Partner of Initiative & Finance, François-Xavier Oliveau supports companies in their ecological transition. It contributes to the thinking of different think tanks about the interactions between technology, economy and society. In his latest book* he points to a paradox: our societies have entered “the age of plenty” because “there is no limit to the ability to produce everything we need”. But this abundance generates multiple crises.
Our societies have entered the “Age of Abundance”. What do you mean ?
Simply that supply capacity now exceeds demand. It’s very new. For millennia, production capacity was limited, and the role of the economy was to manage scarce resources, mainly capital and labour. The incessant progress since the industrial revolution has taken us to another world: there is no limit to the ability to produce everything we need. Today we have the opportunity to meet the needs of humanity.
“The environmental crisis is a direct result of our consumption and this abundance.”
You show that this abundance creates crises: environmental, monetary, in the world of work… Should these crises be dealt with at the same time or should the environmental crisis now become the absolute priority?
The environmental crisis is indeed a direct result of our consumption and this abundance. It needs to be resolved urgently. But it is also necessary to move forward in parallel with the monetary crisis that is causing many inequalities. One is difficult to solve without the other, as illustrated by the yellow vest crisis in France. The solutions are actually complementary.
“The challenge now is to continue to take advantage of abundance by eliminating its harmful effects on the environment.”
Is it possible to maintain this abundance situation and save the planet at the same time?
Surprisingly, we are still afraid of the scarcity of raw materials, the disappearance of, for example, oil or certain metals. Yet we have made them abundant. Their prices have been falling steadily for decades. In terms of mining and energy, the resources available are objectively much better than our needs.† Technological progress gives us access to an abundance of increasingly cheaper resources. It is their overconsumption that threatens us, not their scarcity.
The challenge now is to continue to take advantage of abundance by eliminating its harmful effects on the environment, starting with the greenhouse gas emissions that cause global warming. Luckily we have today more and more technological means to solve these problems, and these solutions are getting cheaper. The latest IPCC report is a reminder of this, notably by emphasizing carbon capture technologies.
“Degrowth seems neither necessary nor desirable to me. Moreover, six billion people dream of our abundance and legitimately intend to access it.”
So you think degrowth’s solution is a dead end?
I’m not a proponent of growth at all costs, but degrowth seems neither necessary nor desirable to me. In addition, six billion people dream of our abundance and legitimately intend to access it. It is about making abundance more sustainable through technical progress. Nowadays “green” solutions are often more expensive than traditional solutions, but this additional cost decreases very quickly. Batteries or photovoltaic panels, for example, have divided their costs by 10 in ten years. In the coming years we should see an explosion of these sustainable solutions. A thoughtful environmental impactwhich, in particular, would replace existing taxes would accelerate their introduction.
“We work less and less over the course of our lives. And the economy will find it more and more difficult to reward work well, because more and more work can be done mechanically, better, faster and cheaper.”
Technology also has a major impact on work. Some thunderously announce the “end of work”. Do you share this observation?
No, I don’t think work will disappear simply because we actually want and need to work. On the other hand, I note the decline in working time over the centuries. Because we work full-time, we have the impression that we work just as much as our ancestors. But in the past there were no weekends, no retreats, no holidays and few long studies. In the early 1800s, we were working 70% of the time we were awake; today the figure is 12 to 14% depending on the country. The fact is, we work less and less over the course of our lives. And the economy will find it increasingly difficult to properly reward work, because more and more work can be done mechanically, better, faster and cheaper. This trend, which has lasted for two centuries, is still accelerating.
How can wealth redistribution be considered in this context?
That is the challenge for the coming years. How do you distribute the wealth increasingly produced by capital? I think that work and income are increasingly diverging. Over the course of a lifetime, unpaid work time – household activities, education and childcare – already exceeds paid work time. Remuneration will therefore no longer necessarily be linked to work. Income independent of labor will probably be essential to redistribute abundance. Without job replacement, it provides additional income for those whose work can no longer be properly paid for by the market.
“I see universal income as a solution to an economic problem.”
So you justify using universal income from a strictly economic point of view?
All the way† I see universal income as a solution to an economic problem. It makes it possible to distribute wealth and support consumption in a world where the share of capital in wealth creation is increasing† Universal income is not against workon the contrary: by distributing purchasing power, it stimulates the provision of local serviceshardly replaceable by the machine.
“It would make much more sense to create a permanent, non-exchange currency.”
You also see a very different role for central banks. According to you, the money should be paid directly to the citizen. Why imagine this formula, which is iconoclastic to say the least?
The mechanism of abundance is lower prices, the ability to produce cheaper and cheaper. Today, this deflation is accelerating with the technological and digital revolution. Despite their efforts, central banks are unable to offset this decline and meet their inflation target. In addition, they use the instrument of debt, a temporary currency intended to be repaid. So we try to compensate for permanent deflation with a temporary currency: this is absurd!
The consequence is inevitable: the temporary becomes permanent and the debt continues to increase. In reality, it would make much more sense to create a permanent, non-exchangeable currency. Again, this is a very pragmatic solution: every month central banks send people a check, the amount of which depends solely on the level of inflation. It is thus a monetary and non-tax instrument. This “monetary dividend” materializes the economic value created by the fall in prices.
“The debt problem is not so much financial as social and political. So the failure of our monetary instruments has a very disturbing democratic impact.”
But we’re not really going that way… And the health crisis hasn’t helped: debt is exploding. Should it be cancelled?
It would be a temporary solution: the debt would be mechanically repaired afterwards. Moreover, to cancel debt is to give considerable power to the States, by directly creating money for their benefit. It is better to create money for people than for states.
Our current system produces a Leviathan state, which goes into debt cheaply without paying back. In contrast, the debt currency is extremely unequal, as we saw during the crisis: the values of equities and real estate have risen sharply due to the build-up of debt, to the benefit of the holders of these assets.
The debt problem is therefore not so much financial as social and political. So the failure of our monetary instruments has a very disturbing democratic impact. For example, I am concerned about the consequences of the aid distributed during the crisis. Some companies will not be able to repay them: will the state then convert them into capital? There is a threat of latent nationalization here. In each casethis monetary creation mechanism gives the state considerable power. And it won’t stop when this crisis is over.
*The Crisis of Abundance, François-Xavier Oliveau, Éditions de l’Observatoire, 320 p., €20