Tribune leader, 2 April 1993
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?