THE POWER OF “THE MARKET”

In May 1981 François Mitterrand was elected President of France, the first Socialist Party President of the Fifth Republic. The Socialists then gained a handsome parliamentary majority in a legislative election held just six weeks later, enabling Mitterrand to enact the radical programme for government on which he was elected. This was the so-called “Cent Dix Propositions pour la France” (Cole 1994: 35). The sixteenth to thirty-fifth propositions largely covered economic policy, attempting to create new sources of domestic demand that would lead to high levels of job creation. Mitterrand’s egalitarian instincts saw him use the tax system to redistribute income from the wealthiest to the least wealthy members of society. The real value of transfer payments rose significantly, the minimum wage likewise, workers were given the right to more paid leave and the length of the standard working week was capped at a much lower level than previously (Tiersky 2003: 133). The Socialist leader’s political popularity remained sufficiently strong for him to win the next presidential election in 1988 with a substantially enlarged majority, and the French electorate never voted down his reform programme. However, Mitterrand made a spectacular U-turn just two years into it, compelled to give up on his dream of a more equal society, it appeared, by pressure on the French franc making it more difficult for him to execute his European policy of ever deeper integration (Dyson & Featherstone 1998: 92; Callaghan 2000: 107; Parsons 2003: 170). So the conventional account of this episode has it, “the market” forced him into a significant change of heart.

In July 1997 the monetary authorities of Thailand decided to allow their country’s currency, the baht, to find its own price level on global foreign exchange markets. Later that month the monetary authorities of the Philippines, Malaysia, Indonesia and South Korea took exactly the same decision (Griffith-Jones 1998: 4).