Le capitalisme contre les inégalités

Our book provides an interdisciplinary and multidimensional perspective of inequalities and their dynamics. It challenges traditional treatments of inequality based on tradeoffs between equity, economic prosperity, and stability, and shows ways to make these objectives compatible and mutually reinforcing. 

More equity can generate more economic efficiency and growth.

Growth can be strengthened by addressing the main drivers of inequality: borders, discrimination, abuse of market dominance, poor equality of opportunity, poor social mobility, and crises. And fiscal policy, the typical instrument to address inequalities, can be made more effective and less distortive if combined with reforms at earlier stages of the production and distribution cycle. Market power abuses and externalities thus deserve more active policy responses. 

Significant market dysfunctions deviate economic outcomes from both equity and efficiency. Abuse of market power stifles investment and innovation, and hence prosperity. It also generates rents, equivalent to a ‘private tax’, creating perverse redistribution from the less well-off to the upper-income tiers of the population, in opposite directions and sometimes of higher magnitude than fiscal redistribution.

In parallel, negative externalities create health, safety, or stability hidden costs and may lead to eventual crises that exacerbate inequalities between individuals, companies, and countries.

Three-pronged policy reforms

To remedy this, we advocate policy reforms at three stages:

At the pre-production stage, supporting human capital in the early years, especially programs aimed at early childhood development, can yield exceptional social returns over a lifetime.

At the production stage, we propose more active competition policies and enforcement to reduce ‘private taxes’, and regulatory policies to address externalities: In the United States, 4% of GDP would become available for public investment, or even tax cuts, if ‘private taxes’ were halved.

At the redistribution stage, replacing some of the ad-hoc compensations with an ex-ante universal basic income financed with progressive taxation can bring benefits along the three dimensions. It can be more efficient than multiple needs-based protection schemes, often based on poor information. It can facilitate efficient behavioural taxes and a single-rate VAT, now constrained by regressiveness considerations. Universal basic income can enable an effective review of social benefits and eliminate the stigma and underutilisation currently associated with them. It can moreover improve both risk-taking and stability, alleviating tomorrow’s fear, acting as a safety net in the event of shocks, and facilitating support for long-term public policies, such as on climate change. Understood as a dividend on the social capital and use of common assets like basic research, it can enhance inclusiveness and political stability and help regain confidence and engagement in the democratic process. 

These reforms require concerted action by all levels of government

In this respect, we recall how the EU has contributed to growth and territorial equality of opportunity, in particular by abolishing physical and economic internal borders, institutionalizing fundamental and social rights, enacting competition and consumer protection policies, and effecting transfers via the European budget. These account for a significant share of public investment in the least developed countries and thus improve their opportunities.

And Europe can be a stabilizing factor, too, as proven by the joint initiatives adopted during COVID-19, supporting national recovery and resilience plans and reinsuring national unemployment insurance schemes, which may also prove useful in future crises.

This book is based on several hundred research papers, on exchanges with many high-level experts, on our own, quite complementary professional experiences, and on our determination to converge on valuable leads to a more efficient, more equitable, and less unstable capitalism.

My book Capitalism against Inequalities with Yann Coatanlem on Pres. Macron’s desk.

In the news

  • Le Monde | Inflation : « La conduite à long terme des politiques publiques est plus que jamais nécessaire »

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  • Commentaire | Le capitalisme contre les inégalités

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  • Le Figaro | Comment rendre le capitalisme plus social et performant

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  • Radio Villalba | El capitalismo contra las desigualdades

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  • Polytechnique Insights | Comment la crise du Covid-19 a fortement aggravé les inégalités sociales

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  • Melchior | Le capitalisme contre les inégalités

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  • Atlantico | L’équilibre instable entre démocratie et capitalisme : les houleuses relations entre marchés et gouvernements

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  • BFM | Le duel des critiques: Yann Coatanlem & Antonio de Lecea vs Philippe Richard - 18/03

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  • Pour l'Éco | Inégalités : tous les bouts de la lorgnette

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  • Lire Magazine Litéraire | Manifeste social-libéral

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  • Journal spécial des sociétés | Le Capitalisme contre les inégalités, un ouvrage de référence

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Awards

March 2023 | Prix Turgot

Honored to have received the 2023 Turgot Prize, for the best book in French on financial economics, awarded by the Cercle Turgot, the Ministère de l’Économie, des Finances et de la Souveraineté industrielle et numérique, and the Institut de Haute Finance’s Alumni Association, for my book Le capitalisme contre les inégalités co-authored with Yann Coatanlem. 
 
Our book points to policy reforms building synergies between equity, efficiency, and resilience, in a context of instability and technological change.
 
My deep thanks to Jean-Claude Trichet, who presided over the jury, Jean-Louis Chambon, President of the Cercle Turgot, Christian de Boissieu, and Philippe Dessertine. It was an honor to be alongside Olivier Blanchard, who was awarded a Special Prize for his whole-career work, Thomas Philippon, Jeanne Lazarus, Guillaume Bazot, Nicolas Dufourcq, François Lenglet, AEFR - Association Europe - Finances - Régulations, represented by Pervenche Bérès, and Benoît Coeuré and Hans-Helmut Kotz.

November 2022 | Prix Louis Marin, Institut de France

  • « This work offers us a very comprehensive overview of inequalities and their impact up to the present day and obliges us to reflect on the great challenges that we face to transmit a less unstable and more just world to the next generations. »

    Joaquín Almunia

  • « A very ambitious book that recalls that it is in the interest of all living people today to reduce inequalities between members of future generations; and that, in the process, settles some false solutions. »

    Jacques Attali

  • « Are the inequalities engendered by technological revolutions, globalization and the financialization of capitalism really inevitable, as we hear all too often? Should social justice necessarily be sacrificed to economic growth? In response, Yann Coatanlem and Antonio de Lecea’s ambitious book conducts an extremely comprehensive examination, and one that often goes against the received ideas, forms, and causes of the inequalities that plague democratic societies. But what makes it so special is its optimism and its assertion that there exists a real possibility for both more inclusive capitalism and fairer and more effective public policies that promote social mobility, equal opportunities, and shared progress. »

    Catherine Audard, Professor of Philosophy at the London School of Economics

  • « Can growth be expected to lead to equity and equality of opportunity, rather than inequalities as it is often the case today? This book’s answer, documented and persuasive, is yes. Governments have the means to afford it. But they still need to use them. An important book, on a central subject of society. »

    Olivier Blanchard

  • « The book by Yann Coatanlem and Antonio de Lecea clearly shows that in the fight against inequalities, the quest for justice and the quest for economic efficiency are common causes, thus opening the way to the indispensable renewal of capitalism. »

    Michel Camdessus

  • « The coronavirus pandemic has thrown a stark light on the inequalities that divide our world. It has made glaring the urgency of thinking about and forging together what Léopold Sédar Senghor called “a new civilization, more civilized because more total and social.” This book illuminates the task. »

    Souleymane Bachir Diagne, Columbia University, Director of the Institute of African Studies

  • « The authors paint a colorful fresco of the dilemmas facing us - from the deep roots of moral philosophy to the most recent rebellion in economic research. It is an impressive book, with its richness, scholarship, and salutary, and ultimately optimistic, meditation. »

    Xavier Gabaix, Professor of Economics and Finance at Harvard University

  • « As Yann Coatanlem and Antonio de Lecea explain so well in this book of enlightenment, there can be no progress without controlling inequalities. Contrary to popular beliefs, there are many convergences of thought between liberals and progressives in defending a strong democratic state against the perverse effects of a market economy, especially a globalized one. »

    Christian Gollier, Managing Director of Toulouse School of Economics

  • « A very successful essay on inequality, its roots, and the best ways to tackle it. A true tour de force combining historical depth, the latest academic references, and concrete proposals. »

    Jean-Olivier Hairault, Director, Paris School of Economics

  • « On one of the most important economic and political issues of our time, it is a reflection bringing hope, away from sad ideologies. »

    Anne-Marie Idrac

  • « Yann Coatanlem and Antonio de Lecea provide the undoubtedly most in-depth analysis of a fundamental and explosive issue in today’s societies: that of inequalities. And they offer us interesting avenues for reflection. So it is a book for anyone with a deep interest in the future of our societies to read. »

    Hubert Joly, former CEO of Best Buy, Harvard professor and author of The Heart of Business – leadership principles for the next era of capitalism.

  • « May this book guide those seeking the Economic Grail - marrying efficiency and equity harmoniously - to find the right paths to achieve it! That would be beneficial. »

    Denis Kessler

  • « A multidisciplinary, multidimensional and historical account of inequalities is essential at a time when the COVID pandemic is forcing us to rethink our social contract, globalization, international cooperation and the role of Europe. In The Unequal Man in an Unstable World Yann Coatanlem and Antonio de Lecea set the scene and offer us concrete ideas and new approaches to reorient our policies and build a future that reconciles responsibility, freedom, dignity, and solidarity. »

    Pascal Lamy

  • « This book provides a multidimensional view of the inequalities that have exacerbated in advanced countries since the 1980s. While one may have reservations about some recommended measures - such as a universal income - one cannot help but share the authors’ concerns and salute their willingness to address current excesses. The social effects of monetary policy are discussed: ample liquidity and low interest rates caused a massive wealth transfer to stock market investors, while the income share of wage earners was stagnating. To solve the problem of inequalities, we will not escape questioning the extreme financialization that has prevailed for the last thirty years and whose effects are deleterious (moral hazard). In the spirit of the book, as Albert Schweitzer once said, “happiness is the only thing that doubles if you share it. »

    Jacques de Larosière

  • « Yann Coatanlem and Antonio de Lecea provide a broad tour d’horizon of the political issues facing France and the world. Starting from inequalities, they look, for example, at pensions, the future of the European Union, global warming, the evolution of work... They defend, among other things, the notion that retirement through savings should not be the privilege of the rich, as is the case in France. »

    George de Menil, Corresponding Member of the Academy of Moral and Political Sciences

  • « Finally, an optimistic message on inequalities! Yann Coatanlem and Antonio de Lecea show that, if you really trust the market economy, you can ensure economic growth while ensuring equal opportunities and cultivating diversity. Tackling inequalities is truly the defining challenge of our time. The rise of populisms almost everywhere in the Western world attests to this. It is useful that Yann Coatanlem and Antonio de Lecea have devoted their intelligence and competence to identifying the most effective ways of doing this. The priority in this respect, in my opinion, as they say, is to protect individuals from extreme risks (especially poverty) while respecting their freedoms. It seems to me that this is an area in which France, as far as it is concerned, is very involved. First, on a collective level. Few countries spend as much of their GDP on social transfers, whether pensions, health insurance, protections for the unemployed, or support for families. This has its downsides: the level of both our public spending and our taxes, the highest percentage of GDP in the OECD, are a real handicap to our competitiveness and economic growth. Few countries are also in which companies play such an important role in promoting the common good through their policies of human resources, environmental and biodiversity protection, and promotion of diversity. One of our major weaknesses, unfortunately, is the extent of our structural unemployment, which is two to three times higher relative to population than in the other four major advanced economies - Germany, the United States, Japan, the United Kingdom. This is a consequence of the very excessive burden that our public administrations place on our economy. But it can also be partly traced to inadequate labor-market regulations and, more importantly, to the weakening of our education system, which the OECD’s PISA surveys show is less effective than in the past at ensuring high skills and knowledge levels and equality of opportunity for France’s young people - two problems that policymakers have only begun to address. »

    Michel Pébereau, Member of the Academy of Moral and Political Sciences

  • « This important book analyzes justice issues from the perspective of equitable growth. For the authors, the challenge is to make equity an integral part of economic and social institutions and dynamics, rather than to correct inequalities ex-post. A radical remedy for a peaceful and vibrant democracy. »

    Ezra Suleiman, Professor of Political Science at Princeton University

  • « This is a book for anyone who has been troubled by the polemical and imprecise use of inequality. Yann Coatanlem and Antonio de Lecea introduce us to all the unexpected, and subtle, dimensions of inequalities. After reading this brilliant and comprehensive book, inequalities can no longer be considered as they once were. For the first time, we are moving away from conventional wisdom toward perfectly objective approaches to inequality. And the results live up to that demand. One can only regret that this brilliant and comprehensive book was not published earlier. It is a book that must be read by all economists, sociologists, historians, politicians, and anyone with an interest in inequalities. »

    Philippe Trainar, Director of the SCOR Foundation for Science