The theme of the “Currency War” remains a great classic that has been the subject of abundant literature, stimulating for economists and invigorating for generations of students. But the “New Currency War » that is looming, in the wake of the upheavals linked to digital technologies, promises to introduce new challenges, without being able to erase the fundamentals, in terms of status of common good, sovereignty and the purpose of improving each competitive position.  This is indeed the thesis developed by this duo of authors whose expertise is well established – Christian de Boissieu and Marc Schwartz – in this brilliant publication, displaying a conviction that “the “New” Currency War »will oppose, in the digital sphere, public currencies and private currencies”.                                                                                                                                                        Also, one of the great merits of this very well-documented work is that it offers a broad panorama of reflection on each component of this issue: the relations between currency, power, and sovereignty, extended to the political and social dimension of currency; the evolution of the power of Central Banks; the future of cash in the face of digital currency; the unduly consecrated active cryptos, as the authors also wonder about the future of the official digital currencies of Central Banks, versus the public-private currency war; reserve currencies and the illusion of “de-dollarization”; the financial aspects of the energy transition; and the implied  financing conflicts.  Finally, the authors attach great importance to the need to develop a “qualitative theory” complementing the various quantitative approaches: the major facets of money – stability, liquidity, backing by developed financial markets, political and social role, international influence, available quantity – must also take into account the duty of competitiveness of the currency which is not reduced to its exchange rate but “can face the competition of other currencies and embody a country or an economic zone”.                                                                                                                                                                 A reference publication, valuable for specialists and essential for students and a wide audience looking for meaning in the evolution of monetary policies.                                                                                                                                                                                     Christian de BOISSIEU: Professor Emeritus of Paris1 Panthéon Sorbonne – Vice President of the Cercle des Economistes.   Marc SCHWARTZ: CEO of La Monnaie de Paris. Jean- louis   CHAMBON’ s note                                                          

Like most Western countries, and despite having one of the highest fertility rates in Europe, France is not immune to the aging of its population. In his essay, Maxime Sbaihi analyses the consequences of this ageing on the economy and on our social model. Since the end of World War II, our social model has been based on intergenerational solidarity, which is sensitive to demography, the engine of its financing. The conclusion is clear today: the working population must finance, through pay-as-you-go, a record number of retirees who are spending an incresaing  time in retirement. The beneficiaries of the pension system are now on average richer than its contributors. Our pension system is theoretically based on 3 levers: working longer, lowering the level of pensions and increasing contributions. It is understandable that politicians have often struggled to find the best combination without altering the social model. Social needs are increasing, but it is difficult to raise the contributions when the workforce represents 50% of the total population. (The number of active persons in relation to the number of inactive ones aged 60 or over was 1.9 in 2020 but is projected to be 1.6 in 2040 and 1.4 in 2070, source INSEE) The author then focuses on the impoverishment of young people, an increasingly worrying situtation: “the poor of yesterday were retirees at the end of their lives, the poor of today are young people facing the future”. He believes that intergenerational equity is no longer guaranteed. Income gaps are widening in the face of a “patrimonialization” of society. He specifies that the real estate and financial assets of the sexagenarians  (and older) are the highest of all the other age groups. He points out the fact that this overabundant savings has little impact on the financing of the economy since it is mainly oriented towards low-risk and liquid investments. Thanks to a longer life expectancy, today’s retirees postpone the transmission of their wealth. On the political side, the author paints a picture that may once again prove to be divisive: –        Young people abstain the most at each election, are often poorly registered on electoral lists, tend to become radicalized and rather prefer a citizenship of commitment, especially on ecology –        Those over 50 are the most mobilized, compose the absolute majority of the electoral college, are often seduced by centrism and prefer a citizenship of duty Democracy tends to slide towards gerontocracy since politicians tend to give priority to older voters in the face of a youth who shun the polls. The author proposes rather liberal solutions to limit this intergenerational injustice: the establishment of an universal income, modification of inheritance and estate taxation, a new status mixing permanent and fixed-term contracts, and intragenerational solidarity. The essay is well documented, with numerous bibliographical references, and is written in a very accessible style. The subject is topical and is at the heart of political debates in the context of public debt management.  Maxime SBAIHI is an economist and essayist. After starting his career in the banking sector in Paris, then at Bloomberg in London, he was a  Director of Studies at the Institut Montaigne and is now the Strategy Director of Club Landoy. Note by Sophie Friot

This “citizen’s economic primer” is a second edition [1] with an additional chapter devoted to inflation. In the first part of the book, the authors argue, as opposed to the popular belief, that debt is not a burden for the future generations since the current generation already benefits from it through investments in infrastructure and public services. They also promote the idea that, in times of crisis, one should not tighten the belt, since an increase in public spending will lead to a greater increase in activity through the effect of the fiscal multiplier: the ratio between the rate change in GDP and the rate of public spending. Public deficits are thus necessary to achieve full employment or to finance collectively useful investments, but they are harmful in times of full employment where they have an inflationary potential. This ideology goes against neoliberal politics, which argues that it is by producing more wealth that we can finance the social model, by working more (unemployment insurance reform) and longer (pension reform). The second part is dedicated to the trajectory of the French debt in order to understand its evolution since 1945, and more precisely, the dependence on financial markets observed since the 1980s. Some economists believe that the increase of debt contributes to raising interest rates, which discourages private investment.  This raises the question of the public debt sustainability . The authors believe that a State’s reimbursement ability is linked to the strength and reliability of its tax system, as well as to the possibility of borrowing from banks and financial markets. They believe that the French public debt is sustainable, especially since more than 50% of French debt holders are not French resident. This level proves the attractiveness of the French public debt on a global scale. Finally, the third part is a presentation of the solutions and manoeuvers to make public debt acceptable to all. Since the COVID crisis and the return of inflation, the ECB has increased its key rates 10 times (between July 2022 and September 2023) aiming reduce inflation at the cost of an economic slowdown and a rising unemployment, thus limiting the ability of the states to collect tax revenues. As a remedy, the authors recommend a comprehensive tax reform, focusing on three major areas: 1-     Restoring the progressivity of income tax 2-     Implementing an effective fight against tax evasion 3-     Focusing on a better consideration of ecology, with the evocation of a Green New Deal In conclusion,  this book calls to get out of catastrophism, since public debt can be part of the solution and not the problem. They go against the grain of the policies applied for decades by successive governments and confront current political debates in the midst of the 2025 budget vote and the issue of financing the energy transition. The concepts are rather pedagogically approached and accompanied by technical sheets allowing each reader to understand all the contours of public debt and thus form their own opinion.  Éric Berr (University of Bordeaux), Léo Charles (University of Rennes 2), Arthur Jatteau (University of Lille), Jonathan Marie (Sorbonne Paris North University) and Alban Pellegris (University of Rennes 2) are members of the Économistes Atterrés. Sophie Friot’s note

The book presents the research work of  two Nobel Prize winners in Economics awarded in 2024. It takes the form of a monumental review of scientific literature on the factors, forms, and combined effects of technological innovation and institutional change throughout the ages. It focuses in particular on the interactions between the digital revolution and the globalization of the markets since the 1980s. The book begins with a discussion around the notions of progress, which is at the same time technical, institutional, as well as ideological.  It continues with a review of the debates on the mechanization of agriculture and then of industrial processes, leading to several waves of “technological unemployment”. The two authors compare in particular the sometimes contradictory positions adopted by the greatest economists on these phenomena, which resulted in a concentration of wealth and a widening of inequalities between labor and capital. They show in particular that these technological and socio-economic changes have been favored by institutions and ideologies, first Keynesian and then neo-liberal, which have been increasingly adapted to social groups the power of which is based more on capital than on labor. They analyze in particular the decline of unions and political parties influence in the fight against social inequalities. The two Nobel Prize winners also observe that AI, especially in its generative form, generates low productivity gains, but stimulates creativity in all its forms and develops human relationships, which are both sources of economic growth and social well-being. They argue that humanity should seek to improve the usefulness of machines rather than perceive only their dangers. They deplore in particular the use of AI to misinform and manipulate opinion.  They denounce the current trend of considering AI as being at the service of a society of surveillance and control of citizens in the name of an ideology. They compare the ethical frameworks established by different countries and propose a new form of global AI governance  promoting both technological innovation and the common good. One of the main interests of the book is therefore to present in a didactic form the main Anglo-Saxon research devoted to the evolution of the relationship between technical progress and the institutions of Western countries, but also to contribute to the current thought leadership on the supervision of AI. Daron Acimoglu and Simon Johnson are professors at the MIT and co-winners of the 2024 Nobel Prize in Economics. Note by J-J.Pluchart

This book seems surreal, but it is not unrealistic. Doesn’t its subject matter cover an ultimate dream? That of an absolute freedom of action, without conditions or pressure, of an education centered on creativity and imagination stimulated on all types of screens (television, platforms, apps, etc.), of a development of projects illustrating the most unusual passions without great competition, of fortunes exceeding the GDP of several Western countries thanks to tax optimizations in all legality, of a power defying the States, of a disruptive model of a new world at the antipodes of the current world order. In a concise and lively style, Christine Kerdellant engages in an audit of the futuristic visions of a handful of influencers who are both billionaires and Americans. Their actions could undermine the very foundations of capitalism. Their common denominator: their vision as a vector of social change with an extra-planetary scope. Opportunities for humanity or threats to democracy? Their power does not only come from the immensity of their fortune, but for some, from their high-tech activities in a monopolistic situation, and for others, from their dissemination of sensitive data to a fraction of humanity. For the author, this poses a problem of ethics and responsibility of the States. In her book, she arouses the reader’s curiosity in order to warn about the absence of limits and controls of these projects, resulting in a takeover of more than a third of satellites impacting military strategies, the deployment of implants on humans in a medical setting, the exploitation of billions of data for political purposes… These science fiction-passionate dreamers are not far from supplanting the State which, in their opinion, is content to tax them excessively. Is state control pure fiction? Is the Chinese pattern, where the state takes control of the activities of billionaires, more appropriate? Could the European model, where the state regulates by heavily taxing large fortunes, be an alternative? Doesn’t American capitalism, which includes the notion of economic freedom, reflect the American dream that offers the opportunity to prosper in complete freedom? Ideally, in all types of models, there should be safeguards (“wise men”). With a governmental support, the “billionaires stronger than the states” therefore continue to live their American dream. Christine KERDELLANT is an essayist and economic journalist. She studied economics at the University of Caen and joined HEC.  Alongside her career as a journalist, she has written more than fifteen essays and novels. Chronicle by Pona SAMNIK

This collective work brought together 22 of the most recognized American and French teachers and researchers on the subject of economic and social inequalities in the world. In the first part, the authors show their adherence to the thesis of Polyani (author of the bestseller “The Great Transformation”), according to which “the market economy is insufficiently anchored in society”. They question certain principles of the neo-liberal economy, in particular by challenging Friedman’s “trickle-down” theory, according to which market efficiency creates value for all actors in society. They denounce the silence of neo-liberals, inspired by the theories of Friedman and Hayek, on the often hidden negative externalities in the more or less long term, which are generated by the absence of market regulation. They express the views currently shared by post-Keynesian democrats in response to the ultra-liberal measures taken under the new US presidency. They take up the arguments initiated by Stiglitz, Milosevic and Piketty* by extending them to all forms of inequality, be they economic, social, political or cultural.  They identify the issues, trends and synergies, showing that these arguments have been developed – with varying degrees of success – by left-wing populist movements in Western countries. One of the interests of the book is therefore that it reveals the strengths but also the weaknesses of the reasoning developed by the American left parties. The second part, entitled “The New Light on the Facts”, highlights the 40-year decline of the labor market in favor of the capital market, and the decline in wages in favor of dividends and capital gains, due to a double movement of globalization of markets for goods and services (unfavorable to workers because of industrial relocations) and financialization of the world economy (favorable to large fortunes). The exponential growth in executive compensation (driven by increasingly sophisticated engineering combining salaries, bonuses, stock options, executive pensions, etc.) was stimulated by the soaring stock market (due to an increasingly “short-term” management) and real estate prices (fueled by unbridled money creation), which benefited the wealthiest assets.  In the third part, entitled “Policy Issues. Labor Markets, Education, Taxation, and Intellectual Property”, the researchers identify the political decisions and regulatory provisions that have directly affected the distribution of income and wealth in the United States, including those that have led to a stagnation of wages over the past 30 years, despite an increase in productivity in industry and services. The authors analyze the impact of the action of teachers’ unions on school results and find that this de-unionization has penalized teachers and students from disadvantaged neighborhoods and their access to employment. On another note, the authors argue that industrial and intellectual property rights, as well as certain employment aids, create near-monopoly situations and real rents (especially in the finance, health and digital sectors), which benefit the dominant shareholders of companies, who constitute half of American billionaires. During the 2007-2010 crisis, public funds allocated to banks and insurers thus mainly benefited the richest 1%. In the fourth part, devoted to “political contexts and future prospects”, the researchers analyze the evolution of discourse on income inequality.  They observe that these perceptions vary from one country to another because of their socio-cultural disparities. In some countries, such as France, discourses on the “social divide” may have encouraged various forms of discrimination without generating more social justice. The latest surveys show that the rising cost of higher education is making the debt of children from the most modest families increasingly unbearable and is depriving the nation of talent. The authors advocate the establishment of a federal employment guarantee upon graduation and baby-trusts to finance education at the lowest cost. Rudiger L. von Arnim is a professor of economics at the University of Utah and Joseph E. Stiglitz is a professor at Columbia University and a Nobel Prize winner in economics. * see other columns on this blog. note by Jean-Jacques Pluchart