GDP in retreat: the minister blames the economy, the budget looks elsewhere

According to Le Monde, France's gross domestic product shrank by 0.1% in the third quarter, the national statistics institute Insee (Institut national de la statistique et des études économiques) announced on Friday. The economy had stagnated in the second quarter and contracted by 0.2% in the first. Economy minister Roland Lescure declares that "the French economy is at a standstill" and that it "is heading for the wall" without "the budgetary correction we built into the budget". The dispatch we have does not give a breakdown by sector or by spending item, so we do not yet know what pulled the figures down.

Here is our reading, for what it is worth. The first thing that strikes us is the grammar. "The economy is at a standstill", "heading for the wall". The economy becomes a capricious vehicle, almost an animal. Nobody is at the wheel. This is what we call the fetishism of commodities: relations between people (firms that invest or don't, households that spend or don't, a state that cuts or doesn't) appear as the moods of a thing. Yet an economy does not stop on its own; decisions to invest, hire and spend keep it moving or block it.

The second thing is the logic of the remedy. The minister proposes to cure the slump with a "budgetary correction". Note the paradox, without pretending to settle it for lack of data: cutting public spending when activity is falling generally amounts to withdrawing demand from an economy that is already short of it. Three quarters of faltering breath, and the answer would be to tighten further? The state, in the tradition we defend here, is not a neutral referee but a manager of the common affairs of the bourgeoisie, bound by the need to keep capital accumulating. Within that framework, austerity is not a steering error; it is a distribution. Who sees their public services, benefits or wages cut, and who sees their profits and wealth protected?

The dispatch does not say so, but the question deserves asking. When production stagnates, capital does not stand still: it protects its share. Rising unemployment, more precarious jobs, wages that no longer dare to ask for more: the reserve army of labour rebuilds itself and reminds those who still have a job where they stand. We have no employment figures in this dispatch, so this is a hypothesis to test in the coming publications, not a finding.

Finally, the word "recession" hangs over the headline like a weather warning. Two consecutive negative quarters are the common definition; here the sequence is −0.2, 0, −0.1. A paper technical recession, then, but a very real stagnation. And stagnation always has a payer. The question for the coming weeks is not whether the economy is "picking up again", but which of the two groups will be asked to finance the promised correction: those who work, or those who own.