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Unemployment spurs Le Pen phenomenon

by Brigitte Granville

Unemployment spurs Le Pen phenomenon


Commentators on the French presidential elections and related political risks in Europe are blaming a range of issues for the strength of the protest against the political establishment. In France the debate hinges on whether identity politics or economic discontent – above all, chronically high long-term unemployment – is mainly influencing the growing appeal of Marine Le Pen, head of the right-wing National Front (FN).

I see France’s poor growth performance – its causes and effects – as the most powerful explanation for the FN’s popularity. The party is on course to exceed, by a large margin, its share of votes in previous presidential elections.

Putting emphasis on the economics is justified when looking at Jean-Luc Mélenchon, the second most effective anti-establishment candidate after Le Pen, from the opposite end of the political spectrum. He draws his support from economy-related grievances rather than public concerns about immigration.

The need to pay attention to France’s economic situation is highlighted by a comparison of Le Pen’s prospective first-round vote share of around 25% with the relatively modest 15% achieved in the Dutch election by Geert Wilders. The far-right politician, Le Pen’s counterpart in the Netherlands, campaigned overwhelmingly on identity issues, without emphasising the economy.
The prominent FN economic agenda – including a commitment to take France out of the euro – is an important part of its platform and reflects the inferior performance of the country’s economy.

Social costs of weak economy
An alternative approach to explaining the FN’s strength might be to stress the links between the two elements of its appeal – economic grievances and identity (anti-immigrant) politics.

This argument suggests that the failure of immigrant communities from North Africa to integrate into French society would never have been so deep had the labour market performed better. Put another way, the social costs of unemployment – which extend far beyond the problem of immigration – are a core driver of the anti-establishment protest vote.

There is an additional underlying cause of the FN phenomenon which goes deeper than these surface economic and identity issues. This is the alienation of a large portion of French society from the country’s oligarchic elite. This oligarchy monopolises state power and the economic rents derived from what, by European standards, are still extensive state asset holdings.

This group – formed from a web of connections and vested interests among no more than a few thousand individuals – is resistant to external input. Instead, policy initiatives emanate from the rigid world view of this hermetic core. Their unquestioned way of thinking is disseminated, articulated and entrenched thanks to the ‘public intellectuals’, journalists, pollsters and lobbyists who are drawn into the elite thicket.

The result is widespread policy blockages that have entrenched high unemployment and the relentlessly expanding share of value added recycled through state budgets. Broader public attitudes echo the rigidity of the elite. In a series of surveys conducted by the polling firm GlobeScan since 2005, France emerges as the most hostile of all developed countries to free enterprise and the free market economy.

This French distrust of free markets is paired with a low level of trust in others, compared with the country’s European peers. Herein lies part of the explanation for the poor performance of the French economy. Kenneth Arrow, the eminent US economist who died in February, illustrated in his work how trust is the cornerstone of a properly functioning market economy.

In France, high levels of distrust stimulate demand for regulation. Pervasive regulation is the government activity most associated with corruption. All major measures of corruption show France as performing considerably worse than high-trusting nations such as Nordic and Anglo-Saxon countries.

Shock or relief
Unless the French elites adapt to the enhanced transparency and exposure of privilege which social media engenders, Le Pen will continue to make progress. While all candidates promise to reduce unemployment and poverty, she can highlight – to good electoral effect – the failures of her rivals.
The French and international media have played down Le Pen’s chances. They will be discredited if she wins.

However, in the event of her defeat in the second-round run-off on 7 May, the sense of relief felt by the establishment and media will prove hollow. The underlying realities in France make it impossible that the probable victor Emmanuel Macron, who is in practice the continuity-candidate from the François Hollande presidency, could govern any more effectively than his dismal predecessor.

Brigitte Granville is Professor of International Economics and Economic Policy and Director of the Centre for Globalisation Research at Queen Mary University of London.