Les leçons de Turgot et de Smith Cette semaine, le club Turgot publie aux éditions Arnaud Franel,son 3e livre (158 pages)dont la rédaction a été coordonnée par Jean-Jacques Pluchart : This collective book, whose title is borrowed from the two most famous works of Turgot and Smith, was written by the Turgot club, which for 40 years has been organizing the Turgot Prize awarded to Bercy for the best books on economics and finance. It strives to find in contemporary works the spirit that animated, 250 years ago, the founders of economic liberalism, the French Anne-Jacques-Robert Turgot and the Scottish Adam Smith. It brings together 50 original reviews of works published during the years 2024 and 2025 by 80 researchers, entrepreneurs, and managers attentive to economic phenomena and social facts. The reader of this book will discover that between the end of the 18 th century and the beginning of the 21 st century, “wealth creation systems” have been transformed into “models of growth and decline”, “principles of government” have been replaced by “modes of governance and management”, “laws of nature” have been renamed “environmental standards”, the Encyclopedia of Diderot and d’Alembert has become “big data”, and the Siècle des Lumières has become an alternation of shadows and lights. Contributors to the writing of the book: Hubert Alcaraz, Philippe Alezard, Florence Anglès, Renzo Borsato, Alain Brunet, Jean-Louis Chambon, Dominique Chesneau, Benoit Frayer, Sophie Friot, Michel Gabet, Claude Georgelet, Freddi Godet Desmarais, Loïc Le Menn, Denis Molho, Jean-Jacques Pluchart (direction of the book), Pona Samnik, Olivier Stephan, Kathleen Wantz O’Rourke.

In keeping with what has now become a well-established habit, Nicolas DUFOURCQ lays down truths about the French economy that are objectified by a large number of statistics and his own analyses, and “justified” in the second part of the book by testimonials and interviews. His conclusion is as follows: “The family secret of French society is not debt. Everyone knows it exists. But it is social debt. Two-thirds of French public debt finances social benefits. It is consumer credit, not an investment in the future. It pays the monthly bills of millions of our fellow citizens.” This “flaw” in the French economy is not new, but rather the result of a slow decline spanning 11 periods since 1969, from the era of “new rights and heavy taxation” to the “misfortunes of COVID,” via “the beginnings of the strong franc,” “markets turning to the left,” the “financial crisis” of 2007-2012, and two “missed opportunities” in 1988-1993 and 1997-2002. It should be noted that these responsibilities are not specifically linked to right-wing or left-wing programs as such, but rather to a series of concessions and misguided ambitions. However, it seems that there have been many decisions that went against the grain: the introduction of numerous rights during the first oil crisis, the 35-hour working week during the global recovery in 1997 and China’s active entry into world trade, and the “bad luck” of the 2007 crisis and COVID in 2020. Bad luck or insufficient preparation by the country for endogenous resilience in the face of global turmoil. It was then necessary to rely “on others,” a European plan, “quasi-guaranteed” support from the ECB, a recovery in Germany since 2024, all signs of France’s loss of control over its destiny! And the current debate in Parliament is focused on a quarter of a year of retirement and taxation. The nature of social debt addiction is linked to the fact that “the state failed to protect its citizens in 1939-45” and that the National Council of the Resistance decided to “correct” this mistake…ad vitam, regardless of developments in the world. This led to the perpetuation of a fiction whereby, on the one hand, there was Social Security with contributions considered as insurance premiums, and on the other, what was called “welfare.” Except that, at the same time, the state created “new forms of solidarity and a continent of social rights, unrelated to work,” with transfers in all directions, leading to 58% of public spending being social in nature. Thus, “the social horse gallops ahead of the economic horse because it is doped with the white powder of debt.” A few quotes illustrate the point. “The social partners will not hesitate to systematically increase social security contributions, leading to a rise in labor costs that will herald the mass unemployment of the 1980s and 1990s.” “Raymond Barre himself did not believe it was possible to reduce compulsory levies.” “It can be said that today, part of the €80 billion in social security relief in the state budget compensates for the decisions to increase contributions taken in the 1970s by Raymond Barre.” All are responsible, but none are guilty; yet without awareness of responsibilities, no systemic solution can be validly conceived, let alone implemented. A welfare state requires a mature democracy, and ours has not been one. We are paying for our slowness and delays. We must assert the right of tomorrow’s French citizens not to be burdened with repaying their grandparents’ consumer debt. “According to the author, minds are ripe for an iron rule” and “if there is no other way than to impose a rule of balance on social spending, then we will have to propose to the French people that it be imposed by decree the day after a presidential election.” Dominique CHESNEAU

On January 1, 1999, eleven countries would replace their respective currencies with one. The Euro became the single currency of 300 million Europeans, an unprecedented undertaking. Another unparalleled precedent: the very model of the Euro, a currency without a sovereign state. The common monetary policy is entrusted to a federal institution, but economic and fiscal policies are left to the discretion of the states. To meet this challenge of collective management, a common discipline was put in place with fiscal rules, a deficit of less than 3% of GDP and a public debt of less than 60% of GDP, to which all states committed to, in the Stability and Growth Pact. Nine countries have joined the eleven founding members, and the Euro, the second most important currency in the global monetary system, has played a role in protecting and developing the European economy both internally and externally, and has withstood four major crises (2008, sovereign debt 2010-2012, Covid and inflation from 2021). But it did not bring all the expected benefits because some member states refused the required economic discipline. Worse, some states took advantage of the protection of the Euro to let deteriorating their public finances, thus weakening their productive apparatus, destroying their credibility and fueling the mistrust of their partners. These economic disparities emerged as soon as the Euro was created, with the countries of the North focusing on strengthening their industrial base and controlling public finances, while the countries of the South favored credit, consumption, and social redistribution without worrying about the budgetary consequences and inflation. These two “models” coexisted until reality took revenge and led to the sovereign debt crisis. As a result of this crisis, the countries of the South, with the notable exception of France, improved their fundamentals, greatly helped by the exceptionally accommodating and long policy of the ECB. While inflation reached levels never seen since the creation of the monetary union, the ECB continued this policy, creating adverse effects on productive investment, now zombie companies, dependent on productivity, creating speculative bubbles and promoting State indebtedness. The monetary Union is at a decisive turning point. But what to do? The author first tells us what not to do. Structural problems cannot be solved by an increase in debt. We must stop  easing the money creation, the monetization of debt is not the solution, there is no European magic money. Budgetary discipline is essential, we must lower current spending, and revive productive investment. Reviving the European economy will require improving financing conditions, creating pension funds to drain savings into corporate equity to encourage innovation, revive securitization, and achieve a true banking Union. And finally, we must stop considering the violation of common budgetary rules by a number of states as an acceptable and credible solution. Dider Cahen, PhD in Economics, is the General Delegate of Eurofi, a think tank that promotes the single market for banking and financial services in Europe. Ph Alezard

In these times of investment needs, in order to respond to energy, environmental, economic, and budgetary transitions, public opinion is tempted to seek answers (culprits?) among the so-called “wealthy” members of society and “big business.” Nothing new in itself, except for the inclusion of savings in this never-ending quest for new scapegoats.   The age-old debate that divides economists is back in the news, with the question of whether savings (described in France as excessive) – but immutable as a republican virtue – could become a  brake on investment, growth, employment and, ultimately, demand itself. This new publication from the REF, which draws on a host of prestigious economists, is timely. In three richly documented chapters, the authors contribute factual elements, context, and a long-term strategic vision to the debate. The first chapter provides an overview of savings trends in France compared with Europe, while the second chapter examines the heterogeneity of savings behavior in several dimensions (in relation to the holding of risky assets, household characteristics, product life cycles, and the role of public policy). Finally, the third part sheds light on the important issue of mobilizing private savings to benefit the French and European economies. It should be noted that in France, although individuals save a lot (15% of their income on average, which is higher than in most OECD countries), they do so rather poorly, favoring liquid and less risky assets. Low stock ownership and the increase in foreign stock holdings have negative consequences in terms of sovereignty and competitiveness for our country. The need for regulations that place less emphasis on “safe and liquid” assets is being called for by all financial players and insurers, banks, and asset managers. The authors argue for accelerating the implementation of a genuine “Savings and Investment Union,” identifying four priority areas: redesigning market infrastructure to reduce costs, unifying capital market supervision for better risk sharing,    reviving securitization, financing the green transition, and promoting the European venture capital industry that finances innovative companies. As this remarkable publication shows, the new path that seems to be opening up for savings is full of great promises… no doubt still accompanied for a long time to come by the popular saying: “If you don’t save a penny, you’ll never have two.” Marie-Laure BARUT-ETHERINGTON is a Deputy GM at the Banque de France. Pierre BOLLON is Director of European Affairs at the EIF. Jean-louis CHAMBON 

The book is interesting in more ways than one: educational, practical, inspiring. You can’t do sustainable finance without doing finance first! This book introduces the main concepts of corporate and market finance, then explains how these concepts are relevant to sustainable finance. Each chapter focuses on a financial concept: wealth, interest rates, returns, balance sheets, asset portfolios, arbitrage, derivatives, and even crypto-assets! This book thus provides a bridge between “traditional” finance and sustainable finance. That covers the educational aspect. It is practical thanks to its original format. In each chapter, the concepts are explained by teachers and practitioners: CFOs, central bankers, commercial bankers, investment bankers, managers, trading room managers, appraisers, accountants, auditors, business leaders, and more. We learn that concepts such as IRR, required rate of return, risk-free rate, company buyouts, arbitrage, CAPM, options and derivatives, and extra-financial valuation are applicable to the models and functioning of sustainable finance. The book is inspiring because it is not a pro domo plea for sustainable finance. On the contrary, the choice of interviewees leads us to question the current systemic limitations: difficulties in determining the rate of return on an ESG project and calculating environmental value, the intrinsic value of carbon, questions about regulations and SRI evaluators, etc. Each chapter includes a conclusion in a few points that summarizes the previous discussion and raises questions, an inspiring format! Natural and social capital cannot be reduced to numbers, but numbers are essential and it is crucial to collect reliable data. And “classic” financial concepts provide a solid foundation that can be adapted to the analysis of broader issues, particularly sustainability. The author rightly asserts that the green and sustainable transition will require a return of trust, governance, and value, and the current difficulties are not overlooked. Regarding trust, E. DOLLEY affirms the need to develop blockchains. Given their energy consumption, this point seems counterintuitive, but the arguments put forward are strong. The traceability of funds invested in projects, the reliability of upstream data that is so difficult to obtain that the OMNIBUS Directive has limited the obligations to obtain it, and “certified” renewable energy sources would justify and satisfy the information needs of economic agents. This book does not develop ready-made solutions, but it provides a kind of serious and accessible compendium. Thus, the transition would be driven by a “bottom-up” approach, as the top-down approach has, according to the author, reached its well-defined limits. Dominique Chesneau

The reader will not find in this booklet “the means to earn more by working less”, but he will know how to rebuild a society based on work, allowing both to live better and to acquire a patrimony. The author notes that labor productivity has declined since the 1980s, due to the country’s deindustrialization and the weakening of skills due to educational downgrading. He recalls that France was downgraded from the 6th to the 27th place in the world ranking of GDP per capita. He notes that the purchasing power of the French is no longer progressing and that two-thirds of their wealth comes from inheritances. The French who do not work live better than those who do. Work only supports purchasing power through social assistance in all forms. The progressivity of taxes and contributions financing these aids also discourages employees from working overtime and employers from recruiting and/or increasing the wages of their employees. Workers retain, on average, only half of their gross earnings, while rentiers receive one third, pensioners one sixth, and heirs less than one tenth. This results in different forms of resistance to work, which mobilize more protesters than other social conflicts, encourage sick leave, “silent resignations” and/or rejections of “bullshit jobs”. In 2025, the working population must also support twice as many retirees as in 1980. According to the author, this phenomenon is due to an unequal distribution of the value created by labor, which favors both financial and real estate capital. The French no longer believe in the “collective discourse” that orders them to get back to work. The author therefore strives to propose a new “social contract” aimed at bridging the gap between the living standards of workers, rentiers, retirees, and heirs. He proposes measures to enhance the value of work and the purchasing power of assets through better remuneration, thanks to more professional training, a revival of innovation (especially through AI), a reindustrialization of the country associated with a limitation of imports of dumped products, a more flexible employment and greater professional mobility. He advocates a “revenge of employees on customers”, by redistributing VAT rates in favor of basic necessities. He advises building a “new ideal of work”, based on the values ​​of responsibility, respect, and empathy. The author engages in a rigorous and educational exercise of analyzing the French evil of professional attrition and formulates coherent proposals to deal with it. Antoine Foucher was director of the cabinet of a minister of labor. He currently heads the consulting firm Quintet.Jean-Jacques Pluchart

The Cercle des Economistes signs its latest work under a title borrowed from the populist press, its attempts to answer the main economic and social questions that the French are asking to each other’s in these troubled times. The book brings together the best specialists in the fields covered: the fragmentation of the world economy; the questions of debt and the French employment rate; labor immigration; public money financing culture. In each chapter, the authors emphasize the importance of the questions asked, analyze – or rather criticize – the answers generally given to these questions by political circles and the media, and then, drawing on the best sources, engage in useful “reasoned returns to facts” and “deconstructions of myths”, to finally formulate concrete proposals to revamp the fundamentals of the country. The reader of the book will note that in economic and social matters, elected officials and the media too often engage in abusive simplifications, the propagation of counter-truths and clever simulations, in order to defend ideologies and justify programs with improbable effects. The reader will find that the unemployment rates of “the young and the old” are abnormally higher than those of other Western countries, and that more than 600,000 French seniors are virtually without resources. The reader will also learn that the actual working hours of French workers of working age is close to the European average, that the expulsion of “working immigrants” would ruin the construction, catering, and domestic services sectors. They will be surprised to learn that the responsibility for France’s public over-indebtedness is more attributable to right-wing policies (favorable to tax cuts) than to the left (oriented towards corporate taxation). They will learn that economic growth can be combined with a search for happiness without indulging in laziness, and that the promotion of culture involves both public and private fundings. After reading the book, the reader will remain skeptical about the chances of sorting out the country’s fundamentals in the short or medium terms. The 16 authors are teacher-researchers and leaders of institutions, members of the Cercle des Economistes.J-J. Pluchart

What if power no longer belonged to the great nations? Nicolas Tenzer is certain: the days of the traditional great powers are numbered. Trump’s United States has broken the Atlantic Alliance; China, which remains a predatory power, is bogged down in its internal contradictions; Russia is facing a “no future” scenario. There is now a persistent belief in many diplomatic circles that international politics is essentially determined by the major powers and their games. Other countries are certainly not unimportant in this conventional view, and their policies may sometimes be disruptive, but they never have the final say! However, the return to “American greatness,” which must be based on a rapprochement with China, heralds America’s decline. The major countries that are members of the Security Council have cherished the idea of a closed club of five all the more because it projected an image as flattering as precarious makeup! However, playing on permanent ambiguity gives the illusion of power in the absence of confidence, but hides a lack of will. At the same time, some describe Russia as a paper tiger, and it is not clear that the prediction of China becoming the world’s leading economic, technological, and military power by 2049 will come true! The possible or even emerging multipolarity of the world would lead to the emergence of revisionist states. The radical fragmentation of the poles could also bring about freedom. More agile players ARE likely to reinvent the rules of the international game: Estonia, a pioneer in warning about Europe’s security, Turkey if it manages to choose sides, Syria freed from its criminal occupations, but also the medium-sized powers of Central and Eastern Asia. Together, the democracies of the North, South, and East will join forces against the revisionist powers. Together, they will be able to stand up to the pseudo-empires. France and the United Kingdom will have to play a leading role in this realignment. As for Ukraine, its heroic resistance demonstrates the ability of medium-sized states to stand up to the old powers. Through an analysis of the new balance of power, Nicolas Tenzer reveals how these “intermediate” states are redrawing the map of the world: they are creating unprecedented alliances, developing original strategies of influence, and proving that it is possible to exert greater influence on the international stage without being a superpower. Tomorrow, world security and the freedom of peoples will depend on the determination of small and medium-sized nations. The Trump episode may have been the moment when this realization dawned. The author reviews the power limitations of post-colonial states, China, the United States, India, African disorganization, and the lack of strategy in Middle Eastern countries. At the same time, resistance among peoples is emerging, along with a so-called “Ukrainian” model for the nation of the future. So: G-Zero or G-Infinity? How can stability be built? The signal sent by a Ukrainian victory will undoubtedly be decisive, both symbolically and in practice, and could inspire others to follow suit. This victory is therefore existential for Europe and other medium-sized powers! The strength of an armed people is underestimated until its next victories. While in the old world it was customary to consider that the great powers formed an axis of security, “tomorrow’s security and freedom will come through small and medium-sized states.” The book is supported by highly relevant observations thanks to the author’s geopolitical erudition. Like any projection, the book’s conclusions will not necessarily prove true, but they may. This book is necessary to help us escape the media chaos and take a step back. Readers will gain information and reasoning that will allow them to refine their own views. Whether you agree with the thesis or not, it must be known. In the dark environment of a world at war, this book is a tunnel at the end of which there is a legitimate element of optimism. Dominique CHESNEAU

Crypto Assets and Non-Crypto Currencies. From the outset, the two authors, experts on the technical, economic, and geopolitical aspects of payment methods, warn us against fundamental errors in the assessment of so-called “crypto currencies”, such as the bitcoin. They do not fulfill the attributes of a currency, which are to be a unit of account, a means of intermediation of exchanges, and finally a reserve of value; the authors prefer to speak of crypto-assets which, in the absence of effective regulatory bodies, present considerable risks, essentially linked to an uncontrolled volatility without concrete counterparts and do not constitute, in any way, a reserve of value. A large part of the book is devoted to the risks generated by the uncontrolled expansion of crypto assets. For example, the anonymity of asset ownership and the impossibility of tracing the underlying transactions, the extreme volatility of the prices of these assets, the meteoric expansion of illicit transactions related to money laundering or arms trafficking on the dark web. Overall, in the absence of a framework by central banks, the flow of crypto-assets poses a threat to the monetary and financial order. The book then develops the opportunities offered by the underlying technologies around the blockchain. This technology, properly used, that is to say, exploited in an appropriate regulatory framework, can serve as a platform for the decentralization of part of the financial activities, for example for certain specialized and duly regulated credits and secured payment operations. The major issue is the sovereignty of Central Banks, which may be dispossessed of their role in regulating official currencies. In this respect, the book is a driving force for a controlled use of crypto assets which must not, under any circumstances, become an official currency. Denis Molho