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Reifying entrepreneurship in France

June 29, 2017

President Macron is all the rage these days with his plans to ‘reform’ France’s labor market, i.e. reduce worker rights, and promote a grand new age of entrepreneurship. Now I have nothing against small businesses, but the reification of the entrepreneur as some lordly prince of prosperity is beyond absurd. Ultimately, it’s just another example of the failure of trickle down individualism to adequately serve or even take into account the public interest.

Let’s consider an article in yesterday’s Financial Times entitled Brexit and Macron have French entrepreneurs dreaming of home, written by a French founder of a London based asset management company. Here’s a three-part summary:

1) Why he started the business in the UK: Because of its “business environment in which risk-taking was encouraged and entrepreneurial success valued and rewarded. Simple rules such as entrepreneur’s relief, which reduces capital gains tax on the sale of a business, are very attractive for budding entrepreneurs”.

2) Why he’s an “enthusiastic supporter” of Macron: Because “he has managed to set off a revolution. Not only is he young and dynamic, and able to inspire voters with a message of hope, he also has the crucial private sector experience. His political agenda is ambitious and includes long overdue reforms such as loosening labour market regulations and simplifying administrative proceedings”.

3) How society can prosper: “Encouraging entrepreneurship is the only sustainable way to restore economic growth”. “It is essential that France becomes more attractive to foreign entrepreneurs and companies in order to remain relevant in a globalized economy.”

There are many objections I could make here. Why, for instance, should we care that he’s young and dynamic? Is that necessarily better than middle-age and wise? Or why is private sector experience more valuable than public experience? But I’ll focus on what I take as the most important objection—it’s that there’s no rational reason we should bend social policy to reward entrepreneurs versus others. To answer that we need jobs is facile. Its senseless to go around creating jobs for jobs sake. What we want is not jobs per se but prosperity and the technological knowledge required to achieve that is firmly in hand. The production problem has been solved long ago. In the words of John Kenneth Galbraith, “To have failed to solve the problem of producing goods would have been to continue man in his oldest and most grievous misfortune. But to fail to see that we’ve solved it, and to fail to proceed thence to the next tasks would be fully as tragic”.

The important question, completely ignored by those so enamored with entrepreneurs, is what exactly needs to be produced to achieve the prosperity that’s within our current technological grasp. Do you think many people in France think asset managers are important parts of that equation? Hardly! There’s far too many of them already and what they ‘produce’ only benefits a limited slice of the population. Let’s encourage what we need. I don’t know what the people in France would say they need, but in the US, it would be something down the lines of quality affordable healthcare, far better infrastructure, a good retirement, a secure income, and so on. Public policy should promote those type of activities by doing such things as expanding medical schools, increasing the number of healthcare workers as needed, investing in infrastructure projects, expanding the workforce to guarantee secure retirements and decent living standards. This is rationale and democratic. But to claim the answer is to focus on the entrepreneur, regardless of what he or she produces, is not only silly but is guaranteed not to achieve the simple goals of the great majority.

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