By THOMAS PIKETTY*
Historical experience shows that nationalism can only exacerbate inequality and climate tensions, and that absolute free trade has no future.
Can we give a positive meaning to internationalism? Yes, but on the condition of turning one's back on the ideology of absolute free trade that until now has guided globalization; and adopt a new model of development based on explicit principles of economic and climate justice. This model must be internationalist in its final objectives, but sovereign in its practical modalities, in the sense that each country, each political community must be capable of establishing conditions for the pursuit of trade with the rest of the world, without waiting for the unanimous agreement of your partners. The task will not be simple, and this sovereignty with a universalist vocation will not always be easily distinguished from nationalist sovereignty. It is even more urgent to clarify the differences.
Let us assume a country, where a political majority considers it desirable to introduce a strongly progressive tax on high incomes and wealth, in order to effect a significant redistribution in favor of the poorest, while financing a program of social, educational and ecological investment. To move in this direction, this country foresees a withholding tax on company profits and, mainly, a financial registration system that allows knowing the final holders of shares and dividends and, thus, applying the desired rates at the individual level. All this could be complemented by an individual carbon card, allowing to encourage responsible behavior, while heavily taxing the highest emissions, as well as those who benefit from the profits of the most polluting companies, which again requires knowing its holders .
Unfortunately, this financial register was not provided for by the treaties on the free movement of capital established in the 1980s and 1990s, particularly in Europe in the context of the Single Act (1986) and the Maastricht Treaty (1992), texts that strongly influenced those adopted later in the rest of the world. This highly sophisticated legal architecture, still in place today, in effect created an almost sacred right to enrich oneself using one country's infrastructures and then clicking a button to transfer one's assets to another jurisdiction, with no foreseen possibility for the community follow its path. After the 2008 crisis, when the excesses of financial deregulation became evident, agreements on the automatic exchange of banking information were certainly developed in the OECD. However, these measures, established on a purely voluntary basis, do not include any penalty for the recalcitrant.
Let us then suppose that a country wishes to accelerate the movement and decides to establish redistributive taxation and a financial register. Let's imagine that one of your neighbors does not share this point of view and applies a derisory rate of taxes on profits and carbon to companies based (real or fictitious) in its territory, while refusing to transmit information about their owners . Under these conditions, the first country should, in my opinion, impose trade sanctions on the second, variable depending on the companies, in proportion to the fiscal and climate damage caused.
Recent work has shown that these sanctions would bring in substantial revenue and encourage other countries to cooperate. Of course, it will be necessary to argue that these sanctions only correct unfair competition and non-compliance with climate agreements. But the latter are so vague and, on the other hand, the treaties on the absolute free movement of goods and capital are so sophisticated and restrictive, particularly at the European level, that it is likely that a country that embarks on this path will run a serious risk of being condemned by European or international bodies (Court of Justice of the European Union, World Trade Organization). If that is the case, it will be necessary to unilaterally take [a position] and withdraw from the treaties in question and, at the same time, propose new ones.
What is the difference between the social and ecological sovereignty outlined here and nationalist sovereignty (let's say Trumpist, Chinese, Indian or, tomorrow, French or European), based on the defense of a particular civilizational identity and on interests emanating from it and reputed to be homogeneous?
There are two. First, before starting possible unilateral measures, it is crucial to propose to other countries a model of cooperative development, based on universal values: social justice, reduction of inequalities, preservation of the planet. It is also necessary to closely monitor transnational assemblies (such as the Franco-German Parliamentary Assembly [APFA] created last year but with real powers) that ideally should be responsible for global public goods and common policies on tax and climate justice.
Next, if these socio-federalist proposals are not immediately accepted, the unilateral approach should nevertheless remain encouraged and reversible. The purpose of sanctions is to encourage other countries to get out of fiscal and climate dumping, not to install permanent protectionism. From this point of view, sectoral measures with no universal foundation like the “GAFA tax” should be avoided, as they easily lend themselves to sanctions escalation (taxes on wines versus digital taxes, etc.).
Pretending that this path is well-marked and easy to follow would be absurd: everything still needs to be invented. But historical experience shows that nationalism can only exacerbate inequality and climate tensions, and that absolute free trade has no future. All the more reason to reflect now on the conditions for a new internationalism.
*Thomas Piketty is director of research at Ecole des Hautes Études en Sciences Sociales and professor at Paris School of Economics. Author, among other books, of Capital in the XNUMXst century (intrinsic
Translation: Aluisio Schumacher to the website Major Card.
*Originally published in the newspaper Le Monde.
