But in the end, he succeeded in outmaneuvering and sidelining the Communist Party, to the point where it is no longer a force in politics. This move in the long run helped to consolidate the Socialist Party as the major party of the Left in France. Equally important, it won Mitterrand the grudging respect of his critics to the Right.

Since the 1990s, the PS has been solidly middle-class in its make-up, and cannot be seen as revolutionary in any way, whatever its political enemies like to claim. Meanwhile disenchanted blue-collar workers gave up on the Left altogether and began migrating to the other extreme, voting for the ultra-nationalist and populist National Front party of Jean-Marie Le Pen. This party's candidate, Marine Le Pen—Jean-Marie Le Pen's daughter—pulled a staggering 18% of the vote in the first round of the 2012 presidential elections.

Growing worker disenchantment with socialist rule in the 1980s also reflected France's continuing unemployment problems and Mitterrand's inability to relaunch growth. His predecessor, the center–right politician Valéry Giscard d'Estaing, had tried to liberalize the French economy. Mitterrand instead embraced the interventionist policies of France's earlier experiment in socialist governance—that of the Popular Front of 1936-1938.

True to their roots as the party of social justice, the President and his Minister of the Economy and Finance, Jacques Delors, initially directed a massive infusion of money into state benefits programs when they won power in 1981, including family allowances, pensions, and housing benefits. They also raised the minimum wage in the expectation that the rising tide of state monies would revive the struggling economy—policies which might best be dubbed a form of redistributive Keynesianism.

The hope was that higher wages and social transfers would spur domestic demand; a new tax aimed at the nation's wealthiest citizens was also introduced. To make a long story short, within two years it became clear that these policies could not dam the tidal forces of the global economy. By mid-1983, unemployment had increased from 6.3% to 8.6%. The trade deficit fared no better, and inflation soared to 14%.

Part of the problem was that France joined the European Monetary System in 1979, which in effect prevented any member from a major devaluation of its currency to solve domestic problems.

As France's economic woes mounted, Mitterrand had to choose between continued European integration, which meant in theory a dramatic reduction in public spending and restructuring of its industries to compete in the global economy, or retreating into a kind of economic autarchy within its own national borders.

Despite the reluctance of many members of the Socialist Party, he chose integration from 1984 onward, and tens of thousands of workers were laid off. There was, however, no simultaneous rollback of government expenditures—this at a time when Margaret Thatcher and Ronald Reagan were slashing their budgets for social programs and lamenting the corrosive effects of an overweening welfare state.

The number of civil servants in France rose from 3.8 million to 4.7 million between 1980 and 1990, and today they account for about half of the state's outlays. Although inflation was checked, unemployment continued to climb in France. Today it remains stuck at 10%.

Sarko and the Challenge to the Welfare State

Mitterrand's willingness to countenance massive unemployment to make France more competitive and his unwillingness to rein in public spending on education or social programs may look to outsiders like a typically "socialist" response to the French crisis.

In point of fact, and despite France's on-going economic problems, there continued to be very few voices anywhere on the political spectrum under either Mitterrand or his conservative successor, Jacques Chirac (1995-2007), calling for deep cuts to France's generous social security system.

Only with the election of Nicolas Sarkozy in 2007 did a French president openly advocate the need for reining in the welfare state. Sarkozy's decision to introduce austerity was unpopular, but he made himself even more unpopular by some of his other antics in office.

By 2012, Sarkozy's standing in the polls had plummeted, and he now has the dubious distinction of being the first incumbent French president since 1981 not to have been re-elected. Part of the problem lay with his personality, part of it with his policies.

Once in office, Sarko embraced a kind of star-struck flashiness that profoundly alienated large segments of France's citizenry, regardless of their politics. Nicknamed early on in his mandate the "bling bling president" by the leftist newspaper Libération, the epithet stuck.

The new president surrounded himself with celebrity and multi-billionaire visitors, whom he greeted while wearing designer suits, expensive sunglasses, and conspicuously large wristwatches. Upon winning the election, he threw himself a party at Fouquet's, a stylish restaurant on the Champs Elysées for those who liked to flaunt their wealth, which no ordinary French person could afford.

He proved mercurial in his moods, even when dealing with other heads of state. He also paraded his personal life in public, often at moments when he was in political trouble. Such blatant showmanship constituted an affront to a nation that prides itself on protecting the privacy of its statesmen, and which has traditionally expected a certain display of intellectual loftiness, solemnity, and detachment in its presidents.

Perhaps if this "style" problem had been compensated by more successful economic and social policies, Sarkozy's transgressions might have been forgiven. Alas, policy and style seemed to be cut from the same insensitive cloth.

He consistently supported the German Chancellor Angela Merkel's drive—unpopular in France—to cure the euro zone debt crisis with deep budget cuts and caps on future spending. And he earned the new nickname of "Merkozy."

At the same time, his presidency was marred by several high-profile corruption cases involving personalities close to him, including ministers. Among other serious allegations is the charge that Libya's former leader Muammar Qaddafi funded his 2007 campaign. There is no question that repeated missteps of this nature lost him the political capital he had amassed five years earlier.

Many centrist voters were especially put off by his shameless catering to the racist xenophobia of the extreme Right in the final months of the campaign, in a last-minute bid to broaden his base.

Governing "Humanely": Hollande, French Socialism, and the Global Economy

French voters evidently believed that Hollande would better protect their current benefits than the incumbent President Sarkozy did.

One of Sarkozy's most contested policies to help stimulate growth was educational reform, including massive cuts in the numbers of public teachers. By contrast, Hollande has proposed creating taxes on businesses and the rich to fund spending on education, investment, and state-aided job creation.

The new president has already acted on these promises, instituting an income tax of 75% on those earning more than one million euros and cutting his own salary by 30%, along with those of other high-ranking civil servants. He has promised to increase the minimum wage (already the highest in Europe), to hire 60,000 new teachers, and to lower the retirement age from 62 (which Sarkozy mandated in 2010) to 60 for those who started working very young.

Yet the fact remains that in 2012, even more than in 1981, France is going through a major economic and social crisis, and is more than ever linked to the rest of the world, especially Europe. Just how much room Hollande will have to implement the Socialists' traditional goal of social justice remains an open question, especially given that the new president has made clear that he remains fully committed to the European project.

As France's newspaper of record Le Monde recently pointed out, although everyone in the Eurozone advocates the need for growth, various proponents aren't always talking about the same thing.

While Hollande regularly evokes the possibility of a European "New Deal" modeled on that of the Roosevelt era in the United States, conservative leaders of Europe continue to advocate austerity policies and economic liberalization, especially in the labor market.

Those who favor compromise are nevertheless encouraged. Hollande may talk a tough line—Germany should not, he told supporters on the campaign trail, "decide for all of Europe"—but he has promised to keep to the outgoing government's commitment to bring France's budget deficit down to 3% of GDP next year, and so far has not wavered over this—a first for a Socialist candidate.

And according to the British weekly The Economist, although Hollande says that he will postpone balancing the budget until 2017, a year later than Sarkozy had planned, not once has he advocated a deficit-financed stimulus for the French economy. In this sense, he has emancipated himself from Mitterrand's Keynesian experiment of thirty years ago.

What remains to be seen is how Hollande will manage to bring down the current deficits and deliver on his spending pledges, all at time when the IMF has forecast an anemic 0.5% growth rate next year.

A Return to Normalcy?

If the French people cling to their "different" model of economy and society from that of other Western nations, one in which the state has historically played an enormous role in regulating the free market and guaranteeing a minimal level of security to its citizens, they are not blind to the need to adjust to the realities of the new global economy.

Socialist elation on May 6, 2012 was more subdued than that of May 10, 1981. After three decades of a stagnant economy and twenty years of 10% unemployment, no one on the Left believes any more that inequalities can be abolished altogether. But they do insist that there are better and worse ways to manage the deep structural reforms that are required in order to remain competitive internationally.

Hollande's victory reflects the fact that a majority of French men and women believe that their new president will distribute the pain of austerity measures more fairly and humanely than his predecessors and in a way that will bring them together, rather than divide them.

This dimension of the old socialist dream has not died.

Hollande has already brought to French politics a salutary change in style and tone, in his speech and in his behavior. No Fouquet's banquet for him, no nepotism, and no favoritism; he and his partner Treitweiler wish to live in the same apartment as before, to maintain as "normal" a life as possible. A genuinely affable person, he has encouraged his supporters to respect their opponents.

With this version of socialism returning to power, many French were initially breathing a post-election sigh of relief.

However, Hollande's poll numbers have dropped like a stone over the last couple of months. In part, this is due to the missteps and confusion among his different ministries—so much so that in late August a prominent political weekly journal asked "Are they all incompetent?"

In part, this disillusion reflects the climbing unemployment numbers—for the first time since 1999, there are now more than 3 million French looking for a job.

But it also stems from Hollande's own aspiration to appear "Mr. Normal." Many commentators, on the Left as well as the Right, are asking if "normalcy" is all France needs just now.