For a relaunch of the privatization program
Ministry of the Economy, Finance and Industry, Bercy, Paris. Photo credits: Eric Piermont/AFP
Among the still unshaken "idols" of the interventionist left (and a good part of the right) is the myth of the "strategic state", a state which, unlike the hated private sector, would prioritize the long term over the short term, and the general interest over particular interests, without this general interest ever being precisely defined. And this is not an oversight, but a real conceptual difficulty. Just as we can define justice by clinging to John Rawls, for example, so conducting policy in the "general interest" sounds good to the ear but not to the brain. Of course, the notion of the strategist state is not something to be thrown overboard in a hurry. And we can accept that the State, in order to protect interests that are not only economic but also related to national independence, should be present in the capital of companies such as Thales, Safran, EDF or, at the very least, Orange. But what about the rest? In these times of scarce public money, wouldn't it be a good idea to rid the State of holdings in companies in which it does more harm than good, in order to finance the renovation of our infrastructures, develop new ones or invest upstream in education, universities and fundamental research?
The vague notion of the "strategic State" is used to absolve the shareholder State of its resounding failures.
According to the Agence Française des Participations de l'État (French government shareholding agency), state share purchases meet four objectives: preserving our sovereignty in so-called "sensitive" sectors, "ensuring the existence of resilient operators to meet the country's fundamental needs", developing sectors crucial to growth, and rescuing companies whose bankruptcy would entail a systemic risk. If the first argument and the second (which is in fact a reformulation of the first) are audible, the other two are less so. The State has demonstrated its inability to support companies that are important to the country, and to develop new ones. Out of charity to the current government, we'll skip over the buffoonish rescue of the Alstom site in Belfort and the Areva scandals, which illustrate perfectly that the shareholder-state does not anticipate technological change and barely manages to artificially save plants at a cost that is nonetheless insane for the taxpayer. If we go back in time, there is no shortage of other examples of intervention that was at best muddled, from Renault to Charbonnages de France, via SNCF and SFP. In the final analysis, the so-called "strategic State" is more inspired when it sells off stakes in Airbus or ADP than when it flexes its muscles to show what it can do in terms of industrial strategy. Besides, if the State were such a strategist, why haven't we been able to develop companies like Google, Apple, Facebook, Tesla, Baidu or Xiami? The result of this arrogant neglect is that the global technological and industrial standards that will shape the 21st century will be negotiated between Silicon Valley and Beijing. Let us at least hope that, what the State has been unable to do directly, the Banque Publique d'Investissement will contribute in the future.
Privatizations? Justified as never before!
These difficulties are not due to the supposed incompetence endemic to Bercy or the State's administrators, but simply to the fact that these teams are being asked to solve an impossible equation: make industrial policy while appeasing the unions, saving jobs in the short term and flattering consumers with low prices. Worse still, the French government itself is schizophrenic: it wanted to save Belfort, but never really wanted to develop rail freight; it put out social fires at Air France, but allowed airport charges to rise, as set by... ADP.
For all these reasons, I suggest that the President of the Republic resume a program of privatizations to relieve the State of companies that would be better off without it. The sale of Renault, PSA, Eramet, CNP Assurances and Air France would bring in more than 50 billion euros for the State, and spare it the management headaches that, by its very nature, it is incapable of avoiding.
Article published in FigaroVox on January 24, 2017
