Reflections about the text by Emmanuel Todd^[1]: ”Après La Démocratie” (After Democracy)

ANIMAL FARM 2.0
A EUROPEAN PROTECTIONISM FOR SAVING DEMAND AND DEMOCRACY

ANIMAL FARM 2.0^[2]

(About the fall of the demand provoked by globalization)
Once upon a time, there was a big Farm where the Dogs only bought goods produced by the Dogs, and the Cats bought only those produced by the Cats. The chiefs of the Dogs were not interested in lowering the wages of their employed Dogs, because then they would buy less items at market stalls in the Dogs’ market.

Then came the day when all the chiefs of all the animal species of the Farm made a General Gathering where they decided a turn toward Free Trade. The Dogs’market would no longer be divided from that of the Cats, Rabbits, Pigs, and all the other animals of the Farm. Everyone would be able to purchase the products of other animals, freely choosing the one with better quality at the most convenient price.

In the following days, the Dogs’ chiefs had a secret meeting, where one said: “Why should we give our subordinates high wages, when they use it to buy the goods of the Cats and the Horses? If we lower their wages, our products will cost less and we will be able to sell them even in the markets of other animals, and to beat our competitors!”

So they did it. At the beginning, some of the employees protested because of the wage reduction, but then they saw that thanks to Free Trade they could buy collars and leashes from the Mice, at a much lower price in respect to the Dogs’ market stalls. So, the employed Dogs balanced the reduction of the payroll with the availability of cheaper goods, especially the ones coming from the Mice, Chickens and Crows.

The chiefs of the Dogs were three times happy: they too could buy cheaper goods, their subordinates were less expensive, and they even started selling to the Pigs, Cows and Horses. In particular, there had just been the acquisition of an order of carriages that brought a positive mood in the Dogs’ headquarters; it was then that in the Dogs’ newspapers there appeared titles praising the success of Free Trade, thanks to which Progress and Well-being would ruled forever over the Farm; above all in the zone were the Dogs lived.

But it was destiny that things evolved differently. Within two months from the General Gathering, even the chiefs of the Cats decided to lower the wage of their subordinates to have cheap labour, therefore contrasting the strategy of the Dogs. The Ducks followed soon, and then the Horses, who wanted to take up the orders of carriages they had lost. In the turn of a season, all the chiefs of the different races of animals in the Farm decided to lower the wage of their subordinates, and the Dogs lost the competitive advantage they gained on the markets of the other animals.

So, there was an other meeting of the chiefs of the Dogs, where it was decided to further lower the wages. Even in that case, the advantage was only temporary, because the chiefs of the other animals
followed the path undertaken by the Dogs again. Subordinate animals complained, because at that point the diminution of wages prevailed on the advantage of having some products at an inferior price; but the chiefs were not interested in this, because they succeded anyway in keeping the production cost low and in increasing the gain of their companies.

A wages cutting spiral was triggered, that led all the animals to earn less. The consequence was that, at a certain point, the markets of the Farm were attended by poorer animals in respect to the time when Free Trade began, and the overall sales of the market stalls of the Farm remarkably diminished.

The chiefs of the animals started a fight among themselves to increase the respective share of the market, but they ended up causing a shrinkage of the whole market.

At the beginning of the tale the Dogs’ wages were not reduced since the chiefs of the Dogs felt the market of the Dogs as their own, and they knew that lowering the wages the market would become weaker and the industries of the Dogs would sell less products. With Free Trade, the chiefs of the Dogs no longer thought that the market of the Dogs (in a certain sense) belonged to them, because even other animals could enter it to open sale points for their products.^[3] With Free Trade, the chiefs of the Dogs started thinking of subordinates only as a resource to be exploited as much as they could to increase profits and lower the cost of their products, which were intended to be sold all over the Farm, not only to the Dogs. You can see the outcome of this strategy revealed itself as disastrous.

The solution exists for this condition of things: that all over the Farm there is a unique assembly of chiefs to set wages. So, the assembly of chiefs will return in thinking that defending the wages of the producers, one defends the strength of the market where products are sold. The fundamental concept emerging from this tale is that there must be a correspondence between the extension of the market and the decision-making structure that regulates the market, between the economical space and the political space.

At this point, one could easily think about a unique global government, fixing the problem at its roots, but this is not the way Emmanuel Todd is indicating to us.

A EUROPEAN PROTECTIONISM FOR SAVING THE DEMAND AND DEMOCRACY

The title of Todd’s book is “After Democracy”, it analyzes French society and cares about the future.
Some of the subjects it handles are the lack of collective values and the division of population into a part with high education and another one at a lower level, the irresponsible nature of the élite in charge and the possible political drift toward a racist or antisemitic outcome.

Accordind to Todd, the main issue menacing the continuation of the democratic experience in France as in Europe is the indefinite compression of wages, which is a consequence of the Free Trade doctrine, established as a unique thought since the eighties. “It’s about escaping the current nightmare: the chase for the external demand, the indefinite shrinkage of wages to lower production costs, the following lowering of the internal demand, the chase for the external demand, etc., etc.”^[4]

As we saw above the solution can be a regained coincidence between the economical space and the political one, but not at the global level: “The planetary democracy is a utopia. Reality is that, on the opposite, we face the menace of a generalization of dictatorships. If Free Trade should generate a planetary economical space, the only political form conceivable at the global scale would be the «governance», a euphemism to designate an authoritative system in gestation. Why then, since a well integrated european economical space already exists, don’t we lift up democracy at its level?”^[5]

So, according to Todd the right farm where unifying the government is not the world but Europe, and of course this farm can’t practice Free Trade with the other farms, if not, the wicked game would simply move to a major scale. We are talking about protectionism at a European level.

American theorists make the list of damages Free Trade brought to the United States, but then they end their analysis saying that there is no alternative, since in the United States the industrial structure excessively deteriorated, and makes it unlikely a fast reconstruction of the productive capacity that in a protectionist scenario would be needed. On the contrary, Europe is still able to produce everything, and finds itself, between the decline of the United States and the rise of China, the major concentration of technical competencies of the planet.^[6]

The protectionism Todd talks about is not a definite closing. “As far as I’m concerned, I push for the moderation of protectionism till distinguishing accurately, on the contrary of the ideologists of globalization masked as economists, the movement of goods from that of the means of production. As a good disciple of Friedrich List, I’m in favour of the free circulation of capital and labor”^{[7] [8]}

The primary objective of the european protectionism is to oppose the economical crisis saving democracy, avoiding the drama of a continuous lowering of wages. “The purpose of protectionism is not, fundamentally, to push back the importations coming from the country outside the communitarian privilege, but to create suitable conditions for an increase of wages”^[9] “The increase of incomes implies a revitalization of the internal European demand, that by itself entails a revitalization of imports.”^[10]

Assuming that the European protectionism is the objective, Todd does a simulation game (from a french point of view) to understand how it can be reached. Where England is concerned, Todd says that initially it could not accept a turn toward protectionism because Free Trade is such an important part of English national identity. Germany is at the centre of his reasonment: France should face Germany directly, persuading it to care more about the inner European market and inviting Germans to a change toward European protectionism. If they refuse, France should threaten the exit from the Euro, that would provoke, almost automatically, the same move by Italy.

Economists on television pretend not to know about the issue of the pauperization of the markets described in the tale, otherwise they would admit that Free Trade generates problems, and they would give up being trendy economists (and receiving subsidies from the chiefs of the Dogs).
These economists say protectionism is an old thing and is not part of the shiny future we have made our way to, but maybe they are wrong. Emmanuel Todd invites us to reflect about an intelligent protectionism extended from Great Britain to Russia: “The political and the economical spaces will coincide again. The so created new political form will be of a new genre, and will entail complex institutional changes. But one can affirm that in this case, and only in this case, after democracy, there will still be democracy.”^[11]

1. ^[1]Emmanuel Todd, a french sociologist and demographer that studied at Cambridge University, is a researcher by the Institut national des études demographiques in Paris.↩
2. ^[2]Animal farm is the book where George Orwell tells the vicissitudes of animals in a hypotetical farm, making the parody of the birth of Stalin’s dictatorship.↩
3. ^[3]In this sense we could say that Free Trade entails a sort of communism of markets, since the market of every animal species “belongs” to the sellers of all animal species.↩
4. ^[4]“Il s’agit d’échapper au cauchemar actuel: la chasse à la demande extérieure, la contraction indéfinie des salaires pour faire baisser les coûts de production, la baisse résultante de la demande intérieure, la chasse à la demande extérieure, etc.,etc.” Todd, E. (2008) p. 293↩
5. ^[5]“La démocratie planétaire est une utopie. La réalité, c’est, à l’opposé, la menace d’une généralisation des dictatures. Si le libre-échange engendre un espace économique planétaire, la seule forme politique concevable a l’échelle mondiale est la «gouvernance», désignation pudique du système autoritaire en gestation. Mais pourquoi alors, puisqu’il existe un espace économique européen déjà bien intégré, ne pas élever la démocratie à son niveau?” Todd, E. (2008) pp. 290-291↩
6. ^[6]Todd, E. (2008) p. 292↩
7. ^[7]Todd, E. (2004) p. 21↩
8. ^[8]An example in the textile sector could be the following: the textiles used in Europe must be produced in Europe, but the machines needed to produce textiles could be made in Europe and sold in China, or made in China and purchased by Europe. China could use its money to buy European companies that produce textiles, but with the intrinsic duty of keeping them active in Europe.↩
9. ^[9]“Le but du protectionnisme n’est pas, fondamentalement, de repousser les importations venues des pays situés à l’extérieur de la préférence communautaire, mais de créer les conditions d’une remontée des salaires.”
   Todd, E. (2008) p. 293↩
10. ^[10]“La hausse des revenus implique une relance par la demande intérieure européenne, conduisant ellemême à une relance des importations.” Todd, E. (2008) p. 293↩
11. ^[11]“Espaces économique et politique coïncideraient à nouveau. La forme politique ainsi créée serait d’un genre nouveau, impliquant des modifications institutionelles complexes. Mais on peut affirmer que dans ce cas, et dans ce cas seulement, après la démocratie, ce serait toujours la démocratie.” Todd, E. (2008) p. 298↩