STAFF NEWS & ANALYSIS
Now France to Break Away From EU? Stay Tuned
By Staff News & Analysis - October 16, 2013

Time to take bets on Frexit and the French franc? … We have a minor earthquake in France. A party committed to withdrawal from the euro, the restoration of French franc, and the complete destruction of monetary union has just defeated the establishment in the Brignoles run-off election. It is threatening Frexit as well, which rather alters the political chemistry of Britain's EU referendum. Marine Le Pen's Front National won 54pc of the vote. It was a bad defeat for the Gaulliste UMP, a party at risk of disintegration unless it can find a leader in short order. President Hollande's Socialists were knocked out in the first round, due to mass defection to the Front National by the working-class Socialist base. The Socialists thought the Front worked to their advantage by splitting the Right. They have at last woken up to the enormous political danger. The Front National is now the most popular party in France with 24pc according to a new Ifop poll. – UK Telegraph

Dominant Social Theme: Europe is not divided. It is united!

Free-Market Analysis: In our quest to quantify what we call the Internet Reformation, the Telegraph's Ambrose Evans-Pritchard is sometimes helpful because of his skill (unusual in the mainstream media) in integrating business and economic trends with political ones.

This article, excerpted above, is a good example of how he does it. It seems once again to support our own perspective that the 21st century is a good deal different from the 20th and what we call the power elite is having a harder time than ever establishing and maintaining its dominant social themes.

In the US, we see ongoing changes stemming from an inchoate Tea Party movement, which in our view is a version of libertarianism. And as we've often pointed out, libertarianism, appealing both to social libertarians on the left and economic libertarians on the right, is quite possibly the biggest political movement in the US.

In England you've got UKIP, a libertarian leaning organization that wants to take Britain out of the EU. And now, in France you've got the Le Pen Front National – a party that used to be considered fascist and racist but which, under the leadership of the charismatic Marine Le Pen, has become somewhat left-libertarian, though admittedly more left than libertarian.

Evans-Pritchard does us the service of alerting us to this development. Here's more:

Both the two great governing parties of the post-War era have fallen behind for the first time ever. The Gaullistes (UMP) are at 22pc, and the Socialists at 21pc. I am watching this with curiosity, since Marine Le Pen told me in June that her first order of business on setting foot in the Elysee Palace (if elected) would be to announce a referendum on membership of the European Union, with a "rendez-vous" one year later:

"… Europe is just a great bluff. On one side there is the immense power of sovereign peoples, and on the other side are a few technocrats." Asked if she intended to pull France of the euro immediately, she hesitated for a second or two and then said: "Yes, because the euro blocks all economic decisions. France is not a country that can accept tutelage from Brussels."

Officials will be told to draw up plans for the restoration of the franc. Eurozone leaders will face a stark choice: either work with France for a "sortie concerted" or coordinated EMU break-up: or await their fate in a disorderly collapse. "We cannot be seduced. The euro ceases to exist the moment that France leaves, and that is our incredible strength. What are they going to do, send in tanks?"

Her four sticking points on EU membership are withdrawal from the currency, the restoration of French border control, the primacy of French law, and what she calls "economic patriotism", the power for France to pursue "intelligent protectionism" and safeguard its social model. "I cannot imagine running economic policy without full control over our own money," she said.

As I wrote in June, the Front has been scoring highest in core Socialist cantons, clear evidence that it is breaking out of its Right-wing enclaves to become the mass movement of the white working class. Hence the new term in the French press "Left-Le-Penism".

She is outflanking the Socialists with attacks on banks and cross-border capitalism. The party recently recruited Anna Rosso-Roig, a candidate for the Communists in the 2012 elections. Mrs Le Pen's EMU withdrawal plan is based on a study by economists from l'École des Hautes Études in Paris led by Professor Jacques Sapir. It concludes that France, Italy, and Spain would all benefit from EMU-exit, restoring lost labour competitiveness at a stroke without years of depression.

Their working assumption is that the eurozone's North-South imbalances have already gone beyond the point of no return. Attempts to reverse this by deflation and wage cuts must entail mass unemployment and loss of the industrial core. Prof Sapir said the gains are greatest in a coordinated break-up with capital controls where central bank intervention steers the new currencies to target levels.

… The fact is that her campaign of "dédiabolisation" or image detox seems to have worked. Only a minority of voters still thinks the Front is a "threat to democracy". Mrs Le Pen is winning over white working-class women in droves. The feminised Front is no longer the party of the angry white male. While her father called the Holocaust an historical "detail", she calls it the "pinnacle of human barbarism". I can understand why a lot of people disregard this as cynical repackaging. Parties don't change their character so quickly.

But as Socialist advisers have warned Mr Hollande, the game has changed. It is not longer enough to keep insisting that the Front is beyond the pale. There is a new fact on the ground. I might add that the Front is nothing like Ukip, a mostly pro-American, Right-leaning, libertarian, anti-welfare, free-market party. Marine Le Pen is an ardent defender of the French welfare model. Her critique of capitalism gives her a Leftist hue. Some call it 1930s national socialism, and here we are starting to touch on the populist appeal.

She fulminates against Washington and Nato, calling for France to retake its place as "non-aligned" voice in a multipolar world, and lashing out at the Gaulliste UMP for selling its soul to Europe and the Anglo-Saxon order. "There was a de Gaulle of the Left, and a de Gaulle of the Right. There were two de Gaulles. We stand for both," she said.

The rise of the Front National is yet another reminder that the slow-burn political crisis in Europe has yet to reach its climax. Mass unemployment and the gruelling effects of debt deflation are chipping away at the foundations of the establishment, just as they did in the early 1930s under the Gold Standard, so like EMU today.

This seems an accurate, if hopeful, analysis, though time will tell us of its true worth. A further thought: Even though Marine Le Pen is painted in a quasi-leftist light by Evans-Pritchard, much of her platform seems eerily to resemble that of UKIP, or even the Tea Party.

Strip out the social welfare issues that Le Pen apparently supports and you are left with language supporting a kind of national determinism: a platform emphasizing state control of borders, and of the economy and currency.

Now, electronic newspapers like ours would prefer that control be further localized and not take place at a national level, but at a state or even community level. But, heck, in both England and France now we're seeing powerful party language that opposes the European Union in its entirety.

In the US, in the meantime, the amorphous Tea Party crowd has sent the federal government into convulsions. For a much-reviled movement that is declared dead by the mainstream press at least once a week (when its existence is not merely being ignored), the Tea Party is having quite a bit of impact. UKIP and the French "Front" will likely have their own in due course.

We've spent a lot of time over the past few years trying to explain that a social movement like the "Internet Reformation" doesn't conform to logical expectations and cannot be fully predicted. It may grow quickly in one place and seem to recede in another. But our point has always been that the Internet set something in motion that the power elite will not be able to control for decades. It took them centuries to control the Gutenberg press.

We have used the Gutenberg press as a model for our many accurate predictions. We were not surprised that copyright again – developed initially to slow the spread of Gutenberg's Bibles and other books – became a weapon in the modern elite's war on uncontrolled information. We have pointed out that war and economic depression – and various false flags, as well – were tools the power elite of the day used to try to maintain control.

Capitalizing on disgust with the Roman Catholic Church, the elites of the day may have funded Martin Luther's Reformation. This is one reason we believe that Julian Assange and Edward Snowden are influenced by elite strategies: Neither man may be aware of his manipulation and yet both may be part of something larger …

Many of the elite's machinations apparently availed them little in the aftermath of the Gutenberg press. It would take a great Civil War to bring the US under partial control of European bankers once more, centuries after the original damage to elite control was done.

The world experienced a great if diminishing freedom after the Gutenberg press, and we are living through the same thing now. For the moment, no matter what our "leaders" do, the goals and objectives of further globalization that were so temptingly close only a decade or so ago are probably diminishing.

This must be a great frustration and we have seen the level of authoritarianism and brute force pick up radically in this past decade. It is almost as if the world is having a temper tantrum and expressing it via wars, totalitarian bureaucracy and increasing economic chaos.

We really don't believe at this point that the objectives of Western internationalists are going to be realized any time soon. Too bad for them! The Gutenberg press was such a blow to the elites of the day that they virtually abandoned rule by kings in favor of developing what we now call regulatory democracy. What will happen this time around?

The obviousness of the elite's dominant social themes has become increasingly apparent year-by-year. Global warming is in ruins; Peak Oil lies abandoned; the war on drugs is being radically pruned. Many of these promotional elements are simply unsustainable in the Internet Era. Others are being abandoned because the elites are trying out new strategies of control – usually without much success.

The power elite has responded to all this with heavy-handed authoritarianism. But creating regional wars, building huge spying infrastructures and making people so scared that their inner lives are not congruent with their outer ones is not a recipe for long-term success. This is the reason that the power elite used dominant social themes in the first place. None are so enslaved as those who do not know it …

But today, too many know.

It doesn't take a majority. It only takes an informed minority. And that minority is surely present in the US and is growing in Europe, as well. Soon it will reach Asia, and eventually South America – and even Africa. Just as with the initial Renaissance, and then with a Reformation that soon spun out of control, the elites will lose at least some of the control they finally regained in the 20th century. We'd argue they already have ..

After Thoughts

An enlightenment is taking shape, though of course these things go in cycles: One day this enlightenment too shall be dimmed. But right now, we'd argue it is in the ascendant. And that makes this era an exciting one for entrepreneurs, for inventors, even for investors – so long as they fully understand the reality of the tensions creating significant fault marks in post-20th century economies. Stay tuned!

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