If populism prevails in France, it would have a much more dramatic impact on geopolitical affairs than the victory of populism in the offshore powers.
The immediate geopolitical impact of Brexit is now clear. Britain’s unilateral decision to withdraw has unified the continent against the perfidious Albion. Little England has, in effect, been forced into splendid isolation from the continent. Going forward, Britain will not have a seat at the European table.
Across the pond, Trump pulled off the greatest bait-and-switch in US political history. All promises of economic nationalism and isolationism have been shelved. Instead, the political high tide of the GOP is being mined in the service of plutocratic interests. While the Bannon-Sessions-Miller wing remains committed to constructing an ethnic security state—and is worryingly empowered to do so—the foreign economic and security policies of the United States are back in the hands of the Blob. Despite expectations to the contrary, Liberal Hegemonism is alive and well in the United States. American populism seems to have been tamed at least in so far as US foreign policy is concerned.
The consensus on the impact of a Marine Le Pen victory is that it would spell the demise of the European project. In particular, it would mean the end of the euro. But there is a perfectly feasible alternative scenario that may obtain if she wins. In that scenario, the French withdrawal will leave an even more unified and compact EU; one that would look more and more like a German Delian league.
I will argue that the second scenario is more likely than the first and that it would reconfigure European geopolitics in important and foreseeable ways. But first, how did we get here?
During the 1950s and 1960s, the core of the world economy was tripolar. Global industrial production was dominated by national champions of the United States, Japan and Germany (more generally, western Europe). Northern labor had a quasi-monopoly on Northern knowhow. More precisely, national labor pools had a quasi-monopoly on the knowhow of national industrial champions. Within this context, domestic bargains between labor and capital along the lines of the Treaty of Detroit enabled broad-based growth in the core of the world economy.
The Western economic miracle of the early postwar era came to an end as a result of the Japanese onslaught. Japan was able to combine its relatively low wages with high productivity growth to dramatically swell its shares of the global product market; helped along by the container revolution of the late 1960s that enhanced the integration of global product markets. Unable to compete with the Japanese, western firms tried in vain to increase the growth rate of their productivity. The western world slid into a deep stagflation crisis during the 1970s that prepared the ground for the neoliberal counterrevolution whose main agenda was to put finance firmly back in the saddle and tear up the Treaty of Detroit. That alone would’ve been sufficient to guarantee the rise of plutocracy, precarity and wage polarization. But even more momentous developments were underfoot that undermined the geoeconomic foundations of broad-based prosperity in the center countries even more thoroughly.
The 1980s witnessed the telecommunication and intermodal transportation revolution whereby transportation and communication costs collapsed enough to split the atom of national champions. The result was what Richard Baldwin calls ‘the second unbundling’ of global production whereby managers in the headquarter economies (US, Germany, Japan) trained cheap foreign labor within a day’s flying distance of headquarters to create Factory North America, Factory Europe and Factory Asia. This unified national labor markets at the regional level even as global product markets integrated further at the global level.
The addition of hundreds of millions of Chinese workers to Factory Asia created a tremendous imbalance between capital and labor. The result was even greater worker insecurity, wage polarization, and intensification of plutocracy. At the same time, the reemergence of global finance unleashed the financial cycle that also whipsawed market society with bubbles and financial crises.
The consequence of these global-macro fluctuations and structural changes was tremendous trauma in western market societies. This trauma manifested itself as the rise of populism and the destruction of the political center.
Back to geopolitics. A Le Pen victory in France cannot be ruled out with any degree of certainty. I claimed that if she wins, France and England would likely face a virtual German Delian league. The reason is twofold. First, European states are extraordinarily exposed to the risk of a dramatic unraveling of Factory Europe. A breakup of the eurozone would result in the effective repeal of deep integration on the continent and therefore a wholesale disruption of European value chains. In order to forestall such a catastrophic scenario, other states are likely to stick together. Second, while the renationalization of market society might be a viable strategy for medium-weights like the UK and France, it is decidedly not a viable strategy for either the small rich northern nations of the European core or the poorer nations on Europe’s southern and eastern periphery. Niether the Nordics and the Low Countries on the one hand, nor eastern European nations like Poland and the Czech Republic on the other, have any possibility of maintaining their prosperity after renationalization. Basically, the depth and breadth of skill-sets in every country except maybe Germany and perhaps Italy, provide an insufficient basis to compete in global product markets. They can put up tariff walls to protect domestic industry. But then the size of their national markets would sharply limit their firms’ economies of scale. That’s what doomed the import-substitution strategies of countless developing nations.
Le Pen dreams of an independent France that can stand up to Germany. But the reality is far more sobering. The harsh truth is that, after the second unbundling, without combining the knowhow of the North with the cheap labor of the South you can no longer be truly competitive in global product markets. This is even true of the United States. Renationalization is a recipe for geoeconomic irrelevance. Isolationist Britain and France will not become third world states, but they will be marginalized; both in Europe and in the global marketplace.
So what happens if I’m right and the UK and France face a German Delian league on the continent? France and the United Kingdom are independent nuclear powers and the main politico-military actors in Europe. They are essential partners for the United States. If and when they withdraw into isolationism, European security will rest on German shoulders. Le Pen has already declared her intention on a reorientation of Franco-Russian relations—away from deterrence in alliance with the western bloc to bilateral cooperation. But the security of the Baltics, the Nordics, and central and eastern Europe depends on more than US engagement. It requires a European great power partner. What this means is that the German Delian league would have to obtain its own conventional and nuclear deterrent. Pressures in this direction are already building as a result of growing doubts about the US commitment to defend Europe. They will intensify with the French exit, if it obtains.
One can think more systematically about the geopolitical implications of populism in England and France through the theory of regional security complexes (RSCs). Buzan and Wæver described the European great power RSC as a security community (a territorial cluster of states for whom war amongst each other is unthinkable) of great powers protected by one global power and threatened by another. This configuration is unlikely to last. The question is, How will it be transformed?
In the Policy Tensor’s view, the answer is that the British and French exits correspond to a major structural transformation of the European great power RSC. In particular, there is a strong potential for the emergence of a new, dominant security actor on the scene; namely, the German Delian league. Whether or not security competition reemerges in western Europe will then depend on whether the secondary powers (France and the UK) exacerbate the Russian threat to the league’s security. A possible withdrawal of the American pacifier—which is no longer unthinkable either—will make it considerably more likely. But whether or not security competition reemerges, we’re looking at a major transformation of the European RSC.