Obviously, the landing is brutal. With the arrival of autumn, France enters a painful withdrawal, after years of economic and financial unrealism. How can we find the value of billions when “whatever it takes” has drowned out the meaning of the number? According to the admission of the new Minister of the Budget, Laurent Saint-Martin, the public deficit would exceed 6% of GDP this year, compared to 4.9% in 2023. A slippage of 14% compared to what had been projected and engraved in stone of the draft budget for 2024.
Never, outside of periods of serious recession like in 1993, in 2008 or in 2020 during Covid, have finances drifted so much. The fire is smoldering at the Treasury, the institution responsible for selling French debt to investors, particularly foreign ones. To continue paying teachers, police officers, judges, running the hospital, and settling its creditors, the French state will have to borrow a little more than 315 billion euros next year. A historic amount. However, for several days, France has been going into debt at rates higher than those of Portugal, Spain or Greece, the former dunces of the European class. Imposed by the financial markets or by the Brussels Commission which placed France under surveillance, the restoration of finances is imperative. Priority is given to reducing public spending, insists Laurent Saint-Martin, when Prime Minister Michel Barnier mentions some targeted tax increases, in the name of the sacrosanct “tax justice”.
These choices will inevitably reignite the disagreements that have inflamed the community of economists in recent months. Suicidal austerity, some will proclaim, while others will regret decisions that are too timid. Priority to the fight against inequalities for some; need to restore attractiveness and competitiveness for others. The oppositions between classical, neoclassical, Keynesian or post-Keynesian economists, champions of the regulation school or followers of the Austrian liberal school, have always been intense. “But here, the debates are of a radical nature not seen since 1981,” sighs Christian Gollier, the president of Toulouse School of Economics (TSE).
Rarely have these questions of budgetary policies, often dry, been so widely discussed in the public arena. Like doctors in the time of Covid, economists today monopolize the sets of continuous news channels. Stars – ephemeral? – at the bedside of a patient suffering from unbearable budgetary levity. The polarization and culture of clash that plague the political sphere are also reaching the civilized world of academics. “What is serious is that some of my colleagues have somewhat forgotten that our responsibility is to make a distinction between what is possible and what is not,” maintains Jean Pisani-Ferry, professor of economics. at Sciences Po and inspiration for Emmanuel Macron’s program in 2017.
Scientist or citizen?
Have economists lost their scientific hats? As if the right part of the brain, that which governs emotions, had taken precedence over the left hemisphere, the analytical center of the machine. A problem when science is attacked from all sides. “In France, more than elsewhere, ideology takes precedence over facts in economic debates,” assures Christian Saint-Etienne, holder of the chair of industrial economics at the Cnam and member of LR.
The sequence of the last four months, with the surprise dissolution of the National Assembly, the lightning campaign for the legislative elections and the fear of seeing the National Rally (RN) settle in Matignon, hysterized the debates. “What happened is extremely serious for the profession,” laments Christian Gollier. In an emergency, each political camp has developed an economic program, often quickly done, poorly done, a smokescreen, a catch-all without a backbone, a catalog of empty incantations. And to give credibility to the “gift packages”, everyone knocked on the doors of academics. After all, the “economist” stamp is a guarantee of seriousness. Much more than “seen on TV”. On June 24, in a column published on the website of the New Obs300 renowned economists are committed to the program of the New Popular Front (NFP): “The proposed directions respond to the challenges of our time,” they write.
At the forefront of the signatories, Eric Berr, professor at the University of Bordeaux, but also leader of the think tank La Boétie, LFI’s thinking machine. The economist co-wrote the economic program for Jean-Luc Mélenchon’s party during the 2022 presidential election. It includes Thomas Piketty and Gabriel Zucman, professors at the Paris School of Economics, Emmanuel Saez, from Berkeley, and Camille Landais, from the London School of Economics, also president of the Economic Analysis Council (CAE), a collective directly attached to Matignon. Three days later, on the FigaroVox website, around a hundred economists pleaded for a centrist program, putting NFP and RN back to back. Among the signatories, Philippe Aghion, professor at the Collège de France, or Gilbert Cet, from Neoma Business School, two researchers who largely contributed to Emmanuel Macron’s program in 2017. Between the two camps, the atmosphere is electric. “I officially supported the NFP program, even if I knew that certain measures were not credible, such as blocking prices for example,” assumes David Cayla, professor at the University of Angers. For him, as for many others, it was necessary, above all, to block the RN. The time for realism would come later, once the elections were won, they believed. “The moment was exclusively political. There was no room to build or discuss real programs. The orientations, on the other hand, matter”, argues today one of the big names of this famous forum.
But can politics supplant reason? On the left, those who refused to get involved in the adventure still remember it. “Some of my colleagues accused me of playing against my side. They put activism before thought and knew full well that this program did not hold water. They supported it without professional conscience,” attacks Henri Sterdyniak, professor of economics, classified on the left. This co-founder of the Attered Economists, a group of researchers opposed to neoliberal thought, was even removed from the association’s board of directors in September. “I am too Keynesian, too Republican, too favorable to nuclear power, not de-escalating enough. Along with a few others, we were ‘purged’ by more radical people,” he denounces, bitterly.
A few days before the first round of legislative elections, on the social network next: if you reject the RN, you must vote NFP As if there was no alternative There is obviously one, vote for one of the center parties, whether it is Ensemble, or the LR. did not join the RN, or the ‘various left’ who did not join the NFP.” It is difficult to say whether these different positions had an impact on the choice of the ballot paper in the voting booth. What is certain is that the support of big names in economic science for the NFP program has forged the idea, in part of public opinion, that a debt cannot necessarily be repaid, that it it is enough to tax more and more to bring in the tax, that the constraints of productivity and production costs of companies are almost secondary. Ideas which will not fail to resurface in the coming weeks, during the debate on the budget for 2025. “Collectively, we are not emerging from this sequence any better,” concludes Jean Pisani-Ferry.
The prince’s advisors
Behind this episode, it is the role of the economist within society itself that raises questions. “Economics is the only social science comfortably installed at the heart of political power. A position acquired in the United States, during the Second World War, when it was necessary to quantify the war effort,” observes Béatrice Cherrier, historian of the economy and research fellow at CNRS-Polytechnique. In 1946, the first Council of Economic Advisers was created at the White House. But there is a fine line between advice and exploitation. “Hyper politicization and the negation of democratic times have locked economists into the role of useful idiots,” breathes one of the pundits who signed the column of 300 economists. The more political leaders are discredited, the more they seek the support of economists to restore their legitimacy. “The profession has become the new clergy,” concedes David Cayla. When it came to proposing a name to occupy Matignon, among the many candidates, the NFP thought for a time of Laurence Tubiana, a renowned economist, specialist in sustainable development issues. Then it was Lucie Castets, initially presented as a young 37-year-old economist, experienced in the subjects of tax fraud and financial crime.
At the start of his first five-year term, Emmanuel Macron also made extensive use of the aura of the profession, staging his monthly meetings with a group of around fifteen economists responsible for enlightening him on the reforms to be carried out. . The meetings have become less frequent over the years, the ranks of the prince’s advisors have become thinner. And the reforms? To get the answer, you only have to look at the ton of reports commissioned by successive governments, from France Stratégie or the Economic Analysis Council, two think tanks under the supervision of the Prime Minister, which are gathering dust on the shelves of Matignon.
If the relationship between the two worlds – political and economic – has become so close, and the border sometimes porous, it is also because of the weight given to figures. The cult of quantification, the excessive mathematization of economic science, and the development of econometric models have fueled this need for quantification. And economists, past masters in the art of making databases “speak”, fed the machine. Except that these famous models have limits. “We must be wary of them, they are only a reproduction of the past,” explains Jean-Marc Daniel, professor emeritus at ESCP Business School. It all depends on the hypotheses chosen, and the elasticities retained. In short, the sensitivity of one element to the variation of another. What will be the effect of a reduction in charges on the increase in employment? What impact can a return of the ISF have on business investment?
Numbers above all
These results are necessarily interesting for a political decision-maker, but they must be taken with a pinch of salt. “A model that works at a given moment will not necessarily be efficient in another context, in another country. And then, households and businesses evolve, change their behavior over time. They are not atoms that always react in the same way during a laboratory experiment”, summarizes Pierre Bentata, lecturer at the University of Aix-Marseille. For two years, the economists at Bercy have had the bitter experience of this. In constructing the budget, they overestimated the elasticity of tax revenues to growth. Hence the unpleasant surprises in terms of tax revenues, particularly VAT, at the origin of the poor deficit figures compared to initial forecasts. The politician can try to get rid of it: the facts are stubborn, they always end up imposing themselves.
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