Occupied France (Or, Why the French Aren’t the Socialists They Are Cracked Up to Be)

The Occupy movement that has taken the United States by storm over the past two months is unquestionably a global phenomenon. In its methods and rhetoric, it has borrowed liberally from the Arab Spring and the Spanish indignados. It has deeper origins in anti-globalization activism. Even so, it just as clearly owes it success to a specifically American context. It’s the first movement to mobilize around data that economists have been reflecting on for years, which indicates that, since the 1970s, income inequality in the United States has risen dramatically while social mobility has ground to a standstill. Even though globalization has led to a convergence of economic conditions in industrialized countries, France and Western Europe often appear, to American leftists, as relatively progressive societies. In rankings of countries according to Gini coefficients (an economic measure of income disparities), France comes in as the 37^th most equal country, while the US is 93^rd. A recent OECD report placed the United States well behind France in terms of social mobility. You’re more likely, it would seem, to achieve the “American Dream” in France than in the United States

France’s homegrown Occupy movement rejects, however, this conception that the hexagon is an egalitarian society based on the equality of opportunity. In the US, Republican politicians still like to bash anything that smacks of socialism as “French.”  In 2007, Mitt Romney allegedly planned a line of attack against a possible Democratic rival that could be reduced to an equation: “Hillary = France.” But in France, the Occupy movement (perpetuating, consciously or not, a longstanding tradition) is more concerned by the reverse phenomenon: “Sarkozy = US.” Many French people see their society as becoming more and more unequal and their political system as one that increasingly does the bidding of a handful of extremely wealthy individuals.

These are some of the concerns drive the movement that has dubbed itself Occupy France. On Friday, November 4, the movement launched an occupation of La Défense, the skyscraper-studded business suburb lying immediately to the west of Paris (a blow-by-blow account of their actions can be found here). Though these activists are inspired by the same principles honed by their US counterparts (direct action, civil disobedience, non-violence, direct democracy), they are also influenced by a closer model: the indignados who, since May 15, have been gathering regularly at Puerta del Sol in Madrid, in addition to several other Spanish cities. Last spring, this movement inspired French young people, calling themselves les indigné-e-s, to stage a demonstration at the Place de la Bastille. As in the US, the French Occupy movement is a loose network of organizations, including Démocratie réelle and an anti-austerity organization called France Uncut. None, that I can tell, are directly related to an existing political party.

Though the French Occupy movement refrains, like Occupy Wall Street, from articulating a specific set of demands, their websites and literature offer a vision of the current state of French society. In particular, they’ve solicited the support of a number of economists and sociologists, who make the convincing case that France, in an age of globalization and the reign of the free market, is becoming more and more of an unequal society.

One of the measures that these scholars most frequently denounce is the so-called “tax shield” (or bouclier fiscal). The French are potentially subject to a wide array of taxes: income taxes, taxes on wealth, residence taxes, payroll taxes, and so on. The principle of the tax shield is that no individual should have to pay the state more than a set percentage of his or her total wealth. If your full tax bill exceeds this percentage, you receive a refund from the state. A first tax shield law adopted in 2006 set the threshold at 60%. Shortly after President Sarkozy was elected in 2007, the bar was lowered to 50%.

A number of economists have denounced this as a giveaway to the rich—to what the Occupy movements call the “one percent.” In making this case, they often cite the example of Liliane Bettencourt, the octogenarian heiress of the L’Oréal fortune. Bettencourt has been at the center of several recent financial scandals, most notably one connecting her to Eric Woerth, Sarkozy’s budget (and later labor) minister. Evidence suggests that France’s revenue service turned a blind eye to tax fraud committed by Bettencourt, in exchange for monetary support for the UMP, Sarkozy’s political party (of which Woerth was a treasurer, at the same time that he was serving as budget minister). One of France’s leading economists, Thomas Piketty (whose research on US income inequality has frequently been cited by the US Occupy movement) has explained how Bettencourt benefits from France’s tax laws. Though Bettencourt boasted that she paid 397 million euros in taxes over the past decade, Piketty points out that this revelation really shows how low her tax bill in fact is. Given that her wealth is estimated at around 15 billion euros, she pays in taxes just 2.5% of her fortune, or 0.25% a year.

Yet though her tax bill is already slight, given her wealth, Bettencourt can still benefit from the tax shield. This is because the 50% threshold that it sets is based on a restrictive definition of tax income that has little do with a beneficiary’s actual wealth. Piketty estimates that Bettencourt could plausibly report as little as 10 million euros in taxable income, entitling her to a refund of some 269 million euros (which would essentially reimburse her the sum of her wealth tax). Piketty concludes: “On principle, but no doubt also through incompetence, the tax shield instituted by the current government functions in practice as a machine for subsidizing the wealthy [or rentiers—i.e., persons who live off the income of their wealth].”

In many ways, Nicolas Sarkozy, more than any recent French leader, stands out as the “president of the rich,” as Michel Pinçon and Monique Pinçon-Charlot argue in a recent book (Le président des riches). They recall how, on the night in May 2007 that Sarkozy won the French presidency, he celebrated at a new luxury hotel on the Champs-Élysées, the Fouquet’s Barrière. True, he invited a number of beloved celebrities, including the lizard-like Elvis impersonator, Johnny Hallyday.  But his election night celebration was also a “who’s who” of corporate France. Invitees included Vincent Bolloré, the eleventh richest Frenchman and CEO of Havas, the advertising and communications giant; Martin Bouygues, the CEO of a the eponymous construction and telecommunications multinational, who is the country’s seventeenth richest man; and Serge Dassault (number six on the list of wealthiest French people), the CEO of the historic aerospace group. Sarkozy had run a campaign promoting the values of work, claiming he represented “the France that gets up early.” But as Pinçon and Pinçon-Charlot remark, no sooner was he elected than he was patrying with the France that goes to bed late.

In addition the tax shield, finance bills passed under Sarkozy have significantly expanded tax loopholes (“niches fiscales”) benefitting the wealthy. According to Pinçon and Pinçon-Charlot, their number has risen from 418 in 2003 to 486 in 2008. They quote an article by Didier Mignaud, who claims that in five years, the cost of tax loopholes rose from “50 to 73 billion euros. They represent, this year, 27% of the state’s revenue.” Sarkozy has also pushed a series of measures that make it easier for the rich to hand their fortunes down to their children. Through a combination of gifts and bequeaths, affluent families can pass on some 3,700,000 tax exempt euros to their heirs. Meanwhile, the boundaries between political leadership and corporate power are more porous in France than ever.

Pinçon and Pinçon-Charlot believe that, thanks to deindustrialization, French workers have ceased to be a functioning social class. However, the corporate ruling class is, they maintain, more coherent, self-confident and class conscious than ever. France has become a genuine oligarchy. They write that “under Nicolas Sarkozy and the rule of shameless money, the wheels of power are less hidden. The visibility of the oligarchy’s functioning is, of course, an advantage for the sociologist, who gains access to structures that are usually hidden. But for ordinary, citizens, their display exercises a symbolic violence that makes resistance seem out of reach.”

The success in France of the Occupy movement’s slogan—“we are the 99%”—is a sobering reminder of how global economic trends have affected a country that, in the eyes of many Americans, still seems to be a homeland of revolution, strikes, and cushy welfare handouts. Whatever contemporary France is, it is hardly socialist.