Category: Conjoncture

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Conjoncture Economical and financial crisis Economical policy

THE FRENCH POLITICAL, ECONOMIC AND SOCIAL MODEL MUST UNDERGO A DEEP RENEWAL

29.11.2025

Below is an in-depth essay on the necessary renewal of the politico-economic-social model that defines the system in which we live in Europe, regardless of right–left alternations in power. This renewal is all the more essential in France, where this tradition of thought has gradually been diluted into an overdeveloped statism and the byways of wokisme.

“A state that interferes everywhere not only weakens institutions; it also destroys the relations of trust between citizens, for it stands between them and makes them strangers to one another.”
(The Crisis of Culture) — Hannah Arendt

A Model Out of Breath

The model as it exists today in France has run its course. It has contributed a great deal over the decades. But its intellectual foundations have evolved very little—in fact, they have drifted—while at least four major developments have taken place. These developments have been ignored, left unexamined, sometimes denied, or worse still, embraced without understanding their consequences. Let us list them without ranking.

The issue of public authority, security, and migration, along with the rise of Islamist ideology—reshaping the question of what makes a nation. The rise of fierce individualism, marked by the overvaluation of individual rights and the devaluation of duties. The obsession with equality, leading to a dangerous egalitarianism at the expense of equal opportunity and fairness. And finally, the expansion of an oversized public sector whose entropic growth breeds inefficiency, discouragement, loss of trust and rising anxiety.

We will return to each of these points. The essential challenge of the ecological transition is not mentioned here, for our model—with too many dogmas and an insufficiently scientific approach—has nonetheless integrated it relatively well into its framework. We must therefore renew our thinking, or risk becoming obsolete, by exploring areas that have so far been insufficiently examined. Let us try, modestly, to lay a few building blocks.

Market and State

The market is indispensable, for it generates economic dynamism, allocates resources, and matches supply and demand—imperfectly, of course, but irreplaceably. Yet the market cannot be a sufficient regulatory mechanism on its own, for to remain effective and sufficiently stable it needs law, rules, institutions, regulatory bodies, and intermediary groups capable of acting when the market becomes destabilizing. The public sphere is therefore essential to regulating the market, the economy, and society at large.

Thus the State—in the broad sense—is necessary for maintaining society’s balance, including by fostering intermediary bodies such as trade unions, which help regulate the whole. The various forces at play in society can then be channelled more or less harmoniously in a shifting, inherently unstable balance. And this regulatory model has enabled—unevenly and not linearly—a rise in well-being, relatively well shared across European countries.

The most developed manifestations of this regulatory model, combining ethics and efficiency, have been found in Northern Europe and Germany. Later, with nuances, a form of social democracy spread across Europe and became, volens nolens, one of its defining features. Overall, our model, with its variants, has for decades achieved a successful combination of markets with institutions and rules—including redistributive ones.

We use the term social market economy in a broad sense, beyond the alternation of right- and left-wing governments, to designate the common foundation that best captures the regulatory mode of European countries.

However, Europe now appears to be experiencing a relative decline—and in recent years even a significant economic lag behind the American model. The proliferation of norms and regulations, the weaker incentives for initiative and risk-taking, and the unchecked drive for equality—not fairness—seem to be part of the explanation. This model, even in its reformist versions aware of this dangerous trajectory, has become insufficient.

Authority, Security, Immigration

It is essential to integrate into public-policy thinking the issues of public authority, security, and better regulation and integration of immigration. Failing to address these matters in a republican manner leaves them to populist movements, which can then attract voters who are rightly dissatisfied at not being heard on sensitive issues of daily life.

These subjects are crucial, and they must not be treated moralistically or with disdain. Likewise, conceiving a country, a nation, as a multicultural kaleidoscope with no unity, no real borders, no shared culture, no genuine identity, and with nothing in common but disembodied universal values is an ethereal vision that dissolves history, geography and the very notion of nationhood. It ignores the cultural bonds that forge a country, enabling its inhabitants to recognize themselves within it and live together. Denying this truth leads sooner or later—volens nolens—to disaster.

Renan had already said it all: “What unites us is not a language, a religion or a race, but a shared past and a shared willingness to live together. A nation is a soul, a spiritual principle, built on the memory of past glories and the present consent to continue that common life. A nation is a daily plebiscite.” Let this be an inspiration.

These fundamental issues, however, will not be further developed in this paper.

Over-administration: a Brake on Action

We must also examine carefully the loss of effectiveness in the public sphere. Just as markets are not free of errors and endogenous dysfunctions, public decisions may be ineffective, or simply wrong. Neither markets nor the State are omniscient. We must acknowledge—beyond ideology—that public policy may fail, be unsuitable, or even undesirable. It may even generate perverse effects contrary to its goals.

This must become core to the renewal of social-market-economy thinking. It is worth remembering that there is no “evil capital” and “virtuous State.” No camp of good and camp of evil. This simplistic and dangerous Manichaeism is misleading. Capital and its institutional counterpart each follow their own logic of endless expansion—there, in terms of return, accumulation; here, in terms of control and power. Both feel, like living organisms, the vital need to grow. Yet both are necessary and complementary—so long as neither is allowed to dominate and destabilize the delicate balance required for progress.

The State’s Logic of Growth: Over-administration
We must think freely about the decades-long expansion in France of an omnipresent State that increasingly intermediates relations among individuals—that is, between individuals and society. This State exercises ever-tighter control over citizens and, in an entropic dynamic, develops an ever-heavier over-administration with diminishing returns.

This analysis is especially necessary in Europe—and more particularly in France—much more than in the United States. Over-administration breeds discouragement, nostalgia, and a sense of powerlessness. It also drives individuals to seek maximal advantage for themselves, or even, for some, to desire sedition or insubordination. Through its intrinsic logic of endless growth, over-administration infantilizes people and continually pushes them to demand ever more from the State. This inevitably leads to disappointment, which in turn fuels fear—even in the face of small problems—because the sense of personal responsibility has been eroded.

Too much State intervention atomizes individuals² and alienates them from their own capacity to act. An overintrusive State can undermine self-confidence and mutual trust. It hampers individual and collective action and weakens self-organized solidarity within society.

“Action is what enables human beings to appear before one another, to reveal themselves in their singularity, and to build a common world. When the State monopolizes this capacity, citizens are reduced to mere spectators.”
— Hannah Arendt, The Human Condition

In short, following Arendt’s insight, this dynamic erodes the necessary balance between individual and collective freedom and responsibility on the one hand, and necessary social regulation on the other. “The danger is not only in the violence of authoritarian regimes but also in the gradual slide into a soft, paternalistic administration that suffocates freedom under the pretext of protection.”

The Essential Combination of Ethics and Efficiency

Since the public sphere can err and tends to expand until its effectiveness collapses, the State must regain clarity of vision and vigour. It must avoid developing superfluous structures and refrain from generating unnecessary laws, rules and institutions. The public sphere must ensure the best possible balance between ethics and efficiency; neither belongs exclusively to the market or to the State. Their interplay is complex and interwoven. Ethics and efficiency belong together in companies and in society as a whole; neither can endure without the other.

Hyper-democracy

We must also question democracy’s natural trajectory—its endogenous dynamic—what I call hyper-democracy. Democracy can generate its own excesses. Tocqueville already warned of this. Without deep reflection on these tendencies, democracy can weaken itself and ultimately even disappear, paving the way for populism—whether far right or far left.

We cannot avoid reflecting on democracy’s own specific excesses: the endless expansion of individual rights, enforceable against everyone else, combined with the erosion of duties. This leads to extreme individualism, egoism, and fragmentary communautarisme. These are symptoms of total self-absorption. And ideologically, they are reinforced by the simplistic idea that everyone is necessarily either an oppressor or oppressed, with thought policed by new dogmas.

This produces hatred of the Other—those assigned as oppressors, burdened with indelible guilt. The oppressed, in turn, are deemed to be freed forever from duty or responsibility. Redemption for the “oppressor” is only possible through total re-education and self-denunciation. A fantasy reminiscent of totalitarianism.

All this hides behind totemic words, repeated endlessly—hollow words but mandatory, belonging to the “good” camp. Other words become shameful, forbidden. A police of morals, a police of thought. Wokisme is the caricature and most advanced expression of this distortion of democracy. It is not an extension of democracy, nor of progressivism. It is a new ideology of democratic excess, ultimately destructive of democracy itself.

Opposing wokisme—understood as the intolerant, totalitarian radicalization of progressive activism—is neither conservatism nor reaction. The defenders of the democratic, liberal, social-market model cannot leave the critique of wokisme to populists alone, at the risk of disappearing themselves. The American example is clear; so is that of today’s French Socialist Party, absorbed by NFP/LFI as the RN grows in parallel.

Other endogenous excesses also emerge from hyper-democracy: the quest for absolute equality, magical thinking that suffocates the very dynamism of society. As Tocqueville wrote: “There is no passion so fatal to man and society as the love of equality, which can debase individuals and lead them to prefer a common mediocrity over individual excellence.”

Without self-reflection and regulation, our model drifts fatally. We must reassess absolute equality, equality of rights, equality of opportunity, and fairness, along with their moral, economic and social implications.

Hyper-democracy leads to regression, the erosion of economic dynamism and well-being, financial collapse, and moral decay. It unleashes the lowest passions—jealousy, resentment, hatred—which are already at work.

Without renewed thinking about democracy’s endogenous excesses, about over-administration and its effects, about the legitimate republican need to restore public authority, and about better immigration regulation and integration, mistrust toward democracy will not diminish. The rise of populism does not originate solely in these factors, but it would be dangerous to deny that they are part of the cause.

A False “Progressivism” Concealing a True Regression

Benevolence—or blindness—toward the causes and consequences of these four trends does not constitute progressivism, despite its self-presentation. Quite the opposite. These phenomena confine, isolate, and provoke fatal regressions in relation to humanist and universalist values—always values of progress, responsibility, emancipation and harmony. Imperfectly realized, yes, but they have enabled societies to recognize and respect minorities without doing so at the expense of the majority. They have supported racial, gender and social equality, and facilitated equality of opportunity.

The combination of too much State with hyper-democracy creates a pernicious, destructive dynamic resolved only through limitless expansion of rights and the collapse of duties and responsibilities, as well as through declining effectiveness of socio-economic regulation. This generates societal mistrust toward institutions, politics, and others—in short, toward society itself. And ultimately, it drives unsustainable public debt.

A society with a social market economy must ensure essential protection for the most vulnerable while balancing this with individual and collective responsibility. The welfare state is essential, but it cannot and must not attempt to protect from everything, without limit, at the cost of widespread disempowerment.

Tocqueville again: “The sovereign extends its arms over society as a whole; it covers its surface with a network of small, complicated, minute, uniform rules… it does not break wills, but it softens and bends them… until each nation is reduced to nothing more than a flock of timid, industrious animals, of which the government is the shepherd.”

The Survival of the Social Market Economy Model

The proper balance—the viable equilibrium—has been broken. This endangers the welfare state itself, and thus the precious social protection it provides.

The present analysis questions whether democracy, social democracy, and the public sphere can avoid entropic decline and stabilize at an equilibrium combining justice (ethics), efficiency (wealth creation), and economic and social well-being.

This is a matter of survival for our European socio-economic model. With specifically French shortcomings making the system increasingly inefficient, our regulatory model will sooner or later become incapable of reproducing itself—incapable of surviving. If renewal does not come in time, the consequences will be widespread impoverishment and a moral and financial collapse.

The reflection must therefore continue. How can we design mechanisms that limit these excesses? How can we restore the vital equilibria that allow our societies to survive and regain vitality?

That is the challenge. It is a fundamental question for our future, our “model,” our Europe, and our country.

Olivier Klein
Professor of economics at HEC Paris

Categories
Conjoncture Economical and financial crisis

Should Taxes Really Be Raised Again?

Can we still tax large companies and wealthy households even more? In France, this idea has become a false solution. It would only worsen an already worrying imbalance between one of the world’s highest levels of redistribution and a weakened capacity to create wealth.

France ranks among the five most redistributive countries in the OECD: the gap between the Gini indices before and after transfers is among the largest. More than half of households pay no income tax, while the top 10% account for nearly 75% of total payments. The tax wedge on lower brackets is below that of most European countries, but for upper brackets, it is the highest.

Increasing an already record-high tax burden would mean ignoring its negative effects on both growth and public finances. The supply-side policies of recent years — including the 30% flat tax, the partial alignment of corporate tax rates with our neighbors, and the general stabilization of levies — have helped raise the employment rate (still too low though) and reduce unemployment, while initiating reindustrialization. Any further rise in the tax burden would once again widen the competitiveness gap, discouraging investment.

The deterioration of public finances is not the result of these policies, but stems from the uncontrolled growth of the public wage bill, the cost of emergency Covid measures (useful but poorly calibrated in scope and duration), the abolition of the housing tax, and demographic aging without a completed pension reform.

The logic of “taxing more to share more” has become not only unjustified but also counterproductive. Beyond a threshold that has already been reached, it discourages talent, innovators, and investors. Another increase would accelerate the exodus of affluent households convinced that the process has no end. Young graduates are following suit: today, 23% more of them than ten years ago settle abroad immediately after graduation, and more than half plan to leave within three years, citing a sense of decline and insufficient economic recognition.

When the desire to redistribute outweighs the incentive to create new income, the pie itself shrinks. We are already there. The issue is not “tax justice,” which is largely achieved (though efforts against excessive optimization remain necessary), but collective efficiency. Raising taxes further would neither reduce debt nor the deficit as long as public spending remains unchecked. The French vicious circle would close in on itself: record-high taxes and spending, debt growing much faster than our neighbors’, and deteriorating growth as well as public services.

It is therefore on structural reforms that action must focus: integrating low-skilled youth into the labor market more quickly, promoting technical career paths, encouraging longer working lives when health allows, easing over-regulation that stifles growth and innovation, and strongly raising the level and performance of the education system, now lagging behind the best.

These reforms — successfully implemented by many of our neighbors, including social-democratic ones — belong to no political camp. Only these measures would allow France to regain stronger growth and sustainable public finances, an essential condition for preserving both solidarity and prosperity.

Olivier Klein
Professor of Economics, HEC

Categories
Conjoncture Economical and financial crisis Economical policy

Income Inequality: France Trapped by Treating Symptoms Rather than Root Causes

Published in L’Opinion, Tuesday, September 23

The response to income inequality cannot consist of endlessly fixing the symptoms through ever-greater redistribution. The real challenge for France is to address the root causes, starting with the excessively low employment rate.

The attention that should, with utmost seriousness, be devoted in France today to stabilizing our public debt ratio is temporarily diverted toward the issue of income equality and tax justice. Beyond the fact that even greater redistribution would only marginally address the debt problem in the short term—and could worsen it in the medium term for the reasons described below—it is important to carefully examine income inequality in France and to understand its dynamics, both before and after redistribution.

To this end, the Gini index is one of the key reference tools: the higher it is, the greater the income inequality; the lower it is, the more equal the distribution.

When comparing the following countries—the United States, the United Kingdom, Germany, Spain, Italy, Sweden, and France—before redistribution, France shows a Gini index of 0.49, higher than the average of the three most equal countries in the sample (0.453), and lower than the average of the three most unequal (0.517). Concretely, the gap between France and the most equal countries is +0.037, while the gap with the most unequal is –0.027. This places France among the countries where, before taxes and transfers, income disparities are relatively pronounced.

After redistribution, the picture is very different. The Gini index drops to 0.290, close to the average of the three most equal countries (0.270) and well below that of the three most unequal (0.353). The gap thus narrows significantly to +0.020 compared to the most equal countries, while widening sharply to –0.063 compared to the most unequal. This reflects the massive impact of France’s public transfers and redistributive system. After redistribution, France ranks among countries with relatively low income inequality.

Three key observations must be made to establish a relevant diagnosis for effective and fair action.

First observation: although France shows fairly strong income inequality before redistribution, it ends up among the less unequal countries after redistribution. Other measures of inequality confirm this result.

Second observation: the pre-redistribution situation is largely due to a relatively low employment rate. The Gini index includes the incomes of the unemployed and inactive. In France, a larger share of the working-age population than elsewhere is not employed—particularly among young people and those aged 60–65. This weighs on the measurement of initial inequality.

Third observation: redistribution—one of the strongest in the OECD—significantly corrects these gaps, ensuring necessary social cohesion. But at this level, our very high redistribution rate fuels a vicious circle. The lower the employment rate, the greater the pre-redistribution inequality. The more massive redistribution must be to correct it. But the more redistribution rises, the heavier the tax and social contribution burden becomes, weighing on business competitiveness and reducing work attractiveness. This mechanism, in turn, feeds a structurally low employment rate.

The response cannot therefore consist of endlessly repairing the symptoms through ever-greater redistribution. This cannot be a sustainable strategy. The real challenge for France is to address the root causes, starting with the excessively low employment rate. A significant increase in the activity rate, whether for young people or seniors, would radically change the situation. It would simultaneously reduce income inequality before redistribution, strengthen growth potential, and relieve public finances. According to very cautious estimates, raising the employment rate to Germany’s level (taking into account the lower productivity of new labor market entrants and differences in part-time work) could cut France’s primary public deficit in half.

Redistribution in France is therefore an essential instrument of solidarity. But it acts as a palliative, not as a preventive remedy. To avoid endlessly locking into the vicious circle of low employment – inequality – reinforced redistribution – further loss of business competitiveness and work attractiveness – low employment, the country must sustainably raise its employment rate. This is one of the key conditions for ensuring social cohesion in a sustainable way, with lower income inequality even before redistribution, preventing our GDP per capita from regularly lagging behind that of our neighbors, and giving our public finances a much better chance of consolidation. Misdiagnosing the issue by focusing solely on redistribution would inexorably damage both the economy and the social fabric.

Olivier Klein is Professor of Economics at HEC.

Categories
Conjoncture Economical and financial crisis Economical policy

The French social and economic model is unsustainable

It would be more than reckless to claim that France does not have a serious public debt problem, nor that its social and administrative model does not require profound reforms to become sustainable. Admittedly, an immediate catastrophe on the markets is unlikely to arise solely from France’s financial situation, notably thanks to the protection offered by the euro. However, a lasting political chaos with no foreseeable solution could eventually trigger such a crisis.
In any case, the issue is to act deeply and swiftly to restore the sustainability of our economic and social model, which is now out of breath. Notably, the sharp rise in public debt interest payments, especially from 2026 onwards, will further weigh down the budgetary equation.

France’s Economic Disconnect

Our GDP per capita is increasingly lagging behind that of its neighbors. In 2024, Germany reached 116.2% of France’s GDP per capita, up from 105% in 2000; the Netherlands hit 136.4% versus 114; Denmark 129.3% versus 117.8; and Sweden 114.1% versus 100, for example. This serious disconnect, occurring over just two decades, reflects a decline in competitiveness and the exhaustion of the French productive model.
Meanwhile, since 2000, France’s public debt has risen from 59% to 113% of GDP—a 54-point increase. In comparison, the eurozone (excluding France) saw an increase of only 17 points, from 70% to 87% of GDP. This debt surge did not boost French growth, which has been slightly weaker over the period than in the rest of the eurozone.

116.2%

The tax burden in France reached 45.3% in 2024, compared to 40.3% for Germany, 40.6% for the eurozone (excluding France), and 34% on average in the OECD. Not to mention the growing overadministration and overregulation, which weigh heavily on our competitiveness and entrepreneurial spirit. Our employment rate (68%) is comparatively too low, while Northern European countries and Germany are between 75 and over 80%. The employment rate is strongly correlated with the level of social contributions paid by companies and with retirement rules. Meanwhile, the share of French merchandise exports in total eurozone exports has fallen from 16% to 11%, marking a significant decline in our industrial competitiveness.

It should also be noted that the redistribution rate in France is among the highest in the world. According to calculations by INSEE, the income gap between the top 10% and the bottom 10% drops from 18 to 3 after extended redistribution. The top 1% receive 7.2% of household income in France, compared to 8.7% in Sweden, 10.3% in Italy, and 14.4% in the United States.

Finally, public spending in France amounted to 57.1% of GDP in 2024, far ahead of Germany (49.5%), the eurozone (excluding France, 49.6%) and the OECD (42.6%). In the long term, there is no positive correlation across OECD countries between public spending and growth rates—quite the opposite beyond a certain threshold.

Work and Production Must Increase

Should we ignore these figures and, against all evidence, propose further increases in tax and public spending, instead of reducing them? Can we seriously fail to realize that the right answer for France is to increase the wealth produced, and not even more redistribution? That the issue also lies in the insufficient quantity of work, both annually and over a lifetime? Without understanding that this shortage only supports our standard of living and social protection at the cost of ever-increasing debt?
We must speak honestly and act justly to avoid the accelerated decline of our economic and social model. These observations are not ideological—they are neither right nor left. As Pierre Mendès France used to say: “Public accounts in disorder are the sign of nations in decline.”

Olivier Klein is Professor of Economics at HEC.

Categories
Conjoncture Economical and financial crisis

The Thought of Social Democracy Must Undergo a Profound Renewal in France

27.01.2025

“A state that interferes in everything not only weakens institutions; it also destroys the bonds of trust between citizens, by positioning itself between them and making them strangers to one another.”
(The Crisis of Culture) – Hannah Arendt


Social-democratic thinking as it currently stands in France has run its course. It accomplished much over many decades, but its intellectual model has scarcely evolved in the face of at least four major trends that have emerged over time. These shifts were either ignored, insufficiently addressed, outright denied, or blindly followed without a grasp of their consequences. Citing them without regard to priority: public authority, security, and the migration phenomenon — particularly with the rise of Islamist ideology — making the question of national identity more acute. The rise of a fierce individualism that overemphasizes rights while devaluing obligations. An obsession with equality that tips into dangerous egalitarianism, undermining the pursuit of equal opportunity and justice. Finally, the hypertrophy of the public sphere, whose entropy breeds inefficiency, discouragement, loss of trust, and rising anxiety.

We will return to each of these issues. Although not cited here, the climate transition remains crucial; social democracy has, with too many dogmas and insufficient scientific rigor, managed to partially internalize it. To avoid obsolescence, social-democratic thought must therefore explore new terrain — long neglected, even within itself. Let us lay a few modest foundations.

Market and State

Markets are indispensable: they drive economic dynamism, resource allocation, and (albeit imperfect) supply-demand equilibrium. However, they cannot, in and of themselves, be sufficient regulators. For markets to function effectively and sustainably, they require law, institutional norms, regulatory bodies, and intermediary institutions — all of which become essential when the market becomes volatile.


The public sphere is thus vital for guiding and regulating economic and social activity. The State — in a broad sense — plays a critical role in maintaining this balance, including supporting those intermediary bodies such as trade unions. This system enables society’s various forces to be channeled toward an often-precarious but essential harmony. This model of governance, though imperfect and far from linear, has led to increases in overall well-being, fairly distributed across much of Europe.


Its most advanced manifestations have appeared in Northern Europe and Germany. With variations, a form of social democracy has spread throughout Europe, becoming—willingly or not—a defining characteristic. Social democracy, in its broadest sense, beyond left-right government oscillations, remains the baseline regulatory framework across Europe — the backbone of its political economies.


Yet Europe today faces relative decline, and in recent years, significant economic lag — particularly compared to the American model. Possible culprits? Excessive regulations and norms, reduced incentives for initiative and risk-taking, and a pursuit of absolute equality over fairness. Even the more reformist strains of social democracy remain inadequate in navigating this trajectory.

Authority, Security, Immigration


Public policy under social democracy must now account for authority, security, and better regulatory control of immigration. Failing to integrate these themes into a republican perspective leaves the discourse to populists, who then draw in citizens rightly frustrated by their day-to-day realities being ignored.


These topics are not superficial and cannot be dismissed moralistically or condescendingly. Likewise, thinking of a nation purely as a multicultural kaleidoscope without unity, clear borders, shared culture, or true identity — founded only on abstract universal values — is naive. It denies history, geography, and the Nation itself and overlooks the cultural bonds that allow individuals to recognize and live meaningfully together. Ignoring this truth eventually leads to disaster, as Ernest Renan warned:
“What unites us is not language, religion, or race, but a shared past and a common will to live together. A nation is a soul, a spiritual principle, shaped by past glories and a current desire to continue a shared life. A nation is a daily plebiscite.”
While fundamental, these issues will not be expanded upon further in this article.

Efficiency Loss in the Public Sphere


Just as markets can fail or cause harm, public institutions too can be ineffective — or even counterproductive. Neither markets nor governments are omniscient. Public policy must be approached free of ideology: policies can be ineffective, inappropriate, or even harmful, generating the opposite outcomes they seek. Recognizing this must be central to any renewal of social-democratic thinking.


We must move past simplistic binaries of the “evil capital” versus the “benevolent State.” That dichotomy is not only naïve but misleading. Both capital and the State possess their own internal logics: one driven by return on investment, accumulation, and growth; the other by control and influence. Both must be kept in balance — neither overpowering the other — in order to foster a progressive, stable society.

The Logic of State Expansion: Overadministration


France has developed, over the decades, an omnipresent State that intermediates all social relations — inserting itself between citizens and society, exercising tighter control over individuals, and producing ever more complex, intrusive regulations. This entropic proliferation has diminishing returns.

This is a particularly French issue (more so than in the U.S. or even elsewhere in Europe). Such overgovernance causes a feeling of helplessness, discouragement, and nostalgia — even selfishness or rebellion. Bureaucracy infantilizes the citizenry, encouraging greater dependence on the State, which inevitably leads to disappointment and fear — even of minor challenges — as individual

responsibility is diminished.
Arendt again:
“Action is what allows men to appear before others, to reveal themselves in their uniqueness, and to build a common world. When the state monopolizes this capacity, citizens become mere spectators.”
— The Human Condition

Too much state presence leads to individual atomization and alienation, undermines self-confidence, erodes mutual trust, stifles communal action, and weakens self-organized solidarity. The balance between individual liberty/responsibility and societal order breaks down. As Arendt also warned:

“The danger is not just the violence of authoritarian regimes, but the gradual drift toward a soft and paternalistic administration that suffocates freedom under the pretense of protection.”

Combining Ethics and Effectiveness

To renew public trust and efficiency, the State must reclaim vision and vitality — not through blind expansion, but smart limitation. Laws, institutions, and policies should be strictly necessary for society and economic life. The public sector must aim for the best synthesis between ethics and efficacy — neither of which is the sole domain of either State or market.

These two values are interlinked, feeding one another. There is no sustainable ethics without effectiveness, nor enduring effectiveness without ethics. Social democrats must own this dialectic — not deny it.

Hyperdemocracy and Hypersocial-Democracy


Democracy and social democracy are susceptible to their own excesses. What might be called “hyperdemocracy” or “hypersocial-democracy” — their unchecked dynamic growth — risks weakening their foundations or even causing their undoing.
Tocqueville warned of this. Without deep introspection, democracy and social democracy may collapse under their own weight, ushering in forms of populism — from the left or right.


Endless expansion of individual rights, with no equivalent sense of duty, leads to exaggerated individualism and radical segmentation — identity politics, grievance culture. The framing of all human exchanges as oppressor vs. oppressed dissolves shared narratives. Everyone is assigned guilt or victimhood. This simplifies and falsifies history, which is refashioned to support this binary framing.

All this is masked behind totemic buzzwords — endlessly repeated yet hollow — enforced by a moral and ideological police. Wokism is the most complete expression of this democratic distortion. It is not progressivism nor democracy extended — but their parody, and potentially their undoing.

Criticizing it does not make one conservative or reactionary. Social democracy must not leave this fight to populists alone — or risk vanishing into irrelevance, as evidenced in both the United States and France.

Social Democracy’s Own Excesses

That said, social democracy has its internal structural flaws too — especially its pursuit of absolute equality. Magical thinking, lacking nuance. Total equality leads to jealousy, resentment, suppression of merit — and therefore, stagnation.
Tocqueville:
“There is no passion more fatal to man and society than this love of equality, which can degrade individuals and push them to prefer shared mediocrity over individual excellence.”

We must clarify the differences between absolute equality, equality of rights, equality of opportunity, and equity — along with their ethical, social, and economic effects.

Hyperdemocracy and hypersocial-democracy thus produce societal regression, economic decay, moral confusion, and ultimately collapse. They foster jealousy, resentment, and hatred. And they’re already at play.

A Pseudo-Progressivism That Hides Real Regression
Naïve goodwill or willful blindness about these dynamics masquerades as progressivism — when it is in fact dangerous regression. It isolates individuals, perverts values like universalism and humanism, and damages the foundations of real progress: emancipation, responsibility, and social harmony.
Too much state, too much democracy, too much social democracy — all unleash unchecked demands for rights, diminish any sense of duty, and breed inefficiency. Result? Generalized mistrust — of institutions, politics, others, and society itself.
This leads eventually to insurmountable public debt.
The Survival of the Social Market Economy
For a social market economy to survive, protection for the vulnerable — through the public sphere — must be paired with personal, family, and community responsibility. The welfare state — yes, but not infinite protection from everything. That breeds passivity.
Tocqueville again warns:
“The sovereign stretches its arms over all society; it covers the surface with a network of petty rules, minute and uniform, through which even the most original minds and energetic souls cannot make their way. It does not break wills, but softens, bends, and guides them; it hinders, represses, enervates, extinguishes, and stultifies people until each nation becomes a flock of timid and industrious animals with the government as their shepherd.”
Conclusion: The Stakes
The equilibrium between ethics and efficiency is broken. Without adjustment, the welfare state and the social safety net are both endangered. France’s administrative excesses threaten the very reproducibility — that is, survivability — of this governance model.
If we don’t act, we face cultural, financial, and moral collapse.
The great question, then, is this:
How can we build mechanisms that limit these excesses? How do we rediscover the vital balances upon which our societies thrive?
This is, at its core, a matter of survival — for our model, for Europe, and for France.
Social democracy has long defined the European political model, balancing markets and state authority in the pursuit of fairness and prosperity. Yet in France, this intellectual tradition has stalled — dissolving into excessive statism, inefficiency, and the distortions of hyper-democracy and identity politics. This essay argues for a profound renewal of social‑democratic thought: one that reasserts authority and responsibility alongside rights, reconciles ethics with effectiveness, and rebuilds trust among citizens. Without such a reset, the European model risks decline — culturally, economically, and politically.

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Conjoncture Economical policy

The Dynamics of Economic and Political Fragmentation

The dissolution of the Soviet Union in 1991 marked the end of a bipolar world and the emergence of an international order centered around the United States, the sole remaining superpower. This period saw the rise of a regulatory model based on market economy principles, free trade, democracy, and the promotion of human rights. Alongside it grew the idea of a global spread of democracy and a human rights-based diplomacy, even extending to the concept of a “right of intervention.” This period—sometimes described as the “end of history”—provided a certain form of stability.

Globalization, through the increasing integration of countries into the world economy and international trade networks, as well as through the diffusion of technology and capital, led to a dramatic reduction in global poverty. The share of the global population living below the subsistence minimum dropped from 40% in 1980 to about 10% in recent years. This occurred even though certain populations in Western countries—particularly those tied to industries exposed to competition from lower-wage economies—were negatively affected.

At the same time, this dynamic enabled the emergence and assertion of new powers. China, in particular, progressively moved up the value chain, capturing significant global market shares in a wide range of sectors. Through its Belt and Road Initiative, it has also expanded its spheres of influence—securing, among other things, its access to energy resources and rare earths—eventually becoming a hyperpower in its own right.

Along the way, this transformation led to a growing challenge to the previous order. That challenge has also been taken up by the so-called “Global South,” a diverse set of countries united by their criticism of what they see as American—or more broadly Western—“double standards.” This Global South has questioned the legitimacy of the Western-led order and called for a greater role in global governance.

At the heart of today’s geopolitical fragmentation lies the systemic rivalry between China and the United States. China seeks to reclaim a dominant position on the global stage after a long period of geopolitical retreat—a goal made explicit by Xi Jinping in 2021, when he stated that China should become the world’s leading power by 2049. The United States, conversely, is determined to preserve its current status. Russia, for its part—driven by a historical complex of encirclement and lack of recognition—is striving to reassert its influence on the international stage.

Geopolitical and economic fragmentation is now evident. Between 2010 and the onset of the war in Ukraine, the number of international military conflicts increased nearly fourfold. The number of countries under financial sanctions nearly tripled. Protectionist measures affecting both international trade and cross-border direct investment multiplied sixfold. These developments reflect a logic of withdrawal and rising mistrust among states, undermining the benefits of regulated trade and capital flows. This fragmentation poses a serious threat to international peace and security.

Mistrust between the two hyperpowers has become substantial, deeply affecting global regulatory frameworks. Multilateral coordination and communication mechanisms—essential for managing and resolving conflicts in their early stages—are increasingly impaired, giving way to bilateral relations and a resurgence of confrontational dynamics. The central question today is whether contemporary societies can rebuild sufficient trust among stakeholders and develop effective forms of coordination to avoid a “every-man-for-himself” world and the resurgence of primitive violence, always justified by the anticipated aggression of the other.

Olivier Klein
Professor of Economics, HEC