July 17, 2012

"Entrepreneurship is mostly about action rather than study", Luke Johnson writes from experience (*). On stage, to act is to fake with conviction. Since the world is but a stage, it follows the future is for fakers to take into their untutored hands.

I have in the past argued or disagreed with the author, but I will never accuse him of being hypocritical. He no longer needs to curry favor. Indeed his latest column recommends itself for its sober balance and does not forget to pay due respect to "industry and commitment".

The logic behind its leitmotiv is not restricted to entrepreneurs. How many times have you read help wanted ads looking for beginners out of their depth and sincerely unsecure about their capacity to cope? As "learning on the job" is "always the best way to really understand" what one is doing, it makes one wonder how companies could recruit unless enough beginners are willing to cast themselves as experts.

Human resources self-styled experts will reply job levels come in nicely progressive gradations. What's wrong if spending the summer scooping ice cream cones makes you claim to be a seasoned salesman for the hospitality industry if you do not pass yourself as a nurse for hospital cryosurgery?

But what if there are not enough summer jobs available? And what if no prior experience can properly prepare one for the job?

Take Head of State. Look no further than at French President François Hollande. He has to fake it, has he not? But would a prior senior position in government have helped? Not when what is prudent at a lesser level is held to be reckless at a higher one. In the United States for instance, Mitt Romney's experience in healthcare as Governor of Massachusetts stands against him as the Republican candidate to the Presidency.

Nor does a prior term in office offer comfort. In today's circumstances, incumbents are so badly bruised by battles past they have no less to fake.

Read Martin Wolf's analysis of the world economy in the past five years (**). "If the [US] government had been unwilling to run offsetting fiscal deficits", the "massive [de-leveraging of the private sector] would surely have caused a huge depression". As this was on President Barack Obama's watch, Martin Wolf seems to offer him a fillip but concludes on what looks to me like a pressing plea for him to run against his record.

As the future is about "accelerating de-leveraging, while promoting recovery", "the policies now in place are, alas, very far from good enough".

Not only heads of state must be fakers, they must succeed in convincing the public to fake it too. How else can one be confident to go look for a job, invest in a venture or simply lend money to a government when Jamil Baz tells us "deleveraging is proving impossible to execute" (***). If "all the perceived unpleasantness of the past few years is merely a warm-up act for a greater crisis still to come", can there be any taker without fakers?

Please note the need to deal periodically with a surfeit of debts is as old as the hills. And give credit to the Bible for coming up with a solution, the remission of debts every seventh year (1). Officially the next sabbatical release is in 2014. Why fake it? Would not any increase in moral hazard be compensated by freeing all elected office holders from being beholden to campaign contributors by immoral debts of gratitude?

If I were President François Hollande, I would seriously think it over. While rushing to take extreme measures would be out of character for him, a gradual gain of experience on the job should appeal to his caution. Neither an economist nor an expert in biblical law, I am attracted to the concurrent concept of giving back their personal freedom to enslaved citizens. Why not start the sabbatical year by freeing our personal data?

He would not have to fake an interest in privacy. "Private affairs are resolved in private" he has quite publicly declared "in a 45-minute, nationally televised interview on the French national holiday Bastille Day", as reported by Steven Erlanger (****). No wonder, not a hundred days in office, he has already found the hard way how rich a seam personal confidential information can be for the takers who mine it for free.

Also it cannot hurt his image to draw a sharp line between his predecessor and himself. Former President Nicholas Sarkozy made a point of fighting individual digital piracy, much to the distress of ordinary citizens. In letting the latter legally entitled to their private data, he would go instead after corporate digital piracy, a welcome balancing act.

And he does not need to tread carefully there lest the economy suffer. Amazon, Apple, Facebook, Google, whatever the vandals, they are foreigners all, not some large French employer whose financial health forces a choice between painful amputation or fancy cryosurgery.

Perhaps he should not expect rapid results. We are still at the very dawn of the Information Age and good laws take time to bear fruit. But again, what would be a certain disadvantage to those looking for quick political profits will appeal to someone who has shown he plays a long game.

What's more, the challenge ahead should arouse his love of public service. Capitalists, starting with Luke Johnson, rightly criticize governments for making a mess of running companies. The success of capitalism however is based on the rule of the law and who is responsible for making sure the laws and the rules are attuned to the needs of the time rather than those of greedy rogues, if not the government which promulgate them?

Let Zhuge Liang be his model (2). When the latter first became supreme commander, the field generals grumbled he had no experience of war. They learnt that brawns are best when backed with brains. The state needs entrepreneurs in the field but even more intellectual entrepreneurship.

In this spirit, hear Eric Lichtblau speak. "[Cellphone carriers] responded to a startling 1.3 million demands for subscriber information last year from [US] law enforcement agencies seeking text messages, caller locations and other information in the course of investigations" (*****). For security's sake, governments get themselves trapped into thinking surveillance must attack rather than defend, our eprivacy.

But the state should be no less free to avail itself to personal data as to private real-estate. The scandal is that today, like a vulgar corporate pirate, it takes such data for free instead of paying all innocent contributors. Justly compensated, surveillance will cost quite dearly and still disproportionally target minorities, the young, the unemployed, a scheme worthy of Zhuge Liang to deliver an economic stimulus to those who need it most.

Get enterprising fakers to milk the system for starting capital and build personal recommendation businesses, the Information Age growth industry.

Philippe Coueignoux

• (*) ......... A bluffer's guide to starting a business, by Luke Johnson (Financial Times) - July 11, 2012
• (**) ....... We still have that sinking feeling, by Martin Wolf (Financial Times) - July 11, 2012
• (***) ..... This still-worsening debt crisis is merely a warm-up act, by Jamil Baz (Financial Times) - July 12, 2012
• (****) ... French President Wants Private Lives Kept Private, by Steven Erlanger (New York Times) - July 15, 2012
• (*****) . Cells Carriers Called On More In Surveillance, by Eric Lichtblau (New York Times) - July 9, 2012
• (1) for more details, see the sabbatical year in the wikipedia
• (2) for more details, see Zhuge Liang in the wikipedia