‘Made ill by its finance’


Jean-Luc Gréau, Daniel Mordzhinski

From New Left Review:

Nearly four years after the onset of the worst financial crisis since 1929, a remarkable unanimity as to ‘what is to be done’ appears to prevail among mainstream Anglophone economists. Emergency liquidity supplies to the banks, to keep credit flowing while balance sheets are corrected; a stiff dose of Keynesian public spending, to mitigate the world recession; then a return to deficit-cutting austerity—combined, if possible, with ‘taking advantage of the crisis’ to push through any desirable structural reforms in pensions, retirement age, social provision. The arguments, noisy enough, have been almost entirely tactical, centred on quantities and timings. The strategy itself, aiming to return to business as usual as quickly as possible, has hardly been questioned, despite the fact that the specified measures have shown little sign of working to date—and in sharp contrast to the clash of ideas that followed 1929.

But if mainstream economics has become a depressingly uniform field in the US and UK, across the Channel the landscape remains more variegated. France has a well-deserved reputation for critical economic thought; from the left, there have been important contributions from neo-Marxist and post-Keynesian analysts, as well as the rich and diverse literature produced by the Regulation School. More unusually, there exist powerful critics of neoliberalism on the centre right. Jean-Luc Gréau, a long-time economic advisor at the French employers’ association, is one of the few economists both to have predicted the crisis and to have proposed an alternative set of solutions to those espoused by the G8. Gréau was born in Hadjout, then Marengo, in French Algeria in 1943, and studied economics in Montpellier from 1962. He joined the Conseil National du Patronat Français, as it then was, in 1969—the CNPF would be rebranded as the Mouvement des Entreprises de France, or MEDEF, in 1998—retiring from a senior post in 2004. Gréau has described himself as ‘a mixture of a Keynesian and a Schumpeterian who recognizes his debts to Marx and, above all, to Adam Smith. Difficult to classify.’ A frequent contributor to Le Débat, his published work takes the form of extended discussion of the general questions of political economy at stake, rather than analytical number-crunching as such.

Gréau’s most recent book, La Trahison des économistes (‘the treason of the economists’) is a scathing attack on the intellectual apologists for neoliberalism. Published in 2008, it has become a best seller in France since the fall of Lehman Brothers. But La Trahison builds on two previous works that were published well before the crisis: Le Capitalisme malade de sa finance (‘capitalism laid low by its finance’—or, more literally, ‘made ill by its finance’) appeared in 1998. As its title suggests, it concentrates on the economic malfunctions associated with the transformation of the Western financial system since the 1970s. L’Avenir du capitalisme (‘the future of capitalism’), published in 2005, extends and deepens the original critique, looking not just at financial change but at the process of globalization as a whole.

Although there must now be a wide gap between Gréau and his former employers—MEDEF itself has embraced many neoliberal positions—and although Gréau seeks interlocutors across the political spectrum, his remains a voice of the centre right. Gréau wants to restore capitalism, not to replace it. His critique embraces not only the contemporary functioning of the financial markets but also the ‘expenditure-driven state’. He has suggested that government spending becomes unproductive when it exceeds a third of GDP—a limit that would imply massive retrenchment in most European countries.  Nonetheless, his is a voice worth listening to, for the clear and thorough analysis he articulates and the trenchant critique he offers of the course taken by capitalist development since the late seventies. 

“A Capitalist Contrarian”, John Grahl, New Left Review