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Ces idées qui ont détruit l’économie Française — Transcript

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0:00When looking for those responsible for
0:02the economic fallout we will face over
0:04the next decade, we naturally turn to
0:06politicians, and that is legitimate, but
0:08it is also a vision that is both
0:10cowardly and irresponsible.
0:12First, because we live in a democracy,
0:14so it is the citizens who elect their
0:16leaders and who are the guarantors of
0:18fair elections.
0:20And above all, and this is the real
0:22criticism I would make, if we had a
0:24government that had scrupulously
0:25implemented all the economic wishes of
0:27the French population in a sort of ideal
0:30of representative democracy—so
0:31retirement at 60, a 32-hour work week, a
0:33minimum wage of € 1900, and so on and so
0:36forth.
0:37If we had actually applied this program
0:39, we would be in an even more degraded
0:42economic situation today in terms of
0:43debt and productivity than the one we
0:45have now.
0:48If we want to be honest, the problems
0:50affecting the economy are at least as
0:52much a government problem as a voter
0:54problem, since voters want measures that
0:56tend to weaken the economy very
0:58significantly.
1:00So the question that arises is, why does
1:02the French population specifically have
1:04such a primitive vision of the economy?
1:07And the explanation we can have is that
1:10at the root of this problem are ideas
1:12that have been imposed for 50 years by
1:14intellectuals and politicians.
1:16Ideas in frontal contradiction with
1:18reality and which have, unfortunately,
1:20become the pillars of our political
1:22thinking.
1:24We are therefore going to break down
1:26these ideas that have destroyed the
1:27French economy for 40 years, with three
1:29levels of depth that create a sort of
1:31intellectual system that we have great
1:32difficulty breaking away from.
1:35The first point, the base, is the
1:37observation we make today of the French
1:39economy. It is very important because
1:41the first step before any change is to
1:43first succeed in correctly describing
1:45what economic policy we currently have.
1:47And the observation we will hear most
1:49often today is that for 40 years, we
1:51have been applying a neoliberal
1:53capitalist policy that Emmanuel Macron
1:55himself defines as a supply-side policy
1:57.
1:58Except that taking what he says at face
2:00value is perhaps a bit tricky. And far
2:02be it from me to contradict the
2:04president, but let's try to see what he
2:05means by that.
2:07Supply-side policy, normally, is an
2:08economic strategy that aims to put
2:10private companies in the most
2:12advantageous position possible. Which
2:14allows for stimulating economic growth,
2:16wages, and employment. The state becomes
2:18a sort of servant to companies and will
2:21help them grow, innovate, and develop.
2:24A maximalist example of this policy is
2:26what happened in South Korea after the
2:28war, a period during which the entire
2:31state apparatus was devoted to having
2:33the largest and most profitable private
2:35companies possible.
2:38Singapore also followed a fairly similar
2:40logic, since, since its independence,
2:42the state's almost sole responsibility
2:44was to do everything to ultimately
2:46maximize the profitability of the
2:48companies based there.
2:50But then, is France really applying this
2:52supply-side policy? Well, there are
2:54different ways to find out, but the
2:55first thing we will look at is how much
2:57all the taxes weighing on the production
2:59apparatus bring into the state each year
3:01as a percentage of GDP.
3:03For France, we have the highest
3:05effective level of corporate taxation,
3:07the most significant among all
3:09comparable economies.
3:10What do we mean by comparable economy?
3:13Actually, there may be some small
3:14countries like the Comoros or Eritrea
3:16that can have slightly higher effective
3:18taxation levels depending on the period
3:20.
3:21But if we take normal economies, for
3:23example those in Europe or OECD members
3:25, economies that have a certain size and
3:27stability, well, France is the country
3:30where the amount of corporate tax is the
3:32highest.
3:33Be careful, we are talking about the
3:35effective level of taxation, which
3:37includes all tax cuts, all tax
3:38optimization, and even all the tax
3:40evasion that companies might engage in
3:41within each country.
3:43So, how can we explain this very
3:45significant level of taxation in France
3:47? Well, first, we have production taxes
3:49that are almost the highest on the OECD
3:52scale.
3:53Next, we have employer contributions and
3:55charges that are globally the highest on
3:56the planet.
3:58And even corporate profit taxes, due to
4:00recent budgets, have moved back into the
4:02high average of the OECD.
4:04This means that for the three major
4:06categories of taxes, we are in the
4:07global top two, and for the last, we are
4:09rather in the high average on the OECD
4:11scale, which is a very rare case on the
4:12planet.
4:13In addition to that, a supplementary
4:15figure we can look at to know if a
4:17country applies a supply-side policy is
4:20the margins realized by companies. That
4:22is to say, for each country, looking at
4:24the amount of money in the first
4:25instance that companies manage to
4:27generate on average. And here too, we
4:29have very precise figures on the subject
4:31, and we know that companies in France
4:33are the least profitable in Europe, all
4:35other things being equal. More generally
4:37, labeling France as a country that
4:40pursues a neoliberal supply-side policy
4:42is surprising. Especially since if we
4:44look for the opposite, that is, a
4:46country that pursues a demand-side
4:48policy, France corresponds almost
4:50perfectly to every criteria one can
4:52think of.
4:53Because for countries that pursue a
4:55demand-side policy, what we look for are
4:57very high public expenditures,
4:59significant social transfers, very high
5:01tax levels on businesses, and
5:03spendthrift budgetary policies where
5:05debt is used abundantly.
5:07These are criteria on which France
5:09particularly stands out. We can even go
5:11further and take a figure that I find
5:13synthesizes everything, namely the
5:15distribution of value-added between
5:17labor and capital.
5:18And what we notice once again is that we
5:20are the country with the most
5:22unfavorable distribution towards capital
5:24, which is typical of a country with a
5:25demand-side policy.
5:27In reality, the French situation
5:29regarding this opposition between
5:31supply-side and demand-side policy is so
5:33unambiguous that one might ask: is there
5:35a single other country in the world with
5:37a more demand-oriented policy than
5:39France?
5:40Well, there are a few credible
5:42candidates. For example, Finland, which
5:44is the only country with higher public
5:46spending.
5:47Except that when you look closely, you
5:49realize that Finland has a VAT that is
5:51much higher than in France, and income
5:53taxes that start sooner with a broader
5:56base, which allows the country to
5:57collect more from workers and,
5:59consequently, to have a corporate tax
6:01level that is much more reasonable than
6:03France's.
6:05For information, and unlike Finland,
6:07France has the most progressive taxes in
6:09the OECD, with a huge gap compared to
6:11the runner-up, which means that this tax
6:13brings in relatively little in the
6:15French case compared to many comparable
6:17countries.
6:18Another candidate that is regularly
6:20discussed is a country like Spain, which
6:22supposedly has a more left-wing policy
6:24than France. Except that in practice,
6:26Spanish companies pay production taxes
6:28that are four times lower than those in
6:29France.
6:30A calculation that is net, once again,
6:32of all public subsidies, plus employer
6:34contributions that are also lower, and a
6:37corporate tax rate that is also lower
6:39due to the surtax we currently have in
6:41France. This makes the comparison quite
6:43irrelevant, as the gap is so significant
6:44.
6:46All these elements mean that no matter
6:48the benchmark used, whether it's
6:49European countries, OECD countries, or
6:51all countries worldwide, we must say
6:53that France is a country that implements
6:55a demand-side policy of socialist
6:57inspiration.
6:58And within this international comparison
7:00framework, no objection is possible.
7:03The only option, if one wants to claim
7:05France is effectively pursuing a
7:07supply-side policy, is either to compare
7:09France to itself—and even that works
7:10quite poorly—or to use an imaginary
7:12benchmark with countries invented for
7:14the occasion.
7:15But in that case, the honest thing to do
7:17is to specify it and say that France is
7:19pursuing a supply-side policy within an
7:21invented framework, because otherwise,
7:23people not well-versed in economics
7:25might get confused.
7:26But beyond this observation, the
7:28question we must also ask is: does this
7:30demand-side policy we have actually work
7:32?
7:34The central economic thesis behind
7:36demand-side policy is that popular
7:38consumption will fill companies 'order
7:40books, which will subsequently increase
7:42production and thus stimulate employment
7:44, growth, and economic activity.
7:47And this is a strategy that, according
7:48to economic models, can work very well,
7:50but there is at least one core condition
7:52. Consumption must truly go toward local
7:55businesses.
7:56Because if a state finances popular
7:58consumption that fills the order books
8:00of Chinese, American, or German
8:02companies, the virtuous cycle of
8:04demand-side policy collapses completely
8:06.
8:06We lose the main benefit of the policy.
8:08And as you have understood and guessed,
8:10this is a large part of the problem as
8:11far as we are concerned. In France,
8:13nearly two-thirds of the value of the
8:15manufactured goods we consume come from
8:17abroad.
8:19And if we exclude agri-food to focus on
8:21manufactured items like clothing,
8:23electronic equipment, cars, etc., this
8:26proportion even exceeds 85%.
8:28Inevitably, a large part of the money
8:30you spend still remains within the
8:32country.
8:33But these are expenses like housing,
8:35insurance, taxes, and the like, which
8:37won't have the same economic impact as
8:39spending on products that require
8:40industrial manufacturing.
8:43Which unfortunately makes our current
8:45demand-side policy rather ineffective,
8:47because the surplus income flows too
8:49easily abroad.
8:51But that’s where it gets interesting,
8:53because the observations we've just made
8:55are, at heart, quite basic and rather
8:56simplistic. The simple use of a few
8:58European rankings is enough to
9:00understand what policy is actually
9:02applied in France and why it works so
9:04poorly.
9:06Now, to understand why we are so
9:07attached to this policy, we must delve
9:10deeper into the ideology to understand
9:12the mental structures that make it so
9:14attractive, despite its ineffectiveness
9:16.
9:18Among all the economically harmful ideas
9:21poisoning public debate, there is one we
9:24absolutely must discuss: the belief in
9:26France that there is no link between the
9:29amount of capital a country has and its
9:32economic output.
9:35I realize that’s a bit dense. So, let's
9:37look at an example right away. When you
9:39see tax hikes for businesses or
9:41individuals in political platforms, even
9:44if they are very significant, the
9:46estimates assume these tax increases
9:48will have no impact on employment,
9:51growth, or national economic output.
9:53Almost by convention, no platform will
9:55ever cite the slightest negative effect
9:58linked to these tax increases.
10:00This means, for example, that if the
10:02overall tax level on an industrial
10:04company is 70 and we raise it to 80, it
10:06is assumed it will have no impact on
10:09that company's investments in France or
10:11the jobs it creates.
10:14Yet, on the contrary, as soon as we talk
10:16about additional spending, whether in
10:18Social Security or investment projects,
10:20we calculate and include positive
10:22impacts on growth and employment, with
10:24associated stimulus effects and even
10:26additional tax revenue from this new
10:28activity.
10:30This creates a rather striking double
10:32standard, where all public spending is
10:34announced with a heap of positive
10:36consequences, whether economic or social
10:38.
10:39And conversely, no tax increase is ever
10:41accompanied in the estimates by the
10:43slightest negative consequence for the
10:45economy.
10:46It is an asymmetry that makes the idea
10:48of a program imposing 100 or 150 billion
10:51in additional taxes extremely seductive
10:53, since it is simply free money falling
10:55from the sky without any economic
10:57consequences, allowing for the financing
10:59of projects that will have very real
11:01impacts on growth, employment, people's
11:03lives, and so on.
11:06But unfortunately for us, not only is
11:08the link between the overall tax level
11:10and economic activity very strong, but
11:12beyond that, private capital
11:14accumulation is one of, if not the main
11:16growth engine for advanced capitalist
11:18economies.
11:19Let’s use an example once again to
11:21explain this. In Switzerland, the
11:23average salary is five times higher than
11:25the Hungarian salary. We are looking at
11:27roughly 100,000 versus 20,000. And even
11:28if we take into account the price
11:30differences in each country, a Swiss
11:31person will, all else being equal, be at
11:33least twice as wealthy as a Hungarian,
11:34even though Hungary is not even a poor
11:35country in absolute terms. This wealth
11:37gap, as is often the case, comes almost
11:39exclusively from a productivity gap,
11:41since on a national scale, the Swiss are
11:43globally twice as productive as the
11:45Hungarians.
11:46Now, we might imagine that this gap
11:48comes partly from education or the
11:50specific faculties of the Swiss, but the
11:52real difference is that the amount of
11:54capital invested per worker in the Swiss
11:56production apparatus is considerable
11:58compared to its Hungarian equivalent.
12:02And so, in Switzerland, we have, for
12:03example, pharmaceutical laboratories
12:05with enormous capital and a gigantic
12:07productivity per employee.
12:10Industries are also at the forefront in
12:11terms of equipment, infrastructure, and
12:13technology, which allows for very high
12:15productivity and, ultimately, a
12:16considerable creation of wealth by the
12:18population.
12:19Except that all this capital available
12:21to the Swiss economy did not appear
12:23magically. It is the result of decades
12:26of investment and development of this
12:27private capital, which today enables
12:29this productivity. This is what we call
12:31capital deepening, and as we said, it is
12:33one of the main drivers of growth in
12:35developed countries. And this is where
12:38the French economic vision diverges
12:39completely from the rest of the world.
12:42Because for most developed countries,
12:44economic production is defined by the
12:46quantity of capital times the quantity
12:48of labor times the efficiency of the
12:50factors.
12:52Whereas in France, we are one of the
12:54only, if not the only developed country
12:56where we estimate national economic
12:57production as the quantity of labor
12:59minus the quantity of capital.
13:02The belief is that the more billionaires
13:04, large companies, and investment
13:05pension funds hovering around France
13:07there are, the more impoverished France
13:09will inevitably become.
13:11The ideal, conversely, is a world
13:13without billionaires, without large
13:14corporations, without investment funds,
13:16and without financial savings, where we
13:18could finally reap the full fruits of
13:19our labor.
13:20Now, one might think this is a
13:22Marxist-inspired vision, but that isn't
13:24even the case, since Karl Marx himself
13:27considered the growth of private capital
13:29to be one of the main drivers of
13:31economic development.
13:33So, we are dealing with a zero-sum game
13:35logic, where if someone builds and
13:36develops capital, it is necessarily at
13:38the expense of the population: a sort of
13:40medieval mindset where, if your neighbor
13:42is rich, they must have embezzled or
13:44stolen it in some way.
13:46This is why we can have programs in
13:48France deemed economically serious that
13:51want to tax capital gains at 90%.
13:54Taxing companies as much as possible,
13:55and billionaires until they disappear.
13:57All of this—and this is very important—
13:59is not even to finance the creation of,
14:01for example, a massive national
14:02investment fund like they have in Norway
14:04, which could fund the economy. No, it
14:06is to finance pure short-term
14:08consumption. And how can one justify
14:10something so absurd? Well, because
14:12capital is considered to be inherently
14:14evil. There is no other rational
14:15explanation for this behavior. This
14:18vision obviously generates many problems
14:20. For one, since growth depends either
14:22on the variation in the quantity or
14:24quality of labor, or on the variation in
14:26the quantity or quality of productive
14:28capital.
14:30And since we have no plans to multiply
14:32our quantity of work, nor to multiply
14:34the quality of our work—we are not
14:35making massive progress in training
14:37today—well, we necessarily end up with
14:39zero growth, dependent only on
14:40innovation that potentially comes from
14:42the United States or abroad.
14:45Because on principle, we refuse to use
14:47the accumulation of private capital to
14:49try to develop, which removes one of our
14:51main options nonetheless. The other very
14:53concrete problem weighing on us is that
14:55even if our current level of taxation is
14:57sometimes only slightly higher than that
14:59of other countries, in reality, there
15:01are threshold effects that penalize us
15:03heavily. Meaning that if you lower the
15:05profitability of an investment for a new
15:07factory, for example from 8%to 5%
15:09because of taxes or excessive
15:11regulations, well, the company won't
15:14just reduce its investment by 3%. It
15:16will build nothing at all and
15:18potentially expand elsewhere, or never
15:19build it at all. And in France, this is
15:22something we already observe, since
15:24having a bit more in taxes and
15:25regulations than everywhere else hasn't
15:27just reduced the activity of certain
15:29industrial sectors by 5%or 10%. No, it
15:32has caused certain sectors to disappear
15:33entirely, simply due to a lack of
15:35competitiveness and profitability. There
15:37may be some people who define themselves
15:39as left-wing or socialist listening to
15:41me. Well, at least one I suppose, and
15:43perhaps with the speech I’ve given, I’ve
15:45convinced you that, indeed, demand-side
15:46policy doesn't seem very well-suited,
15:48and so on. But I doubt it, I doubt it.
15:51I even think it’s extremely unlikely,
15:54and that all the economic arguments I’ve
15:56just mentioned are worth nothing in your
15:58eyes, because neo-socialist thought has
16:01managed to find a perfect defense that
16:03neutralizes all these criticisms and
16:05constitutes the final foundation of
16:07their intellectual structure.
16:10Normally, to attack the reasoning we've
16:12just seen, one would try to rely on
16:14concrete examples and say, for instance
16:16, that such-and-such a country has
16:18public spending equivalent to 70%of its
16:20GDP and yet functions very well, or that
16:22another has managed to develop strongly
16:24without ever using private capital, and
16:26that this clearly shows private capital
16:28isn't essential.
16:30But that is almost never the type of
16:31argument that will be used in reality,
16:33and you only need to look at the
16:34comments that may have already been
16:36written on this video to be convinced of
16:37that.
16:38No, what will be done is to attack the
16:40ideological framework directly, by
16:42saying, for example, that the rankings
16:44we saw of different countries were made
16:46by neoliberal institutions and that, as
16:48a left-wing person, one cannot trust
16:50them.
16:51Whether that's true or not, we won't try
16:53to refute the numbers since, by
16:54definition, they are considered
16:55inadmissible evidence.
16:56It is a fairly classic dogmatic rhetoric
16:59. There will be information from the
17:01neoliberal capitalist system that is
17:03false and manipulative. Why? Because it
17:05shows that capitalism works better than
17:07the rest, and there will be, on the
17:08contrary, the "good" information that is
17:10considered reliable. Not because they
17:11have well-supported figures or anything
17:12like that. No, because they agree with
17:14an alternative vision of the economy. It
17:17is the same rhetoric as people who
17:18imagine that the Earth is flat, for
17:20example.
17:21You can show them whatever you want,
17:22videos of the Earth spinning, and so on
17:24, and they will explain to you that, in
17:26fact, those are images manufactured by
17:27NASA and that, therefore, by nature,
17:29they have no value, you cannot trust
17:30them, and that, on the contrary,
17:32credible information is distributed by
17:33the Twitter account "Pitou du 37," who
17:35has the real info and shows the real
17:36images that have nothing to do with that
17:38.
17:40The problem, specifically in France, is
17:42that these theses, which amount to
17:43flat-eartherism applied to economics,
17:45are found everywhere: on the radio, on
17:47television, in newspapers, or in the
17:48mouths of our politicians.
17:51You have, for example, Thomas Porchet,
17:52one of the most high-profile economists
17:54we have, who has been explaining almost
17:55every day on the radio for five years
17:57that there is actually no debt problem
17:58and that, on the contrary, France should
18:00take on more debt and spend much more.
18:03And to do this, he explains that if
18:05France were a household and its GDP were
18:07its salary, well, France could very well
18:09have a debt equivalent to 120%of its
18:11salary.
18:13So he creates a mental construct that
18:14has nothing to do with the reality of
18:16how states are financed, nor companies,
18:18nor anything at all.
18:19But that doesn't matter, because the
18:21main thing is to say things that are
18:23compatible with an alternative economic
18:26ideology, and what happens in the real
18:28world, the truth, has no importance
18:30whatsoever.
18:31In practice, if you try to contradict
18:33him and tell him that the creditors who
18:34directly finance the debt, who mostly
18:36come from foreign countries, do not have
18:38this view, well, he will tell you that
18:39what you are saying is a typical
18:41neoliberal argument, and that's it, he
18:43will have finished his demonstration.
18:45Since you are someone he defines as
18:46neoliberal, well, it's over. You are
18:48dismissed. Your arguments have no value
18:51because you are in the wrong ideological
18:53category. Look, I promise I have nothing
18:55against Thomas Porchet, who I'm sure—
18:57and I say this sincerely—is very
18:59likeable. But, in practical terms, we
19:01cannot remain a developed country, a
19:03country considered wealthy, while at the
19:05same time bringing in someone like
19:07Thomas Porchet to public service
19:08television—on a show ironically titled "
19:11The Hour of Truth"—to analyze the
19:12economic platforms of presidential
19:14candidates. These two things are simply
19:16incompatible.
19:17And unfortunately, it’s sad to say, but
19:20the solution I would propose is to do
19:22what developing countries do: bring in a
19:24panel of international economists from
19:26places like China, the United States,
19:28Europe, Japan, and so on, to analyze the
19:30candidates' economic programs.
19:32It would be much more relevant and
19:34objective because these are people who
19:35would—well, we would aim to select them
19:37for being more detached from French
19:39politics.
19:40Above all, they would have a vision of
19:41the economy that is much more grounded
19:43in reality, because in France we have
19:44this sort of tradition of having
19:45economists who are as far removed from
19:47reality as possible. The ultimate
19:49example being Piketty, who has
19:50practically gone to another planet. But
19:52that’s fine; it’s actually quite chic of
19:54him to have done that and to be capable
19:55of going so far into abstraction. In
19:57France, we value abstraction, whereas in
19:59other countries, they value realism.
20:00That is perhaps something we are missing
20:01. The conclusion one might draw from
20:04this video could seem rather bleak, but
20:06in reality, it actually gives me a lot
20:08of hope. Because, while we will
20:10certainly suffer the consequences of our
20:12poor economic management in the coming
20:13years, since the root of this
20:15dysfunctional economy lies in the ideas
20:16and discourse we have in France, we are
20:18actually fully capable of changing our
20:20trajectory, and even doing so quite
20:21quickly. There are many examples in
20:23Europe that we can draw inspiration from
20:24.
20:25Sweden, Ireland—which has made
20:27extraordinary progress since 1985—
20:28Estonia, for example, which is also a
20:30true European success story; and even
20:31outside of Europe, there are many Asian
20:33countries that have made extraordinary
20:34progress since the 80s, often starting
20:36from situations much tougher than the
20:37one we are about to find ourselves in.
20:40So, we have every reason to be
20:41optimistic about the future of the
20:42French economy. That’s it, I hope you
20:44enjoyed the video. See you next time.
20:46Bye bye.

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This page contains the full transcript of Ces idées qui ont détruit l’économie Française by Crésus, generated from the public captions YouTube serves with the video. The transcript has 3,845 words across 655 segments, with the original timestamps preserved so you can click any line to jump to that moment in the embedded player.

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