Yann Coatanlem is an economist and an entrepreneur. He is currently the Chief Executive Officer of DataCore Innovations LLC, specialized in
“antifragile” investment strategies” and member of the board of the Paris School of Economics. His latest book, “Capitalism against Inequalities”(PUF, 2022), was awarded the “Prix Turgot” and the “Prix Louis Marin”. In 2018, he received, from the Académie des sciences morales et politiques, the Special Prize of the Political Economy, Statistics and Finance section for his book “The government of citizens”as well as for the work he has done at Club Praxis, the think tank over which he presides, and that promotes the use of Big Data in policy making, in particular in revamping the tax and welfare system. Yann Coatanlem was also part of a Commission of economists appointed by the Académie des sciences morales et politiques, along with Olivier Blanchard and Thomas Philippon, to make recommendations on the teaching of Economics in High School. He graduated from ENSIMAG and HEC Paris. He is a recipient of the French National Order of Merit and of the Gold Medal of La Renaissance Française.

KEY TAKE-AWAY
  • The challenge is how to combine equity and prosperity in the current context of instability and multiple crisis. The supposed trade-off efficiency versus equity is a false one: equity favours efficiency.
  • Policy needs to address short term and long-term objectives simultaneously. In many countries, there is currently a divergence between long-term public interests and shorter-term personal interest which has eroded the social contract and given rise to social unrest and the appeal of political extremism.
    Inequality exerts a negative impact on growth. The objectives of levelling the playing field together with a fairer distribution of wealth (in the words of the Harvard political philosopher Danielle Allan espousing a system of “difference without domination”) and improving economic growth can and do re-enforce each other.
  • Inequalities need to be measured in a more granular fashion to formulate better legislation.  AI and big data could play an important role in establishing the ‘right’ minimum wage, to combat poverty while not creating too much dependency.
  • Social mobility is a key issue. In France is takes six generations for someone in the bottom 10% on the income scale to access median income status.  In Denmark it only takes 2 generations.
  • High poverty rates and greater inequalities slow economic growth. The US looks as if it might be the exception that proves this rule – US outperforms Europe despite higher rates of inequality and poverty. But this is an inappropriate comparison. The US should be being compared not to Europe but to its own potential.
  • There is a strong business case for greater equity. In US, research shows that better integration of black Americans into the economic system would generate 1 trillion US$ a year.
  • Furthermore, inequalities of a societal nature are exacerbated by inequalities relating to the extreme concentration of profit and domination of the market by a powerful few.  An effective response to this market domination must go beyond fiscal measures. For example, better deployment of monopoly and patent legislation in the pharmaceutical sector would make a significant difference.

Banking System Fragility

  • Central banks regard themselves “as the only players in town” – governments have been too reluctant to introduce the necessary regulations, plus the fact is that a swathe of financial activities lie in the so called ‘shadow banking’ beyond the scope of the regulators.
  • The influence of social media, fake news, smear campaigns etc. should not be underestimated.  Regulation can be perfect and still not preventing a bank run with fatal outcomes.  Close attention to contagion models could help predict and contain.
  • Increasing the “discount windows “ a full 24/7 operating times could help avoid crises occurring at the weekends.