Category: Global economy

Categories
Global economy

The Forgetting of Schumpeter: “Thomas Piketty Risks Building a Dangerous Egalitarian Utopia”

With his new Report on Global Justice, Thomas Piketty proposes a radical form of global fiscal engineering: a worldwide wealth tax reaching as high as 20%, marginal tax rates of 90% on very high incomes, and an international sovereign wealth fund financing social and climate-related investments. The entire framework rests on the assumption that growth in advanced economies will remain durably weak and that redistribution should therefore become the primary instrument of social justice.

Yet this perspective overlooks the fact that globalization has enabled a dramatic reduction in absolute poverty worldwide, from roughly 40% of the global population living in extreme poverty in 1980 to around 9–10% today.

Beyond questions about the feasibility of the degree of international coordination required, the architecture of Piketty’s proposal also suffers from a weak growth theory, lacking solid microeconomic foundations.

In Piketty’s framework, long-term economic dynamics are largely reduced to a handful of macroeconomic parameters treated as fixed and exogenous. As Philippe Aghion has shown, however, growth is an endogenous phenomenon shaped by institutions and incentives. Capital is also treated as a homogeneous stock, without distinguishing between innovative productive capital and less productive forms of wealth, even though the transformation and reallocation of capital are central determinants of future growth.

The Neglected Question of Innovation Financing

This is where Joseph Schumpeter becomes essential. Schumpeter reminded us that capitalism is fundamentally a dynamic process of creative destruction. Entrepreneurs, financed through credit or venture capital, introduce innovations that disrupt established positions and push the technological frontier forward.

The key issue, therefore, is not primarily the distribution of wealth, but rather innovation, its financing, and the incentives that encourage risk-taking. Growth cannot be treated as a mere backdrop onto which ever-higher taxation can simply be grafted. Moreover, taxes on wealth and very high incomes do not have the same effects when they target economic rents as when they affect the rewards earned by innovators. Excessively heavy taxation can significantly weaken entrepreneurial dynamism and, ultimately, the growth potential upon which social progress depends. Piketty’s proposal appears to overlook these considerations.

The proposal for a global sovereign wealth fund eventually holding assets equivalent to 60% of world GDP raises a similar concern. Such a concentration of capital allocation in political and administrative hands creates problems of legitimacy, information (identifying the most promising innovations), incentives, and resource allocation (taking risks without the disciplining mechanisms of markets).

The danger is that established and politically influential actors would be favored, along with the least risky investments, at the expense of genuine technological breakthroughs. The tendency to overestimate the capabilities of public authorities-implicitly assumed to be omniscient-and to underestimate the role of entrepreneurship and markets is questionable, especially since, in practice, their complementarity is essential.

Reconciling Development and Prosperity

Likewise, the climate transition is presented primarily as a question of investment volumes rather than as a challenge of innovation. Yet its success also depends on businesses, competitive market conditions, and incentives to invest. Without this Schumpeterian dimension, calls for sustainability and restraint risk becoming a technocratic exercise rather than a genuine productive transformation.

A system of redistribution is, of course, necessary. So too are mechanisms that limit excessive concentrations of wealth and power. But such a system must be calibrated carefully to preserve a balance between social justice and economic dynamism. It must also take account of the significant differences between regions such as Europe and the United States.

By neglecting Schumpeter and embracing highly radical fiscal proposals, Piketty risks constructing a dangerous egalitarian utopia upon a fragile analytical foundation. The debate should not focus solely on the taxation of the wealthy; it should above all address the question of the most effective growth regime, one capable of reconciling development and prosperity, environmental sustainability, and the containment of inequality.

Olivier Klein is Professor of Economics at HEC Paris.

Categories
Economical policy Global economy

Artificial Intelligence: The New Frontier of the Value of Work

The arrival of AI in the world of work cannot be reduced to a simple substitution of humans by machines. It represents a profound shift in the boundary between what can be automated and what cannot. As repetitive, codifiable, and predictable tasks are taken over by algorithmic systems, the value of human work is being redefined. It is shifting toward activities that require greater cognitive intensity but also a higher degree of emotional intelligence, intelligence of sensitivity, as I call it.

Non-manual labor can no longer be confined to execution, however skilled; it must integrate abilities of interpretation, judgment, and anticipation. The value of work increasingly rests on the capacity to understand complex situations—the subtlety and dynamics of human interaction—to navigate uncertainty and to make decisions that cannot be entirely derived from past data.

This is precisely where the “intelligence of sensitivity”—or intuitive intelligence, as Kant called it—becomes decisive. Where AI excels in processing vast amounts of data and detecting correlations, it remains limited in grasping human nuances: intentions, weak signals, the conditions of trust, implicit contexts and dynamics. Yet these dimensions lie at the heart of economic and social interactions.
Negotiating, convincing, cooperating, arbitrating, deciding—all are acts that demand a fine understanding of others, both to comprehend and anticipate them.

Anticipation is not merely projecting trends from data; it also implies perceiving what is not yet fully articulated, capturing emerging shifts, and sensing nascent imbalances. In other words, anticipation mobilizes a form of intelligence that surpasses calculation.

As I emphasized in my book Crises et mutations, intelligence cannot be reduced to analytical capacity alone. It lies in the interplay between reason and sensitivity, between modeling and intuition. Judgment is indispensable for anticipating and making sound decisions in a world whose future is barely probabilizable. It is not merely the mechanical execution of an optimization program under constraints.

This idea resonates powerfully with philosophical thought.
“Without sensibility, no object would be given to us; and without understanding, none would be thought. Thoughts without content are empty; intuitions without concepts are blind. Consequently, it is equally necessary to make one’s thoughts sensitive and one’s intuitions intelligible. Neither faculty can exchange functions: understanding can intuit nothing, and the senses can think nothing. Only through their combination can knowledge arise.” — Immanuel Kant, Critique of Pure Reason

Kant’s insight sheds striking light on contemporary challenges. AI embodies a powerful form of understanding—but without sensibility: it calculates, structures, optimizes. Yet it does not “feel.” Conversely, humans who rely solely on intuition without analytical rigor would risk error and bias. The decisive advantage of humanity lies, therefore, in the union of both faculties.

The future of work will be neither humanity replaced nor humanity unchanged. It will be one of enhanced complementarity between human and machine, with human value concentrated in what eludes automation: creativity, sensitivity, discernment—hence, responsibility and decision-making capacity.

In this new landscape, developing and enhancing these skills become both a social and economic imperative. For it is precisely these capacities—those that highlight the essence of human intelligence—that will ensure the continued place of humankind in the world of work.

Olivier Klein is Professor of Economics at HEC.

Categories
Economical policy Global economy

Wokism, Undifferentiation, and the Inverted Logic of the Scapegoat

By Olivier Klein – July 18, 2025

René Girard’s thought provides a penetrating lens through which to view the ideological excesses of wokism and the deep dangers they entail. Wokism—understood not as simple ethical vigilance but as an ideological system aimed at erasing all perceived differences—can be seen as an advanced episode in the mimetic dynamic. What this movement claims to fight—exclusionary violence—it reactivates, in reversed form. And in doing so, it maintains a sacrificial logic that has marked the history of humanity.

Mimetic theory is based on a fundamental discovery: human desire is never autonomous or free from others. It does not preexist the socialization process of the individual. We are not born with our desires or with fixed preference curves, as some individualist anthropologies or economic schools propose. We desire what others desire, precisely because they desire it. The other is envied and imitated because we believe they are complete, lacking nothing—unlike ourselves, who feel an inner void. This drives us to desire what the other desires: to define ourselves, to be, by mimicking their desires in the hope of filling our own emptiness.

This structurally mimetic nature of desire breeds rivalries, since we desire what others desire. This can unleash violence that is itself contagious. It can spread throughout the entire group and, in its extreme phase, lead to the group’s self-destruction.

This rivalry over possession intensifies when differences between group members fade, as the mimetic logic then spirals more easily and dangerously. Everyone develops a desire to possess what others covet—others doing the same. When two individuals resemble each other too closely, each becomes both a model and a rival to the other—especially dangerous because the other is nearly identical. This is Girard’s archetype (frequently found in myths) of the mimetic double, inherently charged with violent potential. Undifferentiation accelerates the mimetic process and its violent outcome.

Differences—sexual, symbolic, cultural—are thus not obstacles to peace. They do not hinder the prevention of violence. Quite the contrary: differences are conditions for preventing it. This is the heart of the paradox: the forced equalization of human conditions, far from abolishing conflict, exacerbates it.

How can the “mimetic crisis” that spreads among all members of a community avoid leading to the group’s self-destruction? A catastrophic outcome can be avoided if the crisis is resolved by designating a scapegoat. The scapegoat channels the violence of all-against-all into a unified violence of all-against-one. The scapegoat is chosen through a mimetic, quasi-random process and becomes the focus of a sudden consensus about their guilt—even though it has no real basis. The expiatory victim absorbs and takes away the contagious violence that had erupted within the group and become focused on them. In primitive societies, once the group is re-united, the victim is often sanctified as the figure who saved the community. Myth arises from this process, concealing the real mechanism while still allowing it to be deciphered for those who look closely enough.

Human groups, societies, establish strategies to avoid the repetition of the destructive logic of the mimetic crisis. In Violence and the Sacred, Girard shows that archaic societies managed to contain this violence by instituting differences, rituals, and taboos that constrain mimetic desire and limit its catastrophic escalation. This stands in opposition to the modern idea of “liberated” desire, assumed to emancipate individuals by freeing them from social constraints. It opposes the will to deconstruct taboos. But this so-called free, autonomous, unbounded desire is an illusion: it denies the mimetic structure of our desires, and therefore their destructive potential. On the contrary, it is civilization—with its mediations, rules, and norms—that can contain this endemic violence.

Differences—sexual, hierarchical, ritual, symbolic—are not archaic remnants. According to Girard, they are cultural tools for peace. In modern societies, this role is taken up by the law, the State (which has monopolized violence), and social norms. Differences remain, particularly economic or status-based. But rather than being sources of oppression, in today’s world these differences are fortunately mobile, evolving, not fixed—and thus become engines of economic dynamism and growth. At the same time, they subtly help restrain mimetic violence. Furthermore, rituals and moral taboos, though weakened in modern society, still play a useful complementary role in containing violence.

Herein lies the clear paradox of wokism. By aiming to erase all differences—perceived as discriminatory—wokism seeks to deconstruct the existing order in order to rebuild society on the basis of absolute egalitarianism. But this constructivism, rooted in the pursuit of undifferentiation, does not pacify—it intensifies mimeticism. It stirs up envy, jealousy, and ultimately hatred. Everyone competes to defend—or even embody—the purest victim, and to sanctify it. This is the contemporary logic of victimhood competition, analyzed by René Girard in I See Satan Fall Like Lightning: “The victim has become the absolute foundation of moral judgment.”

But if everyone is a victim in this artificially constructed world of undifferentiation, the barriers that once contained violence are destroyed. New scapegoats must then be found to absorb the violence this generates. The oppressor—vaguely defined but necessary to the ideological framework—becomes the new scapegoat. The man, the white person, the Westerner, or even the former and long-standing expiatory victim—now, through a historical reversal, recast as the quintessential oppressor—are singled out. The symbolic dominant is targeted for condemnation. The logic of sacrifice returns, but inverted.

From this perspective, wokism becomes a form of mimetic compassionism unaware of its own dynamics. It designates victims en masse, sanctifies them, and traps them in that status by assigning them to a fixed identity. It builds inverted hierarchies where guilt crushes responsibility, where identity replaces action, where absolute determinism denies the capacity to evolve or change status. Having dismantled the civilizational barriers to mimetic violence, the need for a scapegoat returns. But now the aim is not to sacrifice the victim to save the community; it is to sacrifice the supposed dominant—designated by new inquisitors—to redeem a presumed collective guilt. The barriers collapse, and the sacrificial logic endures. In Things Hidden Since the Foundation of the World, Girard wrote that “the modern world is increasingly mimetic.” Wokism illustrates this. Beneath a posture of moral purity, it reproduces what it denounces: judgment, exclusion, violence, sacrifice. The victim is not abolished—only replaced. And the more this is done in the name of Good, the more dangerous the mechanism becomes. Evil—the principle of the scapegoat—thus takes on the appearance of virtue.

Should we then return to old hierarchies? No more than Girard, I believe we should. We must recognize the dynamics of mimetic desire, help disarm scandal, and break the cycle of vengeance. This requires rehabilitating symbolic mediations, legitimate structuring differences, and institutions that prevent the generalization of rivalry—without ever legitimizing injustice. This is what distinguishes equality of opportunity from egalitarianism.

Without differences, there are only rivals. And a society of rivals, without mediation and without cultural boundaries, is a society ready to ignite—and at risk of exploding. Integral egalitarianism, leading to generalized undifferentiation, becomes a breeding ground for distrust, amplified mimetic envy, and ultimately destructive violence.

Olivier Klein
Professor of economics at HEC

⸻

Note [1]: From a Girardian perspective, consider the rivalrous battle and striking mimetic behavior in the U.S. between proponents of wokism and religious ultra-conservatism. Both hurl anathemas at each other and claim victimhood at the hands of the other. Mimetic violence leads both sides to ban each other’s books and rewrite educational programs by erasing what contradicts their worldview—often with anti-scientific approaches. Both camps become polarized in a mimetic refusal of dialogue or exchange.

Categories
Conjoncture Economical policy Global economy

THE FRENCH MODEL: FROM EXCESS TO NECESSARY RENEWAL

The European model, and especially the French one, of political, economic, and social regulation is undergoing a profound crisis. Under the pressure of its excesses, this model proves hardly capable of meeting contemporary challenges.

Five major trends highlight its limits: the weakening of public authority and sense of security, the insufficient immigration regulation and integration of immigrants, the rise of exacerbated individualism, the expression of excessive egalitarianism, and finally, the hypertrophy of the state and regulation.

These dynamics weaken institutions and fuel distrust towards politics, favoring the rise of populism.
The market, essential for economic dynamism, requires effective public regulation to avoid its excesses. However, in France specifically, the public sphere has grown excessively, causing both inefficiency and discouragement. The omnipresent state tends to infantilize citizens and interfere in their social relations while reducing the role of intermediary bodies. As Hannah Arendt points out: “When the state monopolizes this capacity to act, citizens are reduced to the role of spectators.” Over-administration indeed causes a loss of individual and collective responsibility, while weakening respect for others and social rules. This in turn provokes widespread anxiety and distrust.

At the same time, what I call hyper-democracy is developing in our societies, due to an endogenous dynamic that, if unchecked, can lead to pathological excesses that may even endanger democracy itself. These excesses manifest as an unlimited extension of individual rights at the expense of everyone’s duties, fostering selfishness, withdrawal into oneself, and an exacerbated, compartmentalized communitarianism. Additionally, this also weakens the meaning and necessity of work.

These excesses also include an extreme egalitarian obsession, fueling jealousy, resentment, and hatred. Egalitarianism also hinders the engines of growth and progress. Tocqueville, who already analyzed the potentially self-destructive developments of democracy, warned: “There is no passion so fatal to man as this love of equality which can degrade individuals and push them to prefer common mediocrity to individual excellence.”

These excesses threaten the ability to live together and can lead to both moral and economic ruin. The issues induced by financing over-administration and the lack of responsibility regarding social protection spending result in a permanent public deficit, leading to soon unsustainable public debt. These in turn reinforce distrust.

To avoid irreversible decline, it is imperative to reinvent our political, social, and economic balance around several axes. Reconcile ethics (including social justice) and economic dynamics (economic system efficiency). Neither is sustainably viable without the other. In other words, today norms, regulations, and tax systems must not unduly hinder innovation, growth, and business development, lest efforts towards ethics be in vain. Address public authority, security, and immigration matters in a democratic and effective manner, without moralizing bias or contempt. This will also prevent populism from monopolizing these debates. Ensure better social mobility through appropriate quality education. Reject egalitarian excesses by recalling the essential notions of equality of rights and duties, equality of opportunity, and equity, so as not to confuse them with absolute equality in everything, which often contradicts the former.

The survival of the European democratic model and social market economy depends on its ability to renew itself. Without an intellectual awakening to limit the excesses that have developed and to regain the essential balances that underpin them, our politico-economic-social system will sink into entropy. Moreover, this is in a world where power struggles have again become the rule. This renewal is crucial to restore trust in institutions and politics, as well as in democracy itself. It is also crucial to regain vitality and dynamism without which nothing is possible. The sustainability of our beautiful European model depends on it.

Olivier Klein
Professor of Economics at HEC

Categories
Conjoncture Economical policy Global economy

THE DOLLAR-BACKED STABLECOINS: A NEW STRATEGIC WEAPON FOR THE UNITED STATES

Stablecoins are experiencing explosive growth as a means of settlement. In 2024, they processed more transactions than Visa and Mastercard combined. Unlike “pure” cryptocurrencies, which are issued without any backing and whose value is inherently speculative and highly volatile-since it depends solely on the self-referential opinion of the market-stablecoins are cryptocurrencies backed by assets such as the dollar. For each unit of stablecoin issued and purchased in exchange of any currency, the amount received is immediately used to buy U.S. dollars and invested in U.S. Treasury securities. It is this one-to-one rule that makes these specific cryptocurrencies “stable” rather than purely speculative.

Amid rising uncertainties in the U.S. bond market, reflected by a reduction in Treasury purchases, the United States sees stablecoins as a strategic opportunity: to attract new demand for its sovereign debt and reinforce the dollar’s dominance in global trade. Indeed, the more dollar-backed stablecoins are used internationally, the more issuers must acquire U.S. debt to guarantee their value. Washington thus could use stablecoins as a tool to refinance its external debt while expanding the dollarization of the global economy. The recent adoption of the Genius Act bill, supported by the U.S. administration, aims to support and regulate the development of dollar-backed stablecoins, giving American issuers a competitive advantage and consolidating the dollar’s supremacy.

This strategy is not without risk for the rest of the world. The possible massive adoption of dollar-backed stablecoins could accelerate capital flight from emerging or fragile economies, as citizens seek protection from inflation or currency devaluation by turning to these stable payment methods. More broadly, stablecoins weaken the monetary sovereignty of countries outside the United States, reduce their ability to finance their economies with local savings, and expose their financial systems to risks of banking disintermediation. The global reallocation of savings toward stablecoins backed by U.S. debt diverts resources from local private sector financing to the benefit of the U.S. Treasury. National banks, deprived of deposits, see their lending capacity shrink accordingly, slowing economic growth in these countries.

Finally, the expansion of stablecoins poses major challenges in terms of regulation, anti-money laundering efforts, and consumer protection. These assets can circulate without constraint, facilitating illicit flows and eroding the integrity of financial markets.

Ultimately, increased dependence on the dollar via stablecoins further entrenches the asymmetry of the international monetary system, making economies-especially emerging ones-even more vulnerable to U.S. monetary policy decisions.
In sum, by developing dollar-backed stablecoins, the United States has gained an unprecedented lever to further dollarize global trade and refinance its external debt. But this strategy imposes significant risks on the monetary sovereignty, financial stability, and economic development of the rest of the world.

But it’s a double-edged sword for the United States. Stablecoins can also accelerate both the appreciation and depreciation of the dollar, thereby increasing macro-financial volatility.

Olivier Klein
Professor of Economics at HEC and Banker

Categories
Economical policy Global economy

Businesses, State: the Necessary Art of Change

Today, the urgency of change in the management of public administrations is essential. For companies as well as for public administrations, without confusing the two, changes in the behaviour of employees and users or  customers or technological revolutions often require deep transformations to survive and develop for some and to remain effective and legitimate for others. In a changing world, nothing is a given. And, without anticipation, crises lie in wait, which then force sudden, uncertain and socially painful ruptures.

We have to be constantly attentive to changes in the conditions in which we carry out our activity, regularly rethink the validity of our model, while maintaining a methodological doubt so as to never be caught up in our own certainties. At the same time, to avoid Brownian movements, it is essential to rely on a clear analysis of what is invariable in our activity. What it is fundamentally and how it is sustainably useful to people and the economy. Thus, clearly conceiving the very essence of our activity and simultaneously perceiving the changes linked to our mode of practice is a crucial key to forging a good strategy and reaching your goal in the best way possible, ensuring a calm transformation and not a brutal disruption.

But as necessary as this may be, to succeed, it also requires thoughtful and appropriately organised change management. We have to anticipate the reactions that employees, customers/users, and even the competition will manifest in response to the changes that we want to implement. To anticipate correctly is to allow ourselves to act correctly.

Consistency is also a fundamental key to success. It must be totally implemented in the strategy. Otherwise, there is a loss of meaning and with an inconsistent course and divergent directions given, we will go nowhere. But there is more. There must be constant alignment of the strategy, the means needed to achieve it and the incentive systems. When the means implemented are in line with a relevant strategy and the incentive system ensures that each person or team is inclined to direct their action towards the achievement of the proposed strategy, success is often the result.

Finally, it is necessary to have adequate change management and support. This means detecting and considering obstacles to change in advance, thanks to feedback from the teams themselves, especially because they are stakeholders in the change but also because they are in their field. Change cannot only be driven from above. It must be the result of ongoing dialogue between managers and managees. This process is demanding but necessary and fruitful.

Which logically leads to a well-conducted trial-and-error process. Change must have a clearly defined course. But, if it is necessarily a well-thought-out process, it must be flexible. Change should not be planned rigidly and stuck to no matter what. Very flexible and dynamic planning, with a clear route, integrating the encountered realities, in a back and forth between the conceptualisation of the process followed and the reality that is revealed as it is deployed, allows one to achieve one’s objective with much more certainty.

Life is change, a permanent evolution. Just like companies and administrations and their environment. We must therefore think about and lead the essential changes, before being forced to do so by the otherwise inevitable crises. Companies are born and die when they have not been able to adapt. Public administrations do not die by themselves, but they can experience such entropy that they become less and less efficient and more and more costly, and can even lose their legitimacy. This then leads to deficits and debts which, when facing the wall, can lead to a disruption that is always hazardous and painful.

Olivier Klein
Chief Executive Officer of Lazard Frères Banque
Professor of Economics at HEC