French President Emmanuel Macron’s speech at the World Economic Forum in Davos on Jan. 24 called for nation-states and businesses to join in a “true global contract” to invest in human capital, and meet the challenges of terrorism and climate change.

“Globalization is undergoing a major crisis,” Macron said, “and this enormous challenge requires a collective effort.”

A ‘cultural shift’

In terms of domestic policy, Macron proclaimed France’s commitment to creating a business-friendly environment. Speaking in English for the first 20 minutes of his speech, he declared “France is back!” This was an implicit challenge to the United States, which under President Donald Trump has threatened to ignite a trade war by implementing costly protective tariffs.

Macron’s domestic program is also a repudiation of France’s long-standing commitment to social protection and a regulated form of capitalism. France’s postwar policies, he said, produced a nation in which companies were both “forbidden to fail” and “forbidden to succeed.”

Macron’s economic reforms aim to improve French productivity and competitiveness by encouraging a more flexible labor market, essentially by making it easier for firms to fire their employees. In the past, French governments have hesitated to push such reforms, because of the long-standing power of French unions. Macron appears to believe that his decisive defeat of both the candidates of the left and the right in last year’s presidential election gives him more leverage in this fight than his predecessors François Hollande and Nicolas Sarkozy.

Macron also boasted of a “cultural shift” taking place in France. No longer would the French government assume that adjusting social inequalities with tax policy and job protections was enough. He promised instead that his government would address the fundamental causes of inequality, rather than simply try to “correct” it with taxpayer money. Significantly, his speech gave no specifics on how he would accomplish this, beyond his general enthusiasm for economic growth.

En Français

Switching to French, Macron made a very different argument about the global economy. Economic growth, he stated, can never be an end in itself. A world where all nations compete against one another has led to an unsustainable Darwinian struggle, a race to the bottom. Short-term profits accrue to the few. The distribution of wealth in the world is increasingly unjust.

Macron pointed out that a commitment to growth at all costs creates serious divisions within nations. New technologies and the disproportionate growth and power of the financial sector have created winners and losers in every country. The “nomadic” and talented few who are able to adapt to the new economy move easily from New York to London to Tokyo and back, Macron suggested. Many more cannot adapt and are left behind.

In this way, Macron argued, democracies are corroded from within, providing fertile ground for nationalists whose only solution is to turn inward and close the borders against the world. Populist parties in Europe and North America blame globalization for all their problems. Their leaders pull out of international agreements at precisely the moment when cooperative efforts are most needed. Macron did not name names in his speech, but the audience at Davos certainly understood the reference: Trump’s attacks on NAFTA and the Trans-Pacific Partnership; British voters opting for Brexit; and France’s own National Front calling for the French to leave the EU.

For Macron this is the danger of the present moment: a relapse into a sterile nationalism that is incapable of addressing the real challenges posed by the present.

Three obligations

Macron called for a “true global contract” that rests on three obligations that fall equally on nation-states, their populations and private businesses.

The first is the “duty to invest,” particularly in the education of young women in developing countries.

The second obligation is the “duty to share” both the profits and costs that accompany the new economy.

Finally, Macron insisted that the global contract implies a collective “duty to protect.” The challenges of terrorism, large-scale migrations and climate change can only be met with a collective, multilateral effort.

Macron’s global contract sounds eerily like the promises of the postwar European welfare states: Invest in human capital through subsidies of education, redistribute the value generated by capitalism to all participants in the global economy, and protect the vulnerable through multilateral and cooperative policies that involve both states and the private sector.

The difference, of course, is that France’s older social model depended on a strong state to mediate the clash of interests between employers and labor. His “global contract” is a form of multilateralism that includes both states and nonstate actors. It lacks a mediating force to insist that everybody play by the rules.

Macron’s hope is that a united Europe might play this mediating role. A democratic Europe might thread the needle between the unregulated capitalism often endorsed by the United States and the statist and anti-democratic model provided by China. It’s a compelling vision, but even the optimists will admit that it is easier to see the paths that lead to failure than to success. Macron understands the stakes — but seems to see no other option.

Joshua Cole does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.