Another French paradox

Abroad, Kerviel is called "history's biggest rogue trader". In France, he's the "five billion whizz-

After Zinédine Zidane, the banlieue kid with the golden feet, France has a new hero, the Breton lad with a golden keypad. With his feet, Zidane touched everybody's heart; with his keypad, Jérôme Kerviel almost bankrupted Société Générale, one of the world's leading banks. Abroad, Kerviel is called "history's biggest rogue trader". In France, he's the "five billion whizz-kid".

An overnight star of the internet, his name rose from ten references to half a million on Google in just 48 hours. The 31-year-old French trader can now claim five (fake) Facebook profiles, a biography on Wikipedia in eight different languages, and YouTube videos showing him in amateur adverts for Société Générale. Three websites under his name have been created and resold, and is promoted as a virtual place where traders under pressure can chat and wind down.

When he has a minute to himself, Kerviel should think of getting an agent to control the merchandising industry that has emerged in just a few days: a friend saw a pretty young woman in Paris wearing with pride a pink T-shirt boasting: Je suis la petite amie de Jérôme Kerviel ("I am Jérôme Kerviel's girlfriend").

Beyond the humour and self-derision that such a story provokes, Kerviel's coup and the way the French are taking it have revealed once again the very different nature of French attitudes towards haute finance, and towards capitalism in its most abstract form. Together, they are looked on with utter suspicion by most people in France.

In a 2005 survey carried out in 22 countries, France was the only country where only a minority (36 per cent) of those questioned supported the free-enterprise system. This national trait never fails to startle visitors to France and can be attributed to two cornerstones of French culture.

The first one, which may change with time, is that a vast majority of history and economics teachers and professors in France have been taught Marxist views, which they have in turn transmitted to the next generation. The events of 1968 only reinforced those ideas, triggered during the war in opposition to Vichy's capitalist and socially conservative diktats.

An anti-capitalist political platform was carried out triumphantly by postwar communists and socialists who, for decades, benefited from the moral high ground gained from their involvement in the Resistance.

Gaullism then absorbed socialist ideas to create a new national mantra, a melange of strong dirigisme in economy and unyielding independence in foreign policy. Dirigisme meant a capitalist economy with strong governmental direction, but not in a Soviet, authoritarian way. Central planning would use incentives to help create large industrial groups - those very groups which are today's world economic giants, such as Areva, EDF, Alstom and Bouygues. But with dirigisme as its central dogma, France could not cohabit easily with what was thought of as, and still is for most, "Anglo-Saxon capitalism", a simplistic and primitive interpretation of Adam Smith laissez-faire.

I remember how in school, when I was 13, we would all snigger at the concept of an ever-virtuous free market. "As if a free market didn't produce gross inequalities!" we would say on cue. The free market may have become a necessary evil for my generation, but most of us still agree that only strong state regulation can correct capitalism's inherent injustice.

The second foundation of French culture is belief in the harmonious role of the state in citizens' lives. The French want to believe, perhaps in a foolhardy way, that they can have it all, keep their model while agreeing to reforms.

Why, the French keep asking their politicians, could they not keep a system which has made France the sixth-largest economy? And which, they could add, has given it the lowest poverty and income inequality rate among the highly developed economies, along with some of the world's strongest social and public services?

According to the World Health Organisation, France tops the global league for quality of public health and transport services. French politicians, including Nicolas Sarkozy, who talks about "rupture" with the past while promising "economic patriotism", have therefore tried to keep the French system alive while liberalising the economy, and so far succeeded in doing so.

Despite significant liberalisation over the past 15 years, the state in France continues to play an important role in the economy. For instance, government spending is above 50 per cent of GDP, the highest rate in the G7.

Of course, globalisation and the growth of the European Union have weakened the power of nations and the extent to which nation states can play solo in the world economy. Nonetheless, France continues to live a very French paradox: her schoolchildren are taught to despise capitalism, yet she remains the second-largest trading nation in Western Europe. France boasts some of the world's leading utilities and transport and construction companies, and yet maintains a large public sector, employing 4 per cent of her labour force - that is to say 864,000 people - in the country's 1,100 state-owned companies.

The question is: how long can France thrive on her contradictions? Perhaps as long as the French find Zidane's headbutt and Kerviel's ?5bn coup equally sublime.

This article first appeared in the 04 February 2008 issue of the New Statesman, God