With the mitigation of the Covid crisis, the recovery of the economy is spectacular. Has the dream of a world after more harmonious been forgotten?
The restart is brisk, which will not surprise anyone, since the fall had been spectacular. We will find the results of 2019 in the course of 2022. But the world of 2019 was not harmonious: there were 6 million people either unemployed or in unwanted partial activity, and 9 million poor. The upcoming subject, which we are dealing with in this book and during the Economic Meetings of Aix, is how not to be satisfied with returning to the situation of 2019 and meeting the priority challenges of social cohesion and climate change.
You are not a fan of degrowth …
I am an absolute proponent of growth. It is necessary to provide activity so that people can provide for the needs of their loved ones.
To create the conditions for a “Sustainable and inclusive growth”, you want to reconcile Keynes and Schumpeter …
The Keynesian approach is the expression of two principles: the support of demand and the necessary intervention of the State in the economy; Schumpeter, for his part, is convinced that the world is shaped by breaks in innovation, and therefore on the supply side. We will only get out of the slowdown in the global economy, which dates from the 2008 crisis, if we rebalance three elements: demand, partly hampered by low wages, a rapidly changing supply and innovation that certainly has benefits, when it allows new vaccines to be released quickly, but which also has its setbacks by leading to job cuts.
There are also three key elements: the aging of the population, the rapid digitization of the economy and the polarization of the labor market between skilled and unskilled, with no prospects for the latter. All this requires questioning six essential distributions.
The first is the distribution between income and profits. You say that in recent decades, we have favored the latter too much …
The trickle-down theory of saying, in the wake of Milton Friedman, that money well invested by rich people leads to more growth than money distributed equally is now questioned. When the share of profits exceeds one-third of income, the economy slows down. We have seen it very clearly in the United States and Japan since the turn of the millennium, less in Europe and particularly in France.
How to limit the profits?
This is what Joe Biden is doing by proposing to increase the corporate tax in the United States and by instituting a minimum tax on a global level.
In your view, companies should prioritize investments for expansion (growth) over those for rationalization (productivity gains). How to do ?
I am not condemning rationalization investments, they have their effects. But when you take the cashiers out of a hypermarket, those jobs are gone. Now, the most successful economies are those that succeed in balancing the “destruction” and “creation” sides of Schumpeter’s creative destruction, thus making it human and socially acceptable. A good distribution would be 60% for expansion investments and 40% for rationalization. This would make it possible to have sufficient productivity gains without removing too many jobs.
You also want to increase the income of young people by 20% …
In France, we are fortunate to have a relatively large youth. For example, you have to work on access to housing – don’t forget that in my generation, we benefited from high inflation, which made it possible to reimburse acquisitions at a lower cost. It is also necessary to rethink their integration into the world of work and the share of national income reserved for them.
Do you advocate a drop in pensions?
In any case, we must not increase the share of pensions in the GDP (14%), while being very careful with very small pensions. Nevertheless, I would find it quite normal to pay the CSG at the same level as the assets! We cannot sacrifice youth for retirees. Because in reality, the fate of a country is largely determined by its demographic structure. French society has given much of its economic and political power to the over 60s.
You also call for revalorizing the salaries of less qualified employees, the second line …
Yes, we talked about cashiers, nurses… We can also mention professors and researchers. The latter are tempted to emigrate for income reasons.