The Doom of Neoliberalism or That of Redistribution? Land and France's Political Transformation

Why does rising inequality not lead to rising electoral demand for redistribution and to a stronger challenge of neoliberal politics? Proponents of the ‘knowledge economy’ argue that skill-biased technological change has increased market inequality, but that social investment provides for increased human capital and stronger growth, hence incentivizing the compensation of market inequalities through redistribution. Proponents of the concept of the ‘Asset economy’ however, have insisted on the role of growing housing wealth amongst the middle-class to explain lower demands for redistribution but have defended that the rise of house price ultimately weakens homeownership accessibility for those middle classes, threatening their support or tolerance for the neoliberal status quo. This article explores the redistribution puzzle through the case of France, which has recently experienced both rapid economic change in the direction of an asset economy and radical change in the hierarchies of party politics. In addition, France’s electoral system, two turns majoritarian elections, provides a unique case study of political cleavages. It finds that some of the expectations of the asset economy theory are confirmed and others not: inequalities in housing wealth do drive new political cleavages in France – even controlling for education or income – and a growing contestation of the economic status quo. However, this contestation does not arise from the middle-classes’ decreased accessibility of homeownership because of higher house prices. On the contrary, the rising challenge of the status quo is divided between two opposed trends: voting for the left and for the far-right. The first one arises from the popular urban classes who face housing unaffordability and the second from middle-class homeowners who face relatively lower local house price increases (and therefore, supposedly, downwards social mobility). The French case is characterized by rising territorial divergence and the emergence of two competitive cleavages, a class one between renters and homeowners and a territorial one between homeowners, leading to a triangular politics between the left, the center and the far-right. While an anti-redistributive coalition between homeowners is possible and has materialized since July 2024 in France, an anti-status quo populist coalition would face highly salient contradictions resulting from the conflicting position of petty bourgeois homeowners and renters on redistribution. A ‘third way’ coalition between the left and center is theoretically possible on ‘social investment’ but would require a changing political model in France. In consequence, while redistribution is challenged but not doomed despite rising inequalities, neoliberalism remains unchallenged.