week and says he doesn’t earn a decent living, drew a darker picture. He said that he thinks the movement will degenerate into more violence as the government will refuse to change anything, and people will get sick of marching in the streets, getting sprayed with teargas and not being heard.

One bearded older man in a yellow vest and colorful beret had been to every protest since the beginning. “Our goal,” he said, “is to exhaust the police.” He looked at the group of young men in riot gear who had gotten out of a police van, and taken up positions to block a street from a group of protesters arriving at the intersection. “In order to make them come over to our side.” An unknown but reputedly significant number of riot cops have taken sick leave. Attempting to exhaust the police is one tactic, but one shouldn’t have illusions about bringing them over to our side. As Marx wrote, the current State [and its police] are “nothing more than the form of organisation which the bourgeois necessarily adopt… for the mutual guarantee of their property and interests” (The German Ideology). Tired or unwilling individuals can easily be replaced, like other workers.

In order to try to absorb, clean up and neutralize the odor of this rebellious energy expanding like spilled oil, the government has instituted a “big debate,” inviting people to give their opinions on 35 preselected questions about 4 issues (not including the wealth tax), in local assemblies, on an online platform, by regular mail, and at stands in public places. After a month of this process, in each region 100 people picked by chance will debate on the topics and attempt to give concrete suggestions. Apparently a desperate and hasty measure, denounced as a masquerade and smokescreen by the yellow vests, the big debate could easily backfire on Macron. As an unwieldy process that will necessarily exclude more than it includes, it will likely give another clear proof of Macron’s insincerity and theatricality. It will also provide the media the opportunity to chastise yellow vested protesters for continuing to protest despite the invitation to be heard through institutional channels. But alternative in-person forums for debate are also springing up.

Whether or not the government is hearing the protesters in the streets, it is certainly hearing the protests of business owners who are losing money due to the weekly events. Two billion euros worth of business was lost in December in the retail sector due to the protests, two billion in transport and distribution, and the agri-food sector estimates a potential loss of 13 billion since mid-November largely due to blockages of highways and intersections. Tourism has dropped 10%, 4000 cars and 2000 businesses have been vandalized for a total of 100 to 200 million euros in damages, and financial groups which are thinking about moving to Paris after leaving London due to Brexit are now hesitating, “wondering about the consequences and the longevity of the movement.” Already, Macron is seen as a lame duck by his European counterparts, having lost the support of the population and possibly unable to enact the rest of his ambitious program of capital-friendly reforms.

But even if he wanted to, Macron would have a hard time bringing back the French social model as it existed during the 30 “glorious” years between 1945 and 1975. The yellow vest movement is essentially calling for a return to the welfare state, and their movement is born of the crisis of the European welfare state in its last strong bastion, France. But the welfare state is (was) an attempt to stabilize capitalism in the highly developed countries, and rather than trying to save it or bring it back, we should call for a new form of socialism.

Deficit spending and the redistributive system, on which the welfare state is based, are stretched to their limits, producing the crisis that sparked the protests. Keynesian deficit spending attempts to stabilize capitalism by providing shock absorbers during its inevitable crises, and is impossible in the context of chronically high debt. French public debt is at 99% of GDP, up from 67% in 2008. Lowering the debt and reinvigorating redistribution mechanisms would depend on tax revenue, but taxing the wealthy and the corporations, in the globalized economy, just makes them flee the country. The only way to keep companies, factories, and their profits in the country is to nationalize them so they can’t leave. To create a durable “redistribution,” that is, true economic equality, the means of production have to be collectively – that is, publicly – owned.

The protesters are calling on the state to “tax big the big ones, and tax little the little ones.”  The 40 biggest corporations in France (CAC40) made record profits in 2017 and 2018, and the people know it. But French corporate tax is among the highest in the world (33.3%, though it will gradually drop to 25% by 2022), and the large companies, which already use every loophole they can, could move their headquarters elsewhere, for example to Ireland where corporate tax rates are nominally 12.5% but effectively 2-4%. Companies are taxed based on the location of their headquarters, not where they extract, manufacture or sell their products. The small and medium-sized companies which can’t leave are already overstretched, and some of these business owners are wearing yellow vests on Saturdays. Increasing corporate tax on companies which already have one foot out the door will not save the welfare state.

The yellow vests are particularly angry at the fact that Macron killed the wealth tax on the ultra-rich, as their own taxes rise, their wages and pensions fall, and public services suffer. But the wealth tax only brought in 1.4% of tax revenues in 2017, its last year of existence, and it was more symbolic than significant for the budget. Reinstating or even raising it would not bring back the conditions necessary for the welfare state, and the money of the rich would simply continue to leave. In our current globalized and deindustrialized economies, taxation can’t provide the revenue necessary for the social programs associated with the welfare state. Private wealth necessarily slips away. Only public ownership of the sources of wealth can finance the social programs that the French are used to, and more.

Socialism is the only answer to this situation, the crisis of the welfare state. The only way to keep the results of economic activity inside the country and available for social services is to nationalize the industries, so that they become public goods, owned collectively and not by private individuals and stockholders. The only way to maintain and pay for the public programs that the population cherishes, is to finance them through state ownership of the means of production and distribution. The welfare state is played out, and the yellow vest protests are symptomatic of this. Rather than looking backward and wishing it to return, we should embrace the future by building the conditions for socialism.

The Figaro, the French conservative daily newspaper, recently published an ultraliberal article arguing that the yellow vest movement is “the fruit of the death-throes of the welfare state.” In this, the analysis is correct (though the mixed metaphor is ugly). But the solution proposed is inhuman: to overcome the crisis we need more “liberalism,” or liberation of capitalism from the last grip of the nanny state; we need “to organize the gradual but thorough withdrawal of the public power” from the economy. To hell with the people who don’t fit into the Silicon Valley economy, except (maybe!) as end-user consumers. The ideologues of the elite are delighted with the sufferings of the welfare state, waiting for the kill. “Liberated” (barbaric) capitalism is one possible path, socialism is the other, and there is no other way.

What is the welfare state? It is a series of concessions made by the Western capitalist elite, under pressure from workers’ struggles, to make capitalism a bit less inhuman in the Western countries and thus to prevent socialist revolutions there. It is not only the result of generations of workers’ struggles for social gains, but also a defensive, counterrevolutionary creation around the middle of the 20^thcentury to impede the expansion of socialist movements in the West. In the first half of the twentieth century, the movements fighting for socialism were very strong in the West, despite the repression. Advanced capitalism was producing deep economic crises, massive unemployment and wars, and it was clear to all at the time that the Soviet planned economy was much more successful than Western ones in the 30s (whatever else one may think of the USSR). It grew so much that in 25 years it brought the USSR from a backwards and destroyed nation to being capable of victory over the strongest military in the world. Clearly a planned economy was more efficient than the chaos and waste under capitalism. To prevent socialist views from spreading, the Western capitalist elite adopted a two-pronged attack: repression and concessions. The new deal and welfare state were essentially counterrevolutionary measures, concessions intended to stop the spread of socialist movements in capitalist countries. They were part of the strategy adopted by the bourgeois elite from the 30s to the 60s to stabilize capitalism in the West.

Whatever we may think of the reality of the Soviet and Chinese systems, their effect in the West in the 20^thcentury was to contribute to the adjustment and softening of Western capitalism, which put on the mask of a human face. Then in the 1990s when there seemed to be no more threat, no more alternative system to compete against ideologically, the capitalists stopped providing, and the mask dropped. The yellow jackets are confronting its real face.

Furthermore, the welfare state is inseparable from Western imperialism, which has largely contributed to financing it through siphoning off resources from neocolonies. The rise of standards of living in the West has gone hand in hand with the overexploitation of the peoples of the Global South, who have been kept in underdevelopment and debt. Their raw materials and agricultural products have been practically stolen, their workers severely overworked and underpaid, their local industrial development stunted by forced importation, their governments kept submissive to Western powers and business interests. Objectively profiting from the exploitation of their counterparts in the Global South, large parts of the Western working class (and even more so, the middle class) have been won over to the idea that capitalism can provide. With the crisis of the welfare state, they are being confronted with the truth. This is not to say that socialist states, not guilty of imperialist exploitation, will not be able to provide a high standard of living. Our current level of development is high enough to provide a good living for all with shorter working hours, if we don’t have the rich absorbing all the wealth.

One of the measures of the standard of living of a country is the gross national income (GNI: total income received from sources both domestic and abroad) divided by the number of inhabitants. But if instead we take the GNI and divide it by the domestic population plus the number of people in foreign countries who contribute directly to this income – for example the exploited workers making Apple products, picking Chiquita bananas, mining copper for Freeport McMoRan, etc. – the “standard of living” of the country would fall dramatically. In addition, capitalism, including its form called the welfare state, has always been dependent on the exploitation of resident undocumented workers.

The welfare state has always only brought its benefits to a small, privileged part of the world population, and has created the illusion among them that capitalism can be humanized. It’s essentially reactionary, unsustainable and not worth fighting for. Socialism is what we should fight for. In abandoning the aspiration toward the welfare state model, we’re certainly not abandoning the struggle for workers’ rights, social services, and all the other advantages associated with the welfare state. We’re fighting for these with a clearer vision of the goal: socialism.

The yellow jacket movement’s weakness is the vagueness of its demands, calling for the return of the welfare state. But its force is its dynamism, its determination, its size, and its deep-set, justified feeling of anger at economic injustice and inequality. To win, we should stop looking backward, and start looking forward, toward the construction of socialism.