“We must tax fortune when it is immobile”, assures Matthieu Pigasse

Matthieu Pigasse is an investment banker, former advisor to Dominique Strauss-Kahn at Bercy. He is also a media man, shareholder of the newspaper The worldowner of Radio Nova and the weekly Les Inrocks. He also participates in several festivals, notably Les Eurockéennes de Belfort and Rock en Seine. He has just published a book with Éditions de l’Observatoire entitled The Light of Chaossubtitle, “For a society of possibility.”

franceinfo: We have entered, you say, an era of chaos, particularly because the social contract has been broken. What do you think is wrong?

Matthieu Pigasse: There are many, many things wrong. Chaos takes multiple forms today. First of all, the chaos of the world, with war “over there”, if I may say so, in Ukraine and the Middle East and terrorism, here in Arras or in Brussels. There is also climate chaos, of course, with the upheavals that we are experiencing. And finally, we have in fact, economic and social chaos, that is to say a form of dislocation of society here and which is explained in my opinion by a main factor which is a capitalist system which is reaching the end of breath.

How did you see this capitalist system run out of steam? What are the factors that cause us to be in this situation today?

You just have to look around and you can see a halt in growth, an explosion of inequalities, a withdrawal into oneself and a loss of collective meaning. Liberal capitalism was the promise of a better world, the idea that tomorrow would be better than today for ourselves and for our children. It was basically progress. The reality as we see it today is the opposite. It is the triumph of the party of selfishness. It is a permanent risk of social downgrading, it is a rise in poverty and precariousness. INSEE has just released a report showing that poverty has further increased in France in recent years. 15% of the French population lives below the poverty line, that is to say with less than €1,160 per month. That represents, to get an idea, 10 million people. So the symptoms of this exhausted capitalist system are inequalities. It is a bomb that is placed at the heart of our society with the hyper concentration of work, the hyper concentration of capital. It is something that today is inexplicable, unjustifiable and unsustainable.

Are you extremely critical of the elites?

Yes, I think there is a generalized bankruptcy of all elites. First, a failure of political elites who have demonstrated a form of powerlessness and incapacity over recent decades. Then a bankruptcy of the media elites with the responsibility of journalists and a bankruptcy of the judicial elites. Finally, we obviously have a bankruptcy of the economic elites. But for all that, it is not a negative book. This is absolutely not a pessimistic book. I am no less a declinologist or a declinist. I think it is very important to clarify this. Hence the title of the book, The Light of Chaosis that I think that light can emerge from this chaos.

When Emmanuel Macron came to power in 2017, he talked about trickle-down economics, isn’t that the case?

“No, trickle-down doesn’t work. In fact, I even think it works in the opposite direction in society.”

Matthieu Pigasse

at franceinfo

This is not a surprise to me because this is my fourth book and I have been experiencing this functioning of the capitalist system and the world for several decades now.

A capitalist world to which you still belong since you are an investment banker.

It is precisely because I am an actor in this system, in fact, that I can talk about it as I do. It is precisely because I am an actor in the system, that I know it, that I understand it and that I see these dysfunctions. I see what we need to act on in my opinion.

What changes and solutions in your opinion should be initiated very concretely and quickly?

The book offers a whole range of solutions which are sometimes individual or personal, what I call in the book, being oneself, but also collective, what I call being together. I see two main directions: better distribution and better redistribution. Better distribution means better sharing of added value, particularly for the benefit of salaries. It also means distributing a minimum income, that is to say a universal income. Better redistribution means taxing not risk; on the contrary, in my opinion, we must favor and encourage risk-taking, but tax the income and acquired situations.

The economist Gabriel Zucman, who heads the European Taxation Observatory, was in your place a few weeks ago. He wants to implement a 2% tax on wealth, is that a good idea?

What I think we need to do is tax wealth when it is immobile or sterile. What I am proposing, moreover, is the creation of a tax on immobile wealth, the IFI, but reinvented, revisited. What I call immobile capital is capital which is not used in the productive economy, which is not used for investment purposes here in France, but which can be invested. For example, capital that is invested in financial products, funds of funds abroad or in the United States. I think that this sterilized and immobile capital must be taxed. Conversely. We must encourage investment in the economy.

You know what the current French government will say to you: it scares away talent and great fortunes. It’s not a good idea.

I absolutely don’t think this is a bad idea. I think that encouraging risk and penalizing income should, on the contrary, attract entrepreneurs and investors.

So this forces the big fortunes to take this money and place it in the real economy rather than letting it sit dormant.

“The problem is not making profit, but it is its use.”

Matthieu Pigasse

at franceinfo

So we must ensure that this profit is directed towards investment and returns more to the employee and, for example, penalize the payment of surplus dividends.

Another dogma that you want to break down is that of public debt and respect the Maastricht criteria. The economist, Jean Pisani-Ferry wants to finance green investments through public debt in particular. Do you agree with this idea?

I think that the State is not an economic agent like any other. The State is not an individual or a company. He has at his disposal a bank which itself is not a bank like another which is the central bank, which is independent, and this is moreover one of the problems that I raise because this central bank should be at the disposal of the State. I don’t want to be a caricature by saying that we can create money in an unlimited way, throw it out of a helicopter and that tomorrow everything will be better. On the other hand, under certain conditions which seem to me to be met today, it is possible to create more money and to use this money to do two things. First, as Jean Pisani-Ferry says, use it to finance major investment plans, for example on the ecological transition, the construction of schools or hospitals. Secondly, use it to distribute a universal minimum income.