- 3 min
World Cup, final, green, and so on!
We are not going to deny ourselves the pleasure: France is in the final and no-one can argue with the jubilations, which, whatever one may think, are doing the country a lot of good. But how much good exactly?
Today’s Le Figaro Economie seeks to assess the economic impact of a French victory in the World Cup final. “If they were to win Sunday’s final, the French players could unintentionally give a boost to the French economy. The team will no doubt have other things on their mind when the final kicks off in Moscow on Sunday.” “I’m not going to quantify GDP points, but it’s good for growth,” an economist enthused.
So how much then? At the end of the summer, an additional 0.2% growth, together with a more robust morale, a new-found entrepreneurial desire and renewed national pride. This all counts, and is highly visible. So here we are. But football cannot take us out of our current economic reality. We need other sources of growth; at least a paradigm, a virtue for the coming years. In this respect we only have to read the Les Echos financial daily to guess, imagine and understand what could help us make a leap into the future. Capitalism lacks projects, with businesses giving money back to shareholders rather than making useful investments. The ecological transition alone would be capable of satisfying the system.
Capitalism is a snake eating its own tail. Lacking projects, it simply devours its capital. And this poses a real threat for the future, as capitalism boasts formidable economic effectiveness. “It is largely behind the amazing improvement in living conditions in the last two centuries. Even its most ferocious critics, such as Swiss sociologist Jean Ziegler, have to concede to this fact. Yet capitalism stands before a wonderful project. But one it cannot accomplish alone. It will need to be saved by its enemies, as has happened several times in the past,” writes Les Echos, with a fresh and enthusiastic approach.
“We need to start by agreeing on words, as this is an area prone to fantasy. The anarchist writer Pierre-Joseph Proudhon gave us a crisp definition of capitalism over a century and a half ago, referring to it as ‘an economic and social system in which capital as a source of income does not generally belong to those who use it in their own work’.”
The historian Fernand Braudel went on to clear up the common confusion between market economy, competitive space (where the trend is the “tendency of the rate of profit to fall” in Karl Marx's words) and capitalism, “an upper echelon” dominated by monopolies (where the natural trend is towards accumulation, again as noted by Marx and recently highlighted in the work of Thomas Piketty).
If capitalism is formidably powerful, it is because it can be used to accumulate capital and this last can then be invested where it is most effective, for example in machines, transport infrastructure and research. The power of capitalism is such that it cannot exist without opponents, be they the state, trade unions or intellectuals. Sébastien Groyer, philosopher and venture capitalist alike, writes: “Without these checks and balances, capitalism would be consumed by its own excess of power, by imbalances in income, production losses and the attendant revolutions.” But capitalism today has lost its bearings and no longer knows where to go. More specifically, capitalism’s main players – company chiefs and large investors – no longer know what to do with the masses of money they put into circulation. They no longer have major projects. And so this money goes to shareholders. Instead of raising funds by issuing new shares to finance their growth, companies are buying back their old shares. Companies such Apple, which recently announced a buyback of some USD 100 billion. Which is hardly a petty sum. With the World Cup final comes the desire to change things...
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