Each generation believes that it has a special destiny and that progress is bound to follow. Yet our world is plagued by eruptions of violence on an unprecedented scale. Ten years ago, Jean-Hervé Lorenzi and Mickaël Berrebi were already describing the political, economic and social tensions, and explaining that the result would be geostrategic conflicts that could lead to wars on the very borders of the West.
In this fascinating essay, the authors document in precise detail and with an extensive bibliography the following observations: the breakdown of productivity gains, the curse of ageing, the irresistible acceleration of inequalities, the extreme difficulty of reindustrialization, the illusion of definanciarization, savings, the ultimate scarce resource. Of the three known transitions, the demographic shock is at least as important as the climate shock.
It’s easy to believe that the markets themselves will find the answers to these immense difficulties, but we know that this perception is not shared by the authors, who have been campaigning for years for regulation (such as the late Michel Aglietta) and political initiatives to play an active role in accompanying global change. Due to a rise in raw materials prices (not yet confirmed, but likely in the medium term), which would imply a decrease in industrial supply, and the ageing of a population that consumes more sservices, the much-vaunted reindustrialization cannot be a pale copy of the production systems of the last two centuries. “Will trade pacify international relations – Montesquieu’s sweet commerce? Unlikely (!)
With a declining industrial supply and an aging population that is more inclined to consume services, the much-vaunted reindustrialization cannot be a pale copy of the production systems of the last two centuries. “Will trade pacify international relations – Montesquieu’s sweet commerce? Unlikely (!)
And current events seem to largely vindicate the authors, who do not hesitate to mention that “constraints” have become “conflicts” and that, if nothing is done, the situation will become a “confrontation”! Underestimating today’s dangers, and failing to find a global solution for them, means leaving the field open to all possible scenarios, including the most unmanageable.
The authors describe 14 major ruptures – global ones, as the authors emphasize, which makes it all the more difficult to implement the proposed solutions – but necessary to meet the challenge of the 6 constraints that structure the world: the breakdown of productivity gains, the aging of the population, the explosion of inequalities, the massive transfer of activities on a global scale, the unlimited financialization of the economy and the impossibility of financing our investments. If these changes are understood and implemented, we can escape the worst.
The 14 ruptures are listed as follows: Centering the world on its youth, building a “French-style” immigration model, socializing scarce resources, importing a virtuous wage-profit split, regulating the rules of inheritance, dismantling the Big Tech monopoly, Engendering a digital métissage, taming debt, rebuilding risk-sharing, launching a new Bretton Woods, Subjecting globalization to climate demands, investing massively in the three transitions, investing massively in Africa, preparing for pandemics.
The chapters are presented in a balanced way, even if the authors “commit” themselves. They do not address questions such as: how far should open borders go? How should the quota strategy be approached? To think “calmly, it is normal to evoke the terms assimilation and regulation”. In other words, faced with a Gordian knot that some are wondering how to untie, let’s slice it open and see what comes out. Reflections will therefore focus on the origins, history and balance between assimilation and regulation.
With regard to inheritance, the idea is to “align” the rules on this issue with those that prevailed when the IFI was created. The current rules tend towards an “increase in inequalities of birth to the detriment of the common good”. But public opinion is not ready – nor is it desirable – for an increase in taxation. On the other hand, the demographic transition so dear to the authors’ hearts could be financed “virtuously” by a transfer of productive wealth invested for the long term. And this share – blocked for 10 or 15 years – would benefit from lower taxation than at present, while the other would bear higher duties. This debate should take place to generate a social and economic consensus, albeit a relative one.
In the face of AI, which can be a factor of exclusion, the authors recommend “creating the conditions for a digital crossbreeding … i.e. the creation of a new societal framework favorable to a just transition to better mitigate technological unemployment and the consequent social risks”.
On the subject of debt, the main idea is to mutualize debt. To waltz, you need two people, and so does mutualization. But one element of conviction is to mutualize only those debts that serve exclusively to finance projects that are profitable for the future, with measurable and measured results; in the same way as “green” and “COVID” debts.
It’s easy to see how difficult it would be to go down this road in France, where a large proportion of borrowings are used to “make ends meet”. Mutualization would have a virtuous character… as long as society agrees and our private partners are convinced.
The point of internationalizing the SDR is also addressed, and the authors are careful not to decide, but they do recommend increasing its use.
One point that is not popular is the CIR. All or nothing” is not the right approach. We need to think in terms of financing only breakthrough investments. Question: we only know the result, as in the case of recognized bubbles, when they have burst, when the breakthrough has occurred. And legislators are not necessarily the best equipped for this forward-looking task…
The book recommends a new way of sharing risk, through the generalization of public partnerships.
These proposals are necessary, but probably insufficient, conditions that should be applied on a country-by-country basis, in no particular order of importance, but they are all vital if we are to steer clear of the storms to come.
Radically new visions are needed to face up to these upheavals.
The findings are clearly set out, notwithstanding the abundance of literature references. Some of the recommendations have been the subject of previous books and academic research, but the book “unifies” these responses, and should stimulate the interest of all concerne.
Impertinently, on closing the book, one might think that it could be a contribution to a presidential program for 2027!
Note written by Dominique CHESNEAU
