Economy

France Has A Problem With Money And Wealth

A book published recently by French writer Pascal Bruckner cuts to pieces the taboo of money in French society. For him, it’s one of the barriers French needlessly impose on themselves.

Nothing wrong with that
Nothing wrong with that
Ben
Gérard Moatti

PARIS â€" Getting rich isn’t immoral, it’s even commendable. This, in a nutshell, is the view laid out by Pascal Bruckner, a French author with a taste for prodding his compatriots. In his latest book La sagesse de l'argent ("the wisdom of money"), full of twists and turns as well as digressions, Bruckner serves a curious combination of philosophical reflection and moralizing as he takes on "our money taboo."

It’s a vast subject: Our attitude towards wealth is one of the touchstones of philosophical and religious tradition. Plato believed that wealth corrupted souls, while Aristotle deemed a certain material comfort essential for good domestic management. Original Christianity condemned profit, unlike Judaism, Islam and, later, Protestantism. The subject of money also provoked conflicting views during the Enlightenment era, with Rousseau, for whom money "poisons" pleasures, and Voltaire, who was rich and no stranger to luxury. But in France, when the 19th century rolled around, things were finally settled: hostility towards money, those who earn it and those whose jobs revolve around it spread to literature, from Balzac to Flaubert and Zola.

Triple legacy

Is this hostility a permanent feature of the French mentality? Today, one might argue that the financial crises, slowdown of economic growth and increasing wealth disparities are enough to explain and justify it. In fact, however, its origins go back further in time.

According to the author, they stem from our triple legacy: feudalism (for the nobility, working to earn a living was unthinkable), Christianity and the Revolution of 1789, all of which instilled a profound sense of egalitarianism in us. We could add that, in a country that stands out for its state socialism, the political class has almost always been suspicious of the world of money and business. It’s blatant with left-wing presidents such as François Mitterrand and François Hollande, but it was already obvious with Charles de Gaulle, who was allegedly quoted as saying: "My only enemy ... has never ceased to be money."

To confirm that this aversion to wealth truly is a French trait, the book develops a parallel analysis of the United States, where money is seen above all as a sign of success. There, accumulating wealth can also pass for a patriotic endeavor; John Rockefeller once said that "the power to make money is a gift of God to be developed and used to the best of our ability for the good of mankind." One might be amused at this touching statement from one of the first oil magnates â€" generally classified in the category of "robber barons" â€" but doesn’t the underlying sentiment resemble Bill Gates’ "The Giving Pledge" campaign, in which he encourages billionaires to donate half of their fortunes to great humanitarian causes?

Our "money taboo," on the other hand, has harmful side-effects. French egalitarianism not only targets income and property gaps, it also extends to entrepreneurial and professional success, and even education: academic success in France, Bruckner says, is a form of insider trading, because it is entirely determined by the position of a person’s parents on the social scale.

This blanket denunciation of generalized egalitarianism is admittedly overblown, but it’s also frequently on the mark. The increasingly negative connotation of the word "elite" is a case in point: It’s generally used in reference to a group, emphasizing its inclusion of the wealthy, politicians and intellectuals.

A liberator and a despot

Money, the author says, isn’t all good: It’s both a liberator and a despot. A liberator in that money circulation, by facilitating exchange, promotes a peaceful society, emancipating people and improving their well-being. A despot, because the desire money arouses is limitless.

Capitalism, with no real ideological rival since the collapse of communism, is getting overly comfortable, so to speak: Outrageous managerial wages, tax evasion and wild financial speculation undermine social cohesion and erode trust. Wealth, the author tells us, is tolerable as long as one abides by three keywords â€" integrity, proportion and sharing.

That’s all very well, but the moralizing author leaves the reader dissatisfied: When talking about economics, one needs to at least provide context. Limiting inequalities, but how much? Rewarding risk-taking, but to what extent? One is naturally allowed to regret that France "exports its rich" because of its tax system (page 68), and simultaneously advocates wealth redistribution (page 289), but then one must clarify where to point the cursor. When it moves, society changes.

Bruckner calls for a "moral revolution." But morals need bearings.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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