Paris—A few days into the wave of strikes in December against French President Emmanuel Macron’s pension reforms, a rumor went around that he’d recently met the boss of US investment fund giant BlackRock, Larry Fink. It’s true that since becoming president, Macron has met with Fink on several occasions. It’s true also that the firm has taken a clear interest in French government policy on retirement savings. But the rumor was false.

It didn’t matter: France’s social media networks went into overdrive. A YouTube video showing images of an earlier Macron–Fink meeting with the caption “Pension reform is BlackRock reform” went viral. The firm, which is the largest shareholder of many French multinationals, is regarded in France as the epitome of predatory capitalism—and Macron himself, a former investment banker, is seen as a standard-bearer for high finance.

Emmanuel Macron’s year thus ended as it began, with mass protests against his social policy. With hindsight, it had become plain that the Gilets Jaunes (Yellow Vests), the grassroots uprising that was sparked into life by rising fuel prices and the increased cost of living, reached its high point in January 2019. Eleven months after that populist but politically disparate movement’s peak, the mobilization of opposition to Macron now looks more traditional.

Led by trade unions, notably those representing workers for the national rail company (SNCF) and the Paris metro, this new wave of protest is rebelling against the French president’s proposed pensions reform. These labor unions were big losers in 2018 when they failed to prevent Macron from abolishing the special status that, for example, gave their members guarantees of job security. The rail workers are now challenging a plan designed to end a number of benefits, including the right to retire several years earlier than most employees. Very quickly, staff in other sectors—teachers, doctors, nurses, and nursing auxiliaries—together with large numbers of pensioners and students joined them in striking. The Interior Ministry reported that some 806,000 people had taken part in demonstrations across France on December 5, the first day of action; the left-wing General Confederation of Labor (CGT) trade union federation put the count at 1.5 million. Either way, it was the biggest turnout for a general strike in a generation.

This was not the first time that a French government had tried to reform the pensions system. In 1995, under President Chirac, Prime Minister Alain Juppé proposed a major overhaul of health coverage and pensions, with the aim of reducing the chronic deficit in state spending. After three weeks of strikes and demonstrations, Juppé had to bin his plan. Later, presidents of both right and left (Sarkozy in 2010 and Hollande in 2013) also tried to introduce pension reforms. But after getting their fingers burned, too, those measures were much more modest. From day one, undaunted by these unpromising precedents, Emmanuel Macron pledged to succeed where they had failed.

The French public health and pensions systems were codified in the aftermath of World War II, and their guiding principle has always been of “intergenerational solidarity.” Despite being called “health insurance” and “old-age insurance,” these systems are not what is usually understood by the concept of insurance. Nor are they mostly state-run. They are managed jointly by employers’ and employees’ representatives, with each generation contributing collectively to finance the pensions of the older one retiring ahead of it. These contributions, to both pensions and health insurance, are mandatory, with employers and employees paying, as a rule, shares of around 55 percent and 45 percent, respectively. This “pay-as-you-go” system, as it is known, is distinct from private pension funds that employees may also have. This second system, known as a “funded” scheme, can bring greater dividends, but may also be riskier—and employees have no control over how their pension fund is invested and managed. The fear of French workers, then, is that Macron is planning a more privatized future in which these funded pension plans will gradually replace pay-as-you-go (as has largely happened in the United States).

The French president insists that he intends only to substitute a “fairer and clearer” pension management system for an outdated one that has become increasingly complex over the past seventy years, with countless exemptions from the norm. The monthly pension of civil servants, for example, is based on the average of their six final salaries, whereas that of private-sector employees is calculated on the average of their twenty-five highest-paid years. By now, there are forty-two “special” retirement plans, all more advantageous than “normal” pensions.

In the case of the 145,000 SNCF employees, they are at present entitled to retire between the ages of fifty-two and fifty-seven. Macron’s reforms seek to bring these workers into line with the general retirement age—which is presently sixty-two, but set to be raised to sixty-four (as the age a worker would need to reach to collect a full pension). Clearly, some SNCF staff would be looking at another decade or more of working life. The argument for reform is that when the system was designed, in the late 1940s, the driver of a steam locomotive retiring at the age of fifty could expect to live no more than another decade. But the drivers of modern-day high-speed-trains, though skilled technicians, have a much less strenuous job, and their average life expectancy is now more than seventy-five years. The same is true for workers in almost all sectors of industry.

On top of this, increased longevity and later entry into the workplace have reduced the ratio between the number of years worked and the number of years in retirement. In short, social, health, and technological changes are making many of the old pension arrangements, these “special regimes,” unfit for purpose nowadays. Fighting against such unfair “privileges” for some categories of workers is Macron’s leading argument in favor of his reform. And in theory, his proposed new, standard “universal retirement plan,” based on a points system for each hour worked, and identical for everyone, seems to adhere to notions of fairness and clarity.

However, employers, including the state, have also taken advantage of these so-called privileges to hold wages down—since the generous pension benefits are seen as compensation for low salaries. As a result, entire categories of workers have seen their wages stagnate and even fall in real terms. This is particularly true for staff in the public sector, who are the main beneficiaries of “special schemes.” French doctors and nurses earn among the lowest salaries in Europe, and thousands are deserting public hospitals. The same applies to education: in France, a high-school teacher at the peak of their career earns about 42,800 euros ($47,770) a year before tax, whereas in Germany, a teacher’s final salary is approximately 72,400 euros ($80,780). But Macron’s universal standard will necessarily mean harmonizing the whole panoply of pension plans downward for millions of employees—without covering anyone’s lost benefits with higher pay.

Why is he doing this? Because, whatever he says, he is a fiscal conservative: his way of thinking is primarily governed by his determination to balance the books.

Since French pension funds were already in financial difficulty, the real reason for reform is not so much to manage pensions more efficiently, but to reduce their cost. And the government’s strategy for getting the reform through has been to try to divide the workers, telling private-sector employees that safeguarding their pensions requires the abolition of public-sector workers’ special privileges.

Not surprisingly, people see through the device—and this explains why the pensions issue has brought huge numbers of protesters out on the streets, including young people who are usually difficult to mobilize around an issue that seems abstract and far in the future. Nurses and students especially see the dispute as part of a general erosion of terms and conditions and pay. And many of them see the only winners as being those with the means to preserve their pensions through private insurance schemes.

President Macron’s perceived arrogance and lack of experience has only added to public suspicion of a hidden agenda. After a week of strikes last month, he sent out his prime minister, Édouard Philippe, to explain in a series of interviews the details of the reform. The result was a fiasco.

Until then, the moderate union organization the French Democratic Confederation of Labor (CFDT) had been in favor of a universal pension and intended to negotiate its details with the government, and so had not taken part in labor action. After Philippe’s speech, however, the CFDT leader Laurent Berger announced that although his union still supported a universal pension in principle, his members would now join the demonstrations. The government compounded its strategic misjudgment with unforced errors, such as offering—as a concession—a minimum monthly pension of 1,000 euros ($1,116). But the unions quickly did the math and found that most employees would have reached that level within three years in any case. “They take us for idiots,” said one union rep on national television.

Women’s rights advocates are adding their voices to the protest, pointing out that women are more likely to have “disrupted working lives,” thanks to pregnancy, childcare, and career breaks, so they would be the main losers in the proposed points-based system that calculates a person’s pension entitlement at retirement over their entire working life rather than, say, the best twenty-five years. The contradictions in the government’s position were swiftly laid bare.

Just before Philippe’s counterproductive intervention, four eminent economists—Philippe Aghion, Antoine Bozio, Philippe Martin, and Jean Pisani-Ferry—all Macron supporters who helped draw up his campaign manifesto and were involved in talks on introducing the universal pension system—sounded the alarm. “To achieve such an ambitious reform, clarity is needed… But so far this has been lacking,” they wrote. And they highlighted three errors: that “budgetary considerations” had overridden the reform’s main aims of “transparency, security, trust, and fairness”; that the reform had generated mistrust by failing to lay out clear rules that would maintain the value of pensions “even in periods of recession”; and that merely “extending [the deadline] for the various measures to take effect” was beside the point since, to win popular assent, the reform had to be seen as “socially just and economically efficient.” But Macron’s team offered no response, other than continuing to vacillate between stonewalling and vague conciliatory noises.

Philippe’s only significant concession was to say that the universal system, which was to come, step by step, into full effect by 2025, would now be delayed until 2037. The gambit was about as subtle as a brick: for anyone aged forty-four or older, don’t worry—only your kids will be affected. No wonder the strikers harbor a deep-seated conviction that the government’s real aim is to dismantle the welfare state.

Nor is it a surprise that Macron seems unable to shake off the nickname “président des riches,” or “president of the rich.” According to INSEE, the French equivalent of the Census Bureau, 2018 saw the greatest increase in inequality since 2010. The poverty rate has also edged upward, to more than one in seven of the population. This would seem its own rebuke to Macron’s version of “trickle-down economics,” which early on gave a generous tax break on investment income to France’s wealthiest people.

It was precisely to avoid Macron’s pension reform being seen as a prelude to the takeover by private insurers that his former economic advisers urged him to separate his rationalization of the pension system from his stated aim of balancing the budget. The president’s refusal to do so appeared to confirm the strikers’ worst fears, but after a month and a half of strikes—the longest period of such labor unrest in modern French history—they have not defeated his plans yet. Although polls show that a majority of French people support the demonstrators, opponents of the reform are struggling to put forward an alternative.

The left-wing economist Thomas Piketty has proposed “doing everything possible to guarantee and improve the lowest pensions (between one and three times the minimum wage), even if that means a bigger ask of those on very high salaries and with assets.” Other left-wing academics, a group known as “les économistes atterrés,” the “appalled economists,” reject the Macronistes’ claim that there are only three options for addressing the shortfall in pension funds: increasing the number of years worked to augment contributions, reducing the level of pensions, or a combination of both. They advocate instead measures based on preserving that foundational principle of intergenerational solidarity and the underlying collectivist, redistributionist ethic of the system, which Macron’s reform would erode.

But the progressive movement is struggling to shift the focus of the debate. Not only are its trade unions being progressively undermined (especially the CGT, which, long associated with the Communist Party, has lost its hegemony), but the left in general is struggling to offer a credible alternative to the prevailing economic system. The left appears as the “Party of No,” with no real plan of action. France is not alone in this. From Chile to Iraq, from Lebanon and Algeria to Ecuador and Sudan, 2019 saw a spate of popular uprisings that in some way expressed rejection of a global economic order that appears increasingly out of step with people’s needs and offers only greater precariousness. What these uprisings also have in common is their repudiation of the political sphere; rather than the means for redress, it is seen as the embodiment of negligence and corruption.

In France, after days of strikes, a sudden revelation came: Jean-Paul Delevoye, the minister appointed by Macron to formulate the pension reforms, had “forgotten” to relinquish thirteen other posts, including several paid positions (worth at least 120,000 euros, or $134,000 a year)—one of which was with a private insurance firm. A clear conflict of interest. Delevoye, an experienced politician who has been a mayor, a deputy in the National Assembly, a senator, and a minister, pleaded good-faith ignorance of the rules—an explanation the public greeted with cynicism. “These people think they are above the law” is the popular response. That is how the political class is judged. At first, the government had tried desperately to save its soldier Delevoye. But a week later, he resigned.

The Delevoye affair was disastrous for the government. The general disaffection with politics stretches from left to right, and in France, as in the rest of Europe, social democracy is gradually disintegrating. The old political order has increasingly failed to protect the welfare state from the unchecked growth of financial capitalism, which leaves no room for the redistribution of wealth. Worse, social democracy itself is implicated, because for a century, from the age of Bismarck until the 1970s, it worked in partnership with industrial capitalism and benefited politically from the arrangement.

Today’s globalized financial capitalism, though, gives governments little space to negotiate with traditional labor unions; neither does it allow much room to maneuver to center-left reformist parties. Hence the slow disintegration of the old social-democratic compact, which has almost nothing more to offer to workers. As a result, the hostility of a majority of French employees to pension reform has no real voice or representation in the political system. And this crumbling left is unable to come up with any credible alternative to what Macron proposes. The people are rebelling against the brutal domination of financial capitalism but they find themselves without a party.

Emmanuel Macron appeared, in effect, to share this analysis; at least in the sense that he saw no institutional opposition to his proposals beyond the street protests. After realizing that the protest movement was set to last, he opted for a strategy of pourrissement—letting things fester. On December 23, while the government accused the strikers of ruining everyone’s Christmas, he suddenly announced that talks with the unions would resume—but not until more than two weeks later, on January 7. Then he offered exemptions from his “universal pension scheme” for specific categories: the military, police and firefighters, pilots and employees of state-owned airlines, sea-fishermen, truck drivers, dancers at the Paris Opera, and others. In other words, he reintroduced “special regimes” on the fringes, the same regimes he’d vowed to abolish. But he has remained focused on the main pillar of his overall reform: reducing the deficit.

On January 11, Prime Minister Philippe put forward what he claimed was a major concession. He appeared to retreat from the position of raising the retirement age for full pension to sixty-four. But to find the 12 billion euros ($13.35 billion) needed to balance the books, he said he was still committed to raising, in a phased way, that age from sixty-two. Even the moderate CFDT adamantly opposes this, and so Philippe has given the unions and the employers four months to come up with an alternative—although he has ruled out one possible solution: an increase in pension contributions, which employers oppose. If the stakeholders fail to reach an agreement, the government will put its original proposal to a vote in the National Assembly (and it has now presented it there for debate). In other words, if there is no increase in working years and no increase in contributions, there will be only one option: to cut pensions.

This, of course, is anathema to all the trade unions. With the exception of the CFDT, they have labeled this plan “a con.” But Macron’s ministers have begun to trumpet that “there is no longer any reason to strike,” thanks to this supposed concession. While opinion polls show that rejection of the reform has broad popular support, the strike does appear to be unraveling. Strikers have already lost more than a month’s pay, and Macron seems convinced that this is his “Thatcher moment,” his version of the Britain’s miners’ strike of 1984–1985, when the Iron Lady refused to negotiate an end to a strike called in protest at pit closures.

As they were for Margaret Thatcher thirty-five years ago, the stakes for Emmanuel Macron today are hugely high—far beyond simply the need to fix the pension-fund deficit. Macron believes that this battle is fundamental—and the unions agree. When he was elected, Macron’s favorite expression was “and at the same time”: I deliver a blow to the left, “and at the same time,” a blow to the right. Those days appear to be over, precisely because the old social-democratic settlement is failing. Macron means to propel France into the era of financial capitalism, and he is no longer trying to maintain a centrist position but to rally the right to his standard.

Macron’s overhaul of pensions is a response to what the French conservative right has wanted to accomplish for two decades, without success. The French right is also weaker politically than it once was, but far less so than the center-left. Hence Macron’s strategy. De Gaulle used to say, “Between me and the Communists, nothing,” by which he meant: as long as he made sure that his only opponent was the Communist Party, he would always keep power. Macron believes that social democracy is no longer a threat to his rule. So, if he succeeds in siphoning off to his cause a vast majority of the old conservative and center-right voters, the Gaullists and the Sarkozy-ites, then there will be nothing between him and Marine Le Pen. If populist far right is his only opponent, he will always win. It’s a risky game.

This essay was translated from the French by Ros Schwartz.