France is at the heart of "Old Europe", where the vestiges of a class system still prevails. That got me thinking: Is France more elitist than America?1. The French elite work very hard and are educated very well.2. Contrary to stereotype, France has arguably the strongest work ethic in the world. Given the rates of taxation, and the difficulty of being fired, most people still do a fair amount of work and they do it fairly well. If that's not a work ethic, what is?3. Esteem and approbation are especially important in France, as incentives. This is one reason, not always voiced as such, why immigration in such an issue there. It breaks down prevailing forms of status competition.4. France has been well-positioned to benefit from the growth and economic integration of Europe. The more open the economy, the less domestic economic policy matters.5. The French are very smart and able, and have been so for a long time. You'll note that a wide variety of French companies, whether Dannon or Carrefour, do well around the world. The French are preeminent globalizers.6. The foreigners' view of France, and its charm, would be very different if all of the country's buildings dated from after World War II.7. The French are the very best, and wisest, consumers in the entire world, whether it be for clothing, music, food, or for that matter Hollywood movies and American blues and jazz. The French government tries to influence this activity, or put up some nominal protectionist measures, but for the most part this French specialty and strength remains unregulated. It helps account for the very high living standard there.8. If you see a "World Music" recording from a French record label, buy it.Personally, what I find most distressing about France is the limited number of dimensions for status competition. Very often there is one right way to do things, to dress, and so on. But that's also part of what makes the place work.
The chart below from the OECD that plots the Gini coefficient, which is a measure of income inequality (the higher the less equal), against inter-generational social mobility shows that the Gini coefficient is slightly higher in the US than France but the French have a substantially better social mobility.
What about the French system of grande écoles? Doesn't that serve to keep French society elitist? On the other hand, I have seen many Wall Street recruiters look only for graduates from a "top school", i.e. if you didn't graduate from one of the best schools, don't bother me?
Much of the disparity has been generated from Wall Street, consider this Bloomberg story that shows how experienced Wall Street bankers and traders make more than:
- Four-star general
- Cancer researcher
- Aerospace engineer
Warren Buffett said: "There's class warfare all right, but it's my class, the rich class, that's winning." Jeremy Grantham echoed those sentiments recently in his latest quarterly letter as he warned about the excessive influence of the elites on American society:
Unfortunately, the political-economic power problem has mutated away from the military, although it has left important vestiges there, toward a broader problem: the undue inﬂuence of corporate America on the government, and hence the laws, taxes, and social policies of the country. This has occurred to such a degree that there seems little real independence in Congress, with most Congressmen answering ﬁrst to the desire to be reelected and the consequent need to obtain funding from, shall we say, sponsors, and the need to avoid making powerful enemies. “Well, Senator, we have $10 million here, which can either be used to point out how wise and desirable you are for your sensible vote on the upcoming energy bill or, alternately, can be used to point out how un- American and anti-job you are. Your call.”
Grantham went on to castigate Wall Street, or the financial industry:
The ﬁnancial industry, with its incestuous relationships with government agencies, runs a close second to the energy industry. In the last 10 years or so, their machine, led by the famously failed economic consultant Alan Greenspan – one of the few businessmen ever to be laughed out of business – seemed perhaps the most effective. It lacks, though, the multi-decadal attitude-changing propaganda of the oil industry.
Still, in ﬁnance they had the “regulators,” deregulating up a storm, to the enormous proﬁt of their industry. Even with the biggest-ever ﬁnancial ﬁasco, entirely brought on by the collective incompetence they produced (“they” being the ﬁ nancial regulators and the ﬁnancial industry leaders working together in some strange, would-be symbiotic relationship), reform is still difﬁ cult. Even with everyone hating them, the ﬁ nancial industry comes out smelling like a rose with less competition, proﬁ ts higher than ever, and not just too big to fail, but bigger still.
If America were to go back to "simpler times", where kids looked up to neurosurgeons, four-star generals and cancer researchers, does that mean it becomes more French?