Dominique Michaut has undertaken a work of public salvation: to restore order, method, and above all common sense, to the anarchic conceptual proliferation that characterizes economic discourse today, and even, to a rather large extent, economic science itself.
Statistics and the models that use them are plethoric. As the capacity to process digital data has grown exponentially, economists – and others who like to talk about economics – are having a field day. But the quantity of data does not always go hand in hand with its quality. The ready-to-wear of the economic figure comes out of workshops whose often prestigious name hides the lack of professionalism from the untrained eye.
Why is that? Because numbers are only of interest if they measure a correctly conceptualized reality. Unfortunately, reality is often poorly conceptualized. Statisticians frequently calculate and disseminate sums that bear a certain administrative label without checking too much whether this label corresponds to a well-defined, reasonably homogeneous reality, defined by a clear concept.
For example, international comparisons relating to wages, wages, or labor costs. Prestigious organizations, such as the OECD, widely reported by the media, base themselves on gross wages, as if employers' social security contributions were not part of employees' compensation. This is because, administratively, the said contributions are deemed to be paid by the enterprise, but not by the employee. This leads to considerable errors in diagnosis, as the financing of social security is distributed very differently between employers' contributions, employee contributions and taxes depending on the country. It is therefore of the utmost importance that voices be raised to call a spade "a spade", even if reputable bodies and eminent personalities persist in referring to it as a dog.
It is this immense and salutary task that Dominique Michaut has tackled. His Introduction to Objective Political Economy, the first part of his Précis of Systemic Political Economy, has precisely the object and merit of carefully defining the words used to analyze economic phenomena. He took seriously Albert Camus' warning, which he is careful to quote: "Not naming things correctly adds to the misery of the world." And he introduces us to a universe in which concepts, and their names, are used to name things, at the end of a reasoning intended to determine what deserves to be measured because it has meaning and consistency.
This universe can be observed, to a large extent, with the help of accounting. This discipline holds a large place in Dominique Michaut's work, because accounting data is our number one source of information: it is very important that by putting on accounting glasses we do not become colorblind, myopic or hyperopia! When we see the absurdities committed in the context of public accounting, where, for example, the expenses of a financial year are calculated partly in accrual accounting, and partly in cash accounting, we understand how important it is to be perfectly clear about this tool, which is a central part of the apple of our eye as economists.
But Dominique Michaut does not limit himself to building good instruments of observation and analysis. It advocates rules of conduct – which is why the third part is entitled Major Economic Policy Guidelines. And the most central of his recommendations, which links him to Paul Fabra, is the increased use of capital as a means of financing economic activity.
Dominique Michaut does not plead for speculative capitalism, for which our contemporaries seem to have an extreme attraction, and others an inveterate hatred. He proposes a yield capitalism, in which the providers of capital would be rewarded not by the hope of surplus value, but by the almost total distribution of the profit made. Self-financing, greatly reduced, would be replaced by share issues: shareholders would be free to reinvest or not the dividend received; they would thus regain the power that has been confiscated from them by the technostructure and the businessmen. Corporate income tax could therefore disappear, replaced by shareholder income tax.
This original proposal, which is the opposite of the usual pleas in favor of a corporate tax system that encourages them to finance themselves, is of the same inspiration as the plea that Dominique Michaut, like myself, makes in favor of the "truth payslip", i.e. the absorption of employers' social protection contributions (social security and supplementary schemes) by employee contributions. In both cases, it is a question of returning to the people who make the enterprise operate, ordinary shareholders and employees, the responsibilities that have been in a way confiscated from them: ensuring the financing of the investments necessary for the development of the enterprise; pay the insurance premiums that provide them with social security coverage.
The analytical and conceptual part of Dominique Michaut's book therefore leads, as should always be the case, to proposals for structural and, above all, structuring reforms. By basing these projects on a strict intellectual discipline, it gives these recommendations a coherence and solidity from which we would all benefit greatly if our rulers and future rulers were inspired by them.
Jacques Bichot, August 2016