Brazil, 1984

Danilo Gentili, one of Brazil’s most famous and popular comedians, was convicted and sentenced to seven months of prison time for defaming Maria do Rosário, a Brazilian federal congresswoman with a suggestion that she was a whore in a YouTube video. I wrote about Maria do Rosário before here.

Danilo has been literally on the Worker’s Party blacklist for many years because of his political remarks against it. His “crime” this time, according to the official sentence, was to offend a congressperson. The same kind of defamation against a “normal” citizen would not lead him to jail. Here is what happened: in his twitter account, Danilo criticized Maria do Rosário, saying that she was a hypocrite. The reason was because José de Abreu, a Brazilian actor famous for supporting the Worker’s Party, spit on the face of a woman in a restaurant after she criticized his political positions. Abreu did that shortly after Jean Wyllys, a former Brazil congressman, spit on Jair Bolsonaro. Maria do Rosário, who always presents herself as a feminist, defended José de Abreu. Danilo commented in the case in his twiter account saying that Maria do Rosário was a hypocrite. The congresswoman sent Danilo an official congress letter asking him to delete his twits. The comedian answered putting the letter inside his paints and then sending it back, an action he recorded on video and uploaded to YouTube.

In a similar case, not too long ago, Supreme Court judge Enrique Ricardo Lewandowski threatened with jail an airplane passenger who, turning to him, said he was ashamed of the Supreme Court. Lewandowski is often perceived as defending the Worker’s Party and its interests.

Why do I so frequently write in English about Brazil? In part because I want a broader audience who doesn’t know Portuguese to know what is going on there. As far as I know, for quite some time people outside Germany or the USSR thought that they were doing pretty well. Little did they know. Also because I want to offer a counterpoint to the (more often than not) leftist media that calls Bolsonaro a far-right racist, misogynist. Finally, because I hope that people from outside who read this might engage with the cause of freedom in Brazil. George Soros and others are engaging with the cause of slavery. They count on you not caring about it.

As I wrote before, Brazilian democracy is under threat. And it is not because of Jair Bolsonaro.

Poverty Under Democratic Socialism — Part III: Is the U.S. Denmark?

The Americans who call themselves “socialists,” do not, by and large, think in terms of government ownership of the means of production. Their frequent muted and truncated references to Sweden and Denmark indicate instead that they long for a high guarantees, high services state, with correspondingly high taxation (at least, for the more realistic among them).

When I try to understand the quasi-programmatics of the American left today, I find several axes: End Time-ism, a penchant for demanding that one’s collective guilt be dramatically exhibited; old-style pacifism (to an extent), a furious envy and resentment of the successful; indifference to hard facts, a requirement to be taken care of in all phases of life; a belief in the virtuousness and efficacy of government that is immune to all proof, demonstration, and experience. All this is often backed by a vigorous hatred of “corporations,” though I guess that not one in ten “progressives” could explain what a corporation is (except those with a law degree and they often misuse the term in their public utterances).

I am concerned that the last three features – nonchalance about facts, the wish to be cared for, and belief in government – are being woven together by the American left (vaguely defined) into what looks like a feasible project. I think that’s what they mean when they mention “democratic socialism.” The proponents seem to know no history. They are quick to dismiss the Soviet Union, currently foundering Venezuela, and even scrawny Cuba, as utterly irrelevant (though they retain a soft spot for the latter). And truly, those are not good examples of the fusion of socialism and democracy (because the latter ingredient was and is lacking). When challenged, again, American proponents of socialism refer vaguely to Sweden and to Denmark, about which they also seem to know little. (Incidentally, I personally think both countries are good societies.)

The wrong models of democratic socialism

Neither Sweden nor Denmark, however, is a good model for an eventual American democratic socialism. For one thing, the vituperative hatred of corporations on the American left blocks the path of economic growth plus re-distribution that has been theirs. In those two countries, capitalism is, in fact, thriving. (Think Ikea and Legos). Accordingly, both Sweden and Denmark have moderate corporate tax rates of 22% (same as the new Trump rate), higher than the German rate of only 16%, but much lower than the French rate of 34%.

The two countries pay for their generous welfare state in two intimately related ways. First, their populace agrees to high personal income taxes. The highest marginal rates are 60+% in Denmark and 57+% in Sweden. (It’s 46% currently in the US.) The Danes and the Swedes agree to such high rates for two reasons. For one thing, these rates are applied in a comparatively flat manner. Everyone pays high taxes; the rich are not publicly victimized. This is perceived as fair (though possibly destructive to economic growth). For another thing, their governments deliver superb social services in return for the high taxes paid.

This is the second way in which Danes and Swedes pay for their so-called “socialism” (actually welfare for all): They trust their government and the associated civil services. They generally don’t think of either as corrupt, or incompetent, as many, or at least a large minority of Americans do. As an American, I think of this trust as a price to pay. (I am not thinking of gross or bloody dictatorship here but more of routine time-wasting, exasperating visits to the Department of Motor Vehicles.) The Danes and the Swedes, with a different modern experience, do not share this revulsion or this skepticism.

Denmark and Sweden are both small countries, with populations of fewer than six million and about ten million, respectively. This means that the average citizen is not much separated from government. This short power distance works both ways. It’s one reason why government is trusted. It makes it relatively easy for citizens’ concerns to reach the upper levels of government without being distorted or abstracted. (5) The closeness also must make it difficult for government broadly defined to ignore citizens’ preoccupations. Both counties are, or were until recently, quite homogeneous. I used to be personally skeptical of the relevance of this matter, but Social-Democrat Danes have told me that sharing with those who look and sound less and less like your cousins becomes increasingly objectionable over time.

In summary, it seems to me that if the American left – with its hatred of corporations – tries to construct a Denmark in the US, it’s likely to end up instead with a version of its dream more appropriate for a large, heterogeneous county, where government moreover carries a significant defense burden and drains ever more of the resources of society. The French government’s 55% take of GDP is worth remembering here because it’s a measure of the slow strangling of civil society, including in its tiny embodiments such as frequenting cafés. In other words, American democratic socialists will likely end up with a version of economically stuck, rigid, disappointing France. It will be a poor version of France because a “socialist” USA would not have a ready-made, honest, elite corps of administrators largely sharing their view of the good society, such as ENA, that made the unworkable work for a good many years. And, of course, the quality of American restaurant fare would remain the same. The superior French gourmet experience came about and is nurtured precisely by sectors of the economy that stayed out of the reach of statism.

Poverty under democratic socialism is not like the old condition of shivering naked under rain, snow, and hail; it’s more like wearing clothes that are three sizes too small. It smothers you slowly until it’s too late to do anything.


(5) When there are multiple levels of separation between the rulers and the ruled, the latter’s infinitely variegated needs and desires have to be gathered into a limited number of categories before being sent up to the rulers for an eventual response. That is, a process of generalization, of abstraction intervenes which does not exist when, for example, the apprentice tells his master, “I am hungry.”

[Editor’s note: Part I can be found here, Part II here, and the entire, longform essay can be read in its entirety here.]

Poverty Under Democratic Socialism — Part II: Escaping the Padded Cage

There aren’t many signs that the French will soon free themselves from the trap they have sprung on themselves. The Macron administration had been elected to do something precisely about the strangling effect of taxation on French economic life and, on individual freedom. (The latter message may have been garbled during his campaign.) Are there any solutions in sight for the French crisis of psychic poverty, framed by both good social services and high taxes?

I see two kinds of obstacles to reform. The first is comprised of collective cognitive and of attitudinal deficiencies. The second, paradoxically, is a feature of French society that American progressives would envy if they knew about it.

Cognition and attitudes

After four months of weekly demonstrations, the gilets jaunes (“yellow vests”) protesters had not found the language to articulate clearly their frustration. I mean, at least those who were left protesting. They seem to be falling back increasingly on crude views of “social justice” (“les inégalités”) as if, again, the issue was never to produce more, or to retain more of what they produce, but only to confiscate even more from the (fleeing) rich. Over the many years of democratic socialism, French culture has lost the conceptual vocabulary that would be necessary to plan an exit out of the impasse. Here is an example of this loss: In the past twenty years of reading and watching television in French almost every day, I have almost never come across the single word “libéral.” (That would be in the old English meaning of “market oriented.”) The common, nearly universal term is “ultra-libéral.” It’s as if favoring an analysis inclined toward market forces could not possibly exist without being “ultra,” which denotes extremism.

What started as a fairly subtle insult against those who discreetly appreciate capitalism has become fixed usage: You want more free market? You are a sort of fanatic. This usage was started by professional intellectuals, of course (of which France has not shortage). Then, it became a tool tacitly to shut off certain ideas from the masses, all the while retaining the words derogatory muscle. So, in France today, one can easily think of oneself as a moderate socialist – on the center left – but there is no balancing position on the center right. (3) It makes it difficult to think clearly, and especially to begin to think clearly about politics. After all, what young person wants to be an extremist, except those who are really extremists?

I saw recently online a French petition asking that French economist Frédéric Bastiat’s work be studied in French schools. Bastiat is one of the clearest exponents of fundamental economics. His contribution is not as large or as broad as Adam Smith’s but it’s more insightful, in my judgment. (He is the inventor of the “broken window” metaphor, for instance.) He also wrote unusually limpid French. Bastiat has not been part of secondary studies in France in my lifetime. His name is barely known at the university level. Marx and second, and third-rate Marxists, on the other hand, are omnipresent. (Some cynics would claim that whatever their conversation, the educated French do not read Bastiat, or A. Smith, but neither do they really read Marx!)

Few, in France, are able to diagnose the malaise that grips the country because it has ceased to have a name. The handful who understand capitalism are usually allergic to it because it does not guarantee equal outcomes. A minority, mostly business people, grasp well enough how it works and how it has pulled most of humanity out of poverty but they are socially shamed from expressing this perception. There is little curiosity among the French about such questions as why the American GDP/capita is 35% higher than the French. They treat this information as a sort of deed of Nature. Or, for the more ideological, among them, it’s the sad result of America’s unfairness to itself. A debate that ought to take place is born dead. How did this happen? Socialists of my generation, most good democrats, born during and right after WWII largely, early on took over the media and the universities. They have shaped and constrained public opinion since at least the sixties. They have managed to stop discussions of alternative economic paths without really conspiring to do so, possibly without even meaning to.

A really deep state

In 1945, after the long night of the 1940 defeat and of the Nazi occupation, many French people where in a mood to engender a new society. They created a number of novel government organizations designed to implement their vision of clean government but also, of justice. (They took prosperity for granted, it seems.) One of the new organizations was a post-graduate school especially designed to ensure that access to the highest levels of the government bureaucracy would be democratic and meritocratic. It’s called, “École Nationale d’Administration” (ENA). It accepts only graduates of prestigious schools. The ENA students’ per capita training costs are about seven times the average cost for all other higher education students. ENA students are considered public servants and they receive a salary. France thus possesses a predictably renewed cadre of trained administrators to run its government. And, repeating myself here, its members are chosen according to a strictly meritocratic process (unlike the most prestigious American universities, for example), a process that is also extremely selective.

In 2019, ENA is flourishing. The school has contributed four presidents and eight Prime Ministers to-date. Its graduates are numerous among professional politicians, as you might expect. In addition, they are teeming in the highest ranks of the civil service, and also of business. That’s because they go back and forth between the two worlds, with some benefit to their careers and to their wallets. This iteration does not imply corruption. Mostly, ENA graduates do not have a reputation for dishonesty at all. They help one another but it’s mostly above board. (4) This being said, it’s difficult to become really poor if you are an ENA graduate.

Graduates of ENA are often disparagingly described as a “caste,” which is sociologically inaccurate because caste is inherited. The word is meant to render a certain collective attitude of being smugly sealed from others. The intended meaning is really that of “upper caste,” of Brahman caste, to signify: those who think they possess all the wisdom.

All ENA graduates have made it to the top by taking the same sort of exam. The style of exams and the way they are corrected become known over time. Naturally, ENA candidates study to the exam. The ENA formula for success is not a mystery although it’s not just a formula; ENA also requires a sharp intelligence and character. ENA graduates have important traits in common, including a willingness to spend their adolescence cramming for increasingly difficult competitive exams. There are few charming dilettantes in their ranks. They all emerge from a process that does not reward imagination.

ENA graduates – dubbed “énarques” – seem overwhelmingly to share a certain view of the desirable interface between government and the economy. It’s not hard to guess at, based on thousands of their speeches reproduced in the media, and with the help of a little familiarity with French classical education. Its origin is neither in capitalism nor in socialism. (Sorry for the only slightly misleading title of this essay.) It predates both by 100-150 years. It’s rooted in the well known story of the Minister Colbert’s 17th century economic reforms. (It’s well known in the sense that every French school kid knows his name and a thing or two about the reforms themselves.) Colbert (1619-1683) raised tariffs, regulated production in minute detail and, above all, he created with public funds whole industries where none existed, in glass, in porcelain, but also in textiles, and others. I believe his main aim was only to increase government (royal) revenue but others think differently. At any rate, there is a widespread belief that general French prosperity rose under his administration.

To make matters worse, Colbert is a historical figure easy to like: hard working, honest, an effective patron of the arts. With such a luminary to look up to, it’s fairly effortless to ignore both the actual disorderly origins of capitalism, and also the initially compassionate roots of its socialist counter-reaction. (On capitalism’s origins, and originality, you might consult my entry: “Capitalism.” The Blackwell Encyclopedia of Sociology. Blackwell Publishing. Vol. 2, Malden, Mass. 2006. Make sure of that particular edition – 2006 – my predecessors and successors were mostly opaque Marxist academic lowlifes.)

For seventy years, French economic policy has thus been made largely by deeply persuaded statists, people who think rule from above natural (especially as it takes place within a broadly democratic framework), who judge government intervention in economic matters to be necessary, fruitful, and virtuous, people who believe that government investment is investment, people who have given little thought to private enterprise, (although they occasionally pay lip service to it, largely as if it were a kind of charity). Almost none of them, these de facto rulers, is a bad person. Their pure hearts make them all the more dangerous, I believe. The result is there in France for all to see: a sclerotic economy that has failed to provide enough jobs for fifty years, a modest standard of living by the criteria of societies that industrialized in the nineteenth century, a worsening unease about the future, a shortage of the freedom of small pleasures for the many.

I do not use the conventional words of “tyranny” or “despotism” here because both are normally more less deliberately imposed on the populace. Nothing of the sort happened in France. On the contrary, lack of individual freedom in France is the accumulated consequence of measures and programs democratically adopted within the framework described above. Together, these well-meaning social programs are squeezing the liveliness out of all but the upper layers of French society.

There exists in the country a growing resentment of the énarques’ basically anti-capitalist rule. One recent president, Sarkozy, even declared he partly owed his election to bragging about not being a graduate from ENA. Yet, the thousands of énarques permanently at the levers of command for seventy years are not about to relinquish them, irrespective of the political party or parties in power. Few groups controlling as much as they ever does so voluntarily. The deep sentiment of their collective virtuousness will make them even more intransigent. Most French critics believe that the énarquesare incapable of changing as a cadre, precisely because they are really an intellectual elite of sorts, precisely because they are not corrupt. And, as I remarked above, ENA’s statist (“socialist”) reign has lasted so long that the French people in general have lost track of the very conceptual vocabulary an anti-bureaucrat rebellion would require. (We know what we don’t want, but what do we want?)


(3) It’s true also that historical accidents have deprived France of a normal Tory party. Its place is currently occupied by reactionary nationalists (currently the “Rassemblement national,” direct descendant of the “Front National,” of Marine Le Pen) who don’t favor market forces much more than does the left.

(4) I take the ENA graduates’ reputation for probity seriously because, right now, as I write, there are clamors for abolishing the school but its generating corruption in any way is not one of the reasons advanced.

[Editor’s note: Here is Part I, and here is the entire longform essay.]

Poverty Under Democratic Socialism — Part I: the French Case

I saw a televised investigation by the pretty good French TV show, “Envoyé spécial” about current French poverty. It brought the viewer into the lives of six people. They included a retired married couple. The four others were of various ages. They lived in different parts of mainland France. All sounded French born to me. (I have a good ear for accents; trust me.) All were well spoken. The participants had been chosen to illustrate a sort of middle-class poverty, maybe. Or, perhaps to illustrate the commonness of poverty in one of the first countries to industrialize.

All the interviewees looked good. They seemed healthy. None was emaciated; none was grossly obese, as the ill-fed everywhere often are. All were well dressed, by my admittedly low standards. (I live in the People’s Democratic Republic of Santa Cruz, CA where looking dapper is counter-revolutionary.) None of those featured was in rags or wearing clothes inappropriate for the season.

The reporter took the viewer into these people’s homes. There was no indoor tour but you could see that the outside of the houses was in good repair. Most of the interviewing took place in kitchens. Every kitchen seemed equipped like mine, more than adequately. There was a range and a refrigerator in each. Every house had at least one television set.(I couldn’t determine of what quality.) No one said he or she was cold in the winter though two complained about their heating bills.

The show was geared to sob stories and it got them. Each participant expressed his or her frustration about lacking “money,” precisely, specifically. It seems to me that all but two talked about money for “extras.” I am guessing, that “extras” mean all that is not absolutely necessary to live in fairly dignified comfort. One single woman in her forties mentioned that she had not had a cup of coffee in a café for a year or more. (Keep her in mind.)

Another woman talked about the difficulty of keeping her tank filled. She remarked that a car was indispensable where she lived, to go to her occasional work and to doctors’ appointments. Her small car looked fine in the video. The woman drove it easily, seemingly without anxiety or effort.

A woman of about forty, divorced, took care of her two teenage daughters at home two weeks out of each month. She explained how she went without meat for all of the two weeks that her daughters were away. She did this so she could afford to serve them meat every day that they were with her. I could not repress the spontaneous and cynical reaction that most doctors would probably approve of her diet.

Yet, another woman, single and in her thirties, displayed her monthly budget on her kitchen table. She demonstrated easily that once she had paid all her bills, she had a pathetically small amount of money left. (I think it was about $120 for one month.) She had a boyfriend, a sort of good-looking live-in help whose earnings, if any, were not mentioned.

The retired couple sticks to my mind. The man was a retired blue-collar worker. They were both alert and in good shape. Their living room was comfy. They also talked about their bills – including for heating – absorbing all of their income. The wife remarked that they had not taken a vacation in several years. She meant that she and her husband had not been able to get away on vacation, somewhere else, away from their house and from their town. They lived close to a part of France where some rich Americans dream of retiring some day, and where many Brits actually live.

I ended up a little perplexed. On the one hand, I could empathize with those people’s obvious distress. On the other hand, I got yanked back to reality toward the end when the retired lady blamed the government for the tightness of her household budget. Then I realized that others had tacitly done the same. The consensus – which the reporter did not try expressly to produce – would have been something like this: The government should do something for me (no matter who is responsible for the dire straights I am in now).

Notably, not one of the people in the report had a health care complaint, not even the senior retired couple.

So, of course, I have to ask: Why are all those people who live far from abject poverty, by conventional standards, why do all those people convey unhappiness?

The first answer is obvious to me only because I was reared in France, where I retain substantial ties: Many small French towns are dreadfully boring, always have been. That’s true, at least, if you don’t fish and hunt, or have a passion for gardening, and if you don’t attend church. (But the French are not going to church anymore; nothing has taken the social place of church.)

And then, there is the issue of what the French collectively can really afford. This question in turn is related to productivity and, separately, to taxation. I consider each in turn.

French productivity

According to the most conventional measure – value produced per hour worked – French productivity is very high, close to the German, and not far from American productivity: Something like 93% of American productivity for the French vs 95% for the Germans. (Switzerland’s is only 86%.) However, to discuss how much money is available for all French people together, we need another measure: the value of French production divided by the number of French people. Annual Gross Domestic Product per capita is close enough for my purpose. (The version I use is corrected to incorporate the fact that the buying power of a dollar is not the same in all countries: “GDP/capita, Purchasing Power Parity”).

For 2017, the French GDP/capita was $43,600, while the German was $50,200. (The American was $59,500.) Keep in mind the $6,600 difference between the French and the German GDP/capita (data).

If French workers are almost as productive as the Germans when they work, what can account for the low French GDP/capita? The answer is that the French don’t work much. Begin with the 35/hr legal work week. (1) (A study published recently in the daily Le Figaro asserts that 1/3 of the 1.1 million public servants work even less than 35 hours per week.) Consider also the universal maximum retirement age of 62 (vs 67 in Germany), a spring quarter pleasantly spiked with three-day weekends for all, a legal annual vacation of at least thirty days applied universally, a common additional (short) winter (snow) vacation. I have read (I can’t confirm the source) that the fully employed members of the French labor force work an average of 600 hours per year, one of the lowest counts in the world. Also log legal paid maternity leave. Finish with an official unemployment rate hovering around 9 to 10% for more than thirty years. All this, might account for the $6,600 per year that the Germans have and the French don’t.

There is more that is seldom mentioned. The fastest way for a country to raise the official, numerical productivity of its workers is to put out of work many of its low-productive workers. (That’s because the official figure is an arithmetic mean, an average.) This can be achieved entirely through regulations forbidding, for example, food trucks, informal seamstress services, and old-fashioned hair salons in private living rooms, and, in general, by making life less than easy for small businesses based on traditional techniques. This can be achieved entirely – and even inadvertently – from a well-meaning wish to regulate for the collective good. The more of this you do, the higher your productivity per capita appears to be and also, the higher your unemployment, and the less income is available to go around. I think the official high French productivity oddly distorts the image of real French income. I suspect it fools many French people, including public officials: They think they are wealthier than they are.

La vie est belle!

The French have nearly free health care – which works approximately as well as Medicare in the USA, well enough, anyway. (French life expectancy is higher than American expectancy.) Education is tuition-free at all levels. There are free school lunches for practically anyone who asks. University cafeterias are subsidized by the government (and pretty good by, say, English restaurant standards!) Many college students receive a stipend. Free drop-off daycare centers are common in big and in medium-size cities. Unemployment benefits can easily last for two years, three for older workers. They amount to something like 55% of the last wages earned, up to 75% for some.

That’s not all. The fact that France won the World Cup in soccer in 2018 suggests that the practice of that sport is widespread and well supported. It’s mostly government subsidized. Other sports are also well subsidized. French freeways are second to none. They are mostly turnpikes but the next network of roads down is excellent, and even the next below that. This is all kind of munificent, by American standards. The French are taken care of, almost no matter what. The central government handles nearly all of this distribution of services directly and some, indirectly through grants that local entities have to beg for.

Someone has to pay for all this generosity. After sixty or seventy years, many, perhaps most French people, still believe that the rich, the very rich, have enough money that can be pried from their clutching hands to pay for the good things they have, plus the better things they wish for. (No hard numbers here, but I would bet that ¾ of French adults believe this.) In fact, multi-fingered, ubiquitous, invasive taxation of the many who are not very rich pays for all of it.

French taxation

The French value added tax (VAT) is 20% on nearly all transactions. When a grower sells $100 of apples to a jelly producer, the bill comes to $120. When the jelly-maker in turn sells his product to a grocery wholesaler, his $200 bill goes up to $240, etc. Retail prices are correspondingly high. The French are not able to cheat all the time on the VAT although many try. (Penalties are costly on the one hand, but there exists a complicated, frustrating official scheme to get back part of the VAT you do pay, on the other hand.) I speculate that the VAT is so high because the French state does not have the political will nor the capacity to collect an effective, normal income tax, a progressive income tax. Overall, the French fiscal system is not progressive; it may be unintentionally regressive. To compensate, until the Macron administration, there was a significant tax on wealth. (That’s double taxation, of course.) It’s widely believed that rich French people are escaping to Belgium, Switzerland, and even to Russia (like the actor Gérard Dupardieu).

The excise taxes are especially high, including the tax on gasoline. In 2018, the mean price of gasoline in France was about 60% higher than the mean price in California, where gas is the most taxed in the Union. An increase to gasoline taxes, supposedly in the name of saving the environment, is what triggered the “yellow vests” rebellion in the fall of 2018. Gasoline taxes are particularly regressive in a country like France where many next-to-poor people need a car because they are relegated to small towns, far from both essential services and work. (2)

All in all, the French central government takes in about 55% of the GDP. This may be the highest percentage in the world; it’s very high by any standard. It dries up much money that would otherwise be available to free enterprise. Less obviously but perhaps more significantly, it curtails severely what people individually, especially, low income citizens, may spend freely, of their own initiative.

What’s wrong?

So, with their abundant and competent social services, with their free schooling, with their prodigal unemployment benefits, with their superb roads, with their government-supported prowess in soccer, what do the French people in the documentary really complain about? Two things, I think.

Remember the woman who couldn’t afford to take her coffee in a café? Well, the French have never been very good at clubs, associations, etc. They are also somewhat reserved about inviting others to their homes. The café is where you avail yourself of the small luxury of avoiding cooking chores with an inexpensive but tasty sandwich. It’s pretty much the only place where you can go on the spur of the moment. It’s where you may bump into friends and, into almost-friends who may eventually become friends. It’s the place where you may actually make new friends. It’s the best perch from which to glare at enemies. It’s where that woman may have a chance to overhear slightly ribald comments that will make her smile. (Not yet forbidden in France!) The café is also just about the only locale where different age groups bump into one another. The café is where you will absorb passively some of that human warmth that television has tried for fifty years but failed to dispense.

This is not a frivolous nor a trivial concern. In smaller French towns, a person who does not spend time in cafés is deprived of an implicit but yet significant part of her humanity. The cup of coffee the woman cannot afford in a café may well be the concrete, humble, quotidian expression of liberty for many in other developed countries as well. (After all, Starbucks did not succeed merely by selling overpriced beverages.) The woman in the video cannot go to cafés because the social services she enjoys and supports – on a mandatory basis – leave no financial room for free choice, even about tiny luxuries. She suffers from the consequences of a broad societal pick that no one forced on her. In general, not much was imposed on her from above that she might have readily resisted. It was all done by fairly small, cumulative democratic decisions. In the end, there is just not enough looseness in the socio-economic space she inhabits to induce happiness.

She is an existential victim of what can loosely be called “democratic socialism.” It’s “democratic” because France has all the attributes of a representative republic where the rule of law prevails. It’s “socialistic” in the vague sense in which the term is used in America today. Unfortunately, there is no French Bureau of Missing and Lost Little Joys to assess and remedy her discontent. Democratic socialism is taking care of the woman but it leaves her no elbow room, space for recreation, in the original meaning of the word: “re-creation.”

The second thing participants in the documentary complain about is a sense of abandonment by government. Few of them are old enough to remember the bad old days before the French welfare state was fully established. They have expected to be taken care of all their adult lives. If anything is not satisfactory in their lives, they wait for the government to deal with it, even it takes some street protests. Seldom are other solutions, solutions based on private initiative, even considered. But the fault for their helplessness lies with more than their own passive attitudes. An overwhelming sense of fairness and an exaggerated demand for safety combine with the government’s unceasing quest for revenue to make starting a small business, for example, difficult and expensive. France is a country where you first fill forms for permission to operate, and then pay business taxes before you have even earned any business income.

The French have democratically built for themselves a soft cradle that’s feeling more and more like a lead coffin. It’s not obvious enough of them understand this to reverse the trend, or that they could if they wished to. There is also some vague worry about their ability to maintain the cradle for their children and for their children’s children.


(1) I am aware of the fact that there exists a strong inverse correlation between length of week worked and GDP/capita: In general, the richer the country, the shorter the work week. Again, this is based on a kind of average. It allows for exceptions. It seems to me the French awarded themselves a short work week before they were rich enough to afford it.

(2) You may wonder why I don’t mention the French debt ratio (amount of public debt/GDP). All the amenities I describe must cost a lot of money and the temptation to finance them partly through debt must be great. In fact, the French debt ratio is lower than the American: 96% to 109% in 2018 according to the International Monetary Fund. This is a little surprising but all debtors are not equal. A country with near full employment and plenty of talent is better able to pay off its debts than one with high long term unemployment and a labor force decreasingly accustomed to laboring. The latter is, of course, a predictable result of inter-generational unemployment and underemployment. Nowadays, it’s common to cross paths in France with people over thirty who have never experienced paid work. International investors think like me about the inequality of debtors. Investors flock to the US but they are reserved about France.

[Editor’s note: You can find the entire, longform essay here if you don’t want to wait for Parts II and III.]

Nazism: left or right? (again)

A few days ago, Brazil’s Foreign Affair’s Minister declared that Nazism “derives from the left”. Asked about his minister’s remark, president Jair Bolsonaro confirmed that he understands Nazism as a left-wing movement.

The understanding that Nazism is a left-wing movement is growing among Brazilian conservatives, especially those who support Bolsonaro’s government. On the other side of the debate, Bolsonaro’s adversaries ridiculed his remark or manifested concern with his “historical revisionism”.

Seems to me that classifying Nazim as a left-wing movement is not a Brazilian exclusivity. Political commentators from other countries (such as Dinesh D’Souza) are saying the same thing. It is probably more accurate to say that Brazilians are following a trend.

This trend, however, is not new. One of Friedrich Hayek’s main points in Road to Serfdom was to tell social democrats (who were indeed democrats in the classical liberal sense of the word) that they were closer to Nazis than they would like to admit. Hayek’s remark was as polemic then as it is now, but mainly because he is saying the truth: as Milton Friedman said, “The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.” If I remember correctly, it was also Friedman who said that in order to obtain perfect equality more government would be necessary, which would completely undermine the desire for equality, for those in government would most certainly not be equal to everyone else.

The standard in Political Science is, of course, to call Nazim a right-wing movement. However, we see in moments like this how political and how little scientific Political Science can be. What many people observe is that Nazism shares a lot with communism: both are violent, both emphasize the collective (and not the individual), both rely on popular leaders, and so on. Of course, there are also differences: Nazism has nothing of the class-struggle so central to communism and certainly doesn’t appeal to the cosmopolitanism present in “workers of the World, unite!”.

With all that said, I have a growing feeling that there are only two political tendencies: “live and let live” and all others. Some people can’t stand the possibility of having others living a different lifestyle from them. Some people can’t stand people who disagree. Some people like to blame others. Some people truly believe that those who think and do like they do are superior to everyone else. These people come together and ask the government to force everyone else to comply.

Conservatives vs Liberals vs Libertarians

What I’m going to say here is far from original, but I believe it is worth reminding from time to time. Yes, there is a lot of over-simplification here, but bear with me! This is the difference between conservatives, liberals, and libertarians (or at least this libertarian who writes):

Gun control:

  • Liberal: Guns are dangerous! People should not have guns!
  • Conservative: From my cold dead hands!
  • Libertarians: I personally don’t like guns and I wouldn’t like to have one. But I believe that people who so desire should have the right to own guns.

Drugs:

  • Liberal: Marijuana is less dangerous than alcohol and should be legalized!
  • Conservative: Marijuana is a gateway into heavier drugs and should be prohibited!
  • Libertarian: Although I personally never did drugs and have no desire to do so, nor have deep knowledge of how particular drugs are heavier than legalized substances or not, I believe that people who want to do drugs should not be prohibited from doing so.

Foreign Policy:

  • Liberal: We have to send more foreign aid. It is our moral responsibility! And who are we to judge which nations are democratic or not?
  • Conservative: The world is a dangerous place and it is our responsibility to police it!
  • Libertarian: Although I can see that the World is a dangerous place and I feel personally obligated to do something to help those in need, I don’t believe it is the role of the government to interfere in other nations.

Labor laws:

  • Liberal: We have to protect the poor!
  • Conservative: Capitalism is God’s way of deciding who is poor and who is smart!
  • Libertarian: I feel for the poor, and I believe we should do something to help. I believe that some governmental policies predictably hurt the poor and therefore should be changed. However, I believe that helping the poor should be mainly done by individuals and independent organizations, not by the government.

Crime in general:

  • Liberal: He is a victim of society!
  • Conservative: The chair!!!
  • Libertarian: External circumstances can explain and even attenuate certain crimes, but never justify it. On the other hand, if we are cruel towards criminals, we are becoming just like them. Also, throwing people in jail is very clearly an awful and simplistic way of dealing with crime and should think of other ways of punishment, always having reconciliation as an ideal.

Economics:

  • Liberal: We need more government oversight!
  • Conservative: The market will solve everything!
  • Libertarian:

Immigration:

  • Liberal: Open the border!
  • Conservative: Build a wall!
  • Libertarian: Completely opening the borders is abandoning any notion of nation-state. Nevertheless, we should be welcoming, though thoughtful, about immigration.

Education:

  • Liberal: Your kids are mine!
  • Conservative: We need to bring prayer back to public schools!
  • Libertarian: Education is fundamentally religious and reflects the values we aim to have. Maybe the state can have a very limited role in it, but the main responsibility belongs to the parents, who likely will instill their values on the children.

Politics in general:

  • Liberal: My party will solve everything!
  • Conservative: My party will solve everything!
  • Libertarian: There are no perfect solutions, especially not through politics. Do you want to change the World? Start by cleaning your room.

Relicts of the past? The current challenges for diplomacy

The last few weeks were quite a blast for me: I’ve interned at the German embassy in Rome. A new job in a new city. I thought to process the experiences I made here in one (or a few?) articles.

It’s been quite a rough month for Germany’s Foreign Affairs department. First, Daniel Kriener, the German ambassador in Venezuela, was forced to leave the country after welcoming Interim President Guiadó at the airport of Caracas. Interestingly, although plenty of other diplomats joined him, he was the only one to be declared a “persona non grata” for interfering in Venezuela’s internal affairs. A few weeks later, a deputy speaker of the German Bundestag (who is also a member of the liberal party) demands to expel the US ambassador Grenell for the same offence. Prior, the US diplomat has criticized Germany’s plan to break their promise of contributing more to NATO’s defence budget. Albeit I politically agree with both actions of the diplomats in these cases, they delineate the ongoing structural changes in the diplomacy sector. To illustrate this, I will first provide a theoretical framework to analyze ongoing diplomatic challenges before trying to examine the role of diplomacy in the future.

Principal-Agent Theory and decreasing relevance

I conceive diplomacy as mostly a principal-agent based problem. I believe that many problems in diplomatic negotiations can be traced back to the classic effects of asymmetric information. Since two principals, in this case two states, cannot negotiate with each other directly in most cases, these arbitrations are carried out between various agents. Those agents are of course not always the ambassadors. In a broad meaning, one can apply the principal-agent paradigm to diplomacy by every negotiating process initiated by the state.

Through the lens of the principal-agent paradigm, I perceive the main task of diplomacy to achieve a good negotiating position, for example through an informational advantage. However, due to globalization, state-to-state diplomacy has been drastically weakened. The negotiating game is now mostly carried out within other institutions with lower transactions costs. Two countries want a new trade deal? Just orientate on WTO Rules. Sue another country? Call the International Criminal Court. A few voices made reasonable arguments even for abolishing unnecessary embassies and only keeping the crucial ones. The Trump administration, for example, seems not eagerly committed to fill the around 18 vacant ambassador positions hastily.

Certainly, the globalization combined with the expansion of robust institutions leaves little space for traditional diplomacy as a driving force in interstate relations. This is not necessarily a bad development: As Paul W. Meerts points out, this can be a huge chance for weaker states since negotiating in multilateral rather than bilateral constellations tends to weaken the position of stronger states. Thus, playing out the trump cards in negotiations will be harder for the hegemon. We can currently witness this in the Brexit debate: Even though the strong states, Germany and France, have a vast repertoire of power resources to use as leverage against GB in the negotiations, the can hardly deploy them through EU’s multipolar negotiating structure.

Contrary, there are also recent examples of deploying bilateral traditional diplomacy measures successfully. China’s initiation of Italy’s accession to the Belt Road Initiative (see Tridivesh Singh Maini’s great article here for a quick overview) is a prime example for this. But no other case shows the weaknesses of bilateral diplomacy in a more drastic way: China was able to transpose their tremendous power resources into a deal which heavily favours the Chinese economy. The very ambiguous agreement laid down a strategy of “closer economic collaboration.” The oppositional criticism of the deal coming from the very left and the right is based on economic nationalism and thus misses the important point. Chinese government exerts immense influence on key enterprises like  Tencent, Alibaba, and Badoo: Digital fundamental research topics such as AI were distributed to the firms not through competition but through the state ( I highly recommend Amy Webb’s EconTalk if you want to dig deeper into this.). Once they build sufficient digital infrastructure here in Europe, network effects and technological advantage will come into effect and engender high entry barriers and exit costs. This makes it easy for China to enforce its regulation rather than obeying European ones. Although it is hard to finally determine if multilateral negotiations would have secured a politically better deal, I favour higher short-term transaction cost of multilateral negotiations over the long-term threat showed above.

Embassies as service provider

Of course, taking care of a good interstate negotiation position is not the only task of an embassy. A popular counterargument is that the principal-agent perspective neglects the vital daily business of embassies to help their citizens abroad. Speaking of large and prestigious Embassies though, I estimate that their role as service provider for abroad living citizens will further decline. Most of their maintenance work for citizens living abroad will be redundant due to technological process and further institutionalization. Renewing a Passport, issuing visas and transporting back coffins (yep) are a frequent task, but easy to “source out” to private actors in the future.

But what is the role for ambassadors and embassies then?

This question is where it gets interesting in my opinion. Deeply rooted in international conventions and international customary law, discreet and silent work has been prerequisite for an ambassador. Carefully collecting small pieces of information and building bridges to local actors were the key for a good negotiating position. But as elaborated above, international institutions do the job more efficiently. A new role of ambassadors as advocates for concrete policy measures would be diametrically opposed to international conventions. Based upon the “legality creates legitimacy” premises, a further politicization of diplomacy seems not at present having a majority and thus is unlikely to be buttressed by legal means.

However, if we fall back into a narrative of nationalism, bilateral diplomacy will regain relevance. Otherwise, it will continue to slowly lose importance and eventually wane. Hence, the main challenge nowadays is to look for the right niche for traditional diplomacy – and it seems that it has not been found yet.