Neoliberal capitalism killed by the Covid-19. This statement does not come from the hidden corners of the anti-globalization left, but from Patrick Artus, the very liberal chief economist of the investment bank Natixis, in a short note on economic analysis, published Monday, March 30.

Within two days, one would have thought of an April Fool. An investment bank that announces the end of the economic system that made his fortune? CheckNews, the fact-checking site of the newspaper Liberation, even considered it useful to publish an article confirming the reality of this analysis note, widely used on social networks.

Undermining the main pillars of neoliberal capitalism

Patrick Artus is the author. In this six-page document, he explains that the current health crisis will undermine the three main pillars of neoliberal capitalism as we know it. The economist predicts the collapse of globalization, the end of forced outsourcing, and a resumption of public spending, which will put an end to the neoliberal temptation to seek lower taxes at all costs.

The Covid-19 has already started to nibble on these fundamentals of the dominant economic model, notes Patrick Artus. Direct investment in China is declining, it is stagnating in the direction of other emerging countries and world trade is slowing down. So many signs of the beginning of "deglobalization". "The coronavirus crisis has highlighted the fragility of global value chains: when production stops in one country [China, note], the whole chain is stopped," he notes. This is why, he considers probable a relocation of investments to the regional scale to minimize these risks.

For its part, the State has become aware of the need to revert to an "industrial policy which implies that it must produce a certain number of strategic products nationally, such as medicines, telecom equipment and equipment for the development of renewable energies ", continues Patrick Artus. President Emmanuel Macron did not say anything else in his speech of March 16, describing as "madness" the fact of "delegating our food, our ability to care, our protection to other [countries]".

The health crisis also demonstrated the importance of ensuring "adequate social protection for the entire population", says the author of the note for Natixis. The billions of euros urgently mobilized by all countries to minimize the economic impact of the pandemic are, of course, of exceptional magnitude, but would be symptomatic of a emerging trend. "Governments have become aware of the need to protect individuals financially so as not to have to act urgently in the event of a shock," said Pascal de Lima, chief economist at the financial consultancy Harwell Management, contacted by France 24.

Rectifier of the wrongs of neoliberalism?

We should therefore expect a tax hike, made necessary to finance the resumption of the welfare state, which had fallen out of favor for the benefit of a government which, on the Anglo-Saxon model, left the market to act. as he pleases. For Patrick Artus, the time of the race to lower taxes, which made the happiness of multinationals always quick to play tax competition to choose where to settle, comes to an end.

Would Natixis' chief economist make his Marxist "coming out"? After all, he had already split in February 2018 of a note entitled "What if Marx was right?" in which he defended the idea that capitalism was out of breath. "Patrick Artus knows how to use his indisputable economic authority to provoke reflection by launching controversial ideas", recalls Pascal de Lima who stresses that the economist is capable, from one note to another, of saying one thing and its opposite depending on the economic models selected.

In reality, Patrick Artus does not announce the dismantling of the current economic model, but plans, at the conclusion of his thesis, "the end of this form of capitalism". In other words, the Covid-19 could become the rectifier of the wrongs of neoliberalism "by correcting its excesses", decrypts Pascal de Lima.

What would such a healthy or healthy neoliberalism look like? "There can be intelligent interventionism with a small dose of protectionism and targeted regulation of the markets without however overhauling the entire economic model", believes Pascal de Lima. Tracks of reforms of capitalism which are not new, but which until now had remained dead letters. The coronavirus would thus force the hand of decision-makers who have too long rejected the need to restore order in the functioning of globalization.

Rehabilitated trades

Such an inflection of capitalism would have sometimes unexpected consequences. "We must expect a rehabilitation of certain professions which have demonstrated their usefulness during this health crisis, while they were neglected in favor of other professions more in line with the logic of neoliberal capitalism", says Pascal de Lima . Hospital staff, education professions and even local businesses could find themselves better supported financially by the State, while the urgency to promote certain start-ups which mix "as much wind as money" could disappear.

Multinationals that reveled in the tax shallot race to minimize their taxes could also suffer from the increased importance that public spending should take. They may find it more difficult to obtain significant tax benefits from governments tempted to prioritize social protection.

But the decline announced by Patrick Artus in trade could also come at the expense of the poorest countries. As a result of the slowdown in world trade, direct investment in developing countries has stagnated, thus depriving some fragile economies of one of the main engines of their growth.

The Covid-19 will therefore be a crash test for neoliberal capitalism. The health crisis should demonstrate whether it is possible to save this economic model by simply correcting these excesses or demonstrate whether these excesses have become inseparable from the functioning of globalization. In other words, the big economic question that the coronavirus may help answer is whether, as Pascal de Lima says, "excesses have become the norm of neoliberal capitalism today".

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