The free market has failed and it is time for a new model, says author and researcher Emmanuel Todd in this week's Le Nouvel Observateur. He criticizes French president Nicolas Sarkozy's reaction to the economic downturn, saying that he has ignored the lessons of the crisis: rather than trying to practice old habits with a few twists, we need a complete overhaul of business-as-usual. Todd believes that free trade has actually led to a plunge in demand, created social insecurity and a lowered the standard of living. Against this backdrop, he writes that protectionism is the last chance for European democracy.

Although free trade was once useful, says Todd, its heyday has passed. Globalization, as we know it, is gone, and the best way to proceed is to turn inward. Europe could decide to become a regulated economic zone, protecting itself against imports and outsourcing. With a population of 450 million, this goal is not as far fetched as it sounds, he says, because there is considerable potential to be self-sufficient. At the core, Todd believes that protectionism is less about halting imports and more about creating the conditions that stimulate domestic demand and raise European salaries. The transition to protectionism is possible as long as French elites recognize their social responsibility and promote protectionism as the way to stave off the decrepitude of the Old Continent.

All of this, however, is contingent on Germany's acceptance of this new direction. Although the French don't like to admit it, Germany is the heart of European economic production. Without Germany at the helm, there is no way that Europe can turn around its economy. It is essential to make Germany understand that there is a bigger gain to be had by increasing domestic demand than by relying on unpredictable global demand. To encourage Germany's participation, Todd thinks that France needs to acknowledge Germany's political and economic power and encourage Germany's recognition of its responsibility in redesigning European protectionism.

Todd insists that this system is the best way to ensure the future for Europe's children. Free trade "has destroyed two generations," says Todd. The only way to be sure that will not happen again is by inventing a new European economic model.