Arthur BOUTIAB
Author
A letter to Roland Lescure, the French Minister for the Economy, Finance, and Industrial and Energy Sovereignty
Our economy runs on excess. Within the current economic paradigm, macroeconomic stability is only possible in a growing economy. As shareholders seek to maximise profits, they tend to reduce the number of employees when labour productivity increases. As tax income also largely depends on the amount of goods and services produced, the only answer to unemployment and budget deficits is material growth.
The State has actively contributed to the consumption-driven structure of our economy. It has tolerated manufacturers' strategy to shorten product lifespans, a phenomenon described as "planned obsolescence". Instead of supporting the French railway network, it has halved its coverage in less than a century and has chosen to bolster the automotive industry by investing in polluting and socially inequitable infrastructure, like the Toulouse-Castres highway. Our economy is thus locked into unsustainable consumption levels by design.
An economy that runs on excess can hardly be sovereign in a troubled geopolitical context. The war in Ukraine was a warning, the conflict in Iran is a call to action. In 2024, France required 1,514,451 barrels of oil per day to satisfy its domestic demand. As geopolitical tensions are flaring under the joint effect of nationalism and climate change, energy price shocks will likely multiply. Soaring energy prices will leave us in a dilemma: let prices rise, and a new Yellow Vest movement may emerge due to the low price elasticity of fuel consumption. Resulting political instability may in turn lead Standard and Poor's to downgrade France's credit rating as it did in the past. Alternatively, you could introduce oil subsidies, with the risk of further aggravating public deficits, eroding investors' trust, and raising the cost of debt. A system that relies on consumption and production growth has no future in an unstable world.
A new economy organised around sufficiency could put France on the path towards sovereignty and macroeconomic stability. We urgently need to explore new ways of satisfying needs while avoiding the unnecessary energy and material demand that harms our sovereignty. Under the triple compass of "sufficiency, efficiency, and renewables", we could reduce France's exposure to energy price volatility.
However, France does not need a refurbishment but an overhaul. In an economy organised around profit maximisation, efficiency can result in increased material consumption, a phenomenon known as Jevons' paradox. To deliver sovereignty and macroeconomic stability, we need to put sufficiency at the core of our economic strategy. Reorienting our economy towards democratically determined satisfaction of needs with minimum energy and resource inputs is a necessity. Only this approach can satisfy people's needs and create a stable economic environment in which investors can commit with a reduced perceived risk of instability or unrest.
In a changing geopolitical environment, it is either dependence or sovereignty. It is either social discontent or macroeconomic stability. It is either excess or sufficiency. It is your responsibility to choose which path France will follow.