Transcript Dijon 2009 Rules of economic governance for positive action

Dijon 2009
Stability conditions of a capitalist economy
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1/ Full employment should be the unique principle of State intervention
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2/ The State should impose the highest share of labour in the distribution of wealth
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3/ Sufficient ratio of sound public assets over private assets
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4/ The State should not be constrained in its expenditures
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5/ No fixed exchange rate in order to have no foreign constraint
Dijon 2009
Rules of economic governance for positive action
• Rule 1: Implement at once a strong growth of long-run public investments
• Rule 2: Finance public investments by planned deficits not out of borrowing
from savings
• Rule 3: The State must issue debt for public investment in its own currency
and fix the interest rate of this debt at a very low level
• Rule 4: Impose high enough wages consistent with an equitable distribution
of wealth
• Rule 5: Public reconstruction must include employment of last resort (ELR)
• Rule 6: As Rules 1 to 5 are implemented do not impose the least restraint on
consumption out of rising taxes
Dijon 2009
Rules of economic governance for positive action
• Rule 7: Do not fear inflation no more than the foreign constraint
• Rule 8: The State must not tax to get income to spend but to prevent evil
animal spirits ie: delocalisation, speculation, predatory behaviour…
• Rule 9: For emerging countries intelligent protectionism and capital controls
are required to pledge to a non fixed exchange rate.
• Rule 10: State deficits should not be used to save banks from their
accounting losses but to nationalize them at least for some time. Central banks
should play the leading role in the supply of money for public investments.