November 2025
Below is an in-depth paper on the necessary renewal of the politico-economic-social model that defines the system under which we live in Europe, regardless of alternations between right and left. This renewal is all the more necessary in France, where this body of thought has gradually dissolved into an overdeveloped statism and into the currents of wokism.
“A State that intrudes everywhere does not merely weaken institutions; it also destroys relationships of trust between citizens, because it inserts itself between them and makes them strangers to one another.”
(Hannah Arendt, The Crisis of Culture)
A model running out of steam
This model, as it exists in France, has run its course. It has delivered much over several decades. But its intellectual foundations have evolved very little; indeed, they have drifted, while at least four major developments have taken place. These have been overlooked, insufficiently examined, sometimes denied, or worse, followed without understanding their consequences. Let us cite them, in no particular order.
First, the issue of public authority, security, and migration, together with the rise of Islamist ideology—raising fundamental questions about what constitutes a nation. Second, the rise of fierce individualism, with an overvaluation of individual rights and a devaluation of duties. Third, an obsession with equality, leading to a dangerous egalitarianism at the expense of equal opportunity and fairness. Finally, the hypertrophy of the public sphere, whose entropic expansion generates inefficiency, discouragement, loss of trust, and growing anxiety.
We will return to each of these points. The issue of climate transition is not discussed here, as our model—albeit with too many dogmas and insufficient scientific rigor—has, broadly speaking, integrated it into its framework. We must therefore renew our thinking, lest we become obsolete, by exploring territories that have so far been insufficiently examined. Let us attempt, modestly, to lay a few building blocks.
Market and State
The market is indispensable. It fosters economic dynamism, resource allocation, and a matching of supply and demand that, while imperfect, is irreplaceable. However, the market cannot regulate itself sufficiently. To function effectively and sustainably, it requires law, rules, institutional authorities, regulatory bodies, and intermediary organizations capable of intervening when it becomes destabilized.
The public sphere is therefore essential to regulating the market, the economy, and society more broadly. The State (in the broad sense) is necessary to maintain social balance, including by fostering intermediary bodies such as trade unions. The various forces within society can then be channeled in a broadly harmonious equilibrium-albeit one that is inherently shifting and unstable.
This model of regulation has, despite imperfections and non-linearity, enabled the development of broadly shared prosperity in European countries. Its most accomplished forms have emerged in Northern Europe and Germany. With variations, a form of social democracy has spread across Europe and become one of its defining features.
We use the term “social market economy” in a broad sense, beyond political alternations, as the common foundation of European systems. For decades, this model successfully combined markets with institutions and rules, including redistributive mechanisms.
However, Europe now appears to be experiencing relative decline and, in recent years, a significant economic divergence from the American model. The proliferation of norms and regulations, weaker incentives for initiative and risk-taking, and an unbounded pursuit of equality-rather than fairness-help explain this. Even in its reformist strands, aware of these dangers, the model has become insufficient.
Authority, security, immigration
It is essential to incorporate into public policy thinking the issues of authority, security, and the regulation and integration of immigration. Failing to address these issues in a republican manner leaves the field open to populist movements, which can then attract voters who legitimately feel unheard on sensitive aspects of daily life.
These issues are crucial and must not be treated moralistically or with contempt. Likewise, conceiving of a nation as a purely multicultural kaleidoscope-without unity, borders, shared culture, or identity, bound only by abstract universal values-is an ethereal vision that dissolves history, geography, and the nation itself. It ignores the cultural bonds that enable people to recognize themselves in a country and live together.
Ernest Renan had already articulated this clearly: “What unites us is not language, religion, or race, but a shared past and a common will to live together… A nation is a daily plebiscite.” This should guide our reflection.
Overadministration: a brake on action
The declining effectiveness of the public sphere must also be carefully analyzed. Just as markets are not infallible, public decisions can be ineffective, inappropriate, or even undesirable. They can produce unintended consequences that are the opposite of their intended goals.
There is neither omniscience of markets nor of the State. It is therefore essential to recognize that public policy can fail. This must be central to the renewal of the social market economy.
There is no “evil capital” and “benevolent State.” This binary view is simplistic and misleading. Both capital and the State follow their own expansionary logic—one of accumulation and return, the other of control and power. Both tend naturally toward growth, yet both are necessary and complementary, provided neither dominates and destabilizes the delicate balance required for a functioning society.
In France, this calls for a clear-eyed analysis of the long-term expansion of an omnipresent State that increasingly intermediates social relations. This dynamic leads to overadministration: a growing, heavy, and diminishing-return bureaucracy.
Overadministration fosters a sense of powerlessness, discouragement, and retreat into the past. It also encourages rent-seeking or, conversely, rebellion. By attempting to respond to everything, it infantilizes individuals and fuels ever-growing demands on the State-inevitably leading to disappointment, anxiety, and a loss of individual responsibility.
Too much State produces atomization and alienation, undermining both self-confidence and trust between individuals. It weakens individual and collective action and erodes spontaneous solidarity.
Ethics and efficiency
Faced with both the failures and expansionary tendencies of the public sphere, the State must regain clarity of purpose and effectiveness. It must avoid unnecessary expansion and refrain from producing excessive rules and institutions.
The public sphere must ensure the best combination of ethics and efficiency. Neither is the exclusive domain of the market or the State. Their relationship is complex and intertwined. Ethics without efficiency is unsustainable; efficiency without ethics is equally untenable. Public authorities must constantly manage this tension.
Hyper-democracy
We must also examine the endogenous dynamics of democracy—what might be called “hyper-democracy.” Left unchecked, democracy can generate its own excesses and ultimately weaken itself, potentially paving the way for populism.
These excesses include the limitless expansion of individual rights, coupled with the erosion of duties; extreme individualism and fragmentation; and the ideological framing of society in terms of oppressors and oppressed. This framework, enforced through new forms of social and intellectual conformity, can foster division and resentment.
In this context, wokism represents an extreme distortion of democratic principles. It is not an extension of democracy or progressivism, but a radicalization that ultimately undermines them. Opposing it is neither conservative nor reactionary-it is necessary to preserve liberal democracy itself.
False progressivism, real regression
The indulgence or blindness toward these developments is not progressivism. On the contrary, it leads to regression, undermining humanist and universalist values that have historically supported equality, emancipation, and social cohesion.
The combination of excessive State intervention and hyper-democracy produces a destructive dynamic: ever-expanding rights, declining responsibilities, reduced efficiency, and growing mistrust-ultimately leading to unsustainable public debt.
A viable social market economy requires a balance between social protection-particularly for the most vulnerable-and individual responsibility. The welfare state is essential, but it cannot protect against everything without limit without generating entropy and irresponsibility.
The survival of the model
The balance underpinning our model has been broken, endangering the welfare state itself. The question is whether democracy, social democracy, and the public sphere can avoid entropic drift and stabilize at a point that reconciles justice, efficiency, and well-being.
This is ultimately a question of survival for the European socio-economic model. Without reform, it risks becoming incapable of sustaining itself, leading to economic decline and moral and financial disintegration.
The challenge, therefore, is to identify mechanisms that can limit these excesses and restore the vital equilibria necessary for renewal.
Olivier Klein
Professor of economics at HEC