Archive for December, 2009

France, an “undeveloping” country

Basically, what I mean by an “undeveloping” country ?

A post-industrial country that failed to follow all profitable technologies in order to enable needed development of “country infrastructures” and people from such country, getting too much money to perform things not useful for the mass and collapsing the whole economy for nothing.

Understanding France and the so-called “French”

Some people say that French have the left hand on the “heart”  while the right hand on the “wallet” in the pocket. So the French can be seen both as a commie (from a US citizen point of view) and as an ugly miser capitalist (from a Chinese toys producer for instance).

So why such shocking previous statement ? We need to dig further to understand the French beast

The French is proud, arrogant, and individualist.  French people are passionate at politics, however passionate in the worst meaning, where passion takes over the reality. This explains why there is so much heterogeneous politics parties from left to right wing: from the most anti-capitalist one (more commies than commies), passing through “green parties”, left and right moderates, to the most fascist ones.

Individualist also is pushed in its worst meaning: to be selfish. For instance, in the US there is a lot of voluntary work and foundations doing the “social work”, while in France most of such “social things” are handled for the most part by the French “state” and very few voluntaries. Basically, when a French see a poor in the street, most of them do not care because there is help from the state (actually, there is a poor explosion as I will detail after).

The “State” can handle it, or how unrealistic is the French

The State is something that can handle anything for French. Before the French revolution, there was the so called  “absolute monarchy” where everything was centralized as a whole state, after the French revolution, few things have changed from this central and absolute system, despite recent “advances” to distribute some amount of  power (I will detail such “advance” after). The hierarchy is almost the same, most of top “politics” have been educated in the well known civil servant school called ENA (founded after World War 2), despite this is changing a little bit, a very few have done any real business. Most French politics have no idea what is the reality of markets. Moreover, since there is a very important part of the population working as civil servants, how can they know about such reality: even if they work or not, there is no change for them and they get payed whatever their performance. Since, there is a lot of politicized syndicates in civil servants, the politician must be stupid to say “no” to such persons… That is why there is no needed change that has been passed for education,  to limit the number of civil servants…etc… (to give a funny image, imagine that some people driving trains receive money for charcoal, even if all trains work with electricity…). Such persons are only interested in their own living standard, and they always assume that the state has enough money to do this or that. However, this is not the case… with around 1500 billion euro of debt, and around 10 billion euro of additional debt each month.

Following this selfish attitude, France has a long and constant history of corruption (as any “developing” country I would say) where a lot of money is wasted by politicians and their friends to do however nothing useful. Actually, this is one of the major illness of France: to waste money for nothing useful. The France state is just like a huge and heavy car, that wastes a lot of gasoline. But, instead of fixing the leak, people are adding more “features” to this car such that is getting slow and slower, the car is wasting more and more gasoline and sooner will fail resulting in forthcoming “crisis”.

Monopoly and the quest for absolute of French people

Following the absolute monarchy, there is an absolute way of handling things for French people, there is always a definite answer. However, reality is much more complex, it needs more balance, adaptability in face of moving situations and the pace of changes we have to deal with in real life. Sooner or later, such absolute attitude falls despite it can be a good choice at a time.

Following, this attitude, since we have the answer why change this ? Since there is no open attitude towards new answers, such attitude is a bottleneck from a point of view of investment. This means that French people like to create monopolies, lobbies, syndicates …etc… You already had an example about political syndicates for civil servants. I can provide another monopoly about electricity: France is full of nuclear plants, it has a lot of hydraulic energy, but almost no wind mills. Nuclear plants is still the definitive answer for electricity in France, despite that a huge number of wind mills are built over the Earth.

Recreating aristocracy across France

The “decentralization” aim at giving more administrative power to so called “departments” (around hundred) and “regions” (a set of departments). However, selection of people working in such department and region is now bound to a set of local persons, this means more favoritism in the workspace, friends at some key positions to ensure your position and so on. Actually, it is another kind of corruption where we create some new aristocrat class holding the power to promote people from the same class while not using fair and unbiased selection process. Such trend is widespread in all administrations in France. Since there is less central control and more power on local representatives, there is literally an explosion of the number of people hired in such administrations for the last two decades. A lot of such administration at the granularity of the department, the region or the state are “duplicated”, meaning a lot of such civil servants are useless and a tremendous charge for the working force of the France. This problem is widespread also on very local level such as cities: do not forget that most French politicians have a wide range of action, across  the state, the region, the department and the city.

Poor explosion, smaller middle class and lack of money

As introduced before, the France state handle a lot of social aspects. When someone has no job, he/she can ask for the RSA where he/she gets around 500 euro by month. Actually, there is around 1.63 million of people having such RSA (and 1,13 million in 2008, actually there is a change to relax the set of conditions to receive such money).  When you consider the size of the country, the number of civil servants and the huge number of “grant” and other kind of helps people can receive, this is a huge charge and it means that a lot of taxes are needed at any level.

A good indicator of the health of the economy of a given country is the gross/loss of people count in the middle class.  Basically, its meaning is does people from the poor side can feel better and have more money. However, as expected in the previous paragraph there is slight cut in such middle class head count. Since, there is a lot of increase in different taxes that an enterprise must pay to hire some people, such money cannot be used for investment to earn more money and hire skilled people.

What to do to redevelop the France ?

The first part is to gain acceptance to do more on less, and have an effective state. We need to reduce the load on all people making the money, there is no issue to still having a strong state on all social aspects, but we have to balance what is needed from what is luxury. This asks for simplicity ! Simplify the life of people to help them focus on the real things, and not waste there precious time.

  • Re-centralize and break new aristocracy: corruption, favoritism is an illness of such system. The France is a small country and do not need to have such hierarchy and all such administrations.
  • Remove not needed administration slowly but surely.
  • Social reforms (health, old persons …etc…) what is needed and what is luxury.
  • Tax cuts for all classes
    • Nothing to pay for poor and middle class (or almost nothing): to have a more dynamic economy (sales tax in France are of  19.6%).
    • Almost no taxes for rich class, as long  as taxes are invested to build new enterprises, to give grant for research. We want to have such persons very involved, since such people are making the real money and we want them to make much more, such that the state can have more. Basically, the state makes an investment in such people to make more money for the state, instead of just having the money and not creating real employment (of course, such people have to play fairly the game).
  • Involve, stimulate people and rethink education for the whole life of each person: we need more education, to have more innovation and create new products and new markets.
  • Enable all classes to make more money (yes, call me foundation…).

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