The complete file on industry and deindustrialization written by Charles Gave is available and downloadable on the website of the Institute of Liberties. Faithful to the habits I have adopted on this forum, I would like to supplement it with a summary and a transcription of the videos (in fact, an intermediate format between these two approaches). I realize that, until now, I have relatively few personal comments to make on economic and financial subjects because, when I reread my notes, I quite agree with the content in question.

This is partly due to the fact that economic analysis, even partial, is more objective than political positioning in relation to current issues, to which reading grids influenced by activism are applied. It is also because it is more difficult to take up economic and financial expertise, even more so when it is logically argued as is the case with Gave, because the field is more technical. We always have to learn from someone who has such experience of international markets, while also knowing the situation in France well.

The issue of industry and deindustrialization was an opportunity for the author to relate different concepts developed in his previous interventions, such as those of money supply, inflation or account deficit, the aim being to try to understand why France, a former industrial power, deindustrialized to reach the 9% that current industry represents in our economy. Gave has long been interested in the context which gave rise to this problem, as shown for example in his work entitled Lions led by donkeys, published in 2003.

Since deindustrialization ultimately amounted to lowering business profitability and destroying entrepreneurial margins, what was the goal of French policies? Their goal was to increase the role of the State in the economy, under the influence of ideological blindness, that which consists of seeing the private sector as the problem and the State as the solution. Another cause to be deplored is that of the ENA: the enarques know, like autistic people, how the workings of the State behave, but know nothing about the world in which we live.

We must first understand the mechanisms that brought about deindustrialization. Since the 1950s, INSEE has published data concerning the gross cash flow of companies. We can simply define this margin, which allows investment, as what remains in the middle of costs (the money that goes out) and sales (the money that comes in). The gross cash flow margin of companies declined from 30% at the beginning of the 1970s to 20% in 2023. Companies have therefore lost a third of their margin, which can be explained, causally, by an increase in state going hand in hand with the decline in businesses.

Added to this phenomenon is the cost of head offices in France, comparable to the weight of the dysfunctional administration in French hospitals. However, such a cost requires even greater profitability, as this dysfunction, by definition, cannot generate, because the administration is not productive. Even more serious, the administrators decline all responsibility. What they manage, they manage for themselves and not for France, while accusing capitalism, liberalism, free trade and globalization of all the evils. Hence their systematic praise of protectionism.

However, when we compare France and Sweden, two countries located in Europe with the same European regulatory constraints, we see that Sweden, having the objective of increasing the gross margin of its companies (including H&M and Ikea) in within the framework of free trade, has been capable of competing with China and even the United States, at least since 1992. Before the development of GAFAM, there were three Swedes among the ten richest men in the world. Another aggravating factor in France has been and remains the cost of immigration.

However, Gave tends to put this point into perspective: for him, the economic policies carried out in France bear a heavier responsibility than immigration in the fact that, unlike Sweden which has literally soared (its debt having declined from 80 % to 35% in twenty years), France has sunk (its debt having gone from 35% to 110% in twenty years). Certainly, presented in this way, the responsibility of economic policies seems heavier. However, should we completely rule out the negative impact of immigration? No in my opinion, because not only does uncontrolled immigration, because of its poverty, not create wealth in France, but it also impoverishes us because it benefits from state aid.

In Sweden, distribution is based on local control (promoting trust), unlike that of France, which depends above all on Paris (promoting distrust and, with it, crony capitalism). Hence the vicious circle of surveillance: the less the system works, the more control increases, and the more dysfunctions become more pronounced, leading to even more thorough control. In this context, France appears as a country under the influence of an ideology fundamentally hostile to freedom, risk and success.

Graphs on corporate cash flow as a percentage of GDP since 1992 show that, while France lost 5 points of profitability, Sweden gained 5. Another graph, using the least square method (minimizing the differences between the statistical trend and each of the points), confirms this divergence between the evolution of the Swedish economy and that of the French economy, which, concerning the latter, has dissuasive effects not only for local entrepreneurs, but also for foreign investors.

Furthermore, we see that, the two countries cited finding themselves at 100 in industrial production during the year 1992, the strong franc policy, an error orchestrated by Jean-Claude Trichet, had the effect of an increase in French industrial production which has only risen to 106 since then, while Sweden has exploded to 166. This point, too, shows that the gap between the two examples has nothing to do with international competition, nor with China: it is, fundamentally, a desire to destroy the French industrial apparatus or, at least, the sovereignty of our country.

This loss of sovereignty, in fact, served the English-speaking world which did not want France to continue to weigh in international relations, including in the Middle East. From this point of view, the French political class has become complicit in American hegemony. Emmanuel Macron's "at the same time" formula is an illustration of this, because he behaves as being on the side of both the United States and the BRICS, while wanting to avoid angering the French unions, but this is not possible: we must choose a coherent political line.

Éric Zemmour does not realize the pitfall that protectionism represents, because his analysis does not allow him to see that the return on invested capital is insufficient. The consequence of poor French economic policies is that GDP per capita will continue to fall in our country, resulting, in the long term, in a fall in the standard of living. Previously, this decline was offset by the increase in debt. On the contrary, good management of foreign trade consists first of consuming what we produce, then of exporting, finally of importing, this order of priorities contributing to an improvement in the standard of living.

In today's world, the French accounts deficit continues to worsen. The two parts of French consumption (what we earn and what we borrow) are unbalanced (to the detriment of what we earn and to the benefit of what we borrow). Automatically, French consumption will have to return to French production, because no one will want to lend us money anymore. Once again, when the weight of the State increases, the self-financing margin of companies decreases, the State taking money from companies to give it to those who do not work. Improving living standards depends on increasing productivity in the private sector.

The act of production precedes the act of consumption. The Keynesian theory which claims the opposite is illogical, but not a single enarque is well trained enough to realize this. The economist Alfred Sauvy (1898-1990) was attentive to reality. We must not stimulate consumption so that production increases (contrary to what Roselyne Bachelot, Ursula von der Leyen and others claim, the latter, incidentally, having become rich thanks to vaccines), but the opposite, because it is only possible to consume what is produced.

This is why we must also talk about the power of civil servants in the destruction of industry. When we look back at the history of deindustrialization, we see that, before the socialists came to power in 1981, the rise in industrial production and that of GDP were consistent. Since the socialists came to power, the rise in GDP is no longer rooted in industry: the gap is widening between the two. First major crisis: socialism (since 1981). Second major crisis: Jean-Claude Trichet and the strong franc policy (since 1992). Third major crisis: the creation of the euro (since 2000). Fourth major crisis: Mario Draghi, rates at 0 and negative rates (since 2012). Fifth major crisis: Covid-19 (since 2019). Each time, French politicians claimed to be able to resolve the crisis by attacking industry; now that there is no industry to go after, they want to go after apartment owners.

For economist Thomas Sowell, solutions do not exist: there are only negotiations. It must be understood in the sense that, for there to be an industry in France, this industry needs to be profitable. The problem comes from the ideology of viewing industry money as dirty money. After taking five times the money from industry to redistribute it, French politicians find themselves without industry. Therefore, they have no credibility, with their obese State, when they speak of a strategic State capable of reindustrialization.

To reindustrialize, industries must make money. A subsidized industry cannot function because it contributes to increasing debt. The basic principle of any industrial policy must be the following: those who do not make a profit are destined to disappear. The result of the ideological conditioning of bad policies is that the French, in the streets, are still convinced, wrongly, that companies make too much profit. It is also the result of left-wing discourse on the climate, which fuels a situation of shortage by blocking research into new sources of hydrocarbons. The role of the State must not be to concern itself with production, but, limited to its sovereign functions, to ensure the protection of property and people.

In absolute terms, French industrial production in 2023 is at the same level as in 1994-1995. After the end of the presidency of François Mitterrand (1916-1996), Jacques Chirac (1932-2019), Nicolas Sarkozy and François Hollande brought us to a stagnation in industrial production, which seems extraordinary. This phenomenon is linked to the fact that, among senior French civil servants, industry is assimilated to a polluting activity whose profits, always from their point of view and as if in revenge, must be taxed.

Let’s take the example of Générale des Eaux. There was a time when it represented French world domination in the water treatment and sales market. With Jean-Marie Messier, it’s as if a racehorse had transformed into a Boulonnais. When we take up the five critical dates cited above, the conclusion remains the same: the decision always comes down to considering adjustment by the industry, which ultimately finds itself and because of this policy, with less and less money, less and less manpower, less and less power.

What happened in the 1970s? Between 1973 and 1980, the price of oil rose from $2 per barrel to $30 per barrel. Hence a gigantic increase in taxes for businesses, due to their energy needs (since the economy is transformed energy). The cash flow and therefore the profitability of companies is collapsing. The socialists, as soon as they came to power, wanted to finish off industry by nationalizing industrial groups and banks. Despite his faults, Valéry Giscard d'Estaing (1926-2020) had at least accelerated the French nuclear program with a view to energy independence. By increasing business charges, Mitterrand did just the opposite.

This policy then led to the fall of the French franc, which had the unexpected effect (always among the socialists) of relaunching French export companies. In their inconsistency, politicians react immediately by blocking the exchange. The French industrial market collapsed again when, Trichet once at the head of the Bank of France, he decided to permanently fix the franc to the Deutschmark, forcing French industry to reform, while the State continued to grow, leading to a loss of 400 margin points for the French economy. German reunification, like the oil shocks, was thus to the detriment of French industry.

Let us compare German industrial production and Italian industrial production. When the Deutschmark could rise against the lira, industrial production was perfectly aligned. Italian management being less efficient than German management, Italian entrepreneurs, paid with Deutschmarks, were paying with lire, but only when they could, civil servants from southern Italy (corruption resulting, moreover, of a State that is too present, which is also true elsewhere, including in France). The following problems appeared, as with us, from the moment the exchange rates were blocked. When adjustment by currency is prevented, it is corporate profits that adjust and then collapse, causing unemployment and tax expenditures to rise. In 2023, Italian industrial production will be lower than in the early 1990s.

Preventing adjustment through exchange rates amounts to exempting the State from adjustment in order, in its place, to oblige private companies in this direction, which corresponds to a form of accusatory inversion when the situation becomes deteriorates because of the possibility of inflation, hence the recurrent criticism made by a certain press against private companies. The discourse which presents capitalism as the culprit and the State as the savior, although erroneous, is thus spreading among the general public. What's more, the complacency of the followers of the prevailing political doxa means that, in the best case scenario, they will present an opinion contrary to theirs (like that of André Bercoff) in the light of an error that belongs to them to correct through education, without taking into consideration Bercoff's experience or the fact that he is followed by many listeners.

The politicians who, one after the other, have undermined industry, see no further than a zadist when they intend to solve the problem of unemployment by creating jobs in the public sector, because, unlike the economist Frédéric Bastiat (1801-1850) who already saw further than them, they do not realize that the civil servants bring: an increase in taxes; a drop in the standard of living due to the impact on consumption elsewhere; the unemployment of three people in the private sector for each new job created in the public sector; an expense taken over 60 years for each new civil servant; the discontent of civil servants despite the advantages they enjoy; the fact that no one checks the added value of the work of civil servants, which is its sole reason for existence. Finally, why are there more administrative jobs in Gers than farmers?

Then comes the euro crisis. What is Draghi doing? Since the industry is already hampered, he decides to take on the banks by setting interest rates to zero. However, a bank is not an NGO: it is legitimate for it to be remunerated, if only to pay the salaries of its employees. In the United States, there had already been the bankruptcy of Lehman Brothers and the crisis of 2008. Then, in Europe, Draghi attacked the banks. What is the point ? Saving a financial monster: the euro. Today, as curious as it may seem, banks are at a lower level than in 1994.

Those who claim that banks make too much money are only endorsing a preconceived idea. Yes, banks create money supply, but that's their job. In the Middle Ages, butchers became bankers because their customers made deposits with them. They realized that when they made a loan, they were creating money from deposits that did not belong to them. This money was then destroyed as repayment was made, which had no long-term effect.

The pattern is the same today: either money is destroyed by a bad deal and the inability to repay, or it is destroyed (as monetary creation) by repayment itself. The State is not a company that will repay our 3,000 billion euros of debt. There is, in this case, a complete and inflationary monetary creation in addition to the monetary creation of the European Central Bank (ECB). Putting banks' interest rates at a level where they cannot go bankrupt amounts to encouraging them to generate profits, in a roundabout way, by borrowing at negative rates, to seek compensation through the purchase of bonds in a more advantageous country. Result: the euro survives at the cost of dependence on banks which, ceasing to be players in a market, enter through the ECB into hypertrophied crony capitalism.

When we return to the comparison between Sweden and France, we say to ourselves that, in the case of the latter, there was definitely a desire to destroy our industry. Otherwise, how can we explain that Sweden is doing significantly better than France with the same European constraints? For Professor Didier Raoult, there are two types of collective organizations: those based on obedience, and those based on skills, a distinction that Gave had already mentioned and analyzed in [url= on-a-remark-by-professor-raoult]an article published on the IDL website in February 2023[/url].

Industry and commerce, dealing with a clientele who buys their goods or not, are based on skills. Their natural enemies are civil servants, whose status is based on obedience. Invested with a power of violence decreed legitimate, civil servants will continue to do everything to destroy industry and commerce, explaining the drain of French brains abroad. France is a country which has around ten state television channels, giving the illusion of competition while all these channels say the same thing.

The goal of the Swedish ruling class was to create wealth, that of the French ruling class was to prevent this creation, in order to maintain a class of resigned slaves. Paradoxically, in a prosperous economy, the population benefits, even if the primary goal of entrepreneurs is not to take care of others. Another essential notion, specific to a flourishing economy, is that of savings, which puts money aside to finance activities that do not have immediate profitability but are likely to become profitable (unlike real estate investments, which transfer wealth without creating it).

In 1992-1993, Sweden had a monstrous budget deficit, corresponding to 10% of its GDP. Unlike us, it took the necessary measures. Today, it generally maintains a situation of budget surplus, while we, in France, are always in deficit, the debt that we must repay abroad (since it is another country which, 50%, holds our debt, perhaps Qatar) being only the sum of our successive deficits, which continue to impoverish us while reinforcing our financial dependence on our creditors outside our borders. Unlike the socialist system in which France is locked, liberalism works because it has self-correcting mechanisms.

France is in a debt trap: if your salary increases by 2% per year and you repay debt that increases by 5% per year, the gap ends up widening to a breaking point. Today, in France, debt and interest rates are rising above the GDP growth rate. The debt will increase further, while it is already at 110% of GDP, resulting in an obvious drop in the standard of living of the population, not to mention inflation which impacts purchasing power, which will probably drop by 0.5% per year over the next ten years.

The political situation promises to be explosive, if it is not already, with either a horizon of supervision comparable to that of Greece within the eurozone, or a scenario of exit from the euro and exit policy difficult to envisage. Whatever happens, a socialist policy always ends badly, as we have seen in Argentina, Venezuela, Cuba and Labor England. Given the current state of our country, we would have to reach the bottom of disinheritance to be able to turn away from Europe and seek partnerships with China or with Russia.

In this context, cryptocurrencies, including bitcoin, can have an effect on the operational system of money, but not on the economy, because they are too small in comparison. Does France need a bankruptcy comparable to that experienced by Sweden in 1992 for our country to regain its greatness? In any case, we must leave the euro because there is no possible improvement on the horizon of being placed under supervision. The French, freed from the European Union, will then have to make the right political decisions. In the current state, they need a cultural revolution to understand that the solution must come from them and not from outside. It is only on this condition that they will avoid falling back into a socialist economy, and that our private companies will once again become the engine of our economy.

The part of the videos devoted to listener questions also gives rise to deep reflections. Today, the decline in the level of education and citizenship caused by poor political management of the economy and finances is such that, despite twenty centuries of Christianity having demonstrated the innocence of victims, a part of the population, under the impetus of mediocre administrators having imposed their common will on elected officials, returns to a pattern of collective stupidity focused on the search for a scapegoat, thus enacting a civilizational regression.

Furthermore, it is a question of understanding that punitive environmentalism (which mainly concerns California and the European countries unfortunately under Californian influence, including France) does not aim to resolve any problem of global warming, but to follow an ideological pattern imitating a religion, with: an artificial reference to a deified planet; intermediaries (including Al Gore) seeing themselves as gods and who, believing that they are not yet at the summit they want to reach, can no longer bear, in their hysteria, to see that the populations which are declared guilty and inferior yet continue to take the plane and the car.

Finally, once again, we must have no illusions about Marine Le Pen. Clearly, she and those around her don't have a better understanding of the economy than their competitors: she said that inflation was due to rising industrial margins, and that it was therefore imported, hence her idea of ​​implementing protectionism. How would this be viable, when we are in deficit not only in industry, but also in our agricultural production? And that there is not a single case of a country that has become rich thanks to protectionism? Remember that the European Union does not allow national preference. In addition, if we tax the products we import, the French products exported will be taxed in return. And then, with French industry representing 9% of our GDP compared to industrial purchases representing 25% of the same GDP, protectionism would accelerate the decline in our quality of life.

When I come across contradictory information on the subject of protectionism, I realize that possible misunderstandings come from the fact that protectionism, that is to say all the political barriers envisaged in favor of the national economy, is sometimes defined or perceived in one absolute sense. I do not think that protectionism, taken in relative acceptance, is fundamentally incompatible with classical liberalism. Everything depends on the place and importance given to it in a classic liberal (and therefore conservative) economic policy.

I give an example: above, Gave presents three priorities to follow, the first being to produce what we need, the second being to export what we produce in excess, the third being to import what we cannot produce. This priority order uses, without saying it, the protectionist lever in a classic liberal framework. Marine Le Pen's error is to put this term forward without precision, not out of misunderstanding in this case, but because it unfortunately aligns with a cultural consensus. However, as hollow as her words are, there are worse than her in thought, word and action: Emmanuel Macron, freemason Jean-Luc Mélenchon, socialists, ecologists, the Gaullian right of French Republicans, etc. There's even worse: I don't see any less bad than her and her party, for the moment, in the French political landscape having any chance of coming to power. This is the whole dilemma of realistic voting.

This also means that Gave is absolutely right in his analysis. Marine Le Pen thinks that by preventing the trade deficit, there will be no inflation. She therefore did not understand that inflation is monetary. In a period of inflation, margins rise, so companies raise their prices. With inflation at 0, if we buy a capital good 100 that we want to depreciate over 10 years, we depreciate at 10 each year. If there is inflation and the good which was worth 100 is worth 200, the sale price must incorporate the fact of depreciating at 20 per year, but the depreciation is still done at 10 and the margins as well as the taxes rise, so profit collapses. What Marine Le Pen does not see is the fact that inflation is a tax on the stock of poorly depreciated capital. By poorly depreciating a stock of capital, we cannot prepare for the future.

There's another aspect to understand, which Gave points out: a village bakery which manages to feed each inhabitant with one baguette per day will not necessarily, by hiring an additional employee or purchasing an additional machine, produce two baguettes per day per inhabitant. Rather than investing internally, a company may see its interest, during a general meeting, in reallocating capital by distributing it to shareholders. This is how capitalism works: by ensuring that the marginal return on invested capital rises. If it no longer goes to a bakery, we can put it in a tea room. In France, we still tend to think that only the employee creates wealth. However, this is also a preconceived idea, because profit, for a company, can come from an increase in the cost of raw materials. The problem with giving ever more capital to the State is that the State cannot end up bankrupt. Growth needs savings, work and the ability to take risks. Failure is therefore necessary for the success of capitalism.

Merci de m'appeler Eric, c'est mon prénom d'usage.