Bruno Le Maire, the French minister of the economy and finance, is warning against the rising power and influence of transnational corporations and the deepening polarisation of wealth and individual incomes, saying that the growing inequality and injustices could crush capitalism.
Kristian Rouz — The French finance minister is warning against a continued growth in global income inequality, saying that the ongoing polarisation of wealth could pose a deadly challenge to the capitalist socio-economic system. Bruno Le Maire’s remarks come as France begins its presidency at the Group of Seven (G7) and amid the ongoing anti-establishment “Yellow Vests” protests across Europe.
Le Maire — who is set to arrive at the World Economic Forum in Davos later this week — addressed the G7 conference in Paris on Tuesday, urging the world’s advanced economies to lead an effort to rebuild capitalism.
He urged for lower taxes and sweeping fiscal changes to boost economic expansion and disposable incomes, while keeping the power of large corporations in check.
The conservative minister warned that the capitalism system might capsize if the ongoing accumulation of wealth at the top continues, while the challenge of poor living conditions across multiple societal groups is deepening.
“If we are not on our guard, we will go toward a total disaster because a capitalism that creates ever more inequality, conflict and rivalry will get us absolutely nowhere”, Le Maire warned. “Capitalism must reinvent itself or it won’t survive the rise of inequalities across the world”.
Le Maire is expected to bring his reform proposals to Davos, where he is set to slam the largest international corporations for being too large and powerful, yet paying too little in taxes — compared to smaller businesses and even some individuals.
His fiscal proposals appear to reflect the anti-corporate crusade that started in the EU last year with discussions of the so-called “tech tax”. EU officials point out that international tech giants, such as Google and Facebook, are making gigantic profits off the single market, yet are paying less than 1 percent in EU taxes due to their domicile abroad.
Le Maire’s calls for fiscal justice include a lower tax for small businesses and lower individual income taxes as well. These proposals seem to reflect the sentiments expressed by “Yellow Vest” protesters, whose rallies entered their “Act 10” this past weekend.
While “Yellow Vest” protesters are demanding a fairer, better economy, Le Maire says deepening inequalities are the main cause of popular frustration.
“We are living in exceptional times when everything is toppling over”, Le Maire said. “We need to defend our vision of capitalism, our French and European vision of capitalism”.
The minister’s remarks also come as French President Emmanuel Macron is facing the accusations of being the “president of the rich”, including by protesters and a broader French public.
In particular, Macron’s decision to abandon the wealth tax, but to keep individual income taxes high, infuriated the French public — and now his finance minister is calling for justice for those, who “are not benefiting from globalisation”.
“We cannot always pay for more growth with ever greater inequalities. We have reached the end of this logic”, Le Maire stressed.
The French minister also called on the G7 to implement a standardised set of rules to regulate international investment. He said that this could help keep international corporations in check, and prevent countries from being dominated by foreign economic influence.
He said corporations must start paying a “minimum tax” in every country they operate in, which would also prevent such companies from offshoring their profits to low-tax jurisdictions, such as Ireland.
Le Maire also said that the G7 should look into the discrepancies between the highest and lowest wages and salaries, and make an effort to ensure a more balanced structure of disposable incomes for the majority of citizens.
He also warned of the rising political influence of corporations with market capitalisation exceeding the GDP of most countries — such as Apple or Facebook. Le Maire said this enormous concentration of wealth and power poses a growing threat to the international economic and political order.
The French minister is expected to provide further details of his proposals at the Davos meetings later this week.