It looks as if next Thursday the railway unions will try their strength against the Government over the issue of special regimes, particularly for retirement. Nicolas Sarkozy and his ministers are determined that everyone shall work at least 40 years before they retire – at the moment some professions have special deals in which they can retire after 35 years or less because their work is (or was when the deal was made) particularly arduous or dangerous.

This post-War policy of breaking down society into segments (miners, teachers, fonctionnaires, farmers) has created one of the present ills of French society, according to the paper I mentioned on Tuesday, “La Societe de Défiance”, published by the Centre pour la recherche économique et ses applications. According to the authors Yann Algann and Pierre Cahuc, segmentation creates widespread distrust (défiance – lack of trust might be a better translation), and they paint a bleak picture of their compatriots lacking trust in their judicial system, trades unions, parliamentary system, bosses, fellow workers and, undoubtedly, her next-door.

Their paper is not a new study, but a synthesis of existing work, so the basic premise that the French lack trust in their fellows is taken as acquis. I’m not sure that in every case (such as the special retirement regimes) distrust is the right word – envy might be better, but it’s less politically correct. In some of the circumstances though, distrust is right: apparently 54% of French people have no confidence in their judicial system. 52% say you can’t get on in France unless you corruptly take advantage of an unequal system – but that doesn’t necessarily mean taking or giving back-handers, it refers, amongst other things, to [the mainly Socialist] teachers being able to wangle their children into the better schools regardless of Egalité or what the carte scolaire says. Again, envy would seem as strong as distrust, for the truism stated by the authors is that not everyone can have access to public things like housing, crèches or good schools and that obvious fact creates lack of confidence, or distrust in the system.

That in turn, the authors say, means that to a greater extent than citizens of other countries the French think it acceptable to cheat the taxman, the social security and public transport. Few believe that on principle you shouldn’t buy something you know is stolen, offer a bribe or take public money knowing you don’t deserve it.

In amongst some rather dodgy logic, the paper does have some wonderful insights: someone studied all the parking infringements in New York by official delegates to the UN (covered by diplomatic immunity): between 1997 and 2002 there were 150,000 illegally parked cars belonging to UN people! In the ranking, the otherwise rather self-righteous French came equal with the Indian and Laotian delegates.

Only 21% of French believe it is possible to have confidence in others (as oppose to about 60% in the USA and Scandinavian countries), and the authors blame this on a mixture of corporatisme (the segmentation of professions into different corps, each with its own conditions, bonuses, pensions) and étatisme (the state is omnipresent because it is forced to intervene between groups who cannot work things out themselves). The French welfare system encourages these differences between social groups, increasing public distrust, whereas the much-praised Scandinavian system treats everyone the same regardless of education or profession.

This same lack of confidence in others experienced by the French is bad for business – Adam Smith and the more recent Nobel-prize winning economist K. Arrow are quoted as saying that the essential ingredient for trade is trust and “a large part of the late development of a society is due to the lack of shared trust between its citizens.” The last 10 of the 100 page piece tries to convince that if the French trusted each other more they would earn more money – the authors quote Sweden as the nirvana in this respect – but by this time their logic was getting beyond me. Nearly half the population in France think competition has little to do with developing new ideas but instead appeals to man’s basest instincts (something I touch on in November’s France Profonde).

This paper’s conclusion seems to be that to get on in the world, French fear of competition must be overcome, and the best way is by state regulation, which seems at odds with their earlier argument that there is too much state. Throughout, Scandinavian countries are held up as the ideal model for the French to copy. This may be right (this month’s economic magazine Les Enjeux has an excellent article looking at the Danish model through the example of Lego [but I don’t think the link will enable you to read it]), but as I said last week, when advocating the Scandinavian model, few (French) people take into consideration that Sweden and Denmark, like the UK, have independent currencies with independent economic rules. France does not. Hence Sarkozy’s raging against the ECB: perhaps [heretical thought] giving France its own currency again will turn out to be Sarkozy’s equivalent of Tony Blair scrapping Clause 4 and Mrs. Thatcher the unions.

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