
France’s Message for Capitalism: Adapt or Die - howard941
https://www.bloomberg.com/news/articles/2019-03-17/france-s-message-for-capitalism-is-quite-simple-adapt-or-die
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Tsubasachan
Amusing. I suggest France adapts or dies if they want to continue to play a
leading role. Countries are only as strong as their economy and France's
economic performance is uninspiring. Sarkozy is pushing for a transfer of
Northern European wealth to the South but the EU is not the US.

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nostromo
The Yellow Vest movement was largely a tax revolt; a Boston Tea Party type
event.

... and Macron’s big take away is that France needs higher taxes?

~~~
wyoh
Not really, they want other people to be taxed instead of them. Of course
people always find someone richer than them to blame. (Taxes are already very
progressive in France).

~~~
kryogen1c
Even if rich people "cheat" and pay a smaller percentage than lower brackets,
they still provide the overwhelming amount of tax dollars. The idea that rich
people dont pay their share (whatever that is suppossed to mean, a moral
premise that is very nonobvious) is silly.

~~~
kanjus
Your comment is contradictory. If rich people pay a lower percentage than
lower brackets, that corresponds exactly to the idea that they don’t pay their
_share_. According to your logic, if the rich represented 85% of tax dollars
(an overwhelming amount) and 99% of the total wealth/income, they should be
let off the hook

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jondubois
I think that the French economy would be better off if France simply outlawed
all major US online monopolies. There is more than enough talent and ambition
inside France to come up with better alternatives to all major US services...
They just need an opportunity to start.

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personjerry
That's a bold statement, and it goes against my anecdotal experience. Do you
have evidence for this?

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jondubois
I think this is true of pretty much any country. Most of the talent is there,
but they just don't have an opportunity to compete against big companies like
Google.

Just look at China; they blocked all US online monopolies and as a result
they've quickly come up with their own alternative versions of every major
service and the Chinese economy is still going strong. As unethical as it may
seem for the government to control such things, there is no doubt that they're
better off like this (strictly economically speaking).

~~~
personjerry
China has a population (and thus potential audience) more than 20 times bigger
than France; I think it's a weak argument to claim the two economies would do
similarly without further evidence. Similarly, I have trouble believing the
talent is there, having talked to entrepreneurs in France and comparing my
experiences there and in Silicon Valley.

We might then think to look at companies like VK in Russia, but VK is order of
magnitudes away from the success of Tencent.

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ancorevard
Is this the same country that lit fire on Uber drivers' cars?

~~~
Mikeb85
Probably. They love lighting cars on fire.

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mc32
A couple of observations:

Russia has less economic disparity than US-Canada (despite oligarchs), at
least as they measured it.

Minimum international corporate tax rate, at least in theory sounds like it
could kerb companies from moving HQs to low tax havens for the main purpose of
reducing tax burden.

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rock_hard
I am baffled about how clueless these people are :(

Europe with its hyper regulation and culture against change has stifled its
own economies to a level where now they need to outlaw foreign
competition...just let that logic sync in!

Instead of making their laws more attractive to innovation (by rethinking
things like GDPR which just strengthens large companies or improving
bankruptcy/Insolvency laws) the best idea they have is to outlaw them in hope
this will create a vidid startup ecosystem...good luck with that.

Here is what you need to do: 1\. Invest more in education, specially: Teach
people how to be independent learners, self management, self motivation, etc.
2\. Remove all hurdles to incorporate a business (should be as easy as signing
up for a Facebook account). 3\. Make it safe to fail by rethinking
bankruptcy/Insolvency laws 4\. Provide a social safety net for failed
entrepreneurs so that they can get back on their feed quickly and try the next
thing (to be fair, many European countries do this well already at least when
it comes to healthcare) 5\. Simplify the tax code so that entrepreneurs don't
have huge overhead (hint, this could all be done by software) 6\. Make it
easier for small to mid sized businesses to hire and layoff employee's...have
the government pay the bills. 7\. Create a strong VC community with attractive
tax laws

I once owned a mid size business in germany, and when the economy tanked
(2008) and I had to declare bankruptcy the government fucking destroyed
me...to the point that I left the country and never looked back! Thats not how
you encourage innovation and competition.

Instead I moved to Silicon Valley, where I was allowed to fail a couple time
more before I got the chance to drive home multiple exits and build 100M
dollar businesses

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ben_w
The EU has about the same GDP as the USA, despite half of it being former
Soviet Union. Several member states beat the US by GDP/capita, despite
(because?) 28 days minimum holiday.

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dragonwriter
> despite half of it being former Soviet Union.

Latvia and Estonia are not half of the EU, by any reasonable measure.

~~~
ben_w
Yeah, I mistakenly thought Warsaw Pact and Soviet Union were synonyms. Oops.

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jumbopapa
> “If we don’t invent a new capitalism, absurd economic solutions will win
> over and sweep us straight into recession,’’ Le Maire said in an interview
> late last month.

This reminds me of the famous quote by F. A. Hayek:

> The curious task of economics is to demonstrate to men how little they
> really know about what they imagine they can design.

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Mikeb85
It's hilarious that all these news outlets still don't get it. They think the
French are protesting against capitalism, and that there's any continuity with
what people like AOC are saying. The fact is, France is protesting against
globalism. As the UK did with Brexit. And the US with Trump. And Italy with
their new government. Even in Canada, our two biggest provinces have elected
populist governments, and it's likely enough we could also have a conservative
government by the end of the year who will likely also take advantage of
populism.

Globalism promised a future where we could outsource manual labour to
developing countries and we'd all have jobs in the information sector. Well
now we're automating large parts of that sector, outsourcing some too,
meanwhile we've also outsourced manufacturing and labour, now all we have left
is shitty service jobs. It was by design and let's face it, people aren't
happy.

US media can bury their heads in the sand all they want, but all these events
are an indictment of globalism and all over the western world people are sick
of it.

Edit - here's a good documentary about inequality:
[https://youtu.be/AFIxi7BiScI](https://youtu.be/AFIxi7BiScI)

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dragonwriter
> They think the French are protesting against capitalism, and that there's
> any continuity with what people like AOC are saying. The fact is, France is
> protesting against globalism.

Globalism (at least the form.thst concretely exists and is being protested)
_is_ capitalism; it's true that some of the current protest is nationalist,
xenophobic, and corporatist, while some of it class-conscious, not targeted
against any non-economic identity group, and socialist, and that despite
protesting against the same thing those two groups are diametrically opposed.

~~~
Mikeb85
So, you've basically just repeated media talking points and have nothing to
say about globalism contributing to inequality and protest?

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dragonwriter
> So, you've basically just repeated media talking points

No, none of that is “media talking points”.

> and have nothing to say about globalism contributing to inequality and
> protest?

Other than the fact that I explicitly agreed that both xenophobic
nationalistic corporatists and socialists are protesting in response to
capitalist globalism...yes, actually I have more to say on the topic (and
already said it in another subthread):

[https://news.ycombinator.com/item?id=19437188](https://news.ycombinator.com/item?id=19437188)

~~~
Mikeb85
> xenophobic nationalistic corporatists

Literally talking points used to discredit conservative populism.

And from your previous comment:

> class-conscious, not targeted against any non-economic identity group, and
> socialist

Again, media talking points. PC culture has taken over the left; now instead
of talking about inequality, they talk about a 'New Green Deal', gender
pronouns, open borders/increased immigration, etc...

On the right, limiting immigration and tariffs are their solutions to reducing
the outsourcing of labour (and both are valid economic principles), yet it
gets dismissed with negative adjectives.

In both cases, all these talking points distract from the fact that inequality
is the problem, globalism is one of the driving forces of inequality, and it's
all glossed over by the media talking points you repeated.

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Nerdfest
I'm quite amazed it's taken this long. Of course, it hasn't actually happened
yet either. If fair taxation alone were in place, the standard of living would
be significantly better in pretty much any country.

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grondilu
> If fair taxation alone were in place,

What is "fair" taxation?

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DArcMattr
Economically, the fairest tax system is one that does not affect people's
behavior. The most straightforward means of doing this is a head tax, but
that's not politically feasible. The best thing to do is a sales tax on price
inelastic things.

~~~
int_19h
What makes it "fair", exactly? I don't think most people would see it as such.

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sremani
What is ailing southern Europe and partially France is the currency union, in
which Germany pretty much consolidated all the economic gains.

This is not about Capitalism, this is about sovereignty and financial
determinism of a state.

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eric_b
Unpopular opinions ahead:

As far as I can tell, "globalism" is the biggest cause of inequality. It's not
about QE or easy monetary policy. It's about the fact that I don't have to pay
a guy next door high wages to have something done. I can pay someone in a
developing nation 10x less to do the same thing. Doing this at scale is what
got us in to this mess.

Some argue that globalism was inevitable, others that there is some shadowy
group pushing an agenda. But whatever you believe, one outcome of
globalization (and there are positives as well) but one negative outcome is
income inequality.

What bugs me about this article is that these people think they can solve
inequality with MORE globalism ("global" taxes, regulating international
companies etc). I don't think doubling down on it is going to fix anything.

You know how you fix capitalism? You break apart the huge companies. You
incentivize smaller companies (with progressive corporate income taxes and
other things). Competition will yield lower prices and more innovation.

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int_19h
It might increase income inequality in your country, but does it do so
globally? I mean, that person in a developing nation will still likely get way
more money than they would have from local work. So it serves as wealth
transfer from developed to developing countries.

Now, large corporations are taking and pocketing a large part of that
transferred wealth, effectively gouging it back (and making it even more
concentrated in their home countries in the process). And why can they do
that? Because, while capital and goods can flow across borders mostly
unrestricted, labor is constrained by immigration restrictions. Chinese
workers don't get direct access to the US market - no, they have to work for
transnationals that will pay them slightly better than local wage, and then
sell the product of their labor for as much as they can in countries where
wages (and hence prices) are much higher.

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RcouF1uZ4gsC
>It might increase income inequality in your country, but does it do so
globally?

I think locality matters for income inequality. The poor kid in Bangladesh,
really doesn't care that someone owns a $100 Million apartment in Manhattan.
However, if you are the working poor in NYC struggling to make ends meet, you
are likely to feel something viscerally (maybe a tiny amount) when you go past
those apartments.

People tend to compare and judge locally. Who you see, who you interact with
on a daily basis matter far more than some theoretical person 1000's of miles
away.

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oliv__
France is barely capitalistic though when compared to the US or even its close
neighbor the UK.

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int_19h
Is French industry mostly nationalized? If not, I don't see how it's barely
capitalistic. Capitalism doesn't require laissez-faire.

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iamthirsty
People's general lack of education on "Capitalism" baffles me.

> _“If we don’t invent a new capitalism, absurd economic solutions will win
> over and sweep us straight into recession,’’ Le Maire said in an interview
> late last month._

> _A key example for him is Italy, where the populist government came to power
> riding a wave of public anger. It quickly threw out the rulebook on fiscal
> responsibility, sent bond yields higher and confidence lower, helping to
> push its economy into a slump._

An example of a failed fiscal policy is a government who gave up on fiscal
responsibility. _No shit Sherlock_.

> “If we want capitalism to hold together work must be better paid,” Le Maire
> said. “There comes a moment when workers won’t tolerate it any longer.”

If you want better paying work: find a better paying job. If you can't get
employed in one, develop/learn marketable skills to do so. If you want freedom
from "finding work", create your own value by starting a business.

The system is fine. Sure, the system can have added "benefits", but it's not
the system that is broken — it's the people.

~~~
AnimalMuppet
If you want better paying work, _have the government stop taking more than 50%
of the money._

(I don't mean that the government charges 50% taxes on workers. I mean that,
in France, government consumes 50%+ of GDP - or so I understand.)

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avmich
We've generally tried that. Turns out there appear strong ones who bend the
rules to their wishes. So we had to gather together to defend ourselves from
such behavior.

Here we see another iteration of power grab - and another iteration of
defense. Government isn't only the burden, it also serves some purposes.

~~~
AnimalMuppet
I agree that government serves some purpose. I agree that it's necessary to
keep the strong from devouring the weak. But _half the GDP_? Is _that much_
government necessary?

And if it is, then you don't get to complain that work doesn't pay very well.
You're taking the rest of your compensation in the form of government.

