Karma Camorra

When I was in my late thirties, we used to have a small house in the southeast of France.  It was in a village not far from orchards where they were growing apples, pears and peaches. In the village there was a scale for weighing the trucks so as to record the quantity of fruit they were carrying.

I remember my son and I when we were watching the weighing operations. He was fascinated by the magnificent peaches and by the magic of all the mechanical tasks. I was proud of providing him with a great educational moment, a firsthand encounter with human labor, in all its nobleness.

At the end of the operation, we naturally asked where all these peaches were going. I was eagerly waiting for an answer, expecting a dignified conclusion to this wonderful moral experience.

“We burn them”, said the farmer.

My son and I had a glimpse of what pure evil meant.

It turns out that the European Union has a price support scheme. When fruit prices hit the floor, the excess supply is carefully gathered, transported, weighed, inspected, and burned. The farmers are then paid by the government (aka us) for the burnt peaches, at the prevailing rate.

We were told the inspectors were severe. They were only accepting the best looking fruits for incineration. You see, they were wary of fraud. They did not want farmers to game the system by artificially collecting second rate fruits so as to reap more subsidies. Consumers would not have accepted those second rate peaches. Otherwise, they would have had to pay them with their own money. But bureaucrats who incinerate the peaches pay them with other people’s money. They have little incentives to control the quality of the peaches. Those particular inspectors, though, were loyal and conscientious. Only the best peaches were burned.

In the 1970s, French economists working on the theory of fixed price equilibrium were worried about the issue of manipulable rationing schemes. How do you allocate supply to demand when price regulation prevents them from being equal? You need to put in place a rationing scheme which is not manipulable, but you also care about efficiency. There is a trade-off. Random rationing is not manipulable but it is inefficient. Allocating scarcity according to self-reported marginal willingness to pay (MWP) is efficient if such reporting is truthful, but manipulable if consumers can overreport their MWP.

The EC rationing scheme was both inefficient and manipulable, because it forced the taxpayer to purchase the excess of supply over demand while destroying the excess supply – a complete waste of resources – and because supply could be boosted artificially by manipulating quality.

I have another story regarding fruit burning. A big French company had sold trains to Argentina. At that time, Argentina was short of foreign currency. Instead of telling the argentines that it was not France’s problem, the geniuses in the French government accepted an in-kind payment. And that in-kind payment was in apples – presumably the government made a transfer to the train manufacturer and ended up with the apples. Unfortunately, this large supply shock inflicted upon the market for apples drove the price down to the common agricultural policy floor, so that most of the apples obtained in exchange for the trains were incinerated. The French government might have just as well directly purchased the trains and sunk them into the ocean.

But everyone has his Karma, or Nemesis, and the Nemesis of all regulators and politicians is an organized crime institution called the Camorra. Every economist should have read Roberto Saviano’s book. It is a treatise describing one of the most efficient organizations on earth. I also highly recommend the movie, which trumps any of your favorite Halloween horror show, if anything because it’s true.

The Camorra will not leave any gain from trade arising from state regulation untouched. This is their business model: they spot an arbitrage opportunity created by government, and they exploit it. This equally applies, of course, to sound and unsound regulation. The Camorra does not care whether regulation is good or bad. But if it is bad, this makes their job easier. They can expect more cooperation down the line.

And so I must confess that I was quite happy to read on page 306 of the French translation of Gomorra that at least in Campania, the peach burning officials had found their Karma. Apparently the fruits were no longer burned but buried into the ground (perhaps as a tribute to the global warming crowd), and the Camorra had set up a scheme by which garbage was illegally buried instead of the fruits. The criminals were getting the subsidies that should have been reserved for burying the beautiful fruits, and at the same time had established a distribution network so that the fruits would reach the consumer, presumably at a price below the EU floor.

The Camorra had managed to annihilate the EU policy according to which the fruits should be destroyed. Instead, because of the Camorra’s criminal activities, the fruits were eaten. By people.

Along with Uber-style web platforms, the Camorra is an institution that considerably reduces the margin of manoeuver for economic regulation and taxation. Its existence should be acknowledged in any policy evaluation exercise.

For example, there is talk of eliminating cash transactions in the Eurozone. Officially, the goal is to fight money laundering. In fact, the true goal is to eliminate the parallel economy, which is flourishing due to the secular upward trend in taxes and in the amount of regulation. If cash disappears, many transactions will have to be effected legally, and even more would probably no longer take place because they will no longer be profitable. Recorded GDP will go up but actual GDP will fall.

But this policy is likely to simply fail, because the private sector will end up with an alternative means of exchange. While there is much talk about Bitcoin, the Camorra is in an excellent position to become a central bank for the new currency.  Should cash be eliminated by the ECB, it has a huge incentive to introduce such a currency, so as to preserve its commercial operations. It is credible enough to impose it as de facto legal tender, because of its ability to use violent means against competing means of exchange. But, since violence is costly, it will probably also make its currency more desirable than competitors by pursuing a price stability objective, keeping its money supply in line with the volume of transactions. An inflationary policy would be hurting itself substantially, since by nature it must have large cash holdings.

The non-employment society: two anecdotes

There is a musical theater near where I live which has a very active and wonderful season. It produces a number of operas. We all know that operas are long and theater halls pretty hot. As a result there are intermissions, during which the thirsty people rush to the bar. At the bar there is a single waiter who is visually impaired. Despite that, he does an extraordinary job at attenting everyone he can, delivering the drinks at an incredible speed. Managing all these customers in the limited intermission period is a stressful and physical activity. Despite all his efforts, there is so much congestion that many people give up on the possibility of buying a drink. The price of a glass of Champagne is 10 Euros. There are perhaps 8 glasses in a bottle, and let’s say the bottle costs 20 Euros to the theater. The theater makes 7.5 Euros per glass sold. The hourly cost of an employee (who could for example be a student) is around 10 Euros. Make it 20 with payroll taxes. This means that the theater would recoup the cost of an extra employee, paid one hour, if only that person sold 3 extra glasses of Champagne. While space is limited, the bar can accomodate more than one waiter — at least 3, perhaps 4. 

I can only speculate why this highly profitable transaction does not take place. Presumably the new recruit will only be employed a few hours per week. While regulation makes this increasingly difficult (what’s the point of having a socialist government if it does not reduce economic freedom?), it is not impossible. It is possible that local unions block such hirings, out of an ideological stance against “precarious” forms of labor (they prefer people to be on the dole). It could be employment protection, which makes it difficult to get rid of the worker if something goes wrong. It could be a lack of managerial incentives, since the theater is indirectly State owned and has little incentives to maximize profits. Or it could be the general cultural aversion toward hirings which pervades French society. Since the early eighties, when a host of restrictive labor laws was implemented, rationally inattentive managers have adopted this simple strategy: only hire when strictly necessary.

My other example comes from a TV program, which described how French driving schools were being opened in Barcelona. The French driving license is aberrantly difficult and costly to obtain. I was supposed to know the formula for kinetic energy, the meaning of signs that were only relevant for trucks my potential license did not allow me to drive, and many other irrelevancies. Things do not seem to have improved since then. In particular, according to the TV program, the administration in charge of running the practical part of the exam is under-staffed, an ironical feature in a country where 25% of employees work for the government. As a result, people have to apply for that part months in advance, and, if they fail (which is frequent), they lose another six months. Many people, especially among the low skilled, cannot find a job because they do not have a driving license. Furthermore, while waiting for the exam, people continue to take regular driving lessons. At the end of the day, their driving license has cost them a fortune. The extent to which the driving school is coercing them into taking all those lessons is unclear to me. Why don’t people apply six months in advance and start taking driving lessons, say, two months before the exam? The sector is somewhat open to competition but once one has elected a school, it processes your application to the exam, so it has some power over its clients.

In any case, according to the TV program, in Barcelona one can take the exam 12 days after applying. Furthermore, wages, labor taxes, and gasoline taxes (an important cost item for such a business) are substantially lower there. And by virtue of the European Single Market, Spanish driving licenses are, I suppose, recognized in France. So people find it worth to purchase a low cost plane ticket (thanks to air transport deregulation), rent a room for a month there, and take the exam. Hence, some clever French people opened a driving school, thus giving lessons in French to their French clients. And the Single Market, again, guarantees that the Spanish or Catalan authorities cannot prevent them from running their business. 

Springtime for madcownomics

Should Creutzfeldt and Jakob get the Nobel prize in economics? Probably, except that they are dead, and did not really foresee how the mad cow disease would hit the economic sphere.
Under the impulse of Eurostat, European Countries are now supposed to include parallel activities — in particular drugs and prostitution — in their GDP computations. The pro argument is that these are mutually profitable transactions, and, as they are legal in some countries, it will facilitate cross-country comparisons. A similar adjustment takes place for owner-occupied housing, which contributes to GDP in the form of imputed rents. This allows to eliminate the bias that countries where renting dominates have an artificially greater GDP than those where owning dominates.

Where the mad cow disease strikes is here: How can the same government decide that an activity is illegal, ergo harmful, and at the same time include it in GDP, i.e. decree that it raises welfare? And, furthermore, if it is illegal, how are we supposed to measure it? And why should national accounts be harmonized between a country which thinks that drugs are bad and a country which thinks that drugs are good? [1]

Another pro argument, beyond ludicrous, is that those computations will mechanically reduce the debt/gdp and deficit/gdp ratios, making European countries look better in terms of “Maastricht”. Except that the reason why we divide debt or deficits by gdp is that we want to express them in relation to some measure of the tax base that will serve to pay back the debt. Including an illegal, and therefore untaxed activity is therefore absurd.

There is no limit to what can be included in GDP. When you watch TV, your TV is performing a service. The TV channels’ advertising revenues widely underestimate the value of this service (in fact they value a totally different service, the grabbing of your attention, which generally comes as a deduction of yoour own utility of watching TV). We could well impute the value of watching TV in GDP. There is no logical difference between doing this and imputing owner-occupied housing. In both cases we put a price on a service that people provide for themselves with the capital they own, so as to make it comparable to the same service sold on the market.

It turns out that each French person above 4 on average spends a daily 3 hours and 50 minutes in front of TV. Let’s make it 4 hours. We can value that on the basis of the price of movie theaters, which is something like 8 to 10 euros for a 2 hour sequence. As many people watch TV because they are not willing to pay that amount for what they see, we have a little bit of a truncation bias here, so let us divide this amount by 2. This eventually values the hour of TV watching at 2 euros per hour. Let us make these 4 hours 2 hours, because some people actually watch pay-tv, which is recorded in GDP. Putting these things together, the value of watching TV is evaluated at 2*2*365 = 1500 euros per year. There are some 60 million French people above 4. We should therefore raise French GDP by 90 billion euros, i.e. 4.5 points of GDP.

[1] In France and other places, the buying of sex is illegal, but the selling of sex is not. Similar absurdities prevail for drugs. For Marxists, feminists, and their ilk, there are no such things as good actions and bad actions; only good people and bad people. A voluntary transaction between a good person and a bad person is therefore good and bad at the same time. From there the Marxist/Feminist has two escape routes. He can claim, in an Orwellian fashion, that good = bad. Or, he can decide that good people are not endowed with free will, implying that the transaction is not voluntary. In the latter case, the life of the good people (women, the poor, etc) has to be regulated by the government. But, if good people have no free will, regulation can only be enforced by bad people…

The political economy of the Breton upheaval. II: A symptom of collective mad cow disease.

que_la_fete_commence18_w_450

I will continue my discussion of the Breton upheaval by discussing its economic, or rather mad-cow-nomic, roots.

Over the last two decades French public opinion has become increasingly vocal against globalization. All political parties have to some extent a protectionist stance, if only a nominal one. The “extreme” parties are outright protectionists. The ruling parties’ platforms include a cosmetic industrial policy agenda to make-up for the fact that they will abide by international treaties and therefore are in no position to close frontiers.

The arguments of the opponents to globalization are simple. How can a French firm with high labor costs compete with a Romanian firm with low labor costs? The French firm will have to close and its employees will be out of jobs. If globalization puts people out of jobs, why does the European Union write reports saying it is good for the economy? And why is it imposed upon the French people, increasingly against their consent?

At the same time, there is much less support for protectionism in other countries with similar levels of developments, such as the U.S., the U.K., Sweden or Germany. These countries seem to adapt better to globalization, in fact they are more globalized than France; the Bolkestein directive has been implemented to a greater extent in the UK and then Germany than in France, and yet their population is more sympathetic to trade. Indeed, in Germany the unemployment rate has constantly fallen throughout “the worst crisis since the great depression” and is now at a minute 5 %. (According to a French magazine, this is “the example not to be followed”.)

We could believe that the French are brainwashed, and that may be true to some extent, but facts seem to confirm their views. Every day a prominent firm announces that it will close or downsize, and the Breton food and agricultural industry is one of the most exposed ones. Could it be that globalization is good for Germany and bad for France? And what differences between these economies could account for that?

To answer those questions, we need to understand why wages are low in Romania in the first place. And we need to understand why we may gain from trading with them despite that some firms can’t compete with their low wage producers.

Suppose we only trade with countries with a similar level of development. Then, clearly, no firm would have to shut down because its foreign competitors have lower costs. Consumers would gain not because they would import cheaper products, but only because they would consume a broader range of products. Yet even in such a situation, some firms would have to close, because they are less productive than their German competitors; and some German firms would have to close, because they are less productive than their French competitors. This should be no problem; because France and Germany have a comparable distribution of skills, trading between them does not impact the distribution of wages. So if lose my job because some German firms are more efficient than my employer, I can expect to find another job at a similar wage elsewhere. In fact, reallocating resources to the most productive competitors increases the productive capacity of both economies and makes everybody better-off.

Yet if you describe this scenario to a French, he will object that once he has lost his job, he won’t find another one. The scenario only works if the economy is sufficiently flexible to smoothly reallocate labor between firms. And that is not the case of the French economy.

Suppose now that instead of trading with Germany, we trade with Romania. These people earn much lower wages. Yet that must be for a reason. If they were as productive as the French in all sectors, they would have the same real wage and real living standards. Any differences in nominal wages would then just be a matter of exchange rate misalignment. The Romanians must therefore be less productive than the French. But if they were uniformly less productive than the French, they would not be able to undermine the competitiveness of French firms. A French firm which pays 100 to workers who produce 100, can sell its good at the same price as a Romanian firm which pays 50 to workers who produce 50.

The problem comes from the fact that the Romanians are not uniformly less productive. They may be far less productive at making airplanes, but equally productive at producing poultry. They only earn 50 because of their low productivity at making airplanes, but their poultry firms pay 50 to their workers who produce 100, while the similar French competitor has to pay 100 and needs to sell its production at twice the price. When forced to compete with the Romanian firm, the French firm has to close unless its own wages fall down to 50. If that happens, its workers will become much more attractive to hire for the aircraft industry and will relocate there. The aircraft industry will grow and indeed it would attract all the former workers of the poultry industry if workers were identical. Given that the aircraft industry does not suffer from competition from Romania, eventually no worker has suffered a wage loss and people are better-off because they can consume cheaper Romanian chicken that is financed by exporting aircrafts. But perhaps workers in the poultry industry are not so productive in the aircraft industry because they are  “unskilled”, and through trade they have to indirectly compete with Romanian unskilled workers who are relatively more abundant. Then the unskilled workers end up with lower wages, but their wage losses are smaller, the better their ability to relocate.

Then, you might ask, why would the unskilled accept trade with Romania if their wages fall? The answer is: they wouldn’t! But in theory we may design the shift to globalization in such a way that they are compensated for the wage losses. We could levy a tax on the consumers, who benefit from cheaper imports, and finance a transfer to the unskilled, who also benefit from cheaper imports but not enough for this to offset the effect of their wage losses, in such a way that everybody is better-off. This is because free trade generates global net gains at the aggregate level.

Of course, one does not have to do it. It is written nowhere that the losers from public policies have to be compensated. In fact most public policies are zero-sum (or even negative-sum) redistributive ones such that compensating the losers is impossible because the policy does not generate any gains. Its legitimacy comes from “consent” of at least a majority of voters. But, as we have seen, that kind of “consent” has been denied to the French in the case of the Eastern enlargement of the European union.

But the central issue is that the French economy does not work as described. In fact it has been designed in such a way that participation in a free-trade zone with low wage countries has catastrophic consequences.

On the one hand, market rigidities make the adjustment to foreign competition more painful, and magnify the losses for the social groups exposed to it. Workers who can no longer compete with their Romanian counterparts have to lose their jobs, because minimum wages and collective agreements make it impossible for them to have a wage cut. Regulation makes it harder for them to relocate to another industry or location. For example, they would have to buy a costly license should they want to become a taxi driver, or to spend years getting a degree should they want to open a hair salon. They would lose their order of priority in access to social housing should they want to accept a job elsewhere.

On the other hand, participating in a global market increase the economic distortions associated with taxes and regulations. For example, in a closed economy, an increase in social minima would make unskilled labor more expensive to hire, and firms that employ lots of unskilled workers could adjust by raising prices. This would generate some employment losses and welfare losses for consumers. But these losses would be smaller than in an open economy, where those firms could no longer raise prices, since their customers would then shift to foreign competitors. Instead they would have to close and their workers would become unemployed.

Many other handicaps compound those issues, such as the working time regulation, the gradual piling up of safety and environmental regulations, the ever crawling up payroll taxes, and the Euro.

With a rigid economy, losers lose more, and gainers gain less, from globalization. It is no longer obvious that there are aggregate gains from trade. To compensate the losers one needs a greater tax hike than in a flexible economy, and it may be impossible for everybody to gain.

The  inherent contradiction in French economic policy is to insist on implementing ideologies that hamper markets, while at the same time participating in globalization, which makes flexible markets more necessary. French politicians live under the delusion that they can survive that contradiction by making it up with subsidies. Last week only the government spent 5 billion Euros of taxpayer money to appease interest groups, including the angry Bretons. They hope that they can find some more malleable people willing to remain silent while they have to pay more taxes to finance the subsidies that the more vocal, connected, or violent groups managed to get for themselves.

Suggested reading: Saint-Paul, Gilles (2007) Making Sense of Bolkestein-Bashing: Trade Liberalization under Segmented Labor Markets.Journal of International Economics, 73 (1). pp. 152-174.

Suggested movie: Que la fête commence, by Bertrand Tavernier, with French actor jean-Pierre Marielle at his best in the role of Breton dissident Pontcallec.

The political economy of the Breton upheaval: I. No taxation without representation

 

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The central government in Paris is facing an old-style peasant wave of unrest in the westernmost part of the country. Small entrepreneurs, workers, farmers and many other people have congregated to oppose, with some degree of violence, a new tax on commercial road transport (with the trendy P.C. label “écotaxe”) that is currently being implemented and had been decided by the preceding government in the name of “sustainable development”.

France is famous for its street protests of a more or less violent form, and this tradition is continuing because it works. Historically, governments have backed down on many policy measures because opponents managed to make life impossible for them.

On paper, there is nothing legitimate in trying to cancel the choices of a democratically elected government through violence. And Brittany has given a large majority to the current government in 2012, thus endorsing more expenditures, more redistribution, more regulation, and more taxes. Who did they expect would foot the bill?

If however we turn to the substance, the root cause of the upheaval is two-fold. First, if you administer people a hefty dose of mad-cow-nomics, they predictably become crazy. Second, people are increasingly taken hostages by a ruling elite which seems totally out of control.

The mad-cow-nomics of the Breton upheaval are the following. On the one hand, people are asked to be competitive in the European single market. On the other hand, the institutional context in France and most recent policy measures are just prohibiting them from becoming competitive. The écotaxe is just the turburlence which triggers the final blast of the pressure cooker.

On the one hand, the Breton agricultural producers are supposed to compete with large German plants that reportedly hire workers from Romania and Bulgaria at Romanian and Bulgarian wages, thanks to the Bolkestein directive.

On the other hand, they have to pay their own workers French minimum wages, topped up by high social security contributions, abide by a myriad of costly regulations, and are a privileged target for more regulations and taxes in the name of “sustainable development”. In particular, the Bolkestein directive is not implemented in France to the same extent as Germany, so they cannot replicate the German strategy of importing cheap labor from the East. The French road transport tax is more severe for medium-size trucks than the German one, adding to the problem. And Schröder-style reforms are unheard of around here, meaning that the minimum wage has kept crawling up — some 17 % of the employed are paid the minimum wage, an astronomical proportion by international standards.

Historically these handicaps were offset by subsidies. But as the subsidies are phased out, the Breton producers can no longer break even.

In the context of the upheaval, we notice repeated attacks on speeding radars, which may sound anecdotal. In fact people have been furious against those radars from the start; they epitomize the contempt of the ruling class for them. They are strategically located at places where the speed limit is abnormally low given the configuration of the road. They impose a mental torture on drivers, especially of course on those who have to drive constantly in their profession. Nobody believes they have anything to do with road safety. They are a consequence of a global ideology where politicians incarnate some moral principle — sustainable development, gender equality, public health, solidarity, European unification — and consequently people are accountable to politicians instead of the other way round. In turn this ideology serves as an excuse for the elites to increase their power and extract more resources from the population.

In 2007 people voted for Sarkozy because he sounded more receptive to the actual problems of the people. Immediately after he was elected he scattered the territory with those radars, while at the same time hiring politicians from the defeated socialist party in his government. At that point people understood that they had been grudged.

How can one explain to the Bretons that there is any good for them in enlarging the European Union to the East and in implementing the Bolkestein directive? This is made more difficult by the fact that there is no democratic legitimacy to such enlargement. Nobody in France was asked their opinion about whether Bulgaria, Slovenia or Latvia should be part of the Union: There was no referendum. To be sure, the parliament agreed. But the two main parties are unanimous over everything European. That is, the scope and scale of the European Union are simply taken out of the debate — in the former Eastern Germany there were 11 political parties; but things like freedom of speech, a market economy or reunification were, similarly, taken out of the debate.

At the same time as we have no say on the frontiers of the Union, we are told that we need more political unification, which of course makes it even more important that enlargement should be subject to referendum. It’s as if the U.S. congress suddenly decided that Mexico, Venezuela and Colombia would now become U.S. states. What would the American people say? In fact such a scenario is not even conceivable.

Once upon a time, transfers of political sovereignty to Brussels were subject to referendums. In 1992 the French said yes to the Maastricht treaty, after a campaign which skillfully lumped together membership of the Euro area with the very existence of the EU (then EEC). In 2005 the French said no and since then there has not been a referendum. We are allowed to have referendums only if we say yes.

The Bretons are angry because they (and other French people alike) have not given consent to any of the things that are imposed on them. They have not consented to the Eastern enlargement, they have not consented to the Bolkestein directive, they have not consented to the écotaxe, and they have not consented to the speeding radars (another bipartisan consensus).

From 1300 to 1660 the kings of France, when levying new taxes, needed the consent of a popular assembly called the Etats Généraux. While political representation was not equal across people, the members of this assembly were not professional politicians but genuine representatives of their constituency. It was not rare for the assembly to say no to a tax proposed by the king. The scope for manufactured consensus to make a mockery of popular representation was lower, precisely because the representative of shopkeepers was not a career politician but a shopkeeper, who would personally experience the pain of any new tax on shopkeepers. Circa 1660 the Capetian dynasty stopped resorting to the Etats Generaux and became a dicature called absolutism. It lasted another 130 years.

Curfew

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A recent law, effective July 1, prohibits the lighting of offices, buildings, churches and shops during the night. We are being told that such practices are useless and wasteful, therefore they should obviously be prohibited. Such a prohibition is good for the Planet and is meant to allow city dwellers (as in cloudy Paris) to watch the night sky, which UNESCO has recently classified as part of mankind’s heritage (it is unclear to me whether UNESCO has officially recognized that we share that heritage with aliens).

Of course, conceivably, some people may want to light a building for good reasons. For example the mayor of a town may want to light a historical building during some celebration. Or, say, a fashion house may want to light its headquarters on the Champs-Elysées, which contributes to the “image of France” abroad.

Well, in this case there is no problem. You just have to ask the “préfet” (a local official nominated by the central government) for a derogation. This is the same guy who decides where and when you may want to open your shop on sundays or have a sale.

You cannot get a derogation for murdering you grand mother or having a picnic on your neighbour’s yard. But you can get a derogation for violating the curfew or opening a shop on sundays. There are crimes for which the degree of criminality is a matter of judgement.

You see, everything is simple and nice. What’s the point of having this outdated concept called “rule of law” if people abuse it to do useless things and harm the Planet? Instead, let’s have people submit their motives to bureaucrats, and let them decide on a case by case basis which motives are noble and which ones are ignoble. And since the government is the source of morality (otherwise there would be no point in letting it grant derogations to the prohibitions it has made), there is no need for public officials to ask for a derogation to the curfew should they want to break it. By definition, their motives are noble.

For example, the “Nuits Blanches” is a cultural event sponsored by the Paris municipality which precisely consists in engaging citizens to spend the entire night out, visiting museums and attending cultural events (this link gives you an idea). A naive mind might ask why it is good that these events, which could happen during the day, or at least not during the curfew (which the law sets at 1 am – 7 am), have to be scheduled at a time when most people normally sleep, and why suddenly the health of the planet is no longer a concern when politicians stage massive festive events, while it remains so when it is the private people who want to have their own festive events.

It is hard to believe that breaking the curfew in order to have the Nuit Blanche would follow from a pure utilitarian argument.  After all, if the happiness of the Planet is important enough to warrant a curfew, surely the utility loss from having the Nuit Blanche events during the day instead of the night must be small (assuming it is a loss at all) compared to the marginal unhappiness inflicted upon the Planet.

So the reason why Nuit Blanche 2013 will stand despite that the government just passed a law making these sort of things illegal is that the event has some special moral meaning. In a recent interview, the Paris Mayor, Bertrand Delanoë, gives us a hint on the true meaning of the Nuit Blanche: “Nuit Blanche has a political dimension. The night is not owned. The night is shared”.

I suppose Mr. Delanoë really meant that the night is shared under the terms of those who own it. And the Nuit Blanche and the curfew both remind us who owns the night.