Nupeswashing turns into trendy | Financial system on land or on land? | Jean Marie Harribey

Economist Henri Sterdyniak, in an interview with financial alternate options, focuses its consideration on this system of the União Ecológica e Social do Novo Povo (NUPES) and brings a number of criticisms to it[1]thus confirming the feedback he had made to the journal Level two weeks earlier: “we’ve many wants by way of public spending, by way of well being, ecological transition, enchancment of our schooling system. Retirement at age 60, which may be very costly, just isn’t a precedence. »[2] It specifies in financial alternate options that this price represents 5% of GDP (barely greater than the 100 billion euros estimated by the very liberal Institut Montaigne) and that it is rather troublesome to boost taxes and contributions even additional.

Allow us to study a number of the arguments raised by our colleague.

1. Social contribution on the payroll

If we don’t enhance the speed of contributions in a context of wage stagnation, the share of the wage invoice in added worth is immutably mounted on the relative stage that neoliberalism has imposed for forty years. And, coincidentally, the extra 5% of GDP that retirement at age 60 would signify corresponds to the extra share of added worth that capital stole from labor in the course of the neoliberal part. Assuming that the extent of contributions can’t be elevated is subsequently tantamount to endorsing this disastrous sharing of added worth for staff. On this sense, our colleague is correct, we’d have issue financing all of the social must be met.

Share of wages in worth added in France in % (supply: Banque de France)


It was famous that Mr. Macron just isn’t a robust supporter of wage will increase. He prefers bonuses, participation and revenue sharing. Medef additionally as a result of there are not any contributions on these disguised wage funds. Would not that be sufficient to cut back pension plan deficits?

Alternatively, Henri Sterdyniak doesn’t handle a proposal that’s current in giant sectors of social actions and commerce unionism: that of increasing the bottom of contributions to the complete worth added (or at the least to the portion distributed in earnings to the homeowners of the capital). . In actual fact, he empties it, with out naming it, saying, “We could not put a contribution on dividends, as that will not open up pension entitlements.” However this argument ignores that the so-called employer contributions don’t open up social safety rights. Nonetheless, we can not think about eradicating them.

To repair concepts, let’s study the nation accounts established by INSEE within the 2019 Normal Financial Desk (final yr earlier than Covid-19).

In keeping with the INSEE TEE 2019:

2019 (€ billion)

Payroll of monetary and non-financial firms

gross wages

Employer social contributions

Gross working surplus (EBITDA)

Gross mounted capital formation (GFCF)

Mounted capital consumption (CCF)

Web working surplus (ENE = EBE – CCF)

Firms’ web added worth (VAN = mass salt + ENE)

Web Funding (GFCF – CCF)










Potential revenue distributed in 2019 (ENE – web funding): 172.4 – 58.9 = 113.5 billion. If we utilized the speed of 28.1% of the contribution for previous age, the present worth of contributions can be elevated by 31.9 billion.

Though some feared that the burden of taxes on capital earnings can be too excessive, it needs to be remembered that they escape the progressive scale of earnings tax and are topic to the only charge of 30% (12.5% ​​tax and 17.2 % social safety contributions).

In actual fact, the reluctance to debate broadening the bottom of contributions stems from a confusion of the notion ofdishwhich is a pure calculation conference for making use of a charge, with the supplyof any tax that continues to be the online worth added by labor[3]. The principle thought behind the enlargement of the social contribution base is that it doesn’t separate work and contribution; it merely will increase the wage invoice and its relative weight in web worth added.

The Authorities, each within the voice of the President of the Republic and the Prime Minister, and the employers usually are not mistaken: we’ve to work extra as a result of the wants are very nice. In a method, they’re proper, as a result of in doing so that they implicitly acknowledge that solely labor is productive of latest worth. Forgetting that rising the variety of hours labored may very well be achieved by hiring unemployed staff, as a substitute of creating those that have already got a job work more durable. The recurring laments in regards to the low employment charge of the aged in France (the employment charge for individuals aged 55-64 is 56%) border on the ridiculous, as a result of elevating the statutory retirement age doesn’t create further employment.

This dialogue exhibits that we can not dissociate the problems of employment, working time and the distribution of added worth. Until we proceed to attend for renewed sturdy financial progress to resolve all social issues with out having to vary earnings distribution. Nonetheless, this method comes up towards the maybe insurmountable impediment, the fragility of labor productiveness positive aspects, which refers back to the degradation of labor and ecological degradation. It’s clear, subsequently, that Henri Sterdyniak is correct to doubt the relevance of the social mannequin advocated by NUPES if the wage invoice stays at its present relative stage, however is completely unsuitable if we transfer the slider of the worth added distribution. If he doesn’t take into account this speculation, is it as a result of he has not completely deserted all hope of financial progress?

2. The place we speak about cash once more

to the query offinancial alternate options whether or not the repurchase of public debt by the ECB, thus reworked into perpetual debt at zero charge, can be an answer, and to the query of whether or not we will escape the debt, Henri Sterdyniak solutions two issues. Firstly, that NUPES “make public debt disappear from the accounts of the Banque de France” and “neglect to demand the important measure, specifically that the ECB assure public money owed, so as to cancel out charge differentials rates of interest within the euro zone and put speculators out of labor”. This censorship is actually a false judgment, simply learn the NUPES program to be satisfied, particularly within the half devoted to the structure of a public banking hub.

So Henri Sterdyniak says: “Home public debt just isn’t an issue. When in 2020 the federal government elevated its deficit whereas sustaining household earnings, those that couldn’t eat saved the excess of their financial institution accounts. The banks entrusted this cash to the Banque de France, which purchased the federal government bonds. The circuit accomplished with none issues. The counterpart of loans made by the state is the French’s deposits in industrial banks or their property in life insurance coverage, which makes the debt non-cancellable, besides to clarify to savers that they won’t be repaid! The issue is exterior debt, if the ECB refuses to refinance many French bonds, because it did with Greece. »[4]

On this assertion, Henri Sterdyniak is unsuitable: the banks by no means entrusted the financial savings of the French individuals to the central financial institution; he by no means used this untraceable cash in his accounts to purchase authorities bonds from banks. In different phrases, Henri Sterdyniak fully turns financial idea into its reverse. The Central Financial institution repurchases authorities bonds by creating central financial institution cash and never utilizing obtainable financial savings. This speaking level about cash and cash creation is a recurring one with Henri Sterdyniak. A number of of us had already identified this disagreement in the course of the first cash seminar at Economists, indicating that it was a revival of the traditional thesis of earlier financial savings funds.[5]. By the way, and this isn’t the slightest element, in Henri Sterdyniak’s mannequin, as a result of, deep down, every thing will depend on financial savings, submission to the monetary markets wherein they flow into stays full.

The conceptual confusion stems from the truth that, on the finish of the financial circuit (the so-called “closing” second), the economies constituted by the financial dynamics come into drive. in alternate for money advances (from strange banks, both straight from the central financial institution or by financial institution refinancing). All up to date financial idea (from Marx to Keynes and post-Keynesians) refutes Henri Sterdyniak’s view that unconsciously makes financial savings the start line of the circuit.

That is such a fancy problem that there’s nonetheless lots of academic work to be carried out on financial points, particularly when the problem is to replicate on the technique of financing the transition. Social and ecological.

The nupeswashing it is getting fashionable. The well-meaning press provides to the federal government and employers’ discourse, whether or not within the financial, social and ecological proposals of Nupes, or in its political orientations, particularly in relation to the European Union.[6]. If any criticism is official and, subsequently, has the best of citizenship, it’s essential to ensure its pertinence. Within the normal local weather of hostility to any deviation from neoliberal dogma, it’s most likely prudent to be cautious of arguments that would backfire.

[1] Henri Sterdyniak, “The Nupes program lacks priorities”, financial alternate optionsCould 27, 2022, interview by Hervé Nathan.

[2] Varied developments on this dialogue may be discovered on the following hyperlinks: Jean-Marie Harribey, “Broadening the bottom of funds to finance pensions”, Be aware of January 15, 2020; “What social contribution to social safety”, February 9, 2019; “The that means of social contribution”, August 17, 2014; “Prolong the social contribution”, Coverage, No. 965, August 30, 2007; “Be aware on Financing Well being Insurance coverage,” June 18, 2004; “Making the talk on financing social safety a political debate”, Technical Be aware, June 30, 2004.

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