Testimony: France in the Twenty-first Century, by Nicolas Sarkozy (Pantheon, March, 2007)

This coming Sunday, April 22^nd, French voters head to the polls for what will probably be the first of two rounds in the country’s presidential contest. Center-right candidate Nicolas Sarkozy is up against the Socialist Ségolène Royal, centrist François Bayrou, and a gaggle of less-popular others. Among the leading three, Sarkozy most proclaims himself to be a reformer, an advocate of a clean break with the past, une rupture, as the French say.

Sarkozy has been active in French politics for more than 30 years. The son of Hungarian immigrants who moved to France in 1948, fleeing communism, his road to political pre-eminence was unusual. Instead of moving from the prestigious and highly elitist École Nationale d’Administration into a series of high-level jobs, Sarkozy climbed up from grassroots work to become mayor of Neuilly and then, with the occasional pause, Minister of Budget, Minister of Communication, Minister of the Economy, Minister of the Interior, and now the Presidential candidate of the center-right UMP party.

Like his political trajectory, many of Sarkozy’s policy proposals and opinions are unorthodox: on crime, immigration, economic reforms, and even his approach to the United States, Sarkozy holds views that are unusual in French politics. The American reader will be struck by Sarkozy’s pro-American bent. Barbs at the American healthcare system aside, Sarkozy writes things that other French politicians would not dare to: “America came to aid and defend us twice in our recent history… You don’t have to be a grand strategist to understand that our interest is to have the best possible relations with this country... Where our strategic interests are concerned, systematically opposing the United States is a double mistake.... If I had to choose, I feel closer to American society than to a lot of others around the world.”

Moreover, in the genre of French political autobiography, Testimony is noteworthy for its relative candor. Those interested in French politics will gain additional insight into many of France’s top political leaders, such as former Prime Minister Édouard Balladur, current President Jacques Chirac, etc. Sarkozy even discusses the relationship with his wife with relative candor.

Yes, the French should work more, yes, success should be rewarded more, yes, people who work hard should be rewarded, but how would Sarkozy change the status quo?

Testimony is most valuable, however, for revealing Sarkozy’s vision on the issues—and Sarkozy’s reformist vision will remain important even if he loses the Presidential elections. On general problems in French society, Sarkozy writes: “France is going through a fundamental crisis of confidence… I’m convinced that no country in the world can get by without effort, and that France—notwithstanding its undeniable merits and prestigious past—will become a thing of the past if it doesn’t take the steps necessary to adapt to the changes taking place in the world.” This is a true statement—but one not often heard in French politics.

On the French attitude towards success, Sarkozy criticizes his countrymen: “[In France,] success is not really seen or accepted as a positive value... All the hard work done by those who are eventually successful is rarely acknowledged. This attitude is explained by the French desire for egalitarianism, the fascination with leveling out, and, frankly, jealousy... Success is more often criticized than presented as a model.”

And when it comes to diagnosing France’s economic troubles, Sarkozy is perhaps at his sharpest: “Great Britain,... it will be remembered, in the late 1970s seemed to be completely left behind, with a GDP 25 percent less than that of France. [Today,] London is becoming the seventh-largest French city. It has attracted, practically to the point of saturation, thousands of young French people who go to live there, including my daughter.... It seems that success has become so shameful in France that a young person who wants to succeed must leave.... A million French people have gone to live abroad over the past few years, a loss almost equivalent in absolute terms to the losses of World War I (1.3 million French deaths).”

Sarkozy harshly criticizes the Socialist government of former Prime Minister Lionel Jospin for its stagnant reaction on immigration and crime, and its general style of governing, but reserves his harshest criticism for the introduction of the 35-hour workweek, which Sarkozy considers both economically unsound and a moral affront to the national work ethic. Indeed, Sarkozy admires the American work ethic and wants France to work much more, arguing perhaps a bit aspirationally that “France has a working culture... Its people know what work is... But the deliberate inversion of values between work and welfare has caused people to lose their bearings… Nothing is more important than restoring work as a cardinal value. And to do that there is only one solution: proving that work pays.”

Sarkozy is right that the French should work more hours in a week and more years in a lifetime, but he falls short on specifics. How would he deal with the angry union protests that greet any attempt to raise the retirement age? If, as President, Sarkozy were to seek to make labor laws more flexible and layoffs easier, would he hold firm in the face of discontent? How would he avoid the fate of previous would-be reformers such as Alain Juppé, Jean-Pierre Raffarin, and Dominique de Villepin, all of whom were effectively doomed to political irrelevance following retracted reform proposals? These questions are not answered in the book.

Remarkably, on economic policy in general, Sarkozy’s instincts can be far more dirigiste than those of the socialist he loves to criticize, Lionel Jospin. When workers at a Michelin tire factory were confronted with significant layoffs several years ago and asked the government to step in, then-Prime Minister Lionel Jospin (who once called capitalism an “unstable” system) responded with exasperation by saying that “The state cannot do everything.” Sarkozy disagrees strongly with that approach, writing: “My complaint about Lionel Jospin is not so much that he didn’t save the jobs threatened at Lu or Michelin but rather that he said that saving them wasn’t the job of the State. Because after all, political will can sometimes make it possible to preserve jobs and it can lead to profitable investments.”

Social expenditures in France have increased from 20 percent to 33 percent of GDP since 1980. Reducing that percentage should be the first order of business of any reformer.

Sarkozy relates with pride how, infuriating the European Commission, he pumped state funds into distressed French energy company Alstom—which he calls “a French industrial jewel”—and engineered the merger between French pharmaceutical giants Sanofi and Aventis. Sarkozy is alleged to have put tremendous pressure on Sanofi CEO Jean-Francois DeHecq to raise his offer for Aventis by roughly $5 billion; in his book, Sarkozy writes only that “We had to maintain a global French pharmaceutical industry.”

Sarkozy is by no means unusual in this regard: steering industrial policy remains in vogue for French politicians, with Socialist candidate Segolene Royal promising to re-nationalize electric firm EDF and gas firm GDF, merge the two, and create a French energy giant that can resist foreign takeovers and pursue a non-capitalist way of doing business.

It is true that massive social spending, not industrial dirigisme, lies at the heart of France’s current predicament: social expenditures in France have increased from 20 percent to 33 percent of GDP since 1980. Reducing that percentage should be the first order of business of any reformer. But it is somewhat surprising to see a would-be economic reformer, even a French one, be so fond of industrial dirigisme.

Perhaps more worrisome is Sarkozy’s willingness to consider—gasp—tax increases for his already-overburdened country. Sarkozy recently commented favorably on center-right German leader Angela Merkel’s VAT increase from 16 percent to 19 percent, saying: “Everyone said it would be a disaster. But there have not been price rises or recession. I will study this option.” Moreover, in his book, Sarkozy writes that part of controlling healthcare costs (necessary to limit the growth of the national debt) can be achieved “through a rise in contributions, an increase in the [payroll tax], or by gradually raising various exemptions or payments.”

Sarkozy’s diagnosis of the current situation is accurate and clear, his achievements in government are numerous and impressive, but his specific proposals for the way forward are often vague. Yes, the French should work more, yes, success should be rewarded more, yes, people who work hard should be rewarded, but how would he seek to alter the status quo?

On the implementation of reforms, Sarkozy is clear and right. Reforms, he writes, should be undertaken in parallel: “The biggest mistake, which is common, is to undertake reforms sequentially. First, you do pensions, then education, and then finally welfare or immigration. With this system, you often end up stopping after the second reform, exhausted by the battles over the first.”

Sarkozy contends that his countrymen “are not afraid of change. They’re yearning for it.” That’s highly debatable: the British public might have been ready for change in the U.K. in 1979 following the famed “winter of discontent,” but there is no evidence that the French are similarly fed up and willing to support true reforms. On issue after issue, the French public has voiced support for strikers, no matter how strange their cause—the successful French truckers’ strike in 1996 to lower the retirement age from 60 to 55 is just one case in point.

Until the French do become willing to accept reforms, Sarkozy will be in the position of a doctor forcing an unruly child to swallow bitter but necessary medicine that would restore the child to health. It is a thankless but necessary task that becomes far more arduous when the child can choose to replace his doctor.

Jurgen Reinhoudt is a Research Assistant at the American Enterprise Institute.