The consumer should not be protected from himself. Instead, he or she should have the possibility to choose freely in offers.

When was the last time you used an FM radio? If your age is between 15 and 50, chances are it’s been a while. I can see you’re one of those streamers on Netflix, Amazon Prime, Hulu, and if you’re interested in sports, maybe DAZN or Skyticket.

The world has changed. The occasional exciting radio show interrupted every five minutes by a mix of dull lift music and repetitive supermarket ads have been replaced by hours of conversations on podcasts, always aimed at a specific niche. You don’t write letters to friends anymore; no, even e-mails seem very formal nowadays. You write to them on one of the messengers.

Naturally, some companies have been able to beat the competition by offering good service. For example, when it comes to streaming music, we think of Spotify (a European company, by the way), when it comes to videos, we think of YouTube, and when it comes to TV shows, we think of Netflix.

Especially when it comes to mobile internet, telecommunications providers are taking advantage of this information and adapting their offers: In addition to the monthly internet volume, packages are offered. Certain apps and services can be used without data limits. For example, a music lover can choose a package in which he or she can listen to Spotify, Apple Music or other contractually defined services without limit. At the same time, a series junkie can opt for a different package.

This is attractive for the consumer; after all, the internet does not grow on trees, especially not in digital developing countries like Germany.

But for the most part, that’s probably over now. On 15 September 2020, the European Court of Justice ruled that tariffs in which certain apps are excluded from speed throttling violate EU law. Specifically, the case concerns the Hungarian branch of the telecommunications company Telenor and the Hungarian Media and Telecommunications Authority, which issued two notices stating that its offers violated Art.3(3) of Regulation 2015/2120.

The court hearing the case referred a question to the European Court of Justice on the interpretation of Art.3(1-3) of the Regulation. The standards concern internet services and their use and the so-called “openness of the internet”, sometimes also called “net neutrality”. The legal norms are intended to secure the rights of end-users. The ruling states: 

“Moreover, that concept covers both natural or legal persons who use or request internet access services to access content, applications and services and those who provide content, applications and services employing internet access.”

According to the ECJ, agreements such as those of the company are suitable for restricting end-users rights. On the one hand, it is argued that the use of preferentially treated apps could be increased as a result. On the other hand, the other services, which can continue to be throttled, are disadvantaged and usage could decrease. It is argued that such agreements could cumulatively lead to a significant restriction of end-users rights.

Moreover, the unequal treatment is not based on objectively different requirements for certain services but on purely commercial considerations.

Thus, Telenorl’s agreements violate European law. The ECJ’s reasoning should not even be challenged here. If one looks at the standards, the ECJ’s line is quite compatible with them or very defensible. What is worthy of criticism are the norms themselves, as well as the philosophical and economic considerations behind them. First of all, it is not a malicious idea to provide everyone in the market with the same conditions. The advocates of “net neutrality” also mean well when they want to prevent discrimination and cartel-like actions in the market.

Unfortunately, few are interested in the fact that this is an encroachment on the private autonomy of telecommunications companies, service providers and consumers. The goal of an “open internet” for all seems more important than consumers and companies trying to do business with each other.

However, the offers and the unequal treatment make sense; they enable the carefree use of specific services that would otherwise mutate into volume guzzlers every month. The consumer does not have to worry about this with such a contract; he can use his preferred service without any restrictions (at least if he lives in a region with good network coverage).

If one bans such voluntary solutions, one first knows what the ban will not lead to: To unrestricted volume for all. It is certainly possible that the telecommunications companies will compete with the total volume. But 5 GB or not will make no difference if the work is only needed for a particular service, but without restrictions. The consumer should not be protected from himself. Instead, he or she should have the possibility to choose freely in offers.

Originally published here.

If we’re lucky, Bezos’s example will inspire millions of more entrepreneurs in the 21st century.

After more than a quarter century at the helm of one of the world’s most valuable companies, Jeff Bezos announced this month that he will soon step down as the CEO of Amazon.

The mark Bezos and his company have left on consumers, small businesses, and the entire global marketplace cannot be overstated: he helped create a revolution in the way ordinary people access and distribute goods.

The innovations pioneered by Amazon now empower billions of individuals who buy and sell products online, host and use websites, consume news, books, and movies and expect speedy and accountable delivery as a standard of doing business.

“If you get it right, a few years after a surprising invention, the new thing has become normal,” wrote Bezos in his farewell letter. “People yawn. And that yawn is the greatest compliment an inventor can receive.”

Indeed, so much innovation has poured out of Amazon’s headquarters and distribution centers these past two decades that they have become ubiquitous to our lives, especially in the past year of coronavirus lockdowns.

None of this would have been achieved without significant risks.

As he leaves his perch from atop one of only two trillion-dollar companies that have ever existed, it is worth remembering that Bezos is a true American success story.

As he stated in congressional testimony last year, Bezos was raised by a teenage single mother and later his Cuban refugee stepfather in New Mexico. During summers, he worked on his grandparents’ farm, and later tinkered in his parents’ garage to come up with various inventions.

That curiosity led him to the idea of an online bookstore with unlimited titles, a pitch that often led him to get laughed out of boardrooms and universities.

Now, all these years later, with plenty of expensive mistakes behind him, Bezos oscillates between the richest and second richest person in the world.

That said, there are people of every political persuasion that have a bone to pick.

His billionaire status and operation of global distribution centers often puts him in the crosshairs of tax-hungry governments, leftist politicians, and labor activists. At the same time, his ownership of the Washington Post newspaper and various political leanings make him a convenient punching bag for conservatives.

Overall, there are legitimate questions about how Amazon treats its workers, how the company partners with law enforcement, and its pursuit of corporate welfare.

Some would say there are better ways Bezos could distribute his significant wealth in philanthropic pursuits, participate in public conversations, or throw his political weight behind important issues of the day. But it would be a mistake to overlook the overall value Amazon has already provided us.

Today, we have a consumer revolution in which we are all empowered to buy and sell products on the Amazon marketplace, have them delivered seamlessly, and have it all running on cloud computing hardware developed by Amazon engineers. We have the explosive growth of Amazon Prime and its video products, and a Hollywood studio that puts the incumbents to shame.

With such a distinguished career in delivering value to consumers, Jeff Bezos deserves our thanks and praise. If we’re lucky, his example will inspire millions of more entrepreneurs in the 21st century.

Originally published here.

Експерт пояснив повільну і невдалу реакцію ВООЗ на останні пандемії – від Еболи в Західній Африці до коронавірусу в Китаї і по всьому світові.

Відомий філантроп Майкл Блумберг і фінансовані ним організації шкодять громадському здоров’ю. Адже відволікають Всесвітню організацію охорони здоров’я від боротьби з епідеміями, перетворюючи її на «поліцейського» проти  дитячих каш, солодких газованих напоїв і тютюнових виробів. 

Про це пише в Washington Examiner заступник директора Consumer Choice Center(глобальної групи захисту прав споживачів) Єль Островський.

“Майкл Блумберг починав із заборон великих пляшок солодких газованих напоїв в Нью-Йорку. Але тепер «мер великий ковток» (як його називали за часів, коли він очолював Нью-Йорк) має глобальні амбіції. Від Японії і Філіппін до Індії і Перу – гроші Блумберга призвели до різкого підвищення податків на споживчі товари – зокрема, на газовані напої та сигарети, до заборон проти вейпінгу і обмежень на рекламу каш для дітей”, – пише Єль Островський. 

Але найгірший результат діяльності Блумберга полягає в тому, що йому вдалося суттєво змістити акценти в роботі Всесвітньої організації охорони здоров’я – що найгірше проявилося у неефективному реагуванні ВООЗ на пандемію коронавірусу.

“ВООЗ збилася з дороги. Замість організовувати роботу із покращення обладнання для лікарень, підготовки лікарів і всієї системи охорони здоров’я до можливих нових епідемій, «глибокі кишені» Блумберга перетворили ВООЗ на глобального поліцейського для країн, що розвиваються”, – впевнений Єль Островський. 

Саме цим пояснює експерт вкрай повільну і невдалу реакцію ВООЗ на останні пандемії – від Еболи в Західній Африці до коронавірусу в Китаї і по всьому світові.

Але незважаючи на такі сумні і сумнівні результати, фонд Блумберга продовжує накачувати фінансами інституції з охорони здоров’я в таких країнах як Філіппіни та Індія – в обмін на жорсткі заборони і обмеження для частини споживчих товарів – констатує Єль Островський.

Така активна політика втручання Блумберга вже призвела до доволі жорсткої реакції зокрема з боку прем’єр-міністра Індії Нарендра Моді, який ще з 2014 р. почав обмежувати вплив фондів Блумберга на місцевих чиновників.

Цього року аналогічний скандал із фондами Блумберга стався на Філіппінах. Там національний парламент вже зацікавився виділенням коштів фонду Блумберга місцевому державному органу – Управлінню безпеки харчових і фармацевтичних товарів, яке зараз розглядає питання регулювання товарів для вейпінгу.

Уряд Філіппін навіть вже закликав чиновників Управління повернути кошти, незаконно отримані від організацій, фінансованих Блумбергом.

Як повідомляв УНІАН, схожий активний фінансовий вплив організації Блумберга демонстрували також в інших країнах з низьким і середнім рівнем доходу. 

Наприклад, міністр охорони здоров’я Вірменії Арсен Торосян також визнавав, що вірменські урядові структури підписали «грантові угоди» з трьома організаціями, які теж фінансує Блумберг. 

Схожа ситуація й у  В’єтнамі, де Bloomberg Philanthropies внесли щонайменше 3,2 млн. доларів у “спроможність контролю над тютюном” з 2007 по 2014 р. За заявою Bloomberg Philanthropies, вони “тісно співпрацювали з урядом та місцевими організаціями”, включаючи Міністерство охорони здоров’я.

В результаті цієї співпраці у В’єтнамі, де 45% чоловіків продовжують палити, місцевий МОЗ оголосив про план повністю заборонити купівлю, продаж, виготовлення та ввезення електронних сигарет. Хоча в деяких країнах Європи електронні сигарети вже вважаються одним з найефективніших засобів відмови від куріння.

В Україні теж діє низка організацій, спонсорованих фондами Блумберга. Серед них – ГО «Життя», що активно співпрацює з народними депутатами та деякими працівниками системи Міністерства охорони здоров’я у формуванні політики й законопроектній роботі.

Originally published here.

In a new white paper presented to the European Commission, the ride-sharing platform Uber defended its business model ahead of new legislation on platform work.

“This standard (for platform work) needs to recognise the value of independent work and be grounded in principles drivers and couriers say are most important to them,” Uber CEO Dara Khosrowshahi said in a blog post.

In many EU member states, platforms such as Uber, Bolt, and Heetch have come under fire for how they structure the relationship between the platform and drivers. Contrary to a standard taxi firm, Uber does not employ drivers and thus is not responsible for various benefits that come with traditional employment.

This independent status gives drivers independence and flexibility, meaning they can clock in and out with no predefined working hours. The structure enables individuals to use these apps as supplementary income next to other employment opportunities and has created a ride-sharing experience that is more diverse, breaking up the licensing system that has burdened individual transport in Europe for decades. 

Especially now, we need functioning and smart laws that empower those who use the gig economy, not penalise them. This is especially true for low-income Europeans, who are more than likely to use these services to supplement their incomes or save money. Too often, regulators and politicians have folded to the demands of the legacy industries that once held monopolies over hospitality services, such as hotels, car rental agencies, and taxi firms.

According to Euractiv, “The Commission said it will first seek feedback on whether a law is needed to improve the working conditions of gig workers, followed by a second consultation on the content of the law.

“As part of the social partners’ consultation, the European Commission is considering issues, such as precarious working conditions, transparency and predictability of contractual arrangements, health and safety challenges and adequate access to social protection,” a spokeswoman said.”

EU legislation on the matter is still a long wait, but forced harmonisation of the rules could be a serious blow to the diversity of the European market. So far, member states have been free to choose the model that works for them. In the Sharing Economy Index 2020, the Consumer Choice Center compared different cities in Europe, showing large disparities in how Europe approaches these innovative solutions.

Of course, the effects of the pandemic on the sharing economy cannot be overstated. The large sharing economy companies such as Airbnb, Uber and Lime are struggling with fewer people travelling and using their services. But that is not how we should measure the success of the gig economy.

The promise of the sharing economy has never been about gains on Wall Street, bold corporate executives or even profits for investors. It is not about a single company’s bottom line or its market share. Rather, it has always been about offering new and innovative options to empower people like you and me to improve our lives.

The sharing economy empowers both consumers and entrepreneurs to creatively and collaboratively use or lend resources they otherwise wouldn’t. That allows people to earn additional income as owners and save money as users.

Whether it is ridesharing, carsharing, home-sharing, the sharing of tools, or e-scooter rentals, the regulations on the sharing economy should not make them more difficult to use or from which to profit.

Some EU member states have found tangible compromises between the platform apps and regulators. But if we want more competition in the field of the sharing economy, we need to keep market entry barriers as low as possible. Sometimes, not regulating is better than trying to regulate in one way or the other.

Yaël Ossowski (@YaelOss) is deputy director of the Consumer Choice Center, a global consumer advocacy group.

Originally published here.

Industri rokok elektronik, atau yang dikenal dengan nama vape, merupakan salah satu industri yang kini terus berkembang di berbagai negara di dunia, termasuk juga di Indonesia. Bagi kita yang tinggal di wilayah urban di kota-kota besar misalnya, dengan mudah kita bisa menemukan berbagai orang yang menggunakan rokok elektronik, khususnya mereka yang berasal dari kalangan muda.

Konsumen vape di Indonesia sendiri bukan dalam jumlah yang sedikit. Pada tahun 2020 lalu misalnya, berdasarkan daya dari Asosiasi Vaper Indonesia (AVI), setidaknya ada 2 juta masyarakat Indonesia yang secara aktif mengkonsumsi rokok elektronik (rm.id, 24/4/2020).
Meningkatnya pengguanan vape di Indonesia sendiri bisa kita lihat disebabkan oleh berbagai hal. Tidak bisa dipungkiri bahwa, rokok elektronik menyediakan berbagai fitur yang tidak disediakan oleh berbagai produk rokok konvensional. Salah satunya adalah, rasa yang sangat variatif, seperti rasa buah-buahan, yang jarang atau bahkan mustahil bisa kita dapatkan di produk-produk rokok konvensional yang dibakar. Hal ini tentu membuat vape memiliki daya tarik tersendiri, terutama bagi kalangan muda yang tinggal di perkotaan.

Namun, tidak semua orang menyambut baik adanya fenomena tersebut. Berbagai kalangan di Indonesia mengadvokasi dan mendukung agar seluruh produk vape di Indonesia dapat dilarang secara penuh.

Organisasi dokter di Indonesia, Ikatan Dokter Indonesia (IDI) misalnya, mengadvokasi dan menuntut pemerintah agar segera melarang seluruh produk rokok elektronik. IDI beralasan bahwa rokok elektronik dianggap sebagai produk yang berbahaya bagi kesehatan, dan tidak jauh berbeda dari rokok konvensional yang dibakar (CNN Indonesia, 24/9/2019).

Meskipun demikian, penelitian oleh lembaga kesehatan dari berbagai negara di dunia justru menunjukkan hasil yang sebaliknya. Pada tahun 2015 lalu misalnya, lembaga kesehatan publik asal Inggris, Public Health England (PHE), mengeluarkan laporan yang menyatakan bahwa rokok elektronik merupakan produk yang jauh lebih aman bila dibandingkan dengan rokok konvensional yang dibakar, yakni hingga 95% lebih aman (gov.uk, 19/8/2015).

Hal ini tentu merupakan sesuatu yang sangat positif. Bila semakin banyak para konsumen rokok yang dapat beralih dan berpindah ke produk-produk rokok elektronik yang terbukti jauh lebih aman dibandingkan dengan rokok konvensional, maka tentu akan lebih sedikit orang-orang yang terkena penyakit kronis, dan biaya kesehatan juga menjadi dapat ditekan dan menurun.

Untuk itu, kebijakan pelarangan vape, seperti yang diadvokasi oleh IDI dan berbagai lembaga lainnya, adalah kebijakan yang tidak tepat dan justru akan membawa banyak kerugian. Dengan demikian, para perokok di Indonesia akan semakin sulit untuk mencari produk pengganti yang terbukti jauh lebih aman, yang tentunya dapat semakin membahayakan kesehatan mereka. Belum lagi, pelarangan tersebut tidak mustahil akan memunculkan berbagai produk-produk ilegal yang justru sangat berbahaya bagi konsumen.

Selain itu, yang tidak kalah pentingnya adalah, industri vape di negeri kita sendiri sudah menyumbangkan banyak lapangan kerja bagi masyarakat Indonesia. Berdasarkan data dari Asosiasi Personal Vaporizer Indonesia (APVI) misalnya, pada tahun 2020 lalu, setidaknya ada 50.000 orang yang secara langsung bekerja di industri rokok elektronik di Indonesia (vapemagz.co.id, 6/6/2020).

Angka ini, berdasarkan data APVI, belum termasuk tenaga kerja yang bekerja di berbagai toko retail rokok elektronik di seluruh Indonesia. APVI memperkirakan, bahwa setidaknya ada 3.500 toko retail rokok elektronik yang tersebar di seluruh nusantara. 2.300 diantara toko tersebut setidaknya tersebar di pulau Jawa, semntara sisanya tersebar di berbagai pulau lainnya, seperti Kalimanta, Sumatera, Bali, dan Sulawesi (vapemagz.co.id, 6/6/2020).

Hal ini tentu merupakan perkembangan yang pesat, mengingat industri vape merupakan industri yang tergolong baru berkembang di Indonesia. Industri rokok elektronik di Indonesia sendiri baru berkembang setidaknya sejak 4 tahun terakhir, atau sejak tahun 2017. Pada tahun 2017 misalnya, pengguna vape di Indonesia berjumlah 900.000 pengguna. Angka tersebut meningkat menjadi 1,2 juta pengguna pada tahun 2019, dan 2,2 juta pengguna pada tahun 2020 (vapemagz.co.id, 6/6/2020).

Hal tersebut tentunya menunjukkan peningkatan yang cukup pesat. Bisa dipastikan, di tahun-tahun setelahnya, industri vape atau rokok elektronik di Indonesia akan terus meningkat, yang pastinya akan semakin meningkatkan lapangan kerja. Dengan demikian, kebijakan pelarangan vape di Indonesia tentu bukan saja merupakan kebijakan yang dapat membahayakan konsumen, namun juga akan menutup lapangan kerja banyak orang, serta akan menutup pintu pembukaan lapangan kerja lain, yang sangat dibutuhkan oleh banyak masyarakat di Indonesia.

Semakin meningkatnya penggunaan vape atau rokok elektronik ini juga telah menyumbang pendapatan cukai yang tinggi bagi pemerintah. Pada tahun 2019 saja misalnya, industri rokok elektronik telah menyumbangkan setidaknya 427 miliar rupiah. Angka ini tentu merupakan jumlah yang sangat besar, dan bisa digunakan oleh pemerintah untuk membiayai berbagai program-program publik (vapemagz.co.id, 6/6/2020).

Sebagai penutup, industri vape telah menyumbang banyak tenaga kerja dan juga pendapatan cukai yang tidak sedikit bagi pemerintah dan negara Indonesia. Belum lagi, produk rokok elektronik merupakan produk sudah terbukti jauh lebih aman bila dibandingkan dengan rokok konvensional yang dibakar tentu merupakan hal yang sangat positif. Dengan demikian, kebijakan pelarangan vape sebagaimana yang diadvokasi oleh berbagai pihak tentu merupakan hal yang tidak tepat, karena bukan hanya akan semakin membahayakan kesehatan publik, namun juga akan mengurangi pendapatan negara, dan menghilangkan lapangan kerja bagi banyak orang.

Originally published here.

Oxfam regularly releases new reports on inequality and keeps getting it wrong.

So let’s revisit an older report to show how the next one is likely to be flawed once again — in an effort to avoid another needless European Parliament debate on inequality. The EU cannot allow itself to get stuck in an endless loop of ill-informed discussion on this issue.

Oxfam’s 2018 report claimed that inequalities are staggering. This was not the first time that the activists who made up the British NGO have shown their real talent: twisting reality to feed their political ideology, in defiance of any scientific rigour. Therefore, the question that arises is why continue to give echo to such people, whose nonsense is not without consequences, since it feeds the mistrust of the French towards their leaders and companies?

Oxfam had produced a similar document on inequalities, absurd in terms of the method, since wealth was calculated according to net worth, i.e. people’s assets minus their liabilities. Reading these figures, the attentive reader is left wondering, as most countries with developed economies allow considerable debt. But large material fortunes also have a large obligation, since this is how they feed their investments.

Similarly, a young graduate who has just found a job starts out with a low income and a substantial debt, which is, in fact, an investment in his or her potential future earnings. Comparing his situation to that of a low-income Chinese farmer with limited assets but little or no debt, using Oxfam’s methodology, the rural farmer far outstrips this indebted university graduate.

Let’s take the case study of France.

Oxfam’s report on CAC 40 CEOs’ incomes is riddled with comparisons, shortcuts, amateurism, and out of context figures. This context, however, is essential to a proper understanding of the economic issues raised. First of all, let us remember that the overwhelming majority of companies are VSEs and SMEs. These small businesses represent 99.9% of French companies and 49% of salaried employment.

The key figure revealed by this new report is that the CEO of a CAC 40 company earns 257 times more than a person on minimum wage. It reads: “In 2016 the average remuneration of CAC 40 CEOs was 4,531,485 euros. According to INSEE, the gross minimum annual salary was estimated at 17,599 euros, a difference of 257: 4,531,485/17,599 = 257.

Oxfam uses the average income of CAC 40 CEOs instead of the more realistic median income. The organisation explains that it does not have the data, due to a lack of corporate transparency, but still seems quite willing to use the average income to make a splash, claiming that CAC 40 CEOs earn more than 250 times the minimum wage. The calculation of median income, on the other hand, is quite possible and gives a result below 250. If we do this calculation, we find that the median income of CAC 40 CEOs in 2016 was 3.745 million, so we arrive at 3,745,000/17,599 = 212. It should also be noted that this calculation does not take into account a differentiation in the hours worked by people paid at minimum wage. Is Oxfam asking us to compare a person who works part-time with a person who works overtime regularly? And why is Oxfam hiding the fact that fixed salaries for company executives represent only 12% of their total income, and that options, bonuses and shares (based on company performance) vary continuously? Assuming we had all the data on the median salary, we would only have 12% of total income, and certainly not a factor of 257.

Next, regarding the assertion that CAC 40 companies would have paid 67.4% of their profits to their shareholders in the form of dividends, it is essential to remember that these are paid according to the company’s added value and after salaries have been paid. However, as economist Jean-Marc Daniel notes, since 1985, 65% of a company’s added value has gone to wages and 35% to the gross operating surplus, which is either redistributed in the form of dividends and or profit-sharing or invested in the company’s productive apparatus. 

But we will be explained that these “small calculation errors” and this representation are not significant. After all, Oxfam is not here to do research but to lecture us. Need we remind you that Cécile Duflot, the former Minister of Housing, author of the catastrophic Loi Alur whose measures are still being felt in the building sector, has just taken over the reins of Oxfam’s French branch? Is she responsible for the appearance of a proposal for a new blacklist of tax havens at the end of the report? This list should include Belgium and Luxembourg, which are by no means tax-havens. Let us add that the CAC 40 companies that are singled out (LVMH, BNP Paris, Société Générale, Crédit Agricole and Total) are in countries that Oxfam considers as tax havens, not because they practice tax evasion (Oxfam concedes that it has no evidence to prove it), but because they have clients there. Removing their subsidiaries from all these countries would be tantamount to depriving themselves of a considerable part of their turnover.

Political and ideological NGO. Instead of recognising the achievements that the development has made of the free market, Oxfam wants to revive the stereotype of the operetta boss, a man in a suit smoking a cigar in his office while looking down from his canopy at his exploited employees. But this caricature, inspired by the Monopoly man, no longer has much to do with reality.

As Steven Pinker reminds us in his book Enlightenment Now, while 90% of the world’s population lived in extreme poverty in 1820, only 10% of it remains today, thanks to the market economy. In recent decades, China’s economic miracle has lifted 600 million people out of absolute poverty, halving the world’s extreme poverty levels. We live in the most materially prosperous times in history, which is not about to be reversed.

Oxfam is a political and ideological NGO. It will continue to release misleading reports to argue for broad redistribution that would harm our economic performance and, ultimately, those it purports to help. Helping the poorest means opposing this demagoguery. It also means, for the media, to stop relaying it massively.

Originally published here.

Trade is not a zero-sum game.

During his speech to the French on 14 June, President Emmanuel Macron outlined a recovery plan based, in part, on economic sovereignty on a national scale: “We must create new jobs by investing in our technological, digital, industrial and agricultural independence” he declared.

The French President’s protectionist turn is surprising. Opposed to Marine Le Pen in the second round of the 2017 presidential elections, Emmanuel Macron ran as the open society candidate. Here he is now defending protectionism! He made fun of trumpet populism, and now he promises to bring jobs home! But the most surprising thing is that he does not limit himself to advocating European sovereignty – as he has already done on several occasions – but national sovereignty, disregarding the principles governing the single market.

This “reinvention” is, unfortunately, not an innovation. On the contrary, Emmanuel Macron is resurrecting the old Ancien Régime fallacy according to which a nation’s wealth is not measured by the number of real goods and services at its disposal but by the amount of gold in its coffers. An ideology championed by Jean-Baptiste Colbert, a minister under Louis XIV.  “This country does not only flourish in itself, but also by the punishment it knows how to inflict on neighbouring nations”, such was his philosophy. But if Colbert is remembered as the Minister who was at the origin of the “greatness of France”, it is because history is more interested in the rich and powerful than in the little people. On the surface, France may have shone in Europe, but in reality France was “nothing more than a large and desolate hospital”, as Fénelon testified in a letter to King Louis XIV in 1694.

Behind the mercantilist ideology, such as the one Emmanuel Macron was inspired by when he spoke of a revival based on sovereignism, lies a misconception: that trade is a zero-sum game. But as the classical authors have subsequently shown, trade, by definition, is a positive-sum game. Forcing consumers to buy domestic goods rather than the imported goods they desire is not in their interest and, by extension, not in the interest of the nation. As Paul Krugman points out in a 1993 article, “What a country gets from trade is the ability to import the things it wants. France is therefore going to invest massively in certain technologies to “gain its sovereignty” when it could benefit from the experience and competence of its neighbours. An excellent way of wasting precious resources. 

Emmanuel Macron also said that the advantage of relocation was the creation of “new jobs”, but at what price? Examples of the economic war between China and the United States show the shortcomings of such a policy. A study by the American Enterprise Institute (AEI), for example, showed that the cost of the Chinese tyre tax set by the Obama administration was $900,000 per job. Moreover, since this $900,000 could have been spent elsewhere, the increase in tyres’ price has led to a drop in demand for other goods. Thus, the AEI estimates that the preservation of a single job in the tyre industry would have actually cost 3,700 jobs in other sectors. This phenomenon is not exceptional, examples abound. Another is the steel tariffs imposed by the Bush administration: while they have saved 3,500 steel jobs, economists estimate that these tariffs have led to the loss of between 12,000 and 43,000 jobs in steel-dependent industries! Krugman’s lesson still holds today: “Government support for an industry can help that industry to compete with foreign competition, but it also diverts resources from other domestic industries. 

These examples clearly show that the economy is too complicated for a President of the Republic,  to hope to administer it. The idea that an acceptable recovery policy would reduce unemployment is a pipe dream: it is entrepreneurs who create jobs, not bureaucrats. Outside of the crisis, about 10,000 jobs are created every day in a French economy that employs a total of about twenty-five million workers. Who can claim to be the direct source of so many jobs? At best, Emmanuel Macron may manage to create a few thousand jobs in the handful of sectors he has arbitrarily designated. Still, it will be to the detriment of tens of thousands of jobs which will disappear as a result.

Of course, what applies to France also applies to Europe: sovereignty is only legitimate when it is applied on a single scale, that of the consumer.

Originally published here.