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I live in France, I work in the IT sector. I can completely agree with what you say.

From my point of view here are the biggest problems entrepreneurs have to face here:

- French labor law gives much more power to the employee over the business owner. 35 hours weeks may not be applicable for IT employees, but there are high compensations. Where I work, a 50 hour week is considered "way too much". We get 35 days of paid vacation per year, my manager gets 50, I'm not even counting the myriad of public holidays. Everything from parenting leaves, to medical leaves can last weeks and cost a ton to the employwer. Did I mention that once the "trial" period (usually 3 months renewable once) is over, there are no cheap ways to fire an employee unless she screws up big time? This may all seem nice and righteous, but it's not very motivating to start your own company.

- Taxes are so high it's not even funny. For every euro I earn, my employer has to pay a euro in social charges, and this isn't counting the exhorbitant taxes you pay on top of it. It's true that startups do get a grace period of 3 years, but from experience (and talking to other entrepreneurs), this is barely enough. The sickest part is that there's a market developed here where expert accountants teach young entrepreneurs how to "game" the system to minimize "tax-damage". I was shocked when I first discovered this. Until I found out how high taxes are.

- Finally, and this one is the most powerful and less obvious one, there's a strong social taboo in France about being rich or even wanting to be. One thing that drives most startups I've encountered, is the drive to become insanely rich. In the US, or at least that's the impression I got there, there's no shame related to wealth. In France it is completely different. Having money, or desiring it, is bad. The rich are the "enemy" (look at recent taxation laws by our government) and the rest of us would be content with very little. Of course this is a bad generalization, but this point of view is prevalent. And this is why, I believe, the proper environment for startups is not a priority for most French people out there.

the "wanting to be rich" thing is frankly a cliche. Lots of people like money in France as much as everywhere else, and I don't see much difference between France and UK. It is certainly more prevalent in the US, but I would say the US are the exception. And if you want money, I am not sure startup is the likely way of doing it. Certainly, for people with the right diploma, working in the finance sector is much more rewarding financially speaking.

Regarding the taxes, I will say what I always say: yes they are higher than in the UK, but you get more. So you need to compare what you're getting, otherwise the comparison is meaningless. I am working in the UK, where I paid around 35 % of taxes, so quite lower than France, where it would be closer to 50-55 % I think for my salary. But then, I get shitty health care and essentially no pension. And if I have kids, I will have to pay a lots of money to get them a decent school. I would love paying 15-20 points more taxes in exchange for that in the UK.

IMO, the main issue in France is more the education system and how the incentives are highly biased toward going to a big company. The whole society is highly biased against failure, and the only path to a 'career' is through 'soft' areas. I am just over 30 and my parents don't understand why I am still doing engineering instead of 'managing' people, for example. This is the main reason why I have been leaving outside France for the last 8 years or so, not taxes.

Certainly, yes, services provided need to be compared along with the tax rate to get a fair comparison - but the idea that you get your taxes back is a red herring. There is a clear element of redistribution built in, there will always be some people who put in more than they use and some people who get out more than they put in - otherwise you could just let people buy these services for themselves.

Yes, of course, there is some redistribution going on. But that's not the main explanation of the difference between say UK and France taxes. If you remove pension funding alone, you get very close between UK and France, I believe, although I have not checked the numbers (it would cost me around 17 % of my pre-income tax to contribute to the French pension system, so I am basing my calculation only my case alone with all the associated caveats).

As for letting people buy those services, this becomes more dependent of what you believe: I don't think it is that clear cut that there is no net benefit of having everyone getting the same basic health care in terms of costs, etc... A lots of what is costly in France is closer to insurance than anything else. Buying an insurance against disability is so expensive in the UK that nobody does it (which is why it is expensive in the first place). Since everybody has to do it in France, the system becomes much more viable since the pooling is very large.

The difference between UK and French pension payments is that in the UK you actually own your contributions, in France you merely hope that a future politician won't decide that you're too rich to get a state pension ("means-tested benefits" is fancy word this in the UK). In Denmark it's a national sport for politicians to figure out just how many pensioners/soon-to-be-pensioners you can afford to piss off in a given election cycle and adjust various limits accordingly.

I think the situation in the UK is only superficially different. Does anything prevent the government from increasing taxes on private pensions?

I think there is a substantial difference in the political tactics required, mostly founded in the awareness of those affected. It's easy to promise that the lowering of pensions is temporary until the crisis passes, while once you've taxed somebody's savings (rather than properly borrowing them, which is very common - pension funds are enormous holders of public debt), there's no cover to pretend you'll give it back.

EDIT: Also, public pension schemes can be allowed to become progressively underfunded to the point where it's impossible to fix and the responsible officials have long since retired. No so with private savings.

This is only a superficial difference. On a relatively big economy like France, the difference between state-based pension and capital-based ones are very minor: in both cases, you're hoping that people who work when you retire will be able to pay for your retirement. Private funds in UK are severely underfunded by the way (although I can't find a reference on the exact number, which is supposed to be around 250 billions pounds), in the same that state-based systems are underfunded.

The main factor for retirement is the 'working people'/retired people ratio (ration de dependence in French, not sure about the proper English translation), much more than how it is funded.

Governments can easily change tax benefits/incentives on those funds, so the taxation aspect is not that different either.

A private savings account can't become underfunded. It may no be enough to comfortably retire on, but that's a different kettle of fish.

Regarding the underfunding number, I believe these are private defined benefit schemes - I'm talking about regular savings-schemes. Also, see my response to mercurial.

I agree with what you say, but it doesn't really contradict what I'm saying:

- the "wanting to be rich" is a bit of a cliche, but it's still a major social taboo. As a foreigner who came to France, that was a major culture shock. True, people want to be rich, but politicians don't say it out loud. From what I see, much more efforts are put into helping poor people become middle class, than helping middle class become rich.

- I agree with you on the taxes thing. After all, I'm living here by my own will and I like these social securities. Nevertheless, while it may work out well on the personal level, it doesn't encourage people to start companies. It's great that my kids' schooling is afforded by the government, but these high corporate taxes are still heavy on entrepreneurs.

- I completely agree with the bias towards being a manager at a big company. Point in case, I work for a major investment bank. It's also true that failure is not easily accepted here. I know relatively few entrepreneurs (I'd say less than 5% of my graduating class 2 years ago) and those who "failed" (whatever that means) are having a hard time going back to the "regular" corporate path.

> From what I see, much more efforts are put into helping poor people become middle class, than helping middle class become rich.

I really don't see the problem with that.

And who says it's a problem? I only say it's, in my opinion, a subtle obstacle to developing a truely startup-friendly environment.

Is society better off that way? probably. I actually like it here. But it's also probably one of the reasons why HN spent all morning debating the state of startup-land in France.

Interesting, but what I don't understand is why businesses aren't adapting and working around this sort of issues.

Look at Canada - you can't discriminate based on gender, age or race, but you can hire beautiful young girls as models that also happen to wait tables in Cactus Club and Earls. If full-timers are such a pain to deal with in France, why not hire more contractors? In fact, why not skip full-timers altogether. Seems perfectly doable, especially in startups context, no?

Sure it's totally doable. But contractors have the drawback to be able to leave very quickly on the other side full-timers once their trial period ended (up to 3 month renewable, so 6 month) have a 3 month period before quiting.

French entrepreneurs can already have flexibility. They only want it to be one way.

It appears the rich are the enemy if what you say is correct. The rich want to pay people less, have them work more, and in the end they also want the system to help them do this.

How are the rich not the enemy here? Maybe VC funding and the startup culture is really not the best way to build technology, despite what Americans may have you believe.

Have you actually been to france? You most certainly can "fire people who aren't working out". The car companies put thousands of people on the streets when the economy tanked. France also tends to have long "probation" periods to ensure they can do exactly that: fire people who aren't working out. What you can't do in France as easily is screw people the way you can in places that aren't as interested in worker's rights (e.g. Zynga and the "google cook").

> to the 35 hour employee work week

Again, if you'd actually worked in France you'd know this doesn't apply to everyone. IT workers work long hours in France just like anywhere else. But it seems you also have a misconception about how human productivity works if you think 60 hours a week (you didn't say this, I'm just guessing based on your tone) will give you a more productive year than 35 or 40 hours.

Did you actually read the first line of my comment?

"But it seems you also have a misconception about how human productivity works if you think 60 hours a week (you didn't say this, I'm just guessing based on your tone) will give you a more productive year than 35 or 40 hours."

No, I didn't say that and you shouldn't read that into what I was saying. I was specifically comparing the situation for startups that I've seen having worked in them in the UK, US and France.

And I am specifically NOT wishing to comment on the moral or political motivations for the work environment in those countries. Each country has developed its own history and culture which I do not seek to criticize. My original point was that I do not believe France is a good place for startups. That is all.

>Did you actually read the first line of my comment?

The part where you claimed to have worked in france? I don't know you, so why should I take your word at face value when the rest of your comment seems to suggest that you actually haven't worked in france?

You could do worse things with your day than learning who JGC is.

It took me about 5 seconds to find John Graham-Cumming's bio:

http://blog.jgc.org/2010/03/my-bio.html

"As a programmer he has worked in Silicon Valley and New York, the UK, Germany and France and currently works at CloudFlare."

Hi, I run a business for a couple of years in France now and you're factually wrong and mixing things up.

There's a difference between a lay off for economical reasons by a big company (which can afford it) and a small company trying to get rid of an inappropriate person (extremely hard).

Even getting rid of someone during probation can be cancelled in trial and become very expensive.

I'm not saying employment at will is the solution, but the system we have in France doesn't work.

Labour laws are one of the big issue in France, you're right. I would love for the current gvt to negociate the end of CDI, with a simpler way to fire bad people, in exchange for a much better unemployment insurance. I am not sure how the economics would work, but the current system where a large minority is working under shitty contracts because CDI is too expensive is a shame. That's a recurring desire from many economists both from the left and right in France.

"Much better unemployment insurance" => I don't follow you, there's already one of the most generous unemployment insurance of the world in France.

Well, for once, you need to give something back if you need to take something, that's basic negotiation tactics :) That's an approach largely defended by economists who are not especially on the left, like Wyplosz (see here if you can read French: http://econo.free.fr/index.php?option=com_content&task=v...).

Of course, given the current climate (austerity, etc...), that's not gonna happen any time soon.

The litany of employee problems that he has to face because he cannot fire people is a nightmare...

The workaround for that in France: don't hire people.

I worked for a French startup. The founder rented all his employees from a consulting agency that assumed the risks and costs of providing fulltime employment. The end result was something that resembled American at-will employment, but with a higher cost of labor.

I rebut everything you just said with one article: http://www.rudebaguette.com/2012/02/07/six-lies/

could you maybe summarize your refutations here?

No, you didn't. My major points were: high taxation and employee laws.

Your rebuttal on taxation is: "In addition, these high taxes are the same high taxes that allow entrepreneurs in France to live off of a 70% unemployment salary for 18 months after they are let go from their company. What goes around comes around."

And? That's fine, but that's not what a startup cares about. Sure, it's what a person cares about, but it does nothing to address my fundamental point about the tax/social charge burden. And your other point about there being an 18 month delay in the first tax return is pointless: the taxes still have to be paid.

On employee mobility, you say: "well, unless of course, you have a periode d’essai (“trial period”) written into the contract (which is the case ~100% of the time), which allows you to let go of an employee with little to no notice for the first three months. Oh, and you can also request to renew the trial period for an additional three months, legally – but you know, if you suddenly hate your employee after six months, well then, buddy, you’re S.O.L."

And? After 6 months you hit all the problems of an employee who is very, very hard to fire.

Wait, your rebuttal to "France is not a country where they really promote entrepreneurship" is that the French president gave a speech admitting that the country was risk averse and needed to become more entrepreneurial?

If that's the caliber of argument you're bringing to the table, I would soften your tone a bit.

What you say is right, but we also have advantages, like the quality of our engineers, etc. The point is, it might not be optimal but we can deal with it. This 60% exit tax, we won't be able to, and this is why I think it is significant.